how can wal*mart afford to make everything so cheap?

Question

the other stores cant... and most of their products are the same stuff, so what's the deal?

wow... interesting. do you think we should publicize all of this? then maybe wal*mart will lose some customers, then people will get the money they deserve for their products.

Answer 1

♥ ♥ quantity ♥ ♥

Answer 2

Wal Mart is the largest corporation in the world. I have read articles where suppliers discuss the following event. A room full of suppliers wait to talk to a Wal Mart buyer. The Wal Mart buyer TELLS the supplier what Wal Mart wil pay, even though it is lower than the company may like if they do not accept the price the buyer will step out of his office and announce who can give him a lower price say on a fan.5 companies stand up. It is cutthroat, plus Wal Mart buys 80% of its items in China. Where labor and products are super cheap right now. In this current economy many companies cannot stay in business if WalMart were not buying the bulk of what they made

Answer 3

I would say 2 major factors are at play:

1. ANALYTICS
They have analytics which are among the best anywhere, so they can get exact demand forecasts, knowing exactly how much of product X they can sell for price Y. Once they know that, they can determine the highest price they are willing to buy the thing at.

2. MARKET POWER
They are the 800-lb gorilla in the consumer marketplace and so can pressure vendors into selling to them at the lowest possible price (it helps that they have superior data on vendors as well). Some of these vendors actually sell at a loss to wal-mart periodically just to keep the account and shelf space.

Those are the principal components of their pricing power. Beyond that, there are many other less influential factors.

Gary S.

Answer 4

Well, one thing they do sometimes is when the Wal-Mart truck drivers show up at the warehouses to pick up the merchandise they tell the warehouse that they will not take it unless they can get it for a lower price. The warehouses don't have much choice since they are sitting on the stockpile that Wal-Mart wanted in the first place. True story...If you know any truck drivers, ask them about it...

Answer 5

They buy in huge quantities and since everyone go to wall-mart they can make their products cheaper since they know people will come there. They also have stores everywhere so even if they only make $1 profit on an item they still make a lot of money from all the people buying it.

Answer 6

That depends highly upon what you view on american is. If capitalism at all costs is you idea of america - Wal-Mart is the ultimate american entireprise. Wal-Mart Is their own economy with purchasing power into the multi billions. The allows for a very backwards idea of business. Suppliers do not set the price of the goods they sell to wal-mart. Wal-Mart tells suppliers how much they will pay. As a result this does lead to manufacturers (suppliers) finding more cost effective means of manufacturing, which results in out sourcing. Then end result is you pay 10 cents less for Pepsi, however they shut down a plant in small town USA and move it abroad so they can manufacture their product cheaper, maintaining their margins and meeting Wal-Mart's price. Another element of wal-marts low prices is they absolutley do pay the bare minimum to workers, offer few benefits (if any) and have a nasty little habit of employing just under the state of provincial mimum hours to deem an employee - full time. So you have a workforce of part-time workers. Part time workers who do not get benefits - who will barely make enough to draw a living wage. Workers who stay, not becuase they want to but becuase they have to. You see, walmart has a tendency to open a store and knock out main street and all of those family run business is an area who do pay a living wage, who do value employers and who do foster loyalty not out of necessity, but out of will. As a side note - wal-mart rarely gives back to the community which supports it. Very few participate in sponsoring local event - sports teams- food / clothing drives. They are not a contributing member of the community. So if capitalism at all costs - namely your community is your idea of america - Wal-Mart is the place for you. However if you idea of America the land of opportunity - a community filled with successful family run businesses. A main street lined with shops and boutiques to serve every fancy. Then you like me - you probably don't like wal-mart.

Answer 7

Buying stuff in quantities of a million, to sell, works out cheaper over the course than buying said stuff in hundreds.

Answer 8

1) buy in bulk
2) squeeze the supplier
1)if you have enough quantity going out you can afford to have a tiny profit margin
2) if you don't sell to walmart you lose a massive source of income, as such walmart has the power to negotiate lower prices

Answer 9

My brother works there actually both of them do at there prices they managed to bring in a couple million dollars FROM 1 STORE IN 1 DAY ITS TRUE

Answer 10

The amount of items bought. Buying in bulk (greater quantity) provides deep discounts from the manufacturer. Can you imagine what one contract from Walmart would do for you individual business?

Answer 11

Walmart doesnt pay thier employees much in wages, no insurance, and less than 40 hrs. Walmart is leading the industry in number of employees on welfare.