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Amazon and Walmart Are In An All-Out Price War That Is Terrifying Big Brands (recode.net)
gollum123 quotes a report from Recode: Last month, Walmart gathered some of America's biggest household brands near its Arkansas headquarters for a tough talk. For years, Walmart had dominated the retail landscape on the back of its "Everyday Low Price" guarantee. Walmart wants to have the lowest price on 80 percent of its sales, according to a presentation the company made at the summit, which Recode reviewed. To accomplish that, the brands that sell their goods through Walmart would have to cut their wholesale prices or make other cost adjustments to shave at least 15 percent off. In some cases, vendors say they would lose money on each sale if they met Walmart's demands. Brands that agree to play ball with Walmart could expect better distribution and more strategic help from the giant retailer. And to those that didn't? Walmart said it would limit their distribution and create its own branded products to directly challenge its own suppliers. But this time around, Walmart's renewed focus on its "Everyday Low Price" promise coincides with Amazon's increased aggressiveness in its own pricing of the packaged goods that are found on supermarket shelves and are core to Walmart's success, industry executives and consultants say. The result in recent months has been a high-stakes race to the bottom between Walmart and Amazon that seems great for shoppers, but has consumer packaged goods brands feeling the pressure.
Malls suck anyway. And those music stores would have gone under anyway due to other internet functionalities.
Here is the real deal: even if Amazon is selling at the SAME PRICE as the brick and mortar store, it is still a better deal because I don't have to waste time going to a brick and motor store and dealing with shitty service and snotty employees. I can sit at home, click, click, click, wait a few days and get my stuff. That sure as hell beats sitting in traffic.
Walmart. If the companies cannot undercut themselves then Walmart won't stock their products.
Guess which department doesn't create value when it comes to making products for the shelf? IT.
The second is ultra expensive health insurance making robots cheaper
http://saveie6.com/
I used to be willing to shop at Walmart, but with their race to the bottom it's become an unbearable place to shop. Their rock-bottom pricing gospel has always attracted people who can't afford to pay anything more than that. Of course this includes many decent people of modest means and quite a few thoroughly unpleasant people. It used to work out well enough when the stores were reasonably staffed and they could keep things in check, but now it seems most of them are being run by a skeleton crew and the damages of the resulting circus are being considered just a cost of doing business. With Amazon, you never have to see these people and suffer the misery of queuing for 15 minutes just to check out. With Walmart, the experience is horrible. So if I'm looking to cheap-out on regular supplies, you can bet I'm going with Amazon. That's why I think they will win out in the end.
Odds are that a long time ago the friends you had were Walmart sales associates, and today your friends are Amazon techies. Just for fun compare the same kind of job levels and you'll be surprised how Walmart employees at the bottom of the pyramid have more opportunities than those at Amazon.
Almost all top managers at Walmart HQ started in Walmart stores. How many top managers at Amazon started in the fulfillment centers?
lucm, indeed.
Walmart is notorious for squeezing vendors to provide goods for a lower price, or more product for the same price.
This is why you can walk down almost any aisle in Walmart, if you can find one which has actually been stocked, and see what seems like every third product sporting "BONUS! NOW 30% MORE FREE!" stickers and packaging. This is not being done because the vendor is thrilled to give away 30% more for free, but because Walmart has threatened them to either provide a better value in terms of more product for the same price OR pay Walmart to carry the product OR provide some sort of deal on making a private label version of something Walmart needs, OR if none of those work, Walmart will evict them from the shelves.
If you are a vendor who derives a huge percentage of sales from Walmart, you have to think hard whether it makes sense to throw away all those sales or do as Walmart demands and come up with a bonus package or provide some other service Walmart wants.
In most cases, Walmart demands sales results from everybody. If you are taking up shelf space, and even if your company paid for it, you better sell product, or Walmart WILL kick you. They may also demand that jobbers be sent in to do stocking, but this mainly happens to soft drink and snack chips. In my area, Utz bought shelf space but the stuff didn't sell and they didn't want to do "Bonus! 90MILLION OUNCES FREE!" bullshit and eventually Walmart kicked them out.
Which kind of sucks since the stores are supplied by 1099 contractor route salespeople who can't offer better deals to Walmart because those decisions are made at a much higher level, and then they get kicked out and lose what sales they were making there.
Sig for hire.
Walmart 2-day shipping is a lie. There. That is the difference.
When you order from Amazon with a two-day delivery, you can reasonably expect Amazon will hit that goal, pretty much all the time. It's extremely dependable.
When you do an equivalent order from Walmart, well... they may not even ship it for two days, and it may ship ground from halfway across the country, and may show up for in-store pickup in five or seven days.
I ordered a TV with two-day delivery a couple summers ago, so not during Christmas or any rush period. Silly me, I assumed two-day meant two-day. In reality, they shipped it via Fedex Ground from over 1000 miles away, and it took five whole days, not two, and then I had to stand in line in the store for 45 minutes behind people doing returns and buying Western Union and money orders, just to claim my item, which they initially could not find. Mind you, it was a 40" TV so not small or anything. It turned out they had been using my TV box to prop open the door to the pick-up area.
More recently, I tried to order a smartphone for in-store pick-up. It was supposed to be at the store and I could just walk in and get it, but I did pick-up just to save time. Paid for it online before the store opened for the day and waited for the email to come pick it up. Never got the email. So I called them. And well, they never bothered to go fulfil the online orders that morning and the stock they had, including the one I had already paid for, got sold when the doors opened and regular customers came in. And now they were out of stock and sucks to be me. Nobody in the store gave a shit. Online is a whole other department and nobody in the store felt any responsibility to do anything for them. At best, they worried only about their own store stuff, not online orders, so nobody even cared that they had failed to secure an item that had been paid for. Oh well.
This happens so often, the online side instantly refunded the money the moment I asked. That's the only thing that actually happened as promised. Refunds.
tl;dr Walmart has grand goals to be like Amazon but they drop the ball in making it happen. Their ads promise what they can't deliver, so no, it's not equivalent
at all.
Sig for hire.
Look at a rubbermaid mop bucket at Home depot. Then look at a rubbermaid mop bucket at Walmart. Then tell me their is 'no evidence'.
As long as the Walmart bucket is "good enough", I prefer to save money.
If I need a bucket to take on an expedition up the Amazon I might pay extra.
But to clean my kitchen floor, the Walmart bucket will suffice.
It turns out that the vast majority of consumers prioritize cost over quality. This is not irrational and those that have a need can usually do otherwise.
For example, Harbor Freight tools are generally crap. But they are cheap. Professionals who use them ten hours a day, six days a week are not going to buy them unless they work in an environment where the tools "disappear" after a couple months (both because they fail more often and because they, generally, are not as easy to do quality work with quickly) -- these professionals buy professional tools. The rest of us are well served by buying a $19.99 "sawzall". If it ends up that we wear it out in five years or less than ten hours of "run-time", we will buy another OR a better brand -- but, in reality, most of these tools end up working for the rest of your life (at least as a backup to the better one you bought because you decided you wanted the cool features or smooth operation of the better one). Sometimes, the best tool from 40 years ago is inferior to the Harbor Freight tool (due to technology advances) and it is better to just buy new tools incorporating recent technology every ten years than using "great" tools that are thirty years old but can't hold a candle to the cheap tools available now.
If you build a new server/desktop, do you buy the "highest quality" bits? If you're wealthy, doing so makes sense for bragging rights. However, for most engineers who are going to toss it in three to four years, it really doesn't matter if the case is plastic or thick steel or flimsy steel -- the resale value of the case is essentially zero and all three types of cases work fine if you don't have a full grown pet gorilla in your household who likes to play "toss the computer against the wall" (in which case, the quality of the case is likely the least of your worries as the gorilla grows up).
Most of the durable goods bought at Walmart (tools, kitchen utensils, small kitchen appliances etc) probably end up being used a few times over the owner's lifetime. If they are going to bake all day, every day, they will buy a professional mixer instead of the deprecated KitchenAid crap that Target or Kohls or Walmart sells. Generally, why pay for "quality" -- do you really care if the kitchen gadget still works when your great grandchild inherits it and it's completely technologically obsolete anyway? Engineers should understand "cost:benefit" tradeoffs very well.
I've got a very cool looking meat grinder that got passed down from my grandparents that still works as it did when my grandmother used it. Guess what, I look at it but don't use it. It's not dishwasher proof (my grandmother probably never saw a dishwasher), it's a pain to clean (my grandmother was used to things being a pain to clean), it spews blood around while grinding (my grandmother probably never thought about that - "it is what it is" - as all her friends' grinders did the same), I have to find a place to clamp it and there's no rational place to do so my kitchen (but probably was in my grandmother's kitchen).
If you care about "quality" (or false pretenses of same), you're not shopping at Walmart, Home Depot, Target, or McDonalds. However, every one of those vendors has multiple competitors who DO offer quality products and better selection (of course at a higher price). For a tiny example, if you want selection and access to quality products, check out McMaster-Carr or similar -- but make sure you've got a high limit on your credit card.
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
Brand destroying? I had an expensive Troy-Bilt mower from Lowes. It had a Chinese Briggs and Stratton engine on it. After three years, a connecting rod end cap bolt came loose, a bolt that is normally held down by a metal tag, the cap went through the crankcase and destroyed the motor. I looked for a new motor from Brig and from Honda. Both are made in China, If I have to have a Chinese motor, then it might as well be a Predator from Harbor Freight. After buying the motor for $104 from Harbor Freight, I looked up the cost on Amazon. Amazon wanted $169 + shipping ($30) for the same motor at the least expensive point and $350 + shipping at the most expensive point. Harbor Freight has these motors manufactured for them by Chingyon-Lifan in China. The same company manufactures the Honda GC Motors that sell for $269 at my local parts importer, and also manufactures the Briggs motors. While the Honda parts interchange with my engine, the Briggs parts do not. As a result, for the cost of the motor and the blade adapter, I have the mower back in commercial service for about 1/4 the cost of a new mower. But Amazon, nor Walmart were of no help whereas a Chinese Importer (Harbor Freight) was of great help. I now have a fine running Tredator.
Yep, that is precisely what happened to me. I had a cheap bucket (brand??) probably from Walmart that barely lasted anytime. The next one I got was super thick and it's been working well for years.
Personally I'd rather manufacturers default to making better stuff instead of junk. Most stuff I buy isn't disposable, it is something I want to last a couple of decades so I don't have to go through the hassle of shopping again.
And shopping for some things on Amazon is getting terrible... too many choices (bad ones) to sort through. Try shopping for a kid's bed on Amazon... let's say one that won't break in 12 months. Good luck, it will take you weeks just to go through the 10,000 choices of junk.
Granted, a portion of the blame here also resides with PayPal, but still extremely frustrating. I burned up almost all the minutes on my then pre-paid flip phone with Walmart and Paypal trying to resolve it.
Side note, it is hard as fuck. But even with a decade in prison, and a felony record, I now have a great job, a side business, bought a new car 2 years ago and now own a home. All in a bit over 5 years. It took a lot of luck, good friends, and a pile of hard work. So if you are unemplyed, have strikes against you etc, don't give up.
Silence is a state of mime.
Not really. It is called learning to live within your means, sacrifice and savings.
I know...old fashioned concepts but they still are valid.
I'm not poor (I've been the broke student starting out tho)....and I'm not wealthy, but I do upper middle income ok.
But even in my pooer days, as even today...I quite often have some things, some necessary like tools, other are plain outright toys...but in many if not most cases, they are of higher quality and build than what most of my peers have.
How?
Well, I tend to have a clear image of what is important to me. If I want "X"....I generally spend a LOT of time researching the shit out of it...I find what I consider to be the best in class. I see how much I have to save to get it, and decide on what things I currently spend money on, that I can do without for awhile so I can save at a more rapid timeline.
I buy what I want and I am happy, no buyers remorse....and hey, the best isn't always the most $$, but when it is, I don't cheap out.
Yes, some people come by and go "OOOooh you must have a lot of $$". Well, no that's not the case. I just drank a little less, didn't go out as much, and cut corners where I could to SAVE money....and also be patient to wait on a good deal when it pops up.
I try to have a little savings in a "toy" savings at all times. I put at least a tiny bit away...for that semi-impulse buy when a great deal pops up for a very limited opportunity time.
For the most part, I try to have cash on hand to buy most any of these things. Even then, I will often keep that cash standing by....and use a interest free payment on these things (mostly with Amazon store card 6-12 months). That way I pay things out and can keep that cash on hand in savings earning at least a tiny bit of interest.
But living within ones means, sacrifice....if you can exercise at least a modicum of self control...life can still be good.
I've been doing this since I was a young teen...doing neighborhood jobs saving for a year to get what at the end was a HIGH end skate board. I've been building my stereo since I was about 12yrs. What I have now blows away what others have....many of them have Dr. money which I certainly do not...yet, they are amazed at how my stereo sound. I've been building it for years by saving, swapping out parts as deals came along, etc.
It isn't hard and geez, I am NOT the most disciplined person around, but fiscally I do try to exercise a little common sense.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
At a past job an on-site supervisor bought a yard tool from Wally World, same brand and model as the ones we normally used from Regional Box Store. The tool broke the first time he used it. He was a bit of a character, and ended up out in the street kicking it around and shouting at it, because he was so sure it should be the same as the normal ones. Later he came to understand it wasn't a universal conspiracy to make his day awful, just a different quality tool. He thought that it was "impossible" that they would sell a different tool with the same model number, so we checked the package; slightly different package, same model number, same UPC code. Different plastic code, different plastic mold! Definitely less plastic.
There was a famous one in the 90s where they were selling "Made in USA" clothes, because those red state poor folks loved those flags. Of course, it was actually all made in China, and then they had to take the fraudulent labels off. Average shopper there thinks they "switched" to Chinese products to save money, and has a whole spiel about how it is libral conspiracy to destroy `Merica.
There was also the famous case of the name brand pickles that at the other stores never had a partial pickle, you would get the amount on the label rounded up to the nearest whole pickle. And a good thing too for pickle lovers, because if you can a half a cuc it gets soft. But at Wally World, that "same" jar of pickles would have exactly the weight on the label, with a partial pickle to make it work. Yuck.
If people want to buy a product that cost 15% less to make than the cheapest version sold at other stores, and they charge 5% less for it, that isn't a very good deal for any product you would buy more than one time in your whole life. It isn't any of my business if people shop there, but they shouldn't be surprised when the item they purchased breaks. Unfortunately, most of these people are so dim that they'll blame only the brand. But eventually, each of those brands suffers real consequences from it.