Being a supplier to WalMart is like a nun who wakes up one morning in bed with Charles Manson! Part One

By Attila Honey

Being a supplier to WalMart is like a nun who wakes up one morning in bed with Charles Manson! Few people know how many employees, suppliers and even consumers are stepped on, over and under in order that the Mass Merchants retain their market share. WalMart is a supplier’s nightmare. I learned early on that dealing with any of the mass merchants, WalMart, in particular, and the Big Drug Chains, in general was like a nun who wakes up one morning in bed with Charles Manson.

Our small but innovative company had developed a unique, cutting edge line of bath & body products at the behest of the head category buyer for one of the largest drug chains. Now if a company follows through on such a request, it becomes a very costly process if you’re manufacturing and developing products abroad, i.e. China, because as each step progresses, that product must be flown in for approval many times before it’s good to go. Therefore we’re looking at big bucks just to come up with a new product line that isn’t sold yet. This particular buyer asked us to create a unique line for each of the chief categories she had on display, i.e. soy bean, orange, vanilla, aloe vera, lavender, lemon, lime, etc, and each category was to be represented by variations of our new product. In addition, she requested that we do similar development with various glycerin soaps using shape and scent for definition. We found a great factory on the Chinese border who was willing to work with us within the buyer’s time frame and together, we came up with very creative children’s bath line as well as the actual soap line, i.e., pomegranate soap that resembled half a pomegranate with seeds, glycerin soap with what appeared to be little soy beans inside – etc. Needless to say, we schlepped back and forth to the corporate office so many times that I considered putting up a pup tent.

We accomplished this feat within the three months she demanded in order to meet her own deadlines, and a date was set for the presentation. She loved the line and congratulated us on a job well done ( $30,000 in product development ). She informed our reps that we had the deal and all that remained was to sign the contract and get vendored…a mere formality. Days turned into weeks and the paperwork never arrived. Why? She’d gone to China to buy direct and knock off our product line. What a shocker after investing so much commitment, time, energy and money in development…but it was a wake up call for us doing business with a major retailer. Several months later I couldn’t resist the temptation to call her. I said, “Honey, someone put a little plaque on my desk that says, “I found my inner bitch and I ran with her! I continued, “It reminded me so much of you….I’m Fed Ex-ing it to you in memory of your China trip!” Well needless to say, she had a good laugh (at my expense) and said, “Let’s do lunch!” Needless to say, I declined saying that I had to have a hysterectomy! But that’s business and it’s called the bottom line in Hell Land. A tough and costly lesson.

The next season our full product line was on the shelves in another large chain and did quite well. But hey! Here’s another wake up call: No matter the size of the order, you just can’t win because of their contractual demands. If your product is jammed in customs because of Homeland Security and doesn’t arrive in their warehouse on time = Huge Fine! You must guarantee the sale and if that product doesn’t sell thru -  they send it back and don’t pay you – even though you have a purchase order. The other alternative to a guaranteed sale is to give them “mark down” money for products that haven’t sold. When you see all the mark downs and sales after the holidays, give the credit to the poor supplier of those goods who is paying through the nose for you to get that blouse for 75% off! Another bad deal for the supplier is being charged back for goods damaged by customers in the store itself or even damages from a fork life which might have dropped from the store’s ceiling and damaged your products. Who is to blame and charged? Why the supplier of course!!!!

The bottom line is that unless you’re the Second Coming, you wind up owing them money even though the purchase order might have been a huge one for 3000 stores. WalMart wanted our children’s line of bath products that had taken two years to develop – but when we realized we’d be working on a 3% profit margin not to speak of the their method of treating suppliers which would have put my stress level through the roof – the decision was made that the price tag was to high to work with a chain with no morals, ethics or principles…not to speak of the stress level of dealing in their environment. Are they great for the consumer? Absolutely! But they are a nightmare to deal with as a supplier. Yep! Being a supplier to WalMart is like a Nun who wakes up one morning in bed with Charles Manson.

(Part 2 continued on 12/13/09)

Attila Honey

The Attila the Honey Comedy Hour is now running 7 mornings weekly at 10am central on wggrn.com…in addition to the evening shows on Fun Friday and Sunday at 7 Central. Come on home America. One thing we know how to do is put a smile on your face! And it’s free! Our new sponsor is FrogtownSoundCards.com – an American based company. Great musical greeting cards. Buy American!