Why Wal-Mart is the Devil
It was posted in another tread and I decided to bring it to a thread of it's own.
As a small business owner I think I can say a bit about the way Wal-Mart does business. Basically it comes down this, Wal-Mart sells a certain product for $15.99. I buy it from my supplier for $16.94. You can't compete with that. Luckily most of my business does not suffer from any big box store for two reasons. First the quality of the main products I sell vs the products Wal-Mart and other big box stores sell is much more superior. Anyone who is looking to use the right stuff comes to me and the ones who don't well, they will eventually since the Big Box products do more harm than good. The other reason is that I am diversified and do more than just retail sales.
Now why is Wal-Mart in particular bad? It is long term thinking. Slowly they are pushing Mom and Pop out of business, but not just Mom and Pop but other small stores that employ more than just 2 or 3 people. But business is business. However, once you start eliminating the competition and decreasing the amount of choices a consumer has then the products and prices start to change. Also, Wal-Mart may have the best price but do they know what they are selling? Have you ever been to Home Depot and asked about a Hot Tub? They don't know anything. Same thing goes with Wal-Mart and the Electronics department. Or to a lesser extent Best Buy and computers. I have seen salespeople make stuff up about a product to sell it. In the Mom and Pop shop there tends to be more ownership and trust available.
I understand paying the cheapest price up front but in long term thinking it is not the best avenue. Paying these prices you are sacfricing a lot more long term qualities.
I haven't even got into a lot more about them and how they treat their suppliers.
As a small business owner I think I can say a bit about the way Wal-Mart does business. Basically it comes down this, Wal-Mart sells a certain product for $15.99. I buy it from my supplier for $16.94. You can't compete with that. Luckily most of my business does not suffer from any big box store for two reasons. First the quality of the main products I sell vs the products Wal-Mart and other big box stores sell is much more superior. Anyone who is looking to use the right stuff comes to me and the ones who don't well, they will eventually since the Big Box products do more harm than good. The other reason is that I am diversified and do more than just retail sales.
Now why is Wal-Mart in particular bad? It is long term thinking. Slowly they are pushing Mom and Pop out of business, but not just Mom and Pop but other small stores that employ more than just 2 or 3 people. But business is business. However, once you start eliminating the competition and decreasing the amount of choices a consumer has then the products and prices start to change. Also, Wal-Mart may have the best price but do they know what they are selling? Have you ever been to Home Depot and asked about a Hot Tub? They don't know anything. Same thing goes with Wal-Mart and the Electronics department. Or to a lesser extent Best Buy and computers. I have seen salespeople make stuff up about a product to sell it. In the Mom and Pop shop there tends to be more ownership and trust available.
I understand paying the cheapest price up front but in long term thinking it is not the best avenue. Paying these prices you are sacfricing a lot more long term qualities.
I haven't even got into a lot more about them and how they treat their suppliers.
Comments
As long as we're talking apples and apples I'm happy Wal-mart offers cheaper prices (but the way they have achieved that is certainly under scrutiny and in question)I think as long as you offer something the big box stores do not or cannot deliver you may find success but if you try and compete I'm afraid the end result will not be good.
Unfortunately as a consumer I don't care if small business survives (friends aside), this may seem a rude comment but I think most consumers like myself want more bang for their buck. That said, for friends I know that have small businesses I will try to support them as much as I can but that is only because I have a personal friendship with them and want to see/help them succeed....but that's just me.
I'm a big fan of a community feeling, which is part of why I love this forum BTW, because everyone is known to each other. Perfect example... I have oodles of comic books, and haven't bought any since I moved back to Guelph. Why? Well, I mostly bought from "King Mob" Dave here, and wouldn't just walk in and buy, we'd shoot the breeze for 1/2 hour (or longer), and chat. That's really fun to me. I love the aspect of relationship building.
Wal-Mart... not so much
Mark
A: standing 12th in line at Walmart surrounded by other people's crying children with only one checkout open and the old lady arguing about how the sepository she is buying should be on sale.
or
B:Trying to explain to someone how they don't have a full house on a non paired board in Omaha. "You have 3 of a kind or 2 pairs.....not a full house"
Dude that is because you are the only one in Dave's store whereas at Walmart you look like an idiot fighting over comic books with 8 year olds. However if you are looking for a MILF maybe not so bad an idea. You can start off with, "Comic books for me? No, no. I am buying them for my nephew. Which one would you recommend?". Then you can follow up with buying her dinner at MickeyD's. One stop shopping at Walmart.
Person opinions about there operations aside, I would rather live, and consume, in a free market - then be controlled by the alternative.
I stopped shopping there after I quit in 2000. I was 24 years old, working 35hrs a week (full time) at a whopping $8.90/hour. The night shift received $1 Premium. The staff discounts was 10%. Cha-Ching!
Since I was one of the few men working the night shift, I got the luxury of stocking the furniture , sports and H&G Departments. (aka where the heavy lifting was.) Then at 5am, collect ALL the cardboard boxes from each department, and bail it until home time.
It was basically slavery, except we could by stocks if we wanted too. I didn't.
Nobody is ever going to get rich by shopping exclusively at Wal-Mart. Most items are only pennies cheaper then the competition. So you saved a buck on the items you were shopping for, but managed to spend more because you picked up something on impulse? That's why the food department is beside the check-outs. They want every cent that you are willing to spend that day.
They're the height of Capitalism. Sam Walton (the founder, may he burn in hell), wasn't satisfied until the company reached $1 Billion in sales per year. The next year, he set the bar at 1.5 Billion. C'mon!! His greed had no bounds.
Most of their non-brand merchandise is Medium grade quality at best. From clothes to appliances I wouldn't buy one item. I'd spend more by replacing it after a few years.
A smart shopper will do their research and hopefully support the smaller, local retailers.
I do just fine with Zehrs, Canadian Tire, Rona and Home Hardware.
Ok I can see that was a crappy job but in 2000 min. wage was $6.85 and you were making $9.90 so they are hardly treating you badly. Add a 10% discount at a store where you could almost buy everything you need and you are lowering your cost of living by over 10% because you are saving another 15% in tax, so 11.5%. You turn down buying stocks which were probably sold to you at a discount and at the very least, without the cost of brokerage fees. The price has been admittedly treading water since 2000, but still yields 1.5% annually and if you had been working for them since say, even 1998 when the price was $20, then at the current price of $48, you would have returned over 240% on your investment. Yet you criticize Sam for pushing to increase his sales, when if as a employee shareholder, that would have only served to benefit the employees.
Long term employees of Walmart have made far, far, far more through their shares. $1000 invested in 1990 when the share price was $5.95 would be worth $8067, not including reinvested dividends. Many savvy employees of Sam have retired well off thanks to employee share purchase plans. Impossible? At $9.90/hr * 35 *50 weeks = $17k, putting aside even 5% of your wages to reinvesting it back in your 'crappy' company would have resulted in purchasing $850 in stock per year. Or you could have said, night shift sucks, but I am putting that $1 per hour or $35 per week or $1750 per year into investments.
As BigE brought up in the lotto thread, many people don't realize how much better off they can be through setting aside a reasonable amount of money and prudently investing it.
Now to Tom: Becareful what you wish for, the free market uncontrolled is not a better option than a completely controlled market. Just look at the headlines... Bre-X, ENRON, Sir Conrad Black etc. Greed and greed alone becomes the moto. And you are never controlled unless you want to be.
Sorry, it was $7.90 hourly + $1 SP= $8.90.
Yes, min. wage was $6.85, but I'd just gotten married to a university student and was paying $950 for rent. Not exactly a comfortable life style.
I believe the stock was valued at $50ish at the time, and my take home pay was $500. It would take a long time to build up a descent portfolio with that income.
I'm sure the store GM could afford many stocks annually, but us peons, no way.
I totally forgot about Wal-Marts' anti-union policy. UNION is a 4 letter word in their stores. Actually, I'm sure that I could have told my boss to F-himself with no punishment, but say I'm looking to join UFCW or CUPE, and I'd be terminated for stealing or something.
Remember that store in Quebec last year? The associates managed to from a union and then the store closed suddenly because it was losing money. As if any Wal-Mart in North America would lose money.
When I moved to Guelph a few years ago, the city actually banded together to PREVENT a Walmart from opening. Not even sure if it is even there now, as I move from Guelph a few years ago. I"m hoping it finally got built though.
Walmart is as big as it is for one reason and one reason only. PEOPLE BELIEVE THEY ARE SAVING HUGE!! Yes, they get quantity discounts from suppliers, but they also have the tightest guidelines of ANY big box store. If a supplier is late, the penalty can be as much 60% of the invoice. And gets worse too. That's huge for penalty. Yes, they have cheap labour, but I won't begrudge them that either. Any business would prefer to pay $6.95/hr for labour over $25/hr or more. And in a way, it helps keep the price down for the consumer (yes, I know the store GM's make more, but believe me, it isn't THAT much a year compared to what they could be making as a manufacturing manager somewhere).
So what makes them so popular? I have never EVER seen an empty Walmart.
Simply put, they offer the WIDEST selection of products at the LOWEST perceived price and they target the low to middle income families. They appeal to a large sector of the community.
For all they are prone to have had done wrong or unethical, they have the BEST sense of doing business of any company in North America. And their market will never shrink. Since only 20% of the population control 80% of the wealth, the remaining 80% of the population must go somewhere affordable, and Walmart provides that.
It's business. And it's war. And Walmart wins hands down.
I'll never ever buy fishing gear at a Walmart, or a Canadian Tire for that matter, but only because I want to buy quality, and require the expertise that only a mom&pop shop can give. Mom & Pop shops have to change their business models to provide QUALITY and SERVICE to the more discriminating market. How many of you will buy a deck of cards from Walmart, or a chip set? Not many I imagine. You would prefer to go to someplace that specializes in what you're looking for to get the best deal, not via price, but for quality and service. THAT'S the ONLY way a mom&pop can ever hope to survive against the big box stores.
I will go to Walmart or CTC or Zellers for stuff like clothing or small appliances or music or games, or to buy gifts for someone (yea, I'm a cheap bastard, sue me), or whatever, and the reason for that is very simple...I don't care about quality or service, these items to me are mundane and I only want to concentrate on the price I'm paying. I'm not looking for advise or expertise, I'm looking to buy a pair of jeans for under $40!
The OP's tone is that all big business, not just Walmart, is evil. It is not. It's business, and they'll do whatever they have to to get a portion of our excess cash. Can the small guy win? Sure, but NOT against price or selection, but by providing what the big box stores won't...high quality products at reasonable prices with exceptional customer service and support. Those are the three targets small stores need to shoot for, and stop concentrating on price, because they will not win.
NOT when I can buy online and support nobody who works or lives in my community!!
Not does Wal-Mart employ the practice of predatory pricing, but they have a history of poor treatment of employees, suppliers, and other parties associated with the running of their stores.
I do give Wal-Mart credit for a few things. They have the best inventory tracking system in the world, they offer a wide variety of products which appeals to a large target market. They didn't become the company they are today by fluke, but what they are doing right now, while is not illegal, but could be argued if it is ethical.
Ethics in business? PLEASE! Business is only in business for one reason. Profit. So long as they provide a product the consumer desires at a price the consumers are willing to pay, then the rest is simply their cost, and like any business today, lowering their cost will make them more profitable. Therefore, penalizing suppliers, offering low wages, and the like are only good business practices, and no company should be flamed for being TOO GOOD at what they do.
Picked it up at Walmart last weekend
They came in and destroyed all the other local burger shops. Does anyone care today? Nope, the market adjusts, the bigger company becomes inefficient and new competitors do things better..
Why won't that happen to Wal-mart? Why is the sky falling?
I don't get this point, when you are defending Walmart. Isn't that a good business practice? I mean the supplier signed a contract. They failed to meet performance. What penalty should they pay? They fucked up but the damage to the image of Walmart and their customer satisfaction is huge. Isn't that the major gripe of any consumer - something being out of stock when you want it? If a consumer goes to purchase something and the store is out of stock, not only does that piss off the customer but the store may never recapture that sale. The consumer might change his mind, or worse yet, may go to a competitor to make the purchase and he may even decide he prefers the competitor, losing all the future sales as well.
I stopped shopping at Zellers for that very reason. Their inventory/supplier control is abysmal. I have gone to purchase things on sale, found it out of stock, and received a raincheck for that item. Months go by, the item goes on sale again, without ever having restocked the item. Wait another couple months and the process repeats again! Brutal.
/g2
As much as I can't stand WM, Zellars is a far worse retailer.
They use the "bait and Switch" method of sales constantly, advertising Item X on sale for $29.99, but when you get there, that Item is sold out, but Item Y is only $39.99! Brutal.
Zellars is trying so hard to be a WM clone, it's sad.
Priceless Johnnie!
and Mark, as for comic books, I fully plan to support Dave and get into his store to get some for my kids...I guess for me I'll choose small business over the big boxes if I know the owner otherwise all things being equal I'll shop for the best price.
Bang on brother, $1 an hour doesn't seem like much but span that over a year and $1750 sounds better, then take that investment over 10-20 years and see where you're at...it's amazing what you can do. I neglected to really focus on this until recently (maybe that's normal as young people become old like me hehe) and in talking with my financial manager my eye's were opened....wide!
I honestly believe that there is absolutely no place for a union anywhere today. I believe they exist solely to keep the good guys down and the bad guys employed. We have moved so far away from how things were in the late1800's and early 1900's.
I'm just curious how you think a union may have helped you back then, given that you were already making above minimum wage?
I find most people who want a union (and I'm certainly NOT referring to you Johnnie) are younger people who have problems with authority and expect above average pay for jobs that do not require specific academic or technical skills? Further unionized manufacturing tends to lead to higher prices. In this day and age I just don't see the need?
Back when I was fresh out of High School I got a job at a hospital, obviously it was unionized, the high pay was one reason I did not finish University but that is my fault not the union's I was young, naive, and thought I knew best..."I'm making a ton why go to school I hate school"....I sure wish now that I had finished University. I used the union to it's fullest too, I was a right prick getting away with whatever I could because the union had my back! Thank God I have matured
I remember the moment I finally stopped believing in Unions, our hospital had two unions, one for the "service" workers and one for the "clerical" workers...well my boss at the time (I worked in the storeroom) convinced me to pursue a purchasing certification and at the time it interested me and I did go through the PMAC, well after I had all these courses under my belt the Purchasing job became open and was posted, I applied. Being related to someone in 'upper management' I came to know that I was the most qualified applicant...however I did not even get an interview because of union rules. The job was classified under the "clerical" union and as long as there was 1 applicant from the clerical side they could not accept applicants from the "service" side. They literally had 1 applicant a part-time secretary, she got the job and was pathetic at it but because of the union she remained employed costing the hospital money because of how poorly she performed. If I was running my own business I would want the best person for the job not just who's in the right union and been there the longest?
Perfectly said AJ! As for 'cheap labour' they do pay minimum wage or better so who can complain, they are doing nothing wrong...and why should someone unloading trucks, washing floors, greeting people at the door, gathering carts, etc get any more then minumum wage? Isn't it the same if you're flipping burgers at McDonald's?
IMO Unions aren't the problem so much as the people in them. Much as BigE is saying here, just in different words.
Unions, much like most other things, live and die by the people participating in them. Unions are a great safety net and tool for workers who deserve it. However, it's also an excellent excuse and crutch for the dumbasses.
My work is unionized. We have certain rules with hiring, but there's also ways around those rules too. We also have some dedicated workers who put in their hours, do their work, and get fairly treated thanks to our agreement. Then we have the other workers, who bitch about having to work certain hours (even though they signed on for it), abuse the sick days / leave days, and various other loop holes. These people exploit the union, while the earlier mentioned employees work within it.
I'm pretty tight with my boss, and he and I chat a bit about practices, policy, and the "by the book" vs. "in the field" implementation of things. He's actually a fan of unions, and feels that it does make things clearer and more efficient in many regards - but when people start bitching about stuff and exploiting it, well... let's just say, being one of only 2 men in my office I get recruited (voluntold) to move stuff, refill the water cooler, kill bugs (though they know I don't do spiders), what have you. These aren't in my job, and I've seen people say no to SIMPLE requests. It won't kill you to move a fucking desk from one office to another!
Anyways... unions are good - people are bad.
Mark
Yeah, pretty well put and I agree with your statement, however I would also suggest that in some cases unions can make people bad, people can tend to become lazy and such if they see others do it, it can snowball. I think unions can also affect prices. As wages are negotiated by the union the company has to adjust prices to compensate. I think with todays labour laws I'd hope to see a decrease in unions certainly not an increase.
I think this is the single biggest hit to the NA car market and one of the main reasons why imports have surged in market share. Not only is quality down, but the cost of production is high and the difference seems to be more than the difference to ship an auto accross the ocean that is assembled in Asia.
I know there are some Toyota employees on here, is the Cambridge plant part of the CAW?