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WalMart, Capitalism and predatory behavior


David Waelder

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Ken, Thank you for sharing your thoughts. I think I've already said everything I have to say on this subject so I'll not make a further response. But I am glad that the colloquy ended more cordially than it began.

On the subject of the quality of US goods, I have actually seen many encouraging signs recently. (Granted, the situation with cars is not looking good right now.)

When I started work in this business virtually every stick of gear was made somewhere else. The only serious contenders as recorders were both made in Switzerland. Mixers came from Switzerland, Germany, Sweden, or, for documentary work, the Isle of Man. Microphones were almost exclusively German. The big 35mm cameras were sometimes American and sometimes German but 16mm cameras were either French, German or English. The good wireless mikes were English. I think the XLR connectors and actual wire may have been made here, but I'm not sure.

Today we have recorders and wireless from Zaxcom in New Jersey, mixers and recorders from Sound Devices in Wisconsin, wireless from Lectrosonics in New Mexico, mixers from PSC in California, time code products from Denecke in California, booms and accessories from Loon in Montana, booms and shockmounts from K-Tek in California. And, of course, until recently we had mixers from Andy Cooper. Did I miss anyone? All of this is well-made, first rate gear.

There are some other areas where US performance has been strong. Not without competition from abroad, of course, but still strong. In addition to aeronautics and military hardware there is also medical and scientific research instrumentation. For example, the products of:

Beckton Dickenson (medical devices)

Dionex (analytical instruments)

Steris Corporation (sterilization equipment)

I can't say with certainty that everything these companies make is actually fabricated here but the design certainly is done in the US along with much fabrication.

On the subject of design, the recent offerings from Apple Computer, milled from a block of aluminum are examples of a promising trend. Yes, made abroad but the quality (disclaimer - haven't actually handled them myself) is a consequence of the design and the construction protocols and parameters set down by the designers here. The crew responsible for programming the CNC machine dictates the quality.

I'd like to be able to point to more but there are good signs and things are looking better, I think, than they were twenty years ago.

David Waelder

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I curious if those who boycott Walmart (and then, presumably, Sam's Club) also boycott Cosco, Best Buy, Home Depot, Lowes, Target, Bass Pro, and K-Mart?

gt

I think you'll find Costco compensates their employees very well, offers good benefits, and manages to make an excellent profit.

http://abcnews.go.com/2020/business/story?id=1362779

Not sure about the others, and I imagine they could do better.  I always buy something from a local hardware store when I see one!!

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I curious if those who boycott Walmart (and then, presumably, Sam's Club) also boycott Cosco, Best Buy, Home Depot, Lowes, Target, Bass Pro, and K-Mart?

In 2006, in two months in the US, i managed to visit ALL these shops. For an Indian who was not exposed to warehousing and magnitudes, it was kind of overwhelming. I bought what i thought I needed, trying to find the best quality out there. Many items were substandard, of course. But i did find a Weller portable soldering iron in the Washington Lowes. I don't think i could have gone around searching for the right place to buy, especially because i was not looking for anything particular.

-vin

-vin

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Part of the reasons here for declaring Walmart and Sam's Club to be an evil empire is that they use their massive multi-department muscles to put small single shops out of business (jewelers, eye glass shops, pharmacies, hardware stores, grocery stores, etc.) by giving consumers a low price option. Costco does exactly this, too, using the Sam's Club wholesale warehouse theme as a model and low price as the bait. Applying the same gauge that many critics use for Walmart, you can also be certain that Costco uses their muscle to put incredible pressure on their suppliers to keep prices low, which results in lower pay and lower standards for the factory workers around the world. That this is omitted from ABC's glowing report is a bit suspect. I'm not saying that I have a problem with this kind of business, but for criticism to be respected it must be consistent, so if Walmart is hated for this practice then so must Costco (and Lowes, and K-Mart, and Apple, and Dell, and Home Depot...).

gt

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I thought that part of the deal with those low-cost big-box retailers was that some of their suppliers often made products specially for them--with the brand name but at a lower cost and quality.  I know the name-brand tires I got at Costco did not last as long as the same brand tires for a similar price that I got at a tire shop, but the exact model I got at Costco was only avail from them.  Or is this an urban myth?

Philip Perkins

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Jim - Just know that when you click on this thread, things are going to get exciting.

Forewarned is forearmed.

Thanks for taking things down a notch, guys.

Best regards,

JG

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Guest jimg

I thought that part of the deal with those low-cost big-box retailers was that some of their suppliers often made products specially for them--with the brand name but at a lower cost and quality.  I know the name-brand tires I got at Costco did not last as long as the same brand tires for a similar price that I got at a tire shop, but the exact model I got at Costco was only avail from them.  Or is this an urban myth?

Philip Perkins

Tires-wise, an urban myth, I think. Often the big box folks have special packaging of some products - look at digital still cameras at Costco vs. from a camera store. There's a blister pack from Costco but at our local camera shop, it's the same package without the big plastic blister pack that's on the Costco item.

The same model Michelin tire for my Dodge van is about $10 or so more on sale at the regional tire chain than the every day online preorder price at Costco. I've actually had better luck with the service at Costco - the balancing is right, the installer used a torque wrench not an impact wrench with a torque stick so I never have had a tire installer at Costco warp a brake rotor. That's just my experience.

Best regards,

Jim

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I understand the need for discount stores.  Bulk buying is a solid option for families and businesses.  Although Costco might muscle out smaller vendors for specialty items, a practice that is its own issue, as a whole their business model seems to be a little less destructive.  Walmart could reduce its "evil" status to something like "rather naughty" if they offered better wages, health insurance options, and a better considered choice of products.

One thing I like to remind people of is the HUGE "check the label" campaign Walmart embarked on a number of years ago in order to lure customers to their rapidly growing chain.  It was basically a support America campaign.  Buy American, support your country, shop at Walmart.  They have since abandoned that model for higher profits and less concern for their communities.

Robert

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I understand the need for discount stores.  Bulk buying is a solid option for families and businesses.  Although Costco might muscle out smaller vendors for specialty items, a practice that is its own issue, as a whole their business model seems to be a little less destructive.  Walmart could reduce its "evil" status to something like "rather naughty" if they offered better wages, health insurance options, and a better considered choice of products.

One thing I like to remind people of is the HUGE "check the label" campaign Walmart embarked on a number of years ago in order to lure customers to their rapidly growing chain.  It was basically a support America campaign.  Buy American, support your country, shop at Walmart.  They have since abandoned that model for higher profits and less concern for their communities.

Robert

Regarding unique products specified by large retailers, yes, stores like Walmart, Costco, Lowes, Whole Foods, etc. do they have products made specifically for them that are slightly different than found at specialty or professional stores, with a different model number and possibly different specs. This includes tires, tools, batteries, and underwear, just to name a few. This allows these stores to sell what look to be identical items for lower prices than smaller stores. It doesn't always mean that the quality is lower, but sometimes it does. Sometimes its slightly better with a much higher price. Sometimes it's the exact same item but without a few accessories. Sometimes its the exact same tire with a different compound and mileage warranty. This is how Lowes and Home Depot can promise "lowest prices, guaranteed* (*for same model)", because that exact model does not exist anywhere else.

Regarding the abandoned "Check the Label" campaign (which was about 20 years ago, as I recall), be sure to spread the same disdain for the other large store chains that buy globally, which is pretty much all of them, who do it for the same motivation: a competitive edge for higher profits (and longevity).

gt

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be sure to spread the same disdain for the other large store chains that buy globally, which is pretty much all of them, who do it for the same motivation: a competitive edge for higher profits (and longevity).

gt

I do have disdain for global buying at all stores, especially when options are available.  I pointed out in an earlier post, a trip to Kmart yielded the discovery of a discount sand toy set, almost identical to the ones found in any other discount store.  The difference was that this one was made in the USA.  It was not more expensive, but equal in quality - or lack thereof.  While it's impossible (and stupid) to drive around looking for these items specifically, it's worth noting where they can be found, and when needed, buy them at that store in an effort to support any small attempt to keep manufacturing jobs at home.

And before "hypocrite" is called, I bought a more expensive set of sand toys made in the USA out of recycled materials.  Whole Foods, I think.  While I recognize not every family can can afford to do this on a regular basis, little things can make a difference.

Robert

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This thread has reminded me to let CNBC know I will be available for the Wal-Mart Shareholders meeting this summer . . . <g>

You folks should be in Arkansas and shoot in their corporate HQ for the networks.  I'm thankful for the work, but that place is like a different world.  I once had to sign a sheet when I went in saying I didn't have SARS.  On the other hand, the manager at a Sam's Club in Texas offered to let us stay there with their employees during Hurricane Rita since they were the only place with power and A/C.  They even let us shoot on their parking lot that day which is usually unheard of.

David   

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It's important to remember that WalMart sells many commodity items as well as the Chinese garbage. I shop at WalMart because the name-brand household items we use everyday are less there. Downey, Ajax, Snuggles, Cheeto's (I love those cheddar jalapeno ones) and many other items are just much less expensive than they are at Von's or Ralph's. Sure, it means two stores for grocery shopping but, times being what they are, we save where we can.

I do not buy WalMart's cheap Chinese TV's. I want better quality than the lines they carry and, I am willing to pay for it. Neither would I buy WalMart's cheap Chinese Bicycles. I would rather support my local Bike shop who will happily repair and support the product I bought from them. However, I will not pay more for the exact same household item sold elsewhere just because they also try to maximize their profits by offering other categories of lower cost and lower quality products to those who only care about price.

BTW, Baked Lay's are like $1.50 cheaper at WalMart!

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It's important to remember that WalMart sells many commodity items as well as the Chinese garbage. I shop at WalMart because the name-brand household items we use everyday are less there. Downey, Ajax, Snuggles, Cheeto's (I love those cheddar jalapeno ones) and many other items are just much less expensive than they are at Von's or Ralph's. Sure, it means two stores for grocery shopping but, times being what they are, we save where we can.

I do not buy WalMart's cheap Chinese TV's. I want better quality than the lines they carry and, I am willing to pay for it. Neither would I buy WalMart's cheap Chinese Bicycles. I would rather support my local Bike shop who will happily repair and support the product I bought from them. However, I will not pay more for the exact same household item sold elsewhere just because they also try to maximize their profits by offering other categories of lower cost and lower quality products to those who only care about price.

BTW, Baked Lay's are like $1.50 cheaper at WalMart!

Better lines than what they carry? They carry Sony, Samsung, Sanyo, Sharp, Phillips, Toshiba, Vizio, Phillips and others. Just about the same product lines as any other place.

Eric

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Will you buy Schoeps, Sound Devices, et al when they start selling them for less than cost?

I know, the manufactures won't currently allow that to happen, hence the pro audio dealers are a protected industry.  Things change.

If someone needs professional support in accessorizing and operating a bag of potato chips, I'm afraid they are out of luck on several different levels.

In the interest of survival and profits, most every decision of a manufacture, from concept and design through the line of distribution and support, is made to keep their products as valuable as possible for the end user. For the longevity and profits of manufacturers in a free market, and for the longevity and high profits of the end user in a free market, that will never change.

Glen Trew

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This issue of making special products for individual stores has several permutations. It's reasonable to be leery of nearly identical units because it's not unheard of for a manufacturer to make products at differing quality standards, depending on the retailer and how much they are willing to pay. I understand this is also true with some of the outlet stores. A respected brand will sometimes make a lower grade product to have something to sell at a discount at their official outlet branch.

However, a different strategy is, I think, more common. One often finds that a particular item is only available at Sears or only available at Best Buy. Competitors will have something very similar but not identical. One shop will have a VCR with built-in preview screen, the other shop will have the identical VCR but a mini-cappuccino press instead of the preview screen. This allows each retailer to advertise a competitive price with the guarantee that they will refund double the difference if you can find it from an authorized dealer for less. Of course, there is no other authorized dealer for exactly that VCR so the guarantee is safely made.

This is a little devious but hardly the worst ruse a retailer can engage in. One is torn between a loss of trust in the integrity of the seller and a little bit of admiration for the cleverness of the gambit.

David Waelder

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For those of you in the Los Angeles area...

"We'll beat the best advertised price or your mattress is FREEEEEEEEE!"

Besides the fact that with exclusive labels the same product does not exist elsewhere, can you imagine a sales manager saying "I'm sorry, we can't possibly beat that advertised price for that mattress, so we'll GIVE it to you for FREEEEEEE!"

I don't mind the private labeling.  It's pretty much all the same product at pretty much the same price, be it a VCR a TV or a mattress.  I typically give my business the company that acts like they want my business.  And these days, surprisingly, that's still hard to find.  Both CompUSA and Circuit City are gone.  When I walked into those stores in the past, nobody seemed to care that I was there to spend hundreds or thousands of dollars at the store.  I walked out.

Robert

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For those of you in the Los Angeles area...

"We'll beat the best advertised price or your mattress is FREEEEEEEEE!"

Besides the fact that with exclusive labels the same product does not exist elsewhere, can you imagine a sales manager saying "I'm sorry, we can't possibly beat that advertised price for that mattress, so we'll GIVE it to you for FREEEEEEE!"

I don't mind the private labeling.  It's pretty much all the same product at pretty much the same price, be it a VCR a TV or a mattress.  I typically give my business the company that acts like they want my business.  And these days, surprisingly, that's still hard to find.  Both CompUSA and Circuit City are gone.  When I walked into those stores in the past, nobody seemed to care that I was there to spend hundreds or thousands of dollars at the store.  I walked out.

Robert

Au contrare mon ami, Compusa is alive and well. Now owned by Tiger Direct. www.compusa.com

Eric

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Au contrare mon ami, Compusa is alive and well. Now owned by Tiger Direct. www.compusa.com

Eric

That's Compusa DOT COM. Tiger Direct bought the name and possibly some assets and goodwill (if there was any) but all the stores (bricks and mortar) are closed, at least in Southern California.

-  Jeff Wexler

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Both CompUSA and Circuit City are gone.  When I walked into those stores in the past, nobody seemed to care that I was there to spend hundreds or thousands of dollars at the store.  I walked out.

Robert

All of the bricks and mortar CompUSA's are indeed gone. I had a special place in my heart for Circuit City and was sorry to see it go. Circuit City grew out of the Richmond, VA Dixie HiFi stores. It became a regional chain when I was in high school, I think. I bought many Dynaco kits there, and several pairs of Advent speakers. They also sold some parts and so on. Dixie HiFi was the company that eventually became Carmax as well. Circuit City was spun off a few years ago, but that's when the downhill slide began. Their online operation was pretty good until close to the end. My wife bought one of the big Epson photo printers from them a little over 2 years ago, and they had the lowest price in the country when you considered the free shipping.

JG

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Really? Go to the website, click on the store locator tab, you'll find that there are 23 Compusa brick and motar locations. Including one about 8 miles from me.

Eric

Okay - but none in California.  And they still suck!  Probably.  I don't know.  Whatever!  :-)

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