Wal-Mart prefers to deal directly with suppliers?

Question

Why does Wal-Mart prefer to deal directly with suppliers rather than buying from wholesalers?

Answer 1

They have very strict requirements for packaging and shipping plus they usually insist on the lowest price and it can be best negotiated with he manufacturer.

Answer 2

Because Wal-Mart can leverage their giant buying power a lot better when they're going direct to the source, and also because a lot of middle-men won't do business with Wal-Mart any more. As an example, a few years ago Wal-Mart ticked off a lot of their wholesalers when they decided the price (already agreed upon) for particular products was too high. If the wholesaler wanted to move the products, they had to drastically drop their prices; the alternative was warehouses full of product already paid for by the wholesaler and no buyer who could take on those significant quantities. Even though refusing to do business with Wal-Mart has cost some wholesalers a big customer, that is better to them than spending thousands of dollars on product in good faith that a sale agreement will be honored, only to have to sell at a loss when the mega-giant changed their mind.

Answer 3

Wholesalers are suppliers .