• Wal Mart is able to buy in bulk which dramatically lowers prices, but also they way products are packaaged and displayed also can have an effect on the price... If you just place the items on the shopfloor still in the main containers this is cheaper than the paying for the time it takes to take each individual item and correctly rotate, orietate and display... Also where the products are purchased may make a difference. The same product purchased from overseas may actually be cheaper than one produced in the same country.. And to be cynical... The prices at Wal Mart are not low as such... If you think about it.. They are as high as they can put them (and still get them to sell)
  • Wal-Mart is a pioneer of supply chain management, which is explained below (from the above site). Supply chain management is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to customers. Let's look at consumer packaged goods as an example of collaboration. If there are two companies that have made supply chain a household word, they are Wal-Mart and Procter & Gamble. Before these two companies started collaborating back in the '80s, retailers shared very little information with manufacturers. But then the two giants built a software system that hooked P&G up to Wal-Mart's distribution centers. When P&G's products run low at the distribution centers, the system sends an automatic alert to P&G to ship more products. In some cases, the system goes all the way to the individual Wal-Mart store. It lets P&G monitor the shelves through real-time satellite link-ups that send messages to the factory whenever a P&G item swoops past a scanner at the register. With this kind of minute-to-minute information, P&G knows when to make, ship and display more products at the Wal-Mart stores. No need to keep products piled up in warehouses awaiting Wal-Mart's call. Invoicing and payments happen automatically too. The system saves P&G so much in time, reduced inventory and lower order-processing costs that it can afford to give Wal-Mart "low, everyday prices" without putting itself out of business.
  • They get manufactures/whole sellers to sell them their products at much cheaper prices, by promising to move a high volume of products. Plus, from countries were minimum wage is extremely low or salve labor is producing those products.
  • All of that is on top of destroying county zoning laws, in place to maintain competition and small businesses, and hiring employees at below minimum wage, terrible hours and almost non-existent benefits.
  • Wal-Mart keeps it's costs as low as possible. This also includes employees pay and benefit packages. Some communities are having second thoughts if having Wa-Mart and it's uninsured workers is good or not. People with no insurance are more apt to use the county's hospitals emergency services.
  • Besides supply chain management and buying in bulk, Wal-mart keeps their prices low because they choose to. The business strategy behind Wal-mart is geared toward the long-term as opposed to the short-term. Rather than charge customers high prices and having them go somewhere else, Wal-mart chooses to charge as little as possible and therefore stave off competition. Wal-mart only has a 3.5% profit margin. That means for every dollar they sell, they only make 3.5 cents. But the key is selling a massive amount of goods.
  • Walmart employees are the single largest medicaid users in the US. You and I are subsidizing Walmarts "low" prices by supplying medical care to their employees while 5 of the richest BILLIONAIRES are Walmart heirs.
  • Some poor people in China will work in sweatshops for next-to-nothing pay.
  • buy in bulk - simple
  • bulk-buying, the ripping off of suppliers, the low pay of staff, and the sale of sub-standard produce. Simple really. Real question, is why do we tolerate it?
  • Keep overhead low: Deal with manufacturers that hire child labor/sweat shops, poor pay to staff.
  • By coming into town, putting the local businesses out, hiring the working class of the town, paying them nothing, and giving them incentives to shop and therefore spend their paychecks at Wal-Mart. And by selling you a whole bunch of crap you don't need because you went in there for MILK, which is in the back of the store.
  • Quantity not quality and getting rid of all the competition because no one else has the buying power they do or can make in on such low markups.
  • Several very sinister tactics. One of which is they use their purchasing power from their vendors to force them to make cheaper products. For instance, the Black & Decker drill you buy at Wal-Mart is not the same quality as the one you buy at a tool distributor. Wal-Mart tells a company like Black & Decker they must make a cheaper, lower quality product for them or Black & Decker merchandise will not be on the Wal-Mart shelves. It is blatant coercion. The effect is that B&D loses their fine reputation as their tools which were formerly known as very high quality now develop a reputation as poor quality, they have to move manufacturing to foriegn countries and use cheaper materials which costs U.S. jobs. The other option is to lose market share and profitability and eventually go out of business. It's really a nasty thing.
  • One word, Exploitation.
  • As explained is a simplified version. Wal-mart buys so much product that they can demand and get a discount which they partially pass on to customers in lower prices. It is called an economy of scale...the more you buy the cheaper the unit price through price breaks. When you pass these savings on to buyers you can offer a lower price then those who do not buy enough to get the discount (smaller stores) As a result you can out-buy and out-sell the competition.
  • ripping off their suppliers, and forcing them to sell well below manufacturing cost in place of volume(not a good tactic), F-ing their employees over in terms of pay, hours, and overall treatment.
  • Looks like you got all the right answers.
  • Also,.... 1) Walmart also allows some of their suppliers to use Walmart's inventory space as a space for their own products. Therefore, Walmart is receiving 'rent' payments from their own suppliers. But the suppliers also choose to do this, because that means their prodcuts will get on the shelves quicker. So, in a way, a win-win situation. 2) Walmart also charges more for suppliers that wish to have their prodcuts on a certain shelf level. Because, psycologicaly, customers are more attracted to prodcuts that are at eye-level, not so high or low on the shelves where they can't really see and grab it easily. So, eye-level shelving is more expensive. 3) Walmart sets their own 'rules'. When a supplier wants their prodcut sold at Walmart, and Walmart finds that the selling price is too high, Walmart pretty much says, "You either bring down your prices so I can purchase them, or I don't sell your prodcuts!" And what business wouldn't want their prodcuts sold at the largest, most well known, and powerful company?! Yes, the supplier might be loosing some money to Walmart, but in the long run they gain profit, because their prodcut will pretty much be getting free advertising from Walmart (just by having it on the shelves).. and that definately goes a long way! So, it's not all about the child labour and stuff like that. Walmart is just a powerhouse and has some great business techniques!

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