Originally Posted by
HandsomeRyan
Are you saying you think it's more cost effective for a inner tube factory in China to set up a whole new production line to make special tubes for Wal-Mart rather than just repackaging the tubes rolling off their current assembly line and selling them to WM for $0.75 less than they sell them to everyone else for?! I strongly doubt this.
I used to work in magazine distribution and a big part of my business was selling magazines to WalMart and I can tell you they did buy the mags for cheaper than mom-n-pop grocery store but they weren't buying special/different/less expensive magazines from the publishers I represented. If you can get your item sold at walmart even if you have a very slim profit margin you'll likely still make money because the volume of product that WM can move is ridiculous.
Big difference between magazines and a manufactured product. And yes WM does have factories make special runs of things for them, especially in some of the larger ticket items like electronics. Problem with the still making money part is that WM will keep coming back and wanting you to lower the cost to them and eventually you won't be making money, and when you dedicate too much of your total production to making things just for WM you are screwed if you can't meet their demands.
Aaron
