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I was thinking about this as well, I think it has to do with Wal-Marts supply chain, distribution centers, and relationships with it's suppliers. I don't know

I was thinking about this as well, I think it has to do with Wal-Marts supply chain, distribution centers, and relationships with it's suppliers. I don't know the answer, but does Wal-Mart have more pull then Amazon? Also, regarding the article, Jet from my memory gave Wal-Mart the infrastructure for online sales, so it's not like they didn't get anything for it. If anything, they are likely playing accounting games and writing off the acquisition, thereby improving their return on investment metrics into the future. When you acquire a company, there is sometimes a penalty to ROI if you pay too much, shows up in the form of intangible assets. When you write off an asset, you are basically removing it from your balance sheet.

tsco77 6y ago
All their stores are local warehouses, no?
- ryansmccoy 6y ago
  I don't know, here are screen shots (I think) of both Amazon and Wal-Mart Distribution Centers: https://www.evernote.com/l/AUmo-KavWKxI35PFfZRw5wIlQOEf7aFO_Dc/ https://www.evernote.com/l/AUmo-KavWKxI35PFfZRw5wIlQOEf7aFO_...
  - tsco77 6y ago
    Yeah, comparable infrastructure for deliveries, but my point isn't about distribution centers though. If stores are closed all their stock can just be delivered with UberDash(tm) delivery drivers because they are everywhere: https://s.yimg.com/uu/api/res/1.2/mu18i_4q9FQSqMWuBtGuXw--~B/aD0xMDgwO3c9MTA4MDtzbT0xO2FwcGlkPXl0YWNoeW9u/http://media.zenfs.com/en/homerun/feed_manager_auto_publish_494/aba5daf0d589cd9cff6ad603d6f9893f https://s.yimg.com/uu/api/res/1.2/mu18i_4q9FQSqMWuBtGuXw--~B...
    - huffmsa 6y ago
      Correct. Walmart has one more layer of last mile vs Amazon.
ethagknight 6y ago
I’m removed from it, but I’m told Walmart has massive loyalty with suppliers and product aggregators (not sure on the proper term). There are small-shop businesses with a contract responsible for supplying all of one product to Walmart, and that person is the sole supplier to Walmart, and the contract gets re-bid every few years. For example, there’s a “small business” who has a contract to supply all beef jerky to all Walmart’s in the USA. It’s one of Walmart’s keys to pushing prices down, using these middlemen to negotiate pricing on the hundreds of thousands of SKUs, in a game where shaving a few cents off a jar of pickles is the difference in winning or losing a $100mm pickle supply contract. As compared to Amazon, Walmart still has a quality threshold (it demands pickles that the market expects), Amazon doesn’t. The contractor will lose his contract if his suppliers slip on quality or fail to meet delivery requirements.
- ryansmccoy 6y ago
  Distributors?
  - ethagknight 6y ago
    Seems like the opposite of a distributor (hence the term aggregator), taking products from a few suppliers and dumping into the Walmart machine. I don't think they are involved with getting the product delivered or logistics, purely about contracts, relationships and market knowledge. I think they do carry some risk on demand forecasting.

tsco77 6y ago

All their stores are local warehouses, no?

ryansmccoy 6y ago
I don't know, here are screen shots (I think) of both Amazon and Wal-Mart Distribution Centers: https://www.evernote.com/l/AUmo-KavWKxI35PFfZRw5wIlQOEf7aFO_Dc/ https://www.evernote.com/l/AUmo-KavWKxI35PFfZRw5wIlQOEf7aFO_...
- tsco77 6y ago
  Yeah, comparable infrastructure for deliveries, but my point isn't about distribution centers though. If stores are closed all their stock can just be delivered with UberDash(tm) delivery drivers because they are everywhere: https://s.yimg.com/uu/api/res/1.2/mu18i_4q9FQSqMWuBtGuXw--~B/aD0xMDgwO3c9MTA4MDtzbT0xO2FwcGlkPXl0YWNoeW9u/http://media.zenfs.com/en/homerun/feed_manager_auto_publish_494/aba5daf0d589cd9cff6ad603d6f9893f https://s.yimg.com/uu/api/res/1.2/mu18i_4q9FQSqMWuBtGuXw--~B...
  - huffmsa 6y ago
    Correct. Walmart has one more layer of last mile vs Amazon.

ethagknight 6y ago

I’m removed from it, but I’m told Walmart has massive loyalty with suppliers and product aggregators (not sure on the proper term). There are small-shop businesses with a contract responsible for supplying all of one product to Walmart, and that person is the sole supplier to Walmart, and the contract gets re-bid every few years. For example, there’s a “small business” who has a contract to supply all beef jerky to all Walmart’s in the USA. It’s one of Walmart’s keys to pushing prices down, using these middlemen to negotiate pricing on the hundreds of thousands of SKUs, in a game where shaving a few cents off a jar of pickles is the difference in winning or losing a $100mm pickle supply contract. As compared to Amazon, Walmart still has a quality threshold (it demands pickles that the market expects), Amazon doesn’t. The contractor will lose his contract if his suppliers slip on quality or fail to meet delivery requirements.

ryansmccoy 6y ago
Distributors?
- ethagknight 6y ago
  Seems like the opposite of a distributor (hence the term aggregator), taking products from a few suppliers and dumping into the Walmart machine. I don't think they are involved with getting the product delivered or logistics, purely about contracts, relationships and market knowledge. I think they do carry some risk on demand forecasting.