The Startling Truth About Wal Mart

[ernest2]

From: "Sterling D. Allan" <sterlingda@greaterthings.com>

Date: Tue, 30 Apr 2002 03:02:07 -0600

Subject: [Greater Things] ENOUGH!! Wal-Mart's Cheap Prices Come at a Terrible Price

Reply-to: Greater_Things-owner@yahoogroups.com

PART 1 OF 2 PARTS
!!!!!!!!!!!!!!!!!! WORTH READING !!!!!!!!!!!!!!!!

The onLY good thing about wal mart is that they still sell long guns. There , I mentioned guns!


http://www.greaterthings.com/News/Wal-Mart/

Wal-Mart provides an up-front savings for shoppers, but the cost is carried
by increasingly brutal labor conditions, especially in China, but also in
the U.S. Because Wal-Mart is now the largest corporation in the world, its
practice of disregarding human rights for the sake of a good sale on the
other side of the world is setting an ominous trend in an industry that is
now trying to keep up with Wal-Mart by wringing more labor for less and less
compensation.

This is creating a very serious breach of conscience for millions of
otherwise upright Americans, who can sense that these low prices come at a
price. It is time to stop patrionizing increasingly slave-like labor
conditions.

Solutions include:
1) Patronize local non-Wal-Mart businesses, even though their prices may be
higher. Buying from Wal-Mart might save money now, but it is like going
into debt because of the labor crisis it is promoting. This trend has a
melt-down point.
2) Inform your local Wal-Mart of your intentions to do the above. Tell them
that you do not appreciate lower prices when it means such increasingly poor
labor conditions for its workers both here and abroad.
3) Let your voice be heard by others in your circle of influence to raise
awareness of this plight.
4) Each time you do shop, whether at Wal-Mart or a previously existing
business for which Wal-Mart is a competitor, hand the cashier a card
summarizing your reservations.

Perhaps it could be as simple as printing on a card/mini-flier a headline,
brief statement, signature, and a web address that itemizes the point.

Here's one I intend to pass out to the cashiers around here:

"Wal-Mart's Cheap Prices Come at a Terrible Price -- I am dedicated to doing
my part to stop supporting increasingly slave-like labor conditions in the
U.S. and abroad. I am avoiding Wal-Mart shopping in favor of other
businesses who compensate their workers at a reasonable level.
see http://www.greaterthings.com/News/Wal-Mart/"

Sterling

p.s. thanks to the following article that inspired the creation of the new
index above.


(American Patriot Friends Network)
Date: Mon, 29 Apr 2002 21:11:38 -0500
From: The Webfairy <webfairy@enteract.com>
Subject: How Wal-Mart is Remaking our World

http://www.alternet.org/story.html?StoryID=12962
How Wal-Mart is Remaking our World
Jim Hightower, Hightower Lowdown
April 26, 2002

Bullying people from your town to China
Corporations rule. No other institution comes close to
matching the power that the 500 biggest corporations have
amassed over us. The clout of all 535 members of Congress is
nothing compared to the individual and collective power of
these predatory behemoths that now roam the globe, working
their will over all competing interests.

The aloof and pampered executives who run today's autocratic
and secretive corporate states have effectively become our
sovereigns. From who gets health care to who pays taxes,
from what's on the news to what's in our food, they have
usurped the people's democratic authority and now make these
broad social decisions in private, based solely on the
interests of their corporations. Their attitude was forged
back in 1882, when the villainous old robber baron William
Henry Vanderbilt spat out: "The public be damned! I'm
working for my stockholders."

The media and politicians won't discuss this, for obvious
reasons, but we must if we're actually to be a
self-governing people. That's why the Lowdown is launching
this occasional series of corporate profiles. And why not
start with the biggest and one of the worst actors?

The beast from Bentonville

Wal-Mart is now the world's biggest corporation, having
passed ExxonMobil for the top slot. It hauls off a stunning
$220 billion a year from We the People (more in revenues
than the entire GDP of Israel and Ireland combined).

Wal-Mart cultivates an aw-shucks,
we're-just-folks-from-Arkansas image of neighborly
small-town shopkeepers trying to sell stuff cheaply to you
and yours. Behind its soft homespun ads, however, is what
one union leader calls "this devouring beast" of a
corporation that ruthlessly stomps on workers,
neighborhoods, competitors, and suppliers.

Despite its claim that it slashes profits to the bone in
order to deliver "Always Low Prices," Wal-Mart banks about
$7 billion a year in profits, ranking it among the most
profitable entities on the planet.

Of the 10 richest people in the world, five are Waltons-the
ruling family of the Wal-Mart empire. S. Robson Walton is
ranked by London's "Rich List 2001" as the wealthiest human
on the planet, having sacked up more than $65 billion (£45.3
billion) in personal wealth and topping Bill Gates as No. 1.

Wal-Mart and the Waltons got to the top the old-fashioned
way-by roughing people up. The corporate ethos emanating
from the Bentonville headquarters dictates two guiding
principles for all managers: extract the very last penny
possible from human toil, and squeeze the last dime from
every supplier.

With more than one million employees (three times more than
General Motors), this far-flung retailer is the country's
largest private employer, and it intends to remake the image
of the American workplace in its image-which is not pretty.

Yes, there is the happy-faced "greeter" who welcomes
shoppers into every store, and employees (or "associates,"
as the company grandiosely calls them) gather just before
opening each morning for a pep rally, where they are all
required to join in the Wal-Mart cheer: "Gimme a 'W!'"
shouts the cheerleader; "W!" the dutiful employees respond.
"Gimme an A!'" And so on.

Behind this manufactured cheerfulness, however, is the fact
that the average employee makes only $15,000 a year for
full-time work. Most are denied even this poverty income,
for they're held to part-time work. While the company brags
that 70% of its workers are full-time, at Wal-Mart "full
time" is 28 hours a week, meaning they gross less than
$11,000 a year.

Health-care benefits? Only if you've been there two years;
then the plan hits you with such huge premiums that few can
afford it-only 38% of Wal-Marters are covered.

Thinking union? Get outta here! "Wal-Mart is opposed to
unionization," reads a company guidebook for supervisors.
"You, as a manager, are expected to support the company's
position. . . . This may mean walking a tightrope between
legitimate campaigning and improper conduct."

Wal-Mart is in fact rabidly anti-union, deploying teams of
union-busters from Bentonville to any spot where there's a
whisper of organizing activity. "While unions might be
appropriate for other companies, they have no place at
Wal-Mart," a spokeswoman told a Texas Observer reporter who
was covering an NLRB hearing on the company's manhandling of
11 meat-cutters who worked at a Wal-Mart Supercenter in
Jacksonville, Texas.

These derring-do employees were sick of working harder and
longer for the same low pay. "We signed [union] cards, and
all hell broke loose," says Sidney Smith, one of the
Jacksonville meat-cutters who established the first-ever
Wal-Mart union in the U.S., voting in February 2000 to join
the United Food and Commercial Workers. Eleven days later,
Wal-Mart announced that it was closing the meat-cutting
departments in all of its stores and would henceforth buy
prepackaged meat elsewhere.

But the repressive company didn't stop there. As the
Observer reports: "Smith was fired for theft-after a manager
agreed to let him buy a box of overripe bananas for 50
cents, Smith ate one banana before paying for the box, and
was judged to have stolen that banana."

Wal-Mart is an unrepentant and recidivist violator of
employee rights, drawing repeated convictions, fines, and
the ire of judges from coast to coast. For example, the
Equal Employment Opportunity Commission has had to file more
suits against the Bentonville billionaires club for cases of
disability discrimination than any other corporation. A top
EEOC lawyer told Business Week, "I have never seen this kind
of blatant disregard for the law."

 

[ernest2]

The Startling Truth about Wal Mart - Part 2

The Startling Truth About Wal Mart

PART 2 OF 2 PARTS

"But TFL 'ers like Wal Mart because they still sell long guns."

Likewise, a national class-action suit reveals an
astonishing pattern of sexual discrimination at Wal-Mart
(where 72% of the salespeople are women), charging that
there is "a harsh, anti-woman culture in which complaints go
unanswered and the women who make them are targeted for
retaliation."

Workers' compensation laws, child-labor laws (1,400
violations in Maine alone), surveillance of employees-you
name it, this corporation is a repeat offender. No wonder,
then, that turnover in the stores is above 50% a year, with
many stores having to replace 100% of their employees each
year, and some reaching as high as a 300% turnover!

Worldwide wage-depressor

Then there's China. For years, Wal-Mart saturated the
airwaves with a "We Buy American" advertising campaign, but
it was nothing more than a red-white-and-blue sham. All
along, the vast majority of the products it sold were from
cheap-labor hell-holes, especially China. In 1998, after
several exposes of this sham, the company finally dropped
its "patriotism" posture and by 2001 had even moved its
worldwide purchasing headquarters to China. Today, it is the
largest importer of Chinese-made products in the world,
buying $10 billion worth of merchandise from several
thousand Chinese factories.

As Charlie Kernaghan of the National Labor Committee
reports, "In country after country, factories that produce
for Wal-Mart are the worst," adding that the bottom-feeding
labor policy of this one corporation "is actually lowering
standards in China, slashing wages and benefits, imposing
long mandatory-overtime shifts, while tolerating the
arbitrary firing of workers who even dare to discuss factory
conditions."

Wal-Mart does not want the U.S. buying public to know that
its famous low prices are the product of human misery, so
while it loudly proclaims that its global suppliers must
comply with a corporate "code of conduct" to treat workers
decently, it strictly prohibits the disclosure of any
factory names and addresses, hoping to keep independent
sources from witnessing the "code" in operation.

Kernaghan's NLC, acclaimed for its fact-packed reports on
global working conditions, found several Chinese factories
that make the toys Americans buy for their children at
Wal-Mart. Seventy-one percent of the toys sold in the U.S.
come from China, and Wal-Mart now sells one out of five of
the toys we buy.

NLC interviewed workers in China's Guangdong Province who
toil in factories making popular action figures, dolls, and
other toys sold at Wal-Mart. In "Toys of Misery," a shocking
58-page report that the establishment media ignored, NLC
describes:

13- to 16-hour days molding, assembling, and
spray-paintingtoys-8 a.m. to 9 p.m. or even midnight, seven
days a week, with20-hour shifts in peak season.

Even though China's minimum wage is 31 cents an
hour-whichdoesn't begin to cover a person's basic
subsistence-levelneeds-these production workers are paid 13
cents an hour.

Workers typically live in squatter shacks, seven feet
by seven feet, orjammed in company dorms, with more than a
dozen sharing a cubiclecosting $1.95 a week for rent. They
pay about $5.50 a week forlousy food. They also must pay for
their own medical treatment andare fired if they are too ill
to work.

The work is literally sickening, since there's no
health and safetyenforcement. Workers have constant
headaches and nausea frompaint-dust hanging in the air; the
indoor temperature tops 100degrees; protective clothing is a
joke; repetitive stress disorders arerampant; and there's no
training on the health hazards of handling theplastics,
glue, paint thinners, and other solvents in which
theseworkers are immersed every day.

As for Wal-Mart's highly vaunted "code of conduct," NLC
could not find a single worker who had ever seen or heard of
it.

These factories employ mostly young women and teenage girls.
Wal-Mart, renowned for knowing every detail of its global
business operations and for calculating every penny of a
product's cost, knows what goes on inside these places. Yet,
when confronted with these facts, corporate honchos claim
ignorance and wash their hands of the exploitation: "There
will always be people who break the law," says CEO Lee
Scott. "It is an issue of human greed among a few people."

Those "few people" include him, other top managers, and the
Walton billionaires. Each of them not only knows about their
company's exploitation, but willingly prospers from a
corporate culture that demands it. "Get costs down" is
Wal-Mart's mantra and modus operandi, and that translates
into a crusade to stamp down the folks who produce its goods
and services, shamelessly building its low-price strategy
and profits on their backs.

The Wal-Mart gospel

Worse, Wal-Mart is on a messianic mission to extend its
exploitative ethos to the entire business world. More than
65,000 companies supply the retailer with the stuff on its
shelves, and it constantly hammers each supplier about
cutting their production costs deeper and deeper in order to
get cheaper wholesale prices. Some companies have to open
their books so Bentonville executives can red-pencil what
CEO Scott terms "unnecessary costs."

Of course, among the unnecessaries to him are the use of
union labor and producing goods in America, and Scott is
unabashed about pointing in the direction of China or other
places for abysmally low production costs. He doesn't even
have to say "Move to China"-his purchasing executives demand
such an impossible lowball price from suppliers that they
can only meet it if they follow Wal-Mart's labor example.
With its dominance over its own 1.2 million workers and
65,000 suppliers, plus its alliances with ruthless labor
abusers abroad, this one company is the world's most
powerful private force for lowering labor standards and
stifling the middle-class aspirations of workers everywhere.

Using its sheer size, market clout, access to capital, and
massive advertising budget, the company also is squeezing
out competitors and forcing its remaining rivals to adopt
its price-is-everything approach.

Even the big boys like Toys R Us and Kroger are daunted by
the company's brutish power, saying they're compelled to
slash wages and search the globe for sweatshop suppliers in
order to compete in the downward race to match Wal-Mart's
prices.

How high a price are we willing to pay for Wal-Mart's
"low-price" model? This outfit operates with an avarice,
arrogance, and ambition that would make Enron blush. It hits
a town or city neighborhood like a retailing neutron bomb,
sucking out the economic vitality and all of the local
character. And Wal-Mart's stores now have more kill-power
than ever, with its Supercenters averaging 200,000 square
feet-the size of more than four football fields under one
roof! These things land splat on top of any community's
sense of itself and devour local business.

By slashing its retail prices way below cost when it enters
a community, Wal-Mart can crush our groceries, pharmacies,
hardware stores, and other retailers, then raise its prices
once it has monopoly control over the market.

But, say apologists for these Big-Box megastores, at least
they're creating jobs. Wrong. By crushing local businesses,
this giant eliminates three decent jobs for every two
Wal-Mart jobs that it creates-and a store full of part-time,
poorly paid employees hardly builds the family wealth
necessary to sustain a community's middle-class living
standard.

Indeed, Wal-Mart operates as a massive wealth extractor.
Instead of profits staying in town to be reinvested locally,
the money is hauled off to Bentonville, either to be used as
capital for conquering yet another town or simply to be
stashed in the family vaults (the Waltons, by the way, just
bought the biggest bank in Arkansas).

It's our world

Why should we accept this? Is it our country, our
communities, our economic destinies-or theirs? Wal-Mart's
radical remaking of our labor standards and our local
economies is occurring mostly without our knowledge or
consent. Poof-there goes another local business. Poof-there
goes our middle-class wages. Poof-there goes another factory
to China. No one voted for this . . . but there it is. While
corporate ideologues might huffily assert that customers
vote with their dollars, it's an election without a
campaign, conveniently ignoring that the public's "vote"
might change if we knew the real cost of Wal-Mart's "cheap"
goods-and if we actually had a chance to vote.

Much to the corporation's consternation, more and more
communities are learning about this voracious powerhouse,
and there's a rising civic rebellion against it. Tremendous
victories have already been won as citizens from Maine to
Arizona, from the Puget Sound to the Gulf of Mexico, have
organized locally and even statewide to thwart the
expansionist march of the Wal-Mart juggernaut.

Wal-Mart is huge, but it can be brought to heel by an
aroused and organized citizenry willing to confront it in
their communities, the workplace, the marketplace, the
classrooms, the pulpits, the legislatures, and the voting
booths. Just as the Founders rose up against the mighty
British trading companies, so we can reassert our people's
sovereignty and our democratic principles over the
autocratic ambitions of mighty Wal-Mart.

More of Jim Hightower's writing can be found in his monthly
newletter, The Hightower Lowdown. For more information, see
www.jimhightower.com.

To unsubscribe from this newsletter, send an email to:
Greater_Things-unsubscribe@yahoogroups.com

 

[BigG]

Since when is making money bad??

???

Wal-mart has been doing this for twenty years and this is news?


By cutting out the traditional distribution chain Wal-mart can sell at what looks like (and is) a g-o-o-d price to the consumer (the last person in the chain) but keeps the middleman profits in its own pocket. This is an American Success Story.

The late Mr. Sam is studied in business schools today, like H-a-hvahd.

 

[bastiat]

I think this qualifies as a 'screed'.

Walmart ticks people off because it succeeds. It succeeds at the game they (small business owners) play. It succeeds because it changed the rules. It changed the rules because it was successful at what it does. It does the same thing thing (sell product) other stores do at a lower price.

Wal mart was once just one store. Would these same people grouse if walmart remained just one store? Maybe - they could just be jealous when other people succeed.

Instead of remaining one store, they used the money to expand. And they kept expanding. They had a strategy and it worked. Maybe failure would have been a more acceptable alternative to the walmart bashers?

And this tripe about the 'walmart monopoly' is pure bovine scat. I guess target doesn't exist in the world of the bashers. Or maybe target is to be bashed if it gets too successful. If there is an opportunity and money to be made, someone will try. And they will succeed if they are willing to do better than walmart.

And there's the real gist of it. Walmart succeeds because it has low prices, better hours, and better selection. I've been to the 'mom and pop' stores they lament. They may be ok if you can get there while they're open. If you need to get something at odd hours, you're out of luck. Is the selection great at mom& pop's? Maybe, maybe not. How about service? Again, that's a crap shoot. Many of these 'mom and pop' stores were actually their own monopolies in the small town - they had no competition before walmart - and monopolies aren't always known for great service. But I guess as long as it's "our monopoly", it's ok.

And btw, do you think the average mom and pop employee is making that much more than someone at walmart? Supporting a family at the five and dime? Most of the workers I see there are the 'second income type'. The mom and pop owners pay what they need to in order to retain the employees they need- just what walmart does. They don't pay any more, unless they are foolish.

Walmart succeeds because it truly understands market forces- give the people what they want, and they will buy it. Pay your employees what they are worth, and they will work their as long as they feel it's enough for them. Its detractors and bashers fail because they embrace emotionalism instead of logic. They will be doomed to failure as long as they blame walmart for their own ills.

 

[Radicalcleric]

There are some who hate Wal-Mart because its a big corporation. There are some who hate Wal-Mart because it is a successful company. There are some who hate Wal-Mart because it is the competition. There are some who hate Wal-Mart because it represents all of the things that some people hate about America, like capitalism, free enterprise, and materialism.

There are deplorable conditions in much of the world. But Wal-Mart nor the U.S. can dictate to these countries how to treat their citizens. I do not think that ceasing to buy goods from developing nations will help those working in "sweatshops." Even though the pay is bad and conditions terrible there is a long line of people anxious to work in these factories so apparently having one of these awful jobs is better than not having one.

It would be wonderful if U.S. companies doing business overseas could encourage improved wages and working conditions but the fact is that in most cases any extra money would wind up in the government bank account or in the pocket of some despot. Most of these countries we are talking about are communist dictatorships and the people at the top siphon off any extra money coming in while continuing to exploit their own people. A bad situation but I think it is unrealistic and unfair to blame Wal-Mart or American consumers for the plight of exploited and oppressed workers in third-world nations. The main fault lies with their own leadership and system of government and economics.

 

['01 GSR]

Wal-Mart

also screws its suppliers.

The way Wal-Mart's product accounting system works, any difference from the agreed upon price, positive or negative, is charged back to the supplier.

That means, for example, if WallyWorld buys a loaf of bread for $.30 and the supplier lets them have it for $.25 b/c of quantity discount, Wal-Mart will charge the supplier back for $.05(X units).

Nothing you can do about it since it's in the agreement you signed and no one DOESN'T want to sell to the kind of market Wal-Mart represents.

If anyone here can justify this as anything other than sleazy, please do so.

What ever happened to a fair price for the product delivered?

The obvious solution to this is not to offer Wal-Mart anything at less than the agreed upon price, but some companies automatically offer a quantity discount and have to get burned for a few million first before they learn that no good deed goes unpunished.

 

[Marko Kloos]

Gotta love capitalism.

Wal-Mart is also the single biggest private employer in the United States, by the way.

Ceasing to buy goods from developing nations will force the people who make a living sewing together sneakers and shirts for Wal-Mart go back to such lucrative vocations as plowing a field 14 hours a day behind a water buffalo. I doubt they'd feel too grateful about the efforts of well-fed, guilt-ridden socialists to relieve them of their jobs...for their own dignity of course.

 

[Hutch]

Jim H is a left wing populist bomb-thrower. He'd be the first person to complain if "the little man" had to pay boutique prices for the commodities WalMart purveys. If your conscience bothers you, take your bidness somewhere else. I actively seek to buy articles made someplace other than the PRC. I have as much luck doing this at Wally World as I do anywhere else. Business practices in the Pacific Rim are of no interest to me. Does anyone believe that living conditions in China or Bangladesh are governed by the buying habits of the US consumers? Would it be better if WalMart did NO business with the Pacific Rim? What would the toy-assemblers do for a living then?

 

[Marko Kloos]

What ever happened to a fair price for the product delivered?

A "fair price" for a product is exactly what a seller wishes to charge, and a buyer is willing to pay for it. Fair is what's agreed upon by both parties in a business transaction, not what's determined fair by a People's Committee for the Prevention Of Excess Profit and Greed.

 

[Kingcreek]

Nothing new here. Either you, the consumer, support the WalMartians or you don't.
I choose not to

 

[Radicalcleric]

I was an art major in college so I don't understand the accounting thing. Why would the price change? You mean if a supplier gives WM a discount beyond the contracted price WM charges the supplier for a cash payment of the difference? In your example the bread was discounted .05 by the wholesaler so WM pays the lower price and demands that the supplier pay them .05 per loaf? That makes no sense to me. That would certainly discourage discounting anything to WM and wait, maybe that's exactly what they want. Perhaps they want to pay the contracted price and they don't want any changes, even in their favor, for recordkeeping or other reasons so this is how they discourage it? I don't know. But I sure wouldn't go changing prices once the deal is signed when selling to WM.

 

['01 GSR]

A "fair price" for a product is exactly what a seller wishes to charge, and a buyer is willing to pay for it. Fair is what's agreed upon by both parties in a business transaction, not what's determined fair by a People's Committee for the Prevention Of Excess Profit and Greed.

Oh, silly me.


I thought that a company would be grateful for receiving a DISCOUNT, not try to exploit that discount by charging it back to their supplier and get it TWICE.

They sound more like looters than capitalists.

Maybe you should check your premises.

Not every profit making entity gets their profits through capitalism and you certainly shouldn't respond like a trained seal every time you hear the word "profit" w/o thinking how that profit was made, either by some sort of subterfuge, or by an exchange of value (true capitalism).

 

[bastiat]

The way Wal-Mart's product accounting system works, any difference from the agreed upon price, positive or negative, is charged back to the supplier.

That means, for example, if WallyWorld buys a loaf of bread for $.30 and the supplier lets them have it for $.25 b/c of quantity discount, Wal-Mart will charge the supplier back for $.05(X units).

Nothing you can do about it since it's in the agreement you signed and no one DOESN'T want to sell to the kind of market Wal-Mart represents.

So you state it's in the contract that they'll be charged, and then complain when they ARE charged? Is illiteracy the other company's defense in this situation?

Chargebacks and accounting errors are a big headache that need not happen. When they do, someone has to clean up the mess. Higher or lower, price differences from the contracted price cost money, because they have to be tracked down and fixed. And because wal mart has contracts to protect themselves when somebody else screws up, they are the bad guy? I guess proper planning and taking approrpiate action to protect yourself are a bad thing if you're a big corporation.

 

[bastiat]

Not every profit making entity gets their profits through capitalism

Yes, we call those entities 'government'. They make their profit through the use of legal plunder, enforced at the point of a gun.

Every business does get their profits through capitalism, unless they dealing with the government through some sort of grant / subsidy system. And they don't do it at the point of the gun. They give consumers the choice, and they vote with their dollars.

 

['01 GSR]

You mean if a supplier gives WM a discount beyond the contracted price WM charges the supplier for a cash payment of the difference?

Exactly.

In your example the bread was discounted .05 by the wholesaler so WM pays the lower price and demands that the supplier pay them .05 per loaf?

Wal-Mart penalizes deviations from the agreed upon price, and charges those deviations back. This would make sense if they charged back positive deviations (price increases). Their accounting system applies no negative or positive to the price differences, so ANY difference is charged back.

That makes no sense to me.

Nor does it to anyone else, unless they are of the looter mentality that expects money they didn't earn and aren't entitled to.



The reason Wal-Mart gets discounts is that there is a change in the market which lowers the price and other customers are getting a discount too.

That Wal-Mart penalizes these seems more like a way to make a profit via subterfuge than any reason I can think of. Accounting departments always have to deal with changing prices, so Wal-Mart doesn't warrant an exception. Yet, they force their suppliers to keep another set of books by Wal-Mart's rules to avoid unwarranted penalties.

 

[Mal H]

I agree, that description of Wal-Mart's accounting and payment practices makes zero sense. First of all, no supplier is going to charge a single mil less than the agreed-upon price per unit, it's just not done for the same profit/greed reasons as Wal-Mart has. Secondly, the practice of charging back an additional "discount" beyond the contracted price would fall under racketeering. I doubt that Wal-Mart wants the DOJ to come visit.

 

['01 GSR]

Every business does get their profits through capitalism, unless they dealing with the government through some sort of grant / subsidy system.

Or protectionism. Or fraud.

And they don't do it at the point of the gun.

The court system represents the barrel of a gun to my mind. Some may have the illusion that it is impartial, but that's their problem not mine.

 

['01 GSR]

Chargebacks and accounting errors are a big headache that need not happen. When they do, someone has to clean up the mess. Higher or lower, price differences from the contracted price cost money, because they have to be tracked down and fixed. And because wal mart has contracts to protect themselves when somebody else screws up, they are the bad guy? I guess proper planning and taking approrpiate action to protect yourself are a bad thing if you're a big corporation.

The market is not static, therefore accounting departments must keep up, so price deviations really aren't the sort of problem you make them out to be.

That a company is able to lower its price represents an extra cost to Wal-Mart? Seems the savings would offset the increased expenses of any accounting changes. Additionally, the point you make seems to assume that Wal-Mart must pass those savings on to the consumer and change its own pricing structure. Not so.

 

['01 GSR]

I agree, that description of Wal-Mart's accounting and payment practices makes zero sense. First of all, no supplier is going to charge a single mil less than the agreed-upon price per unit, it's just not done for the same profit/greed reasons as Wal-Mart has. Secondly, the practice of charging back an additional "discount" beyond the contracted price would fall under racketeering. I doubt that Wal-Mart wants the DOJ to come visit.

A company WILL charge less if the quantity changes enough so that the recipient is eligible for a discount because of increase quantities bought.

Next, shouldn't the ENRON/Arthur Andersen thing make you skeptical of how companies use their accounting practices to make themselves seem more profitable than they really are and to hide losses within depreciation/amortization. "Cooking the books" is an old term.

Wal-Mart surely makes a company sign a contract that allows the legality of this, but in the great divide between the legal and accounting departments of a Fortune 100 company, the specifics can get lost. Wal-Mart's practices are counter-intuitive, and as such seem designed as a way to defraud, than for any other reason that is valid.

This IS legal, BTW, but some here seems so naive as to confuse legality with what is right (unless we've devolved into moral relativism).

 

[BigG]

Thanks for the sensitivity training.