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| reply to Skippy25
Re: It's the revenue Can't believe I'm saying this, but NWOhio is right. Walmart does dictate the price, and you know what this causes? Outsourcing! Cutting corners! Lower quality!
In order to make money at the prices Walmart forces you to charge, you have to make huge cuts to push the cost to manufacture (+overhead) below the sale price. In manufacturing, you can cut labor or material costs. Lower material costs are obtained by getting lower quality materials. Lower labor costs are obtained by outsourcing.
Believe it or not, but Walmart is one of the biggest causes of outsourcing in the manufacturing sector. In order to survive, you have to outsource to make a profit on the Walmart dictated price.
Don't outsource, and one of your competitors will, undercutting your price, allowing the competitor to offer better prices to the retailers (more profit for them), and eventually you will have nowhere to sell your goods.
There's a reason the Walton family is one of the richest in the world. |
