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A lot like this, as I understand it. Publicly traded companies have a fair bit of information generally available, but for a private supplier you might well dem

A lot like this, as I understand it. Publicly traded companies have a fair bit of information generally available, but for a private supplier you might well demand some financials to establish enough confidence to pair with them. What's distinctive here, I guess, is that Walmart has the weight to get that info and then start making demands instead of just deciding whether to trust the partner.

jjeaff 9y ago
It's not like you are required to sell to Walmart. You can always refuse. Plenty of successful companies don't sell anything to Walmart.
- Bartweiss 9y ago
  The FastCompany article linked in the comments is interesting on that, though. (https://www.fastcompany.com/47593/wal-mart-you-dont-know https://www.fastcompany.com/47593/wal-mart-you-dont-know) In 2002, Walmart did more business than its next 6 grocery and general-good competitors combined. Something like that is presumably still true if you restrict to brick-and-mortar spending. If you sell something mass-market (e.g. pickles), a huge portion of all shopping happens at Walmart - you can get beaten by a competitor just for not playing ball with one retailer. Similarly, struggling companies can be saved by Walmart (e.g. Levis), but only if they concede to whatever Walmart demands. I'm not going to take the anti-capitalist tack, here. When Walmart tells Levis to fix their supply chain and introduce products at a lower price point, that's how markets should work. They demanded reform, and that's what saved Levis - they might not even have needed to sell at Walmart if those changes had come sooner. But the larger pattern is troubling. Walmart has so much power over smaller suppliers that it's like informal ownership - they're vertically integrating with none of the legal conditions or risk. And that helps them drive pretty serious ethical issues without ever taking direct action. Everything from monopoly creation to violation of labor laws to environmental devastation (mostly overseas) stems from Walmart's pricing demands. They may not ask for anything unethical, but asking for a 5% price cut every year means something has to give. With such enormous legislative influence, they can bend laws and trade agreements to favor their model. With the freedom to change suppliers and limited legal accountability for their suppliers' actions, they can work with whoever's willing to behave worst, and give them a market that cripples everyone better behaved. So you don't have to sell for Walmart, but in a lot of industries you can expect to suffer for those scruples.

jjeaff 9y ago

It's not like you are required to sell to Walmart. You can always refuse. Plenty of successful companies don't sell anything to Walmart.

Bartweiss 9y ago
The FastCompany article linked in the comments is interesting on that, though. (https://www.fastcompany.com/47593/wal-mart-you-dont-know https://www.fastcompany.com/47593/wal-mart-you-dont-know) In 2002, Walmart did more business than its next 6 grocery and general-good competitors combined. Something like that is presumably still true if you restrict to brick-and-mortar spending. If you sell something mass-market (e.g. pickles), a huge portion of all shopping happens at Walmart - you can get beaten by a competitor just for not playing ball with one retailer. Similarly, struggling companies can be saved by Walmart (e.g. Levis), but only if they concede to whatever Walmart demands. I'm not going to take the anti-capitalist tack, here. When Walmart tells Levis to fix their supply chain and introduce products at a lower price point, that's how markets should work. They demanded reform, and that's what saved Levis - they might not even have needed to sell at Walmart if those changes had come sooner. But the larger pattern is troubling. Walmart has so much power over smaller suppliers that it's like informal ownership - they're vertically integrating with none of the legal conditions or risk. And that helps them drive pretty serious ethical issues without ever taking direct action. Everything from monopoly creation to violation of labor laws to environmental devastation (mostly overseas) stems from Walmart's pricing demands. They may not ask for anything unethical, but asking for a 5% price cut every year means something has to give. With such enormous legislative influence, they can bend laws and trade agreements to favor their model. With the freedom to change suppliers and limited legal accountability for their suppliers' actions, they can work with whoever's willing to behave worst, and give them a market that cripples everyone better behaved. So you don't have to sell for Walmart, but in a lot of industries you can expect to suffer for those scruples.