It's actually worse than that. Suppliers are attracted to WM because it represents a huge market. Once a supplier contracts with WM, they can lose other distribution channels. This means they are often stuck with WM. It ends up being a bargain with the devil.
Originally Posted by wahoonc
Then, WM's strategy is to come back every year and require the supplier to reduce their costs.
WM's business model is a race to the bottom. It works because the consumer thinks the only thing that distinguishes "equivalent" products is price. That is, the consumer thinks that a $100 bike is the same exact thing as a $1000 bike except the person selling the $1000 bike is ripping them off!
Last edited by njkayaker; 01-03-10 at 10:20 AM.