It's the dream of many manufacturers to get their products onto the shelves of a major retailer. And there's no retailer bigger than the Bentonville, Ark., behemoth: Wal-Mart.
What does it really take to service Wal-Mart as an account? A fascinating report from RetailingToday.com's Wal-Mart-focused package "Connecting Northwest Arkansas," which surveyed Wal-Mart suppliers, provides a rare look inside the companies who've won a spot in the retailer's wide aisles.
First thing to know: New suppliers are few. Just 4.2 percent reported they have been with Wal-Mart less than two years. Nearly half had been Wal-Mart suppliers for 12 years or more.
Another interesting tidbit: Most suppliers have dedicated employees on the ground in Arkansas, serving Wal-Mart up-close and personal. Nearly half have fewer than five people stationed there, but 10 percent have more than 50 people on the payroll in the region. More than one-third expect to allocate more resources for servicing Wal-Mart next year.
Still, Wal-Mart has struggled to retain market share since the downturn. Where are the big-box retailer's biggest competitive threats? The suppliers' top answer is dollar stores, followed by Target and Amazon.com.
Suppliers are happy about one trend at Wal-Mart -- after earning customer ire for stripping down its inventory, the retailer added 10,000 items back in the past year. So that's more opportunity for suppliers. But the retailer got only mediocre grades when suppliers were asked if the new-item introduction process at Wal-Mart is easily understood and efficient.
Suppliers said merchandise decision-makers were accessible and interested in their ideas. If you want to pitch Wal-Mart, don't expect a quick decision, though. The retailer got the lowest marks of the survey on a question about speed of execution.
Back when I used to cover the National Hardware Show, I got to know a lot of suppliers to big-box stores. I learned that supplying a huge account is risky business. The big retailers demand low-low prices from vendors -- and each year, they want a lower one.
You have to ramp up production to meet their needs, and drop other clients to focus on serving them. Then, if the big retailer discontinues your products, it can bankrupt a small business -- or even a medium-sized one. My take: Proceed with caution.
Would you like to be a Wal-Mart supplier? Leave a comment and let us know why -- or why not.
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Comments:
I make items by my own hand. Having 100 of them (or so) on hand is not possible. Though I would sell more by being on a Walmart shelf it would frighten me that my idea would be copied. Where each of mine is an original and "one of a kind", a big company could easily change that. What a small business needs is an order for a set amount, deliver and be paid and be ready to do it again if sales are acceptable. This doesn't seem to be Walmarts program. I am interested in Walmart comments on this. My local Walmart is in Omak, Washington, Your manager is Richard Blakemore. It is a fine store and successful. My E-mail address is carolprice31@hotmail.com. Thankyou.
You are a dumba55. Every major retailer carries crap from China; Meijer, Target, Sears, K-Mart, all of them.
No so. I know of many companies who supply WalMart with goods produced in the USA. And they are making money.
What a - article! Not even close to the truth! You can become a Wal Mart supplier if your manufacturing facility is in China where you pay unskilled laborers, mostly children, .50 per day! You don't have to look any further for the blame than the United States of Corporations which is posing as our government. Why do you think Germany kicked Wal Mart out of their Country?
I am a small business owner and completely agree with the author of this and many of his other articles. Most that have been suppliers to the Wal-Marts and Targets, Pottery Barn, etc. out there have had very dissappointing results. I'd say that most individuals that get into a small business with the big business mode of thought behind it are doomed from the start unless they've figured out a certain attractive niche that a customer can only achieve through them, the small business owner. Being original and protecting your ideas are first and foremost. Belive me, the big guys want your well thought out, original inventions and creations and will go to any length to get them, legally or illegally. An example years ago of a woman that made Christams Beads for a living found out that Target got some of her beads and started reproducing them. A lawsuit ensued and of course Target denied unauthorized reproduction of her work. The beads were made by her own hands so it turned out that her own thumb prints were on some of the beads that Target was selling. She then won handily an undisclosed settlement. Most lawsuits unfortunately do not end up favorably for the small business owner against a mega monster box store. I would never supply them or deal with them. They are as corrupt as large government. When they've worn you out and possibly put you out of business, then there is always someone else to sucker. It never ends and they have no feelings for you. You are just one of many expendables waiting in line foolishly.
I found this article relevant and resourceful. I am an entrepreneur with a new cosmetic line geared to budget conscious individuals who want to look and feel great, creative, and trendy. My line's logo is simple but elegant on a budget with vibrant colors. For more information, please contact me at verna.daniels1@gmail.com. I would very much welcome the idea of being apart of the walmart suppliers.
LOL, my last employer was a Wal-Mart and Sam's Club supplier. We actually had to wear Sam's Club T-Shirts and spend an hour waiting in the warehouse to perform a cheer for the Sam's purchasing team one year while they were touring the facility. The annual visit was a really big deal and the sales team would go all out to keep the account. Daisy
I would like to be a wal-mart supplier because I know that It would boost my sales as a small business owner. It would also give me the opportunity to expand and employ more people in the Gulf Coast region. I would also take the advice of other suppliers by having some employees in Arkansas as my local go- to people. I am planning to become a supplier in the future and look forward to my success as earning a spot as a Wal-Mart supplier. Ms McHenry- Dreams Are Real LLC- Pensacola, Fl www.wrapsetion.com www.dreamsarreal.biz www.getmydollar.com