OT Walmart and you

In a recent radio talk show, in the midst of the anti-Walmart crank calls, one brave soul said that if he wanted to buy North American goods, he'd go to Walmart.

The Canadian Hudson's Bay Company chain, apparently, don't carry anything from this continent, according to that caller.

It just goes back to the entitlement mentality under which floor sweepers with a shitty attitude should be paid twice as much as the ones with a little bit of work-ethic.

I can feel that Nomex underwear ocming...

carl mciver wrote:

snip-----

Well done, Carl.

Harold

On Sat, 21 Jan 2006 10:46:42 -0800, with neither quill nor qualm, "Harold and Susan Vordos" quickly quoth:

I'll heartily second that, Harold. Kudos, Carl.

Walmart is one of the most unethical retailers in the US. Costco, on the other hand, does not force employees to work overtime for free, etc., etc., yet offers better quality at lower prices and is a profitable firm. Costco also provides decent benefits which reduces taxpayer funded health care costs.

That doesn't diminish the value of their contribution to the cause. I can't help but think that the folks that benefited from their actions are quite grateful.

Harold

WM spends $25bn a year on a computer system that tracks inventory and sales trends in real time -- that is why they are so successful. They save big money on the fact that a large chunk of their inventory never sees a warehouse, it's in a trailer en route from the port to a store. Something like 70% of their stuff is sold to a customer before they pay the bill to their supplier!

There is no way a small retailer can compete with that kind of efficiency, and that is why most eventually fail when WM comes to town.

carl mciver wrote:

Carl,

You made some good points. I want to first say that it may pay off if you could check out of there are good Polish stores in your area. I am not a Pole, but I am fortunate to live in Chicagoland where there are many Poles and many good stores that sell mostly to ethnic Poles. The food there is real and cannot compare to Walmart's. This is especially true regarding meat products.

Second, the maxim that businesses have to cater to needs of consumers, is ony true to some extent most of the time. The more accurate statement would be that CEOs try to maximize their salary by catering to buyers' perceptions of the moment. If a buyer's perception is that a crappy $15 set of booster cables is a better deal than a well working $69 set, Walmart will sell that. The end result is the customer realizing, later, that $15 set of cables is worse than useless.

The result is that there will be different market segments, one is people who buy crap not realizing its pitfalls (and possibly not having enough money). These people would buy tools at Walmart.

The other segment would be people who got burned by this enough times, who do not want to buy substandard products. I decided to stay mostly in this group.

The issue I have with Walmart, as a consumer (not concerning "lost jobs" etc) is that basically Walmart creates expectations that do not match reality. Like the expectation that the booster cables, or the garage heater that I bought, or a car charger, etc etc, would actually work well. Which is not the case.

i

Competition is good, but there's more to it in Walmarts case. I think its wrong when WalMart tells Rubbermaid "Either move production to China and lower the "price point" of your product, or we will find someone who will." And when 40% of Rubbermaid sales are to WM, they are beholden to WM.

Now does Walmart want lower prices to benefit consumers? No, they want to fatten their margin, and give the customer a token cheaper price.

Tony

In the local Walmart. there were cash collection jars for "Victims of Katrina".

You don't suppose that Walmart could have used the $ for 'giving generators, shampoo, etc.' for the needy and taking the credit for doing so - with your money - do you? What a wonderful company!

I did not contribute because I'm offended that Walmart benefits with their customers generosity without acknowledgement of where the money is coming from.

Walmart is not the only corporation that uses its' customers in this manner.

I have a friend who says "If I can't find it at Walmart, then I don't need it." My response to him is usually "If you bought it at Walmart, you'll likely be needing to buy it quite a few times because it probably won't last very long."

Shawn

"*" wrote in message news:01c61f87$89fad140$d2a2c3d8@race... | RoyJ wrote in article | ... | > And they expect the supplier to have the inventory IN STOCK. So the | > supplier has to carry the cost and risk of the inventory. | >

| | This is trickling into other industries...... | | Auto Zone has propsed a POS (Pay On Scan) scheme where the manufacturer | owns the stock on the A.Z. shelf until it is scanned through the register. | | No A.Z. money tied up in inventory whatsoever.........

Grocery stores have been doing this for a really long time. You can also call it consignment. As long as I can recall, beverage companies have been doing the delivery and stocking of the shelves for just about any kind of event/enterprise that sells their products. There's all kinds of arcane rules that define "inventory" when it comes to taxes, so any way companies can avoid these arcane tax rules I'm all for, since in the end you wind up paying for it anyway. Some areas/states tax inventory a whole lot more heavily than others, so if a business in one state has inventory in another, he doesn't have to pay taxes on it, similarly, if the business with that inventory in its store isn't the owner, they don't pay taxes on it either. These taxes are another reason JIT (Just In Time) logistics have come about, in addition to reducing the real estate required to let it gather dust. A well implemented JIT scheme is well aware of the push/pull arrangements necessary to keep production at the pace it needs to be to maintain no more and no less inventory in the pipe than necessary. This reduced overhead contributes greatly to you paying less for products because the built overhead expenses tend to be considerably less. On the other hand, when I head down to the Ford dealer for a part for my vehicle, I expect them to have everything I could possibly need on hand or easily available, so this highly inefficient necessity is the main reason dealer items are so expensive, and I quit whining about it when I realized the main reason why. Wal-Mart is heavily involved in the JIT process, and expects their suppliers to work the same way. In fact, few sane businessmen will attempt to do otherwise in the face of stiff competition. Wal-Mart works closely with its suppliers to both push and pull them into efficient logistics, which is one of the reasons you would be hard pressed to find a Wal-Mart warehouse anywhere, since all of their inventory is almost always in transit from the manufacturer to the stores. Except for near Christmas, when every Wal-Mart rents dozens of shipping containers for storage to keep up with the massive flow of goods flying out of the stores.

Wal-Mart

I won't comment on the good or bad of WalMart. But I can't let this incorrect statement stand unchallenged.

The latest info I could find was 2001. There were 78 WM distribution centers in operation. The only states not within a 200 mile radius were Montana, North Dakota and South Dakota.

I'll take your word for it. In all my travels, I think I've only seen one, and I don't think it was that big. I would imagine that the stock contained inside is in constant movement and most stuff stays only long enough to transfer from one truck to another. I would bet they'd give UPS a run for their money in that kind of operations, for sure!

LOL

The ones I've seen [Dallas, Kansas City?, elsewhere] have all been HUGE!

At least 2 stories high, at least 3 blocks long and a block wide - city blocks, that is.

The roll-up doors - big enough for 3 semis side by side - look like window openings in the average warehouse.

I wouldn't be surprised if they just used the same floorplans that Boeing developed for B-52 modifications at Wichita. (They look to be the same size.)

All distributors operate on that principle. If it weren't for having to maintain their retail stock, Wal-Mart would be over 100%

No retailer in any business can do that, unless he can turn his inventory 10-12 times per year. That's pretty good numbers for most businesses. In the retail parts bidness, 4 turns is the Holy Grail. Most get about 2.5, if they are good. That means they "own" their inventory, which is a very inefficient use of money.

I doubt that's how it played out. It was probably more like:

WM buyer: We have an offshore company bidding on your segment. They are

25% lower on the same quality, Asia-sourced. Would you like to revise your current bid? RQ: We have our costs cut pretty fine already. We could not match that with U.S. production. WM: We have a good relationship and would like to continue that, but my boss is going to ask some tough questions if I don't give this bid serious consideration. RQ: Let me talk to our BOD and get back to you in a week.

--------- RQ: OK, the BOD has voted to acquire manufacturing facilities in Asia. We will have a new bid to you as soon as we finalize the numbers. WM: Of course, we prefer to source U.S.-made, but offshore is acceptable if the quality is maintained.

I can't help but think that we're now paying the price for the fat cat wages we've come to expect, wages that are, for the most part, unrealistic in the scheme of things.

Seems to me that most folks have lost sight of the fact that we live in a world economy------an economy that is struggling to achieve equilibrium. It makes no sense that some poor fool in China works for a nickel/hour, no more than it makes sense for an unskilled laborer to "earn" $15.00/hr in the US. Never mind the bleeding heart response that everyone deserves a living wage. Why is that? I don't recall any guarantees in life, aside from death and taxes. Seems to me we should be encouraged to achieve a level of education such that we can *earn* a living wage. Gee---what an original thought!

As much as Ed seems to think that my thinking is skewed when I say it, we've had too much too long in the US, but the day of the free lunch is over. The harsh reality is that any job that is paying unreasonable wages is going to be gone for ever, assuming it can be shipped over seas. When all of those jobs are gone, the balance of the people that are still being paid more than their worth will find they have no one to serve----because those that remain won't have the income to pay unreasonable fees for their services.

Just like cheap oil, over-priced wages will soon be nothing more than a fond memory. As it should be.

Harold

While what you say is mostly true, in the long run a country cannot import much more than it exports (otherwise it would amount to free financial support by foreigners). In a capitalist economy, that means adjustment of currency exchange rates to balance imports and exports. The rebalancing could also involve lower purchasing power of consumers due to lower wages.

In the past, there were many economic changes that make skillsets obsolete, with economic dislocations of varying severity. They all became sorted out eventually, to our benefit, although perhaps too late for some people who were actually dislocated.

i