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While Wal-Mart definitely can be cheaper for a lot of things, it is not always the case. You are also in many cases NOT comparing the same product, even if it is in the same packaging and with the same SKU.
For example, many companies will have say a box of 12 "something" that is sent to normal retail distribution. They also have a wal-mart product that uses the *same box* (so it looks identical) but actually has 10 of the "somethings" inside it. The wal-mart version is cheaper, but actually the same/slightly higher cost per unit to the consumer.
While I absolutely admire wal-mart for many things they have done awesomely, I don't agree overall with their business practices. Having been on the supplier side of wal-mart, they play very dirty. Many times this IS a benefit to their customer, but in my opinion a detriment to the way of life I would like to see in this country.
Say you make widgets.. Wal-mart wants your widgets in their store. You usually sell widgets for $2.00/ea. Wal-mart comes to you (or you come to them) and they say "well, we'll buy your widgets for $1.75 but increase your volume 10fold". This is usually a win for you! Yay! 10 times the volume! Everything is going good, you just massively expanded your business to be able to handle your new huge customer. Then... a year later wal-mart says "sorry.. we calculate you can make said widget for $1.60. You will give us this price or we will no longer carry your product". Now you're stuck. It costs you $1.59 to make said widgets, but you cannot stop distribution to wal-mart since now you're beholden to the volume plus the huge capital you invested in being able to handle them to begin with. So you do it.
Fast forward a couple years, and wal-mart will "suggest" you move production to a cheaper locale than the US - because then you can sell them widgets at $.99/ea. This is after you've cut out every last ounce of 'waste' you could have in making said widgets. Some good, some bad. Some of this waste were things like making your widget less reliable.
While buying household goods at wal-mart is generally good, you would be *amazed* at some of the things that are different there. In many cases, wal-mart picks up an established brand and sells it as-is the first year or two and establishes themselves as the retail channel of choice for said brand. But 5 years later, what you buy at wal-mart with the same label as somewhere else - are completely different items. Many large brands maintain a "wal-mart" distribution channel (less quality, lower price), and a "standard" distribution channel.
I know we did for what we sold. Wal-mart got the worst product we had, since we had the worst terms with them. Wal-mart also will slowly impose onerous things like you being responsible for shrinkage (how?!? we have no control over it!), product returns, etc. Basically a vendor gets paid when the sale is rung up - if the item is stolen or whatever, well tough shit.
Now.. Wal-mart has absolutely done amazing things in the automation of stock levels, streamlined distribution systems, etc. For this, I do admire them. I also have to admire in a pervase way the means they can manhandle vendors so freely. They truly do think it is best for their customers I believe.
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