When my family owned a trading company back in Asia, my parents never supplied Walmart because it was not profitable. This well-known American go-to superstore, Walmart, holds such a strong bargaining power against its suppliers that “they’ve driven some people out of business who shouldn’t have been driven out of business”! Even CEO Jim Wier of large supplier “Snapper Lawnmower” has refused to to continue supplying Walmart.

Wier decided to pay Walmart’s Vice President a visit. In the meeting it was revealed that Walmart wanted to make Snapper Lawnmower go large by introducing an outdoor power-equipment business based on the Snapper brand in order to compete with its competitors. This offer, surely intriguing, was waved from Wier’s mind in an instant.

Wier believed that supplying Walmart will forecast a drop in prices and quality standards of lawnmowers, hence moving Snapper away from its luxury brand image.

But leaving Walmart, was this the right choice? Perhaps Wier could have allocated the costs by moving manufacturing offshore where labour is cheaper, or by producing a new and cheaper product line just for Walmart. But Wier has not gone back on his word since. His final gut decision to leave Walmart could inspire other companies to stop supplying Walmart before their bankruptcy.

References:

BusinessManagementDaily. “How Snapper’s CEO said ‘No’to Wal-Mart — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily.” Business Management Daily — FREE reports on business, management, leadership, career, communication, human resources, employment law, technology, and small business tax. N.p., n.d. Web. 27 Sept. 2013. <http://www.businessmanagementdaily.com/24872/how-snappers-ceo-said-noto-wal-mart>.