I was on an assignment at a large consumer products manufacturer (aka: Puke & Gag, Procter & God) in Cincinnati where the project was to redesign their order, shipping, and billing system. At the time this was about a $25 billion company. One day some folks from "Fayette-nam" as they liked to refer to it came calling. Actually the Fayette-nammers requested that the reps from this company come and visit them. Upon arrival they were greeted with a laundry list of changes that they were to be required to make to their ordering and pricing policies, their shipping terms including pallet/container sizes, what rail systems could be used and a whole host of other changes. Well...needless to say these demands were met with well yeah...that's fine we'll get back to you. Under their breath these reps were laughing saying HA HA HA...riiiiight. Like some piss-ants from Fayette-Nam are going to push us around like that. Baaaaaaaaah!!!
Fast forward...they get home and think well maybe we should see just how much business we do with these Fayette-Nammers. A few cobol programs later and viola!!! It becomes apparent that Wal-Mart is actually responsible for 20% of this $25 billion company's sales
Needless to say a flotilla of people from this company were dispatched to placate and accomodate the requests of Wal-Mart. In fact...it didn't take long before a customer service center was opened in Fayette-Nam to deal JUST WITH WAL-MART!
20% of $25 billion you see is a lot of soap, diapers, and Folgers coffee crystals.
Wal-Mart uses market forces to exact a pound of flesh in order to keep prices low. You pay them. I pay them. I will continue to pay them. Their prices are lower. Until someone else comes along who can compete by matching or beating their prices Wal-Mart is here to stay. Unfortunately U.S. manufacturers who cannot compete with low cost labor pools abroad will continue to disappear as Wal-Mart and other retailers buy products from these markets to sell to you at the lowest possible price. It's a market force. You can try and regulate it through trade sanctions and import tarrifs but this will lead to other countries doing exactly the same thing to us.
It's ironic that the trade agreements struck with the likes of China during the Clinton Administration (that I for one thought would benefit U.S. manufacturers) has had a mostly detrimental effect by simply opening markets to lower cost labor pools. It will balance out over time but make no mistake boys and girls...the U.S. economy is changing and in order to compete/survive you need to be educated, and be willing to adapt to doing more with less. Innovate, invest, and learn to do things better, faster, and cheaper or get run over.
Wal-Mart....I will continue to shop there and I suspect you will too. Unless for some odd reason you enjoy paying higher prices. If that's the case you probably also voted for higher taxes but that's a story for another thread!