Walmart Out of the Ammo business?

[IndyBeerman]

So the next time a local mom & pop gun store says that they can't lower their prices to what Wal-Mart has it for, I should call BS, tell them they lie and storm out of the store because they can get it for the same as Wallyworld?

Right.

I think if you believe that Wal-Mart, with its huge network of shipping and gazillion stores doesn't get a break on pricing, you, not I are in lala land.

Hate to bust your bubble, but Wal_Mart makes there profit on MASS sales through out their entire chain, so they "might get a .25 cent reduction" on that box of ammo and with the amount of inventory they move in a year it more than justifies the pricing the have.

While they may not have a big mark up on ammo, they generate sales by impulse buying.

It's the same thing drugs stores like Walgreens, CVS and others do, get them in for an ad price, pick a prescription (that they make tons on) and possibly a new blow dryer for the wife and kids because the old one is on the fritz. That's where the money is.

 

[r.o.b.o.]

Walmart definitely gets a price reduction. Walmart tells suppliers what they will pay for an item. There are hundreds upon hundreds of retailers lined up DAILY for their shot to get their product on Walmarts shelves. You said it yourself above the volume is what is important but you have it backwards. The suppliers are willing to give walmart extremely low prices because they will be selling millions of products if walmart shelves them worldwide. Therefor the supplier can afford to make a very small profit per product because that will add up quickly with the volume sold. This is how walmart makes profit, by having the lowest prices around which attracts customers and allows them to sell milions of products daily.

 

[LawDog76]

I've heard the rumor that "select" Wal-Marts will stop selling it. Cities with multiple stores. The rumored Wal-Mart in Ft Wayne is the one on the South side. But again I stress it's only a rumor and nothing from a official source.

 

[IndyBeerman]

Walmart definitely gets a price reduction. Walmart tells suppliers what they will pay for an item.

They do???

They don't tell our company, they buy it for the same price as the mom & pop store down the street, and believe me, if 3/4's of the stores in Indiana don't buy it off of us, they don't get it, PERIOD!

Here's a question, how many in this thread work wholesale? How many work retail? Now how many can say exactly what Wal-Mart is making off of that product.

 

[Scarnucci]

Wal-Mart absolutely dictates the prices they will pay to their suppliers.

They have a long history of luring companies into supplying them...since they are the holy grail of getting your stuff out there where that is concerned...then once you are hooked and depend on Wal-Marts purchases to sustain your company, they put the screws to you. Year after year they demand lower and lower prices, until American companies are forced to go overseas for their labor.

Here is a decent article describing several instances of these predatory pricing tactics

When old man Walton was alive, everything in the store was made in the USA. He was barely cold when the company shifted tactics and earned the moniker "China-Mart".

 

[rmabrey]

Wal-Mart absolutely dictates the prices they will pay to their suppliers.

This is true. It was discussed in a management class I had a couple years ago. Some suppliers were also required to invest in an RFID system and link to Wal-Marts direct inventory ordering system (this is why they are supposed to scan every item and not type in the quantity). The RFID system is required for the bulkier items though I believe (pallets of food etc.,).

 

[Tomcat_AL200]

Wow, I never expected this type of response, I will take this caution with a grain of salt, and thank you all for the feedback.

 

[Michiana]

<<<<<<<<Indybeerman>>>>>>>
"I've been in the wholesale/retail business almost my entire life and have seen the abuse that is thrown at the general public you'd be amazed at what some people will tell a customer.

Just because Wal-Mart is huge and has buying power does not dictate that they get huge discounts, I know because in my business the Mom and Pop store can buy it exactly for what Wal-Mart buys it for, there is no mega purchase deal."

I am curious as to what business you are in that makes you an expert on Wal-Marts buying power?

 

[rmabrey]

I am curious as to what business you are in that makes you an expert on Wal-Marts buying power?

Im gonna guess beer. In which case no Wal-Mart will not dictate the price. You can't tell one of the big distributors you wont buy their product. They will respectfully tell you to F*** off, and Wally World won't be carrying (insert favorite beer here).


End

 

[IndyBeerman]

Im gonna guess beer. In which case no Wal-Mart will not dictate the price. You can't tell one of the big distributors you wont buy their product. They will respectfully tell you to F*** off, and Wally World won't be carrying (insert favorite beer here).


End

You see he has it right.

Now for some insight, Winchester is not a small company, they do not need Wal-Mart to survive, plain and simple. If they was not making the money they wanted on WWB, they would tell Wal-Mart to pound sand and sell almost as much through the dealer network and not worry one bit and still make a profit.

It's like the age old tale that every gun shop says, "I only make 10% profit." If that was true just how many guns would some of these dealers need to sell to keep the buildings doors open.

 

[IndyBeerman]

This is true. It was discussed in a management class I had a couple years ago. Some suppliers were also required to invest in an RFID system and link to Wal-Marts direct inventory ordering system (this is why they are supposed to scan every item and not type in the quantity). The RFID system is required for the bulkier items though I believe (pallets of food etc.,).

Wal-Mart does not currently use a RFID system at this time that I know of, it has been discuss at length by them and manufactures to speed up the check in process and that is is sometimes refereed by the name of "instant inventory system." But this will take time for it to be implemented because current RFID technology needs to improve more with a stronger signal and lower price.

Works by rolling a pallet off the truck and every RFID chip is read and that pallet is checked in instantly, currently each pallet has to be broken down and each SKU scanned in, taking a very ling time to properly check in an order.

Also a stores inventory can be tallied a simply running down each isle with a hand held and what takes a whole lot of people to do each day for ordering and monthly inventory can be down in under a hour, therefore greatly reducing manpower cost.


Sorry for the thread jack.

 

[300sx]

You see he has it right.

Now for some insight, Winchester is not a small company, they do not need Wal-Mart to survive, plain and simple. If they was not making the money they wanted on WWB, they would tell Wal-Mart to pound sand and sell almost as much through the dealer network and not worry one bit and still make a profit.

It's like the age old tale that every gun shop says, "I only make 10% profit." If that was true just how many guns would some of these dealers need to sell to keep the buildings doors open.

yes winchester is a large company but just makes me wonder why they can sell it for cheaper than ANY other company store front or internet? if they dont get the price they want from one ammo company they go to the next that will..thats why they sell blazer brass, federal, ect..

now beer...its like coke and pepsi..u need that brand name to sell it..

 

[rayf268]

Wal-Mart does not currently use a RFID system at this time that I know of, it has been discuss at length by them and manufactures to speed up the check in process and that is is sometimes refereed by the name of "instant inventory system." But this will take time for it to be implemented because current RFID technology needs to improve more with a stronger signal and lower price.

Works by rolling a pallet off the truck and every RFID chip is read and that pallet is checked in instantly, currently each pallet has to be broken down and each SKU scanned in, taking a very ling time to properly check in an order.

Also a stores inventory can be tallied a simply running down each isle with a hand held and what takes a whole lot of people to do each day for ordering and monthly inventory can be down in under a hour, therefore greatly reducing manpower cost.


Sorry for the thread jack.

beerman you must not be a dsd vendor or if you are you don't pay attention when you get checked in. I am a bread vendor for the largest baker in the world. And sell to 3 walmarts. They have a system like you mentioned and call it ASN Pepsi and frito use it they pull a pallet off there truck and scan the barcode and done with a random audit thrown in . but not all stores use it even though the wholesaler pays to use that system. Walmart does have sales info and inventory available instantly with the scan guns. but they still do complete inventories 2 times a year. There are other stores meijer and kroger to name 2 that use scan based trading (with some vendors) which means there is no check in proess you just wheel in you goods and stock it. with that you are paid on what sells out the register not what goes in the back door, its real nice and a heck of a time saver. Now I am talking about retail grocery.

 

[IndyBeerman]

beerman you must not be a dsd vendor or if you are you don't pay attention when you get checked in. I am a bread vendor for the largest baker in the world. And sell to 3 walmarts. They have a system like you mentioned and call it ASN Pepsi and frito use it they pull a pallet off there truck and scan the barcode and done with a random audit thrown in . but not all stores use it even though the wholesaler pays to use that system. Walmart does have sales info and inventory available instantly with the scan guns. but they still do complete inventories 2 times a year. There are other stores meijer and kroger to name 2 that use scan based trading (with some vendors) which means there is no check in proess you just wheel in you goods and stock it. with that you are paid on what sells out the register not what goes in the back door, its real nice and a heck of a time saver. Now I am talking about retail grocery.

I pay very close attention, thank you very much. ASN and RFID are two worlds apart.

It is the choice of the store manager to use or not use it on each vendor of his choice (even if they are set up and approved by Wal-Mart HQ), or to not use ASN at all. Currently there are a ton of stores that do not use it.

ASN info is supplied directly to Wal-Mart HQ in Bentonville,AK on that particular invoice ONLY from the vendor after the invoice has been filled and double checked for acuracy, it is not an automated system.
Then that info is sent to the stores.

When you roll that pallet off the truck, and scan that barcode it's a better than 60% chance the pallet will be audited, that means every item is checked (open every case). It's nothing compared to RFID and still requires input from the delivery source.

RFID systems are set to scan the pallet, enter the info into their system and then your invoice should match up, no hassle or hoops that have to be jump through like ASN.

Now your mentioning of scan based trading is a whole different world because the vendors do not receive money at the time of delivery, but only when the items sells and leave the store in a legal purchase out the door, placing the ENTIRE burden on the vendor because their money is tied up until it is sold off the shelf, not to mention that they, not Wal-Mart eat it if the item is stolen. While it may be a time saver, it is not RFID and really places the burden of expense on the Vendor while Wal-Mart gets to play with the product with no money involved.

If product disappears because of shoplifting or employee theft, then the vendor loses money because it was a non sale that was not rung up.

Beer wholesaler's are exempt from this extortion because state law requires that it is to paid upon delivery receipt.

Now that's both wholesale and retail grocery.

 

[teknickle]

Just because Wal-Mart is huge and has buying power does not dictate that they get huge discounts, I know because in my business the Mom and Pop store can buy it exactly for what Wal-Mart buys it for, there is no mega purchase deal.

There is no magical wand out there that can be waved around.

Just another 2 cents in here.
WalMarx DOES have a magic wand. They just don't use it on you.
I have flown down to Bentonville to work on a $50M account that WalMart has. WalMart _does_ dictate (to a T) what they will pay and then demand a 10% reduction over x years.
WalMart kills business.

I also had the misfortune of being involved with their botched up EDI deployment in the late 1990's. (they didn't follow standard template settings and dictated how they wanted things--whatta mess).

Have you ever been to Bentonville during their Supplier fairs? It's nuts.
That is where people try to get Walmart to carry their products in ALL of their stores around the country (and world) and often to their own demise.

But IndyBeerman, you are in a different category. You are a local supplier. Like the produce, bread, milk, local sports attire vendors.
You only supply maybe 2-6 stores. Do you have to go to negotiate at Bentonville? While possible, that's not likely.

But we are talking GUNS and Ammunition here. Those are national contracts to where those brands are stocked at MANY locations.
Yes, WalMart _used_ to be the largest gun retailer in the country before the Rosy incident and pandering to liberal fools to get out of guns (at least that was the rumor).
Last I checked, there were only 13 Walmart stores in Indiana that still maintained an FFL.
So of course, not ALL stores will receive the corporate negotiated price on Ruger 10/22's, but they do on other goods.

 

[IndyMonkey]

Richmond Indiana walmart has guns and 45 Auto in stock.

 

[mlang2000]

South Bend has plenty in stock as well.

 

[IndyBeerman]

But IndyBeerman, you are in a different category. You are a local supplier. Like the produce, bread, milk, local sports attire vendors.
You only supply maybe 2-6 stores. Do you have to go to negotiate at Bentonville? While possible, that's not likely.

Snip

But we are talking GUNS and Ammunition here. Those are national contracts to where those brands are stocked at MANY locations.
Yes, WalMart _used_ to be the largest gun retailer in the country before the Rosy incident and pandering to liberal fools to get out of guns (at least that was the rumor).
Last I checked, there were only 13 Walmart stores in Indiana that still maintained an FFL.
So of course, not ALL stores will receive the corporate negotiated price on Ruger 10/22's, but they do on other goods.

114 Wal-Mart stores in Indiana, we deliver to at least 104 of them and I bet I've delivered to at least 75+ at one time or another, so I think that throw's out the local supplier thought out the window.

Wal-Mart tries, it's a take it or leave it price. University Liquors in Evansville, IN pays the same price for a case of 24 loose cans as Wal-Mart in Winchester, IN or Thortons' in Terre Haute, IN.

Never been to it, but I'd guess the supplier show is not mainstream National suppliers like Coke, Pepsi, Frito Lay, Miller, Coors, Budweiser, or even Winchester.

I'd guess it's geared more for smaller companies that are trying to get a foot in the door and have a shot getting their product placed nationally.

Now let's go off on a different direction, ever hear of the loosely thrown around term "Loss Leader", it's where a retailer intentionally sells something at a lowered or reduced price (even taking a loss) to get people in the door for the chance that it will not be their only purchase.

Not saying that Wal-Mart is doing this with WWB, but there is the chance that they are on hopes of getting the male shoppers to make extra purchases in the sporting goods so that they will more than make up the difference.

I will take back to some extent the magic wand comment, it just does not work on everyone.

This has been thread jacked enough.

 

[rmabrey]

Wal-Mart does not currently use a RFID system at this time that I know of, it has been discuss at length by them and manufactures to speed up the check in process and that is is sometimes refereed by the name of "instant inventory system." But this will take time for it to be implemented because current RFID technology needs to improve more with a stronger signal and lower price.

You are correct. I dug the book out and wal-mart was used as an example of how RFID technology could increase profit etc. etc.

As far as them dictating prices, I was more referring to items like, clothing lines (whatever celebrity decides they want a clothing line), As seen on tv type stuff. Mainly things that are exclusive to wal-mart, or more commonly found there. Items from most big name suppliers will not be this way. Wal-mart can sell items at cheaper prices partially due to what IBM said, that is they expect you will but other stuff. They are a big business that makes money in quantity sold not profit off an item. Mom and pop stores can't obviously do this at a level wally world can.

And Im done thread jacking now

 

[SemperFiUSMC]

I've been in the WalMart buyer's room in BV. They absolutely strongarm their suppliers and vendors.

I worked for a truck company in Springdale AR. The founder of the truck company was godfather to one of the Walton kids, and Sam Walton was this guy's kid's godfather. Very strong family and personal connection.

WalMart accounted for 60% of our business. We hired a guy from WalMart's IT division without asking their permission. Walmart cut 40% of the business they did with us for 6 months as punishment. The company never recovered and went under.

They did the same thing to JB Hunt, Tyson's, and other companies down there on a regular basis. And BTW that was when old Sam was still running the show driving around in his pickup truck.

Beer and liquor is a totally different buy for Walmart, because the state regulates sales and requires they go through distributors. The distributors are immune to WalMart's typical tactics as the distributor's has monopolistic power. Walmart must sway to that power or they are unable to sell alcohol. Alcohol is ne of a few categories that Walmart cannot control.

It's really an apple and oranges discussion. Everyone is right on this one.