Wednesday, April 27, 2005
Walmart: Sharp Pencils
Beating up on Wal-Mart is very old hat, but I found this article to be fascinating in its portrayal of Walmart's ruthlessness with its suppliers. Worth a read to anyone in business, or anyone interested in the climate that Wal-Mart produces. I liked this little excerpt (highlighting the renegotiating skills of the folks at WM):
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Carey has a friend in the umbrella business who learned that. One year, because of costs, he went to Wal-Mart and asked for a 5% price increase. "Wal-Mart said, 'We were expecting a 5% decrease. We're off by 10%. Go back and sharpen your pencil.' " The umbrella man scrimped and came back with a 2% increase. "They said, 'We'll go with a Chinese manufacturer'--and he was out entirely."
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