"As I look at the three years Snapper has been with you," he told the vice president, "every year the price has come down. Every year the content of the product has gone up. We're at a position where, first, it's still priced where it doesn't meet the needs of your clientele. For Wal-Mart, it's still too high-priced. I think you'd agree with that.
"Now, at the price I'm selling to you today, I'm not making any money on it. And if we do what you want next year, I'll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80% of our business is over here with them. And I can't put them at a competitive disadvantage. If I do that, I lose everything. So this just isn't a compatible fit."
The Wal-Mart vice president responded with strategy and argument. Snapper is the sort of high-quality nameplate, like Levi Strauss, that Wal-Mart hopes can ultimately make it more Target-like. He suggested that Snapper find a lower-cost contract manufacturer. He suggested producing a separate, lesser-quality line with the Snapper nameplate just for Wal-Mart. Just like Levi did.
http://www.fastcompany.com/magazine/102/open_snapper.html
What's sad about this thread, regardless of the position you take, is one could have bought anything online, from an American owned company, manufactured in the U.S, using U.S. citizens, paying U.S. taxes ---- in less time than it took to post a comment.
This cannot stand. How can we prevent Wal-Mart from pursuing beneficial terms from its vendors?
I've read that article before, here on FR, the CEO of a lawnmower company thinks he'll do better selling his own product because of it's brand identification, and while he wanted to stay with Walmart he wanted a higher profit margin than he could get through them.
I have a similar strategy in my company.
"What's sad about this thread, regardless of the position you take, is one could have bought anything online, from an American owned company, manufactured in the U.S, using U.S. citizens, paying U.S. taxes---- in less time than it took to post a comment."
That didn't make much sense.