OT Walmart and you

It has always been my impression that each Walmart store carries what sells in each region. You don't see swamp coolers for sale here in the
Pacific Northwest (although Home Depot did try and sell them!) Each store and its management troll for considerable time over sales data trying to get to the customer what they want the most. If better quality items of a certain kind sell better than the cheap stuff in one area, they get the clue real fast. No two Wal-Mart's stock is the same; it varies heavily by the location. Walmart is one of the ultimate marketeers in that they provide the market what they want. I want to buy milk at a good price and Walmart does it. I need a pair of jeans, and the selection is always good. They sell what everyone else sells, but in larger selection and quantity. Just as many of you go to Harbor Freight for an item that you deem good enough for your needs, so many of us go to Walmart to provide the same thing. I've noticed on occasion that the cheapest item might be American made. Competition is good because in the end you the customer win. Walmart has had a noticeable effect on inflation in that it has slowed the growth of it. Many of you own Toyotas because you can get a good car at a good price, and the market obviously determines the quality level. If price was the only issue, we'd all have Yugo's and Geo Metro's rusting in the streets, abandoned. Walmart is no different. If Walmart operated according to how some of you think they should, we'd still be buying domestically made cars from manufacturers who would be happy to sell us what they think would be good enough, and that's an old market model that the Japanese proved highly wrong. Walmart, when hurricane Katrina hit, was one of the first stores to open, despite some being heavily clobbered and still not cleaned up. As the hurricane was slamming the area they were already trucking generators and emergency supplies to the area, staging them in safe areas waiting to send it in. Walmart gave more money than any other organization, if I remember correctly, and they did it without a second thought. In the immediate aftermath, you could just show up and without any cash get what you needed, be it a generator or a bottle of soap. Find another American company that did anything like it at all. They didn't do it because they were trying to make loyal customers any more than Tylenol pulled all their products to avoid the lawyers. They did it because it was the right thing to do. That massive act of generosity and getting the customer what they needed is an incredible thing for me, and has the secondary effect of creating awesome brand loyalty. Ironically, they are the largest single donor to education, yet the teacher's unions despise the company. Go figure.
I'm not a die hard fan of Walmart, but I go there when I know they have what I need. I have a large family, so my grocery budget has to go far, and there is where I can do it. I know the quality level of what they sell, and usually its good enough for my needs. It works the same for millions of other Americans as well, so I know I'm not alone in that sentiment. You don't get to be on the top by doing it wrong, but they also know that those at the top will get a whole lot of flack from those who don't like seeing capitalism so successful.
I'm off my soap box now.
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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:

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snip-----

Well done, Carl.
Harold
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On Sat, 21 Jan 2006 10:46:42 -0800, with neither quill nor qualm,

I'll heartily second that, Harold. Kudos, Carl.
--
A lot of folks can't understand how we came
to have an oil shortage here in America.
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. You

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.
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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
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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:

...
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And they expect the supplier to have the inventory IN STOCK. So the supplier has to carry the cost and risk of the inventory.
Tim Killian wrote:

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| > 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.
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On Sun, 22 Jan 2006 22:51:48 GMT, "carl mciver"
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.
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wrote: | | 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. | | 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!
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wrote:

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.)
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On Sun, 22 Jan 2006 20:57:10 -0600, RAM^3 wrote:

The Walmart Distro center in Porterville California is about that size..and it only supports Californias rural central valley
Gunner
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RAM^3 wrote:

The distribution building south of Albuquerque is also MONSTROUS. Even from I25 it looks to be close to a quarter mile square. Thats a lot of room if all they do is swap stuff between trucks. :-) ...lew...
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Tim Killian wrote:

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.
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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
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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
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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

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Tony wrote:

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.
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its
will."
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
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