Ten Reasons Why

This is a very common way to do business in the manufacturing world. A large customer wanted a our company to make a certain product. They then told us what they would pay for it - it barely covered production costs. We took the contract because we needed sales (this was just before the the market tanked).

After 6 months they told us they wanted it cheaper. We couldn't do it more cheaply and told them so. Although we were the only company that could make the product out of the material they wanted, for the original price they wanted, they decided they would have another company develope another product to use in its place. 47% of our small companie's personnel were laid off (myself included) because of this.

2 years later, the large company came back to the small company and decided they wanted their product after all (for the original price). Since our company was small, it was lucky to still be in business, after the large company had pulled its contract (it was very touch-and-go for a while).

Walmart is not alone in this type of practice, but since it is in the public eye, it seems to be horrendous. In reality, it is the normal course of business in the manufacturing world!

It's not the practice of a retailer/wholesaler using the value of its channel to negotiate lower prices from a manufacturer that is disturbing. As you say, that's just business.

Rather, it's the scope and scale on which Wal-Mart, the single wealthiest corporation on the planet, can exert this practice...and the potential significant impact created by this single corporation by that scope and scale.