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View Full Version : The Man Who Said No To Wal-Mart


Turfrific
08-25-2008, 06:05 AM
What struck Jim Wier first, as he entered the Wal-Mart vice president's office, was the seating area for visitors. "It was just some lawn chairs that some other peddler had left behind as samples." The vice president's office was furnished with a folding lawn chair and a chaise lounge.

And so Wier, the CEO of lawn-equipment maker Simplicity, dressed in a suit, took a seat on the chaise lounge. "I sat forward, of course, with my legs off to the side. If you've ever sat in a lawn chair, well, they are lower than regular chairs. And I was on the chaise. It was a bit intimidating. It was uncomfortable, and it was going to be an uncomfortable meeting."

It was a Wal-Mart moment that couldn't be scripted, or perhaps even imagined. A vice president responsible for billions of dollars' worth of business in the largest company in history has his visitors sit in mismatched, cast-off lawn chairs that Wal-Mart quite likely never had to pay for.

The vice president had a bigger surprise for Wier, though. Wal-Mart not only wanted to keep selling his lawn mowers, it wanted to sell lots more of them. Wal-Mart wanted to sell mowers nose-to-nose against Home Depot and Lowe's.

"Usually," says Wier, "I don't perspire easily." But perched on the edge of his chaise, "I felt my arms getting drippy."

Wier took a breath and said, "Let me tell you why it doesn't work."

Tens of thousands of executives make the pilgrimage to northwest Arkansas every year to woo Wal-Mart, marshaling whatever arguments, data, samples, and pure persuasive power they have in the hope of an order for their products, or an increase in their current order. Almost no matter what you're selling, the gravitational force of Wal-Mart's 3,811 U.S. "doorways" is irresistible. Very few people fly into Northwest Arkansas Regional Airport thinking about telling Wal-Mart no, or no more.

In 2002, Jim Wier's company, Simplicity, was buying Snapper, a complementary company with a 50-year heritage of making high-quality residential and commercial lawn equipment. Wier had studied his new acquisition enough to conclude that continuing to sell Snapper mowers through Wal-Mart stores was, as he put it, "incompatible with our strategy. And I felt I owed them a visit to tell them why we weren't going to continue to sell to them."

Selling Snapper lawn mowers at Wal-Mart wasn't just incompatible with Snapper's future--Wier thought it was hazardous to Snapper's health. Snapper is known in the outdoor-equipment business not for huge volume but for quality, reliability, durability. A well-maintained Snapper lawn mower will last decades; many customers buy the mowers as adults because their fathers used them when they were kids. But Snapper lawn mowers are not cheap, any more than a Viking range is cheap. The value isn't in the price, it's in the performance and the longevity.

You can buy a lawn mower at Wal-Mart for $99.96, and depending on the size and location of the store, there are slightly better models for every additional $20 bill you're willing to put down--priced at $122, $138, $154, $163, and $188. That's six models of lawn mowers below $200. Mind you, in some Wal-Marts you literally cannot see what you are buying; there are no display models, just lawn mowers in huge cardboard boxes.

RonB
08-25-2008, 09:48 AM
Not sure of the point of this post but .. Just because Simplicity buys Snapper, why do they have to sell Snapper at WM? Why not just continue selling the cheaper models?

You can buy an iPod at WM but not Apple computers, iPhones, etc.

HOOLIE
08-25-2008, 11:38 AM
I read that article somewhere a couple years ago, I think that was excerpt from it.

Not sure why the guy posted it now. The overall point of the article was that Snapper decided to ditch Wal-Mart, and lots of gross revenue, to maintain their reputation of quality, as Wal-Mart likes to nickel and dime all their vendors and drive the prices down.

txgrassguy
08-25-2008, 03:12 PM
The school of economics that pertains to economy of scale models such as WalMart and other box stores can be quite vicious.
The idea being to enter into an exclusive relationship with a material supplier, ensure that the material supplier becomes entirely dependent upon this one, sole contract. Than squeeze that material supplier until they are either broke or so dependent upon this one contract they are effectively manipulated by the box store.
Actually the first company to do this with wide effect was McDonalds in the beef market from the late sixties.
Walmart took notice and adjusted their practices accordingly. Actually, in that article excerpt, the salient point when dealing with prospective contract holders is their office furniture/surroundings.
Whenever I am meeting with a prime contractor about providing services, one of the "tells" I observe is how/what type of furniture I have verse the contact and how all of this is arranged. I have walked from more than one potentially lucrative appearing deal when subjected to the uncomfortable chair or my chair is much lower than the contact's chair.
I heartily suggest that people here read up on body language and behavioral indicators in an effort to recognize the validity of doing business with certain "types" of people.

Turfrific
08-25-2008, 05:00 PM
Couldn't of said it better myself grass guy.:drinkup:

bohiaa
08-26-2008, 10:18 PM
Most people " who went to college anyway" know the business Practices of wal mart and always steer clear of them.....

I would drive 75 miles NOT to purchase at wal mart...

dbsoccer
08-27-2008, 03:55 PM
One sound bit of advice I heard from a marketing type was never get yourself into a position where price is the only thing that differentiates your product/service from your competitors. If you do you'll either be broke or out of business very quickly.

DA Quality Lawn & YS
08-28-2008, 04:43 PM
Interesting thread....
You realize that Walmart has a good deal of its products custom made CHEAPLY and exclusively for themselves. Good for simplicity, not bowing down to this corporate bully...wanting to maintain quality stds. Walmart IS NOT quality, and money shopped there gets sent right out of town. Will never set foot in one again, I am clean for almost 5 years now:)

txgrassguy
08-29-2008, 12:52 AM
The WalMarts in my area has Murphy Oil signs for the fuel stations.
Price is the same as the local discount supermarket but my Wright Express cards only work at the Murphy Oil places, aside from the obvious big oil joints but they are $.10 to $.15 per gallon more expensive. Fueling is the only time I'm on a WalMart grounds.
I turned down their offer to bid on maintaining the grounds too. I submitted a bid as a result of a request to do so but the manager said payment averaged 45 days after the initial 60 to 90 day "new contractor processing period". WTF?
So I replied that the bid has now gone up by 50% to cover their late payment.
Everyone, and I mean everyone I do business with pays in 15 days or late charges accrues. Residential, commercial, municipal - it doesn't matter, pay in 15 days or late charges apply.
Nope, ain't working for Sam and company - won't shop in the stores either. F 'em, the scabby mud sucking cheap skates that company is.

TPnTX
08-30-2008, 12:53 PM
go'on tex, tell us how you really feel.

LandworksUnited
08-30-2008, 04:51 PM
One sound bit of advice I heard from a marketing type was never get yourself into a position where price is the only thing that differentiates your product/service from your competitors. If you do you'll either be broke or out of business very quickly.

well said

I would drive 75 miles NOT to purchase at wal mart...

coming from a union-oriented family, i learned and experienced why companies like Walmart harbor bad business. aside from the horrendous payment and regulations of their employees, most of their products are outsourced for production millions of dollars cheaper than what they would cost to be produced in the good 'ole USA. Those are millions of dollars that could go to factory employees in our own country. we should remember that as business owners and entrepreneurs , the level of condemnation we have for corporations like Walmart, Coke, and Nike, should always be in direct proportion to our own ethics and practices in business.

I'm not a patriot of uncle sam by any means.. but i am certainly for the improvement of employment and situating of my own people.


S.I.
08-30-2008, 05:55 PM
The lawn chairs in the VP's office was not because the company is cheap or skimping on office furnishings. That is a business strategy to make the person feel uncomfortable and inferior to the VP as they are visiting with them. It lowers their confidence level and makes it easier for the VP to manipulate a lower cost if they decide to stock this persons product. It is actually not an uncommon practice in the buying and selling business.

I believe that what the guy was trying to say was that although you may find a way to sell more of your product/service, you should not let it damage your reputation. In this case the company is very reputable and known for quality products and Wal-Mart is known for selling sub-par product. So the decision was made not to discredit the name of a product by means of association. A good example of a product losing reputation for quality and style is Starter brand clothing. 10-15 years ago this was "the" brand to have and was only sold at high-end stores and sporting goods stores. They have since then started selling at Wal-Mart and now have a reputation of "budget" clothing. I am sure the company is making a substantial amount more money, but their name is now soiled.

Bottom line and point is don't associate yourself or business with someone or something that could discredit the value of your product.