TGroup Marketing

Some things to consider before doing business with Wal-Mart

Whether you have a small business or a large corporation, doing business with Wal-Mart can be a double-edged sword. On one had, it can quickly give a small firm a huge boost in sales. On the other hand though, it can turn off existing or prospective customers because once they find out that you are selling to Wal-Mart they say, "Why bother? I'm not going to compete with them." In the long run this could diminish your brand and ultimately, be unhealthy for the company.

In our manufacturing company, we don't tout the fact that our products are sold in Wal-Mart to prospective customers. It's not something that we try and hide but we don't go around shouting it from the mountain tops either. In one case, we were approached by a high-end department store that really liked our concept but they were not interested any more once we told them that we were also selling to Wal-Mart. In the end we took the basic idea and reconfigured it so that it had a completely different look and would not be confused in any way, shape or form, with what was being sold at Wal-Mart. The department store buyer loved it and went about completing the deal. That has actually worked out quite well for us and do something similar whenever possible.

Wal-Mart

Whether you love it or hate it, as the world's largest retailer, Wal-Mart isn't going anywhere any time soon. The company has more than 3,800 stores in the United States alone (with 21 new stores opening just in the month of November) and thousands more spread out in more than a dozen countries around the globe (source: Wal-Mart).

Wal-Mart deals with approximately 60,000 different vendors from all across the globe. Each year, approximately 10,000 companies try to sell their products to Wal-Mart, but only about 200 make the cut. Those aren't very encouraging odds. That means for every 100 new vendors that walk through the doors at the company's headquarters in Bentonville, 98 of them are going to walk out the door disappointed.

Lots of folks might think that getting a Wal-Mart vendor number is the key to success but believe me that is not necessarily the case. In fact, if the relationship isn't managed properly it can actually be nothing more than the kiss of death. I've seen it happen to a number of small firms--particularly those where Wal-Mart sales accounted for the majority of their business. Disaster struck when they got so wrapped up in focusing on Wal-Mart that they neglected everyone else. When the relationship with Wal-Mart when south and they realized that only a small percentage of their sales come from other customers, the companies went belly up.

If you are fortunate enough to get a Wal-Mart vendor number, the key to success is two-fold: First, the relationship with Wal-Mart must be properly managed; and Second, don't ignore developing relationships with other customers.