what is the reason that wal _mart has low price ?

Answer 1

Because 90% of what they sell is made in China and most of their employees only make minimum wage.

Answer 2

They drive small businesses into bankruptcy.

Wal Mart places very high demands on their suppliers but they don't pay a lot of money per pound. A typical contract will offer a $0.03 per pound profit, which is extremely low.

The more pounds the supplier can sell, the more money they make.

This is good, because when Wal Mart negotiates the new contract, they will insist on lowering the company's profit margin. Because the company made millions of dollars of capital upgrades to meet Wal Mart's specs, they can't afford the cut and will be forced to go bankrupt.

Answer 3

"Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and General Electric. The scale can be hard to absorb. Wal-Mart sold $244.5 billion worth of goods last year. It sells in three months what number-two retailer Home Depot sells in a year. And in its own category of general merchandise and groceries, Wal-Mart no longer has any real rivals. It does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined.
...Wal-Mart also clearly does not hesitate to use its power, magnifying the Darwinian forces already at work in modern global capitalism."

The article I've cited in the link below is very extensive and a good read.

Answer 4

Volume. If you order 10 to 15 times as much of a product as the supplier's second best customer, you are going to get a discounted price. If you pass that discount on to your customers, you will sell more. If you then use your profits to build more outlets accessable to more people, you can increase your next order and get an even larger discount. Walmart is the world's largest retailer with 4 times the sales of #2 Home Depot and probably 10 times whoever is #4 (Sears/Kmart, I think).

Answer 5

Cheap goods and labor:

Over 80% of products in Walmart are made in China, many in sweatshops.

Wal-Mart employs more people than any other company in the United States outside of the Federal government, yet the majority of its employees with children live below the poverty line.

Volume--the more you have of a product, the less you can charge for it and still make a profit.

Lack of competition--they come into a community, artificially lowering prices until other competing stores have to close.

Answer 6

In a marketing class I took we learned that because Wal Mart is so big they have the power to tell the manufacturers what they are going to pay for the products. This causing them to be able to resell the products at a lower cost.

Answer 7

They have very good wholesalers...and the manufacturers will lower the price a little with the agreement that wal mart will pick up their product. I mean, if you had a product, wouldn't you want wal mart to sell it in their more than 12000 stores? I would. So I would lower my price just a little.

Answer 8

becuase they negotiate the price with the companies and if the company will not allow them to sell for that price, then they won't carry the product. Seeming that W mart is a huge company, most places dont have a choice. That is why they don't sell certain brands

Answer 9

WalMart has a huge amount of purchasing power. Because they have so many stores and go through so much inventory, they can "request" manufacturers to build items for much lower costs due to the economy of scales. Some American manufacturers have gonen out of business because WalMart can get Chinese manufactuers to make product for much less. Case in point... a Thomson television manufacturing plant in Circleville, OH went out of business a few years ago because WalMart chose to buy from a Chinese plant. The Chinese manufacturers can afford to make them for less because their government subsidizes thier companies and in many cases, they don't have to repay the loans. Check out the streaming video on pbs, "Is WalMart goo for America"... it's a frontline episode.

Answer 10

A lot of things are made overseas by people working long hours so we can have low prices.

Answer 11

walmart has lower prices because of supply and demand. there buying power is 2nd to none they buy so much cheaper than anyone else therefore they sell so much cheaper. also they buy from overseas from companys that make products a lot cheaaper than the USA.