2. You make 2 cents a piece selling 5 million widgets to Wal Mart.
If I have to make substantial investments that increase overhead to supply Walmart, and that makes me dependant on Walmart's business to survive, then it may not be such a good deal. In a sense, Walmart now owns my business and is in a position to dictate terms to me.
Most independent Wal Mart suppliers could retire wealthy within a year provided they can produce enough product. The nickel and dime businesses who can't see the forest for the trees will stay tiny counting their pennies in overhead.