I don’t get it. Why do so many people hate Walmart? I’m actually a big fan of Walmart. They offer some of the most competitive prices for nearly… everything! Walmart is the single biggest employer in the United States. It employees well over 1 million workers, and gives them the option to opt into a health care program. Wal-Mart pays an average full-time hourly worker of $10.11 an hour, according to independent expert statistical analysis*. That’s nearly double federal minimum wage of $5.15 an hour. Let’s analyze Walmart a bit further by looking at the usual complaints and responding to them.
Complaint: Walmart drives out competition! They’re evil!
My Response: Walmart beats the competition. They offer the same product at a cheaper price. That means they are more efficient then their competitors. Since when was being successful a crime? Let’s look at a scenario. Let’s pretend YOU made a new website. Let’s say your new website competes with Google. Your new website is amazingly efficient, user friendly, and always gets the best search results. You start making millions of dollars. Your new website is absolutely phenomenal. Whenever someone searches something, they always find exactly what they’re looking for. You managed to do this because you spent countless months developing your new search engine. Your new website also gets praise from the entire country for being such a resourceful website. However, due to the result of your new success, you managed to bankrupt both Google and Yahoo by offering cheaper rates. Did you do anything wrong? Absolutely not! You created a BETTER product then your competitors, and in result, they had to close down, because they couldn’t adapt to their new competition. This is exactly what Walmart did. They created an extremely efficient method of getting products and putting them on the shelf at low costs walmartone.com
Complaint: Walmart strong-arms its suppliers for the lowest possible prices.
My Response: Why should Walmart pay the same price for a TV as Joe’s electronics? Walmart purchases 1,000,000 TVs at once, while Joe’s electronics purchases 5. The truth is that suppliers love Walmart. (source below). Why wouldn’t they? When you talk about transactions, you have to understand basic economics. Whenever a transaction occurs, both parties always benefit. If that wasn’t the case, the transaction would not have occurred. Lets look at the most basic example. When I purchase a gallon of milk for $2 at 7-Eleven, I clearly want the milk more then I want the 2$. The 7-Eleven clearly wants my 2$ instead of the gallon of milk. Whenever Walmart needs to restock, they contact their suppliers and negotiate a price. If both parties agree, the order is fulfilled. If the supplier cannot agree on a price with Walmart, the supplier has the option to decline. Walmart will then seek a different supplier to get the order filled. If no supplier will fulfill Walmart’s order, Walmart will most likely raise its offer and try to negotiate once again with its suppliers. Is this penny pinching method evil? Of course not! Walmart is trying to get the best deal possible. Since when was that ever a despicable act? A consumer usually checks the price on higher tag items at multiple retailers before making a purchase, why shouldn’t Walmart do the same thing?