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Why won’t small firms work with Wal-Mart?

Sally Herships Aug 14, 2014
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Why won’t small firms work with Wal-Mart?

Sally Herships Aug 14, 2014
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For some companies, scoring a contract with Wal-Mart can seem like hitting the lottery — we’re talking business bucket list.

Mark Goldstein is CEO of Scott’s Liquid Gold, a medium sized company which expects to make almost $30 million in revenue this year.

“They have been just the best and finest people to deal with,” he says.

Scott’s Liquid Gold sells just under a third of its product line, like air fresheners, to Wal-Mart.

“They help companies like us to be more efficient in manufacturing and transportation,” says Goldstein.

Not all companies feel that kind of affection for Wal-Mart.

Victor Lund, a partner with Wav Group Consulting, used to own WOW, a small company that sold cookie cutters to Wal-Mart.

“Working with Wal-Mart can be a great experience but it’s very, very difficult,” says Lund.

No matter how small you are, he says, if you want to work with Wal-Mart, you have to follow the same requirements that Fortune 100 companies do.

“They have a vendor booklet, that talks about what their requirements are, that was eight inches thick,” Lund says.

With fewer than 20 employees, and less than five million dollars of revenue a year, Lund says WOW was really small,which made dealing with Wal-Mart challenging.

“Making sure that you’re working with a manufacturer in China that’s going to support you in being compliant with Wal-Mart’s rules and regulations is very, very important but it is also drives up costs tremendously,” he says.

And for some companies working with Wal-Mart is just too difficult. In Lund’s case WOW’s vendor agreement with Wal-Mart became more valuable than the company itself. So he sold it.

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