The Wal-Mart You Don’t Know

Fast Company has an interesting article about Walmart, The Wal-Mart You Don’t Know, and how they deal with the companies that supply them with the stuff they sell. This really made me think a little about the long-term effects of their business practices.

Most of the arguments against Walmart focus on their effects on smaller businesses in the areas they open stores in or the treatment of their employees. This article talks about how they’re able to offer such low prices: they squeeze their suppliers to the point where their only options are a) accept a reduction of their own profits, b) close their US operations, lay everyone off, and move production overseas, or c) let Walmart discontinue carrying their products, which will also severely hurt their bottom line. It goes on to talk about a few companies who have been forced into this situation, most of whom have gone with option b and moved overseas in order to stay in business. This in turn puts hundreds, or thousands, of people out of work here.

Interestingly, it also mentions that they had trouble finding anyone who currently does business with Walmart who was willing to talk about them, they were only able to talk to people who used to, but no longer, work for these manufacturers and companies.


kscaldef says:

Is any of this really news to anyone?

I mean, misapprehensions of various geeks aside, the problem with monopolies is not that they manage to sell inferior products for less money. (Or inferior products for more money, for that matter.)

The real problem is when a monopoly gains the ability to dictate terms to everyone they deal with, from suppliers (dictating prices, dictating products), to consumers (dictating choice, or lack thereof), to workers (don’t like our wages? too bad), to competitors (match our prices or die), and even to governments (moving to more “friendly” municipalities, suing to block “unfriendly” ordinances, forcing taxpayers to subsidize their low wages).

People act like this is all so surprising. I mean Walmart just wants to get the consumer the lowest price, right? Bullshit. They’re a business and they exist to make money, not to provide charity, and anyone who forgot that is a sucker.