hi_im_sean

iTrader: (3)

This explains so much about walmart dickies. I was going to switch brands next go around, but it looks like i just need to go to the dickies store. You can see the outline of my lighter in my right pocket after only a few weeks...

hi_im_sean

iTrader: (3)

omfg yes!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Joe Perez

iTrader: (8)

And sometimes it's just misguided corporate policy.

Shortly before I left Harris, an edict was handed down that all of our products, across all divisions (Radio, TV, Transmission, Microwave comm, etc) were to have a uniform look-and-feel. I'm not talking software, I mean the physical box.

This meant that we had to change the paint, molding, and anodizing for all of our equipment, and send back for re-work all of the metal which had already been painted. So not only did the products become quite ugly (they went from a nice textured matte nickel finish to high-gloss gray), our in-house fab shop had to implement a whole new paint process, using different suppliers, to achieve the new color. Huge cost, zero ROI.

EO2K

iTrader: (37)

I can't answer to the quality of the product thing, but I can answer to the volume. I work for a produce company, we grow green things that children refuse to eat. Let me give you a very specific example:

(Numbers will be changed to protect the innocent. I wish I could post the actual numbers but that would get me very very fired. )

Lets pretend that today, as of right now, the wholesale price of Romaine Hearts in a 48ct case on the market is $19.50. As far as Romaine goes, that's pretty solid for us. Let's say we sell 40,000 cases of 48ct today at that price, simple math says $780,000.

These prices vary day to day based on simple supply and demand. Yesterday the price was $18. The day before that it was $18.50. About 2 months ago it was $13 and 3 weeks before that it was $20. These markets are incredibly volatile and having accurate numbers is key to profits. This also means that the lettuce you planted 6 weeks ago during the $25 market is now worth crap when the *** end falls out and the price drops to $10 because everyone planted at the same time ...but I digress.

Lettuce is not something that warehouses well so it usually gets harvested some time around 5-6am, cooled immediately, ends up in one of our cooler distribution centers and is then shipped in less than 24 hours. Let me say that again, product goes from dirt to semi truck in less than 24 hours. Usually its around 12. (This is not a common number for the industry, our company just happens to be really REALLY good at this.) Generally the product is sold before its even harvested based on harvest estimates taken in the days prior. You can't grow "extra" for a rainy day, you are purely at the mercy of the market so you better have your ducks in a row.

I'm not going to to into a description of how the wholesale broker system works but I'm sure you can image fat sweaty guys chainsmoking and reading tickers while filling and moving product and contracts for smaller retailers like Safeway, Piggly Wiggly, HEB, etc but I'm sure you can imagine how it works.

As you can imagine, its an amazing game of chicken. Pure capitalism.

Enter WallyWorld contract.

What if I walked in the room and told you I'd buy 50% of you entire daily production volume @ $16/case deliverable over the next 6 months? That's 3,600,000 cases at a value of $57,600,000. Well, holy ****! Fixed price so you don't have to deal with market fluctuation and now you have a fixed plan for that product for the next 6 months. $10 market? Fuckit! WalMart is still paying you $16. $25 market? Well, you are getting screwed, but that's the price you pay for the contract. (This is where I would talk about pricing triggers built into the contract, but that's another story.)

WalMart watches the market prices and you watch the market as well. They think they know they'll be saving money by buying from you @ $16/case because they think the market will do $20 for the next 3 months. Its up to our people to make sure they have good data to provide to the managers to be able to negotiate these contracts so we aren't contracted @ $10 per case while the market does $25 for the next 6 months.

To make this more difficult for us the supplier, WalMart changes their regional purchasers every 4 years at a minimum. They are not in the position long enough to build a personal relationship that our managers and sales people can take advantage of. They may also know nothing about produce. But that's ok, because they are not buying produce, they are buying volatile commodities under contract rather than the whims of the open market. That is just one commodity line item on a sales sheet. This is not beef or corn with their amazing government subsidies, I talking about stuff like lettuce, broccoli, cauliflower, celery, cilantro, endive, escarole, radishes, onions, etc etc etc. They have contracts for everything.

Anyway, now WalMart owns you. You need them because they are the only single source vendor that can handle the volume you can produce. You need them more than they need you, and they know it. Do YOU want to deal with that volume on the open market? Hell no, you take a dollar per unit in the shorts to sell @ $15/case you sell another guaranteed 3,600,000 units over the next 6 months and WallyWorld gets to "roll back" their already stellar price another 50¢ and murder their competition when the market price is $17.

Now for most of you, this wall of text was just a simple economics example in action. What really boggles the mind is the scale of what is happening here. They are an absolute monster, and when they start to throw their weight around everyone in the industry can feel it.

That 50% number is definitely on the big end but not entirely made up and I don't work for a small company. I believe we are one of the top 2-3 largest fresh veg produce suppliers in California? The only people who are bigger than us in our specific markets is Dole, and that should tell you something right there. We are not small potatoes and WalMart could easily buy our entire volume if we let them. The goal is to find the balance where you can still make money on the contract but not that they buy so much of your volume that if the deal goes sour, you end up shutting the door because you can't handle the shift. We lost 2 or 3 of our main competitors in the last 10 years because they got in too deep with the 'Mart and things got nuts. We actually took a lot of their volume over because we could handle it and we had a positive relationship, but believe it or not we are now slowly scaling back.

TL;DR: Wal Mart is ******* crazy big and can bury you if you don't watch your ***.

bahurd

iTrader: (8)

<p>&nbsp;</p><p></p><p>At a company I worked for early in my career, the original owner passed away suddenly.&nbsp; As he was in the practice of rewarding his managers with company stock (worthless while he was alive) upon his death many people suddenly realized they were potentially rich.&nbsp; To pay off all the stock these 'shareholders' owned it was decided to sell the company to a public company for a sizable amount of money.&nbsp; That company decided to make the new President the former CFO under the old owner.</p><p>One of the first changes the new President made was to change the name of the company because &quot;our customers don't know who we are&quot;.&nbsp; Forget we grew at a rate of 22% annually for many years and at the time of his death the company was arguably #2 in the US market&nbsp;and expanding globally.</p><p>Needles to say, the highest sales year we had was the last year the founder was alive.&nbsp; Over the next 2 decades the company was sold three times finally to a competitor who, at the time of the founders passing, was probably #5 in the world and the company name no longer exists in the market.&nbsp; I remember trying to explain to some of our largest customers (who obviously knew who we were) the reason for the name change.</p><p>That president ultimately presided over the sale from one public company to another and took his multi-million dollar parachute to go away.</p><p>My wife calls me pessimistic...&nbsp; I run my own company.</p><p>&nbsp;</p><p>&nbsp;</p>

codrus

And the scary thing is that Amazon is going to crush them within a decade...

--Ian

concealer404

iTrader: (3)

Then a decade after that or less: Alibaba.

bahurd

iTrader: (8)

<p></p><p>They could but I doubt they will.&nbsp; Ever really thought about who shops at Walmart?&nbsp; Ever thought about who shops at Amazon?&nbsp; Not the same at all.</p>

EO2K

iTrader: (37)

Yahoo actually owns Alibaba. Or at least a vast majority share of control.

concealer404

iTrader: (3)

Tell me which vehicle i want to replace my poor Cherokee of Rarity. All are the exact vehicles being considered save for the FJ80 and FJ100.

Not pictured: 1989 Mazda B2600i 4x4 5spd regular cab because presumably, the current owner is too old to internet. But it has 130k miles on it, so that's cool.



1) Montero


2) FJ70 Land Cruiser


3) 1g 4Runner


4) 2nd gen Montero


5) 1st gen Trooper


6) VehiCROSS: For when you want to buy parts for something they made less than 6000 of. Ever. Worldwide.


7) This weirdness. 96 2dr 4.0 4x4 auto, long arm lift, bushwackers, 33s, and a.... Wagoneer front end conversion. SWAGSWAGSWAGSWAG
80-img_04521_zpsxb7wv9k9_d2aca3aa0096a3a61317dba8f3f6 7a620d73f732 by concealer404, on Flickr

8) FJ100 Land Cruiser


9) FJ80 Land Cruiser

codrus

Land Rover!

--Ian

concealer404

iTrader: (3)

Hahahha, i mean... this COULD be the time to test my theory that one could live with a Land Rover pretty well if they didn't care about anything besides it making it to your destination. I'd test that theory on a Range Rover Classic.

Or.... if you buy one cheap enough, when it blows up, you can part it out, then sell to scrapyard and get all your money back. (Cheap Discovery?)

This "small" list of 10 is just the current front runners. I hate car shopping when it's for real.

rleete

iTrader: (21)

Don't buy someone else's mods. #8 looks stock; go for that one.

z31maniac

FJ100 all day.

Joe Perez

iTrader: (8)

I'm not certain that's true even today, but if so, ask yourself:

Has Amazon adapted its business model to changing market conditions over the past two decades? They used to just sell books. Now they steam movies and tv shows, manufacture computing hardware, sell everything from paper towels to industrial machinery, act as a market aggregator and front-end for small businesses, provide cloud-computing services, partially own their own last-mile distribution system, and are trying to become an aircraft developer.


What percentage out "Wal-Mart people" owned Blackberries 10 years ago? How many of them own iPhones or Android devices today?

Name one brick-and-mortar business which has proven itself immune from disruptive competition from competently-managed dotcom competition.

concealer404

iTrader: (3)

Always cheaper to buy someone else's mods.

#8 and #9 are "stock photos." Those examples probably aren't even for sale, i just pulled them off google images. #8 does have an Old Man Emu 2.5" lift and 35s, though. Which... is all i would do to one of those anyways.

bahurd

iTrader: (8)

<p></p><p>&nbsp;</p><p>All valid points.&nbsp; In retrospect, I was thinking of the brick and mortar Walmart and the prospects of Amazon 'crushing' them.&nbsp; And I guess to a certain extent, the definition of 'crushing'.</p><p>In market cap sure, I can see that.&nbsp; Even to an extent overall $$ volume.&nbsp; But lets talk about brick &amp; mortar vs Amazon online.&nbsp; With nothing in the way or research to back my hypothesis, I believe the 'typical' Walmart shopper likes to go look &gt; feel &gt; touch &gt; buy at the moment they have money to spend while the typical Amazon shopper is doing it out of convenience and has an abundance of credit and consider time of secondary importance.&nbsp; Hey, we all use Prime to satisfy our need for parts and order them with knowledge that in some cases we might be able to pick up the stuff at Walmart or some other local spot.&nbsp; Laziness??</p><p>Amazon made a foray into the industrial market ($60B annual market).&nbsp; A market dominated by a multi channel distribution network.&nbsp; Not sure how they consider the effort but the market considers it a failure.&nbsp; The players have learned to no let the product get too commoditized (first step to failure) and the end customer still perceives the market to be highly technical and values the experience of the face to face tech people.</p><p>I suspect the streaming of content will be different in 5 years so it'll be interesting to see Amazon change with it.</p><p>Hey, you might be right...&nbsp; Don't sell your Walmart stock yet though.</p><p>&nbsp;</p>

sixshooter

iTrader: (12)

Don't get the Monteros. Trust me. Please.

xturner

I work for a large appliance company that does a lot business with WM. Most of our stuff is made by OEM contractors in China/HK. In the 90's, we set up a plant in Costa Rica that made about 70% of our main products as a hedge in case China dropped the million-pound shithammer on HK when they took over in 1997, thus ******* up our supply chain. It was the biggest and most-efficient producer in the world, even cheaper than China.

The GM and I became friends. One night over many drinks he told me about being approached by the Walmart international buying office - they wanted him to make our stuff directly for them as a private-label deal and cut us out of the business. They were disappointed when he refused. I guess they didn't think we'd notice. A couple guys I know at our Chinese OEM's say that Walmart has done the same with them.

WM is a company that talks big about their vendor "partnerships," but they treat those partners like scumbags.

concealer404

iTrader: (3)

Oh neat, putting a heart sign cuts off the rest of the post. Wtf??