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Wal-Mart Pushing Suppliers For RFID

Soulskill posted more than 6 years ago | from the their-way-or-the-highway dept.

The Almighty Buck 145

Weather Storm brings us an InformationWeek article about Wal-Mart's push for suppliers to RFID tag their product shipments. Wal-Mart seems to have lost patience in waiting for its suppliers to adopt the inventory tracking initiative. From InformationWeek: "The retailer says that beginning Jan. 30, it will charge suppliers a $2 fee for each pallet they ship to its Sam's Club distribution center in Texas that doesn't have an RFID tag. The charge is to cover Sam's Club's cost to affix tags on each pallet, says a Wal-Mart spokesman. The retailer hasn't taken such a strong-arm approach yet with the more than 15,000 suppliers that still haven't complied with its request to tag pallets and cases headed for its Wal-Mart stores. Instead, it seems focused on turning its 700-store Sam's Club warehouse-outlet division into an example of RFID supply chain technology in action, down to requiring item-level RFID in 22 distribution centers by 2010."

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Can you charge a supplier $2? (2, Funny)

JimboFBX (1097277) | more than 6 years ago | (#22116658)

So in other words, Sams Club is going to try to give themselves a $2 discount? I think I tried that with my cell phone bill because the service wasn't as good as I wanted. It didn't work out very well.

Re:Can you charge a supplier $2? (4, Funny)

rkcallaghan (858110) | more than 6 years ago | (#22116684)

JimboFBX wrote:

So in other words, Sams Club is going to try to give themselves a $2 discount? I think I tried that with my cell phone bill because the service wasn't as good as I wanted. It didn't work out very well.
Imagine you were, well you, and you were standing under King Kong's foot. If he steps on you, the obvious happens. Kong demands "a $2 discount" from you, even though you are his banana supplier.

The question of the day is, does Kong get his bananas for $2 less? For extra credit, can you explain why reverse would not be true, if you attempted to demand a $2 on Kong's security services he's providing you?

~Rebecca

Re:Can you charge a supplier $2? (2, Funny)

Anonymous Coward | more than 6 years ago | (#22116704)

I'm not sure I understand; could you phrase it as a car analogy for me?

Re:Can you charge a supplier $2? (1)

creimer (824291) | more than 6 years ago | (#22116998)

If Windows was installed on your car, and it suddenly demands you pay $2 to avoid having it go blue screen during freeway traffic, would you pay it? Or you could call the Microsoft support line to complain about this and hope that your license to start the car isn't revoked wirelessly?

Re:Can you charge a supplier $2? (3, Insightful)

ShieldW0lf (601553) | more than 6 years ago | (#22116950)

Imagine you were, well you, and you were standing under King Kong's foot. If he steps on you, the obvious happens. Kong demands "a $2 discount" from you, even though you are his banana supplier. The question of the day is, does Kong get his bananas for $2 less? For extra credit, can you explain why reverse would not be true, if you attempted to demand a $2 on Kong's security services he's providing you?

Qualifying questions:

If I give Kong a discount, am I still going to be able to eat? Or am I going to die slow? Can I feed my bananas to another monkey and have them grow while Kong shrinks? Do I enjoy my life enough that I wouldn't just tell Kong to fuck off out of spite?

Wal-Mart are a short ways from collapse at all times, it's a consequence of their "Keep no back stock" policy. They run everything at the edge, and at some point, it's going to bite them hard.

In the end, didn't King Kong get killed when everyone united against them?

Re:Can you charge a supplier $2? (3, Insightful)

rkcallaghan (858110) | more than 6 years ago | (#22117040)

ShieldW0lf wrote:

If I give Kong a discount, am I still going to be able to eat? Or am I going to die slow?
There's a web full of anti wal-mart sites out there that can show you just how many companies (Levi Jeans, Master Locks, Huffy Bikes, etc.) this has happened to.

So your first question is unfortunately irrelevant. Your second, is however, as the only winning move in this situation is not to play with King Kong at all, and attack him instead of yourselves as he demand. How to get that to happen is a topic for another day, under another revolution thread; as the Kong you'd have to defeat here has help this time.

~Rebecca

Re:Can you charge a supplier $2? (1)

R2.0 (532027) | more than 6 years ago | (#22117390)

"There's a web full of anti Wal-mart sites out there that can show you just how many companies (Levi Jeans, Master Locks, Huffy Bikes, etc.) this has happened to."

I've never understood that. Last time I checked, Walmart doesn't employ armed forces to compel suppliers to sell to them. These companies agreed to sell to Walmart, because they thought it would be profitable for them, and it didn't work out. It's unfortunate when it happens, but why is it Walmart's fault? Are you seriously saying that the 3 companies you named didn't know what they were doing?

I worked for a large general contractor for many years, and I did have instances where subcontractors got in way over their heads. I helped them out as best I could, but in the end they have obligations they need to meet. A couple couldn't handle it and went belly up; some rose to the occasion and are now our "go-to" contractor for tough jobs. And I don't lose any sleep over how I handled the matter.

What you seem to be advocating is a regime where NO ONE gets to graduate to playing with the big boys, out of concern they will go under. And bigger players should have a gentleman's agreement that no one will suffer a loss or go out of business, even if they do something stupid? Welcome back to Detroit in the 70's, and Big Steel in the 80's - expensive, poor quality, wasteful crap.

There's a saying that goes "speed, quality, cost - pick any 2". But in an environment where failure is not a possibility, you get a situation where we don't get ANY of those options.

Re:Can you charge a supplier $2? (1)

ciggieposeur (715798) | more than 6 years ago | (#22119892)

I've never understood that. Last time I checked, Walmart doesn't employ armed forces to compel suppliers to sell to them.

Walmart doesn't use "armed forces", instead it offers use of its position as the #1 distribution channel as a stick against its suppliers. If Walmart wants to stock an item that is produced by an American company, it offers the company a stark choice: be able to offer the item at a particular price, or we will purchase from an overseas (usually Chinese) company. Since the monetary exchange rate automatically favors the Chinese competitor, Walmart is essentially offering the American company the choice to lower its profit margins and sell through Walmart, or keep its profit but sell elsewhere. The Chinese company OTOH can both sell through Walmart AND retain its local profit margins.

Some companies have adapted by staying away from Walmart and tried to link the Walmart brand with crappy quality. Others have been "forced" to comply with Walmart's demands because the loss of the entire distribution channel in one fell swoop would be too great a blow to survive.

Re:Can you charge a supplier $2? (2, Informative)

0100010001010011 (652467) | more than 6 years ago | (#22117620)

In Levi's case, they just run a separate production line. Less thread count, less stitches, cheaper materials. If you get a pair of Levis from walmart and compare them to a pair of Levis from another store, you may very well get a completely separate pair of pants.

Snapper Lawnmowers [fastcompany.com] on the other hand put their foot down and said No. Walmart asked for that $5 discount and Snapper came back and said No and pulled there mowers.

Some companies still have a bit of integrity.

Re:Can you charge a supplier $2? (3, Interesting)

that this is not und (1026860) | more than 6 years ago | (#22117854)

And somebody needs to investigate how well Snapper is doing as a result of that move. You never hear a follow-up.

Here locally, I can tell you that the small mom & pop hardware store, the kind of place Snapper wants to sell through (higher markup, more money per unit sold for Snapper) is now out of business and the building is in the process of being converted into a strip mall.

So let's see some links to a follow-up story, not that same tired old link. How is Snapper doing a year or so later?

Re:Can you charge a supplier $2? (0)

Anonymous Coward | more than 6 years ago | (#22119472)

WHO IS JOHN GALT?

Re:Can you charge a supplier $2? (-1, Troll)

FredThompson (183335) | more than 6 years ago | (#22119046)

"If you get a pair of Levis from walmart and compare them to a pair of Levis from another store, you may very well get a completely separate pair of pants."

I would hope so! If the "pair of Levis from another store" is the same pair I bought at Wal-Mart, that would mean someone stole them, repackaged them and just happened to put them where I grabbed them from the Wal-Mart display.

Words have meanings. Yours were lax.

Re:Can you charge a supplier $2? (1)

Jesus_666 (702802) | more than 6 years ago | (#22117844)

Hmm... What would happen if the suppliers reacted by simply raising their prices across the board? For every product sold at Sam's Wal-Mart takes two dollars and gives two dollars. For every product sold at a regular Wal-Mart Wal-Mart gives two dollars.

If they want to make it less obvious, they'll calculate how much of their stuff goes to Sam's as opposed to other Wal-Mart stores and adjust the price in such a way that they still don't lose any money.

Re:Can you charge a supplier $2? (3, Insightful)

gatkinso (15975) | more than 6 years ago | (#22116686)

It would have if you were responsible for a large fraction of global celluar activity.

Love em or hate em, Walmart has the clout to do so.

Re:Can you charge a supplier $2? (1)

plaxion (98397) | more than 6 years ago | (#22118910)

They're also large enough to be able to afford the $4 processing fee I charge to cut them that check.

Re:Can you charge a supplier $2? (0)

Anonymous Coward | more than 6 years ago | (#22119906)

Walmart has the clout

Really? Never shopped there. Never will. Walmart is significantly less relevant to me than the black hairy goo that accumulates on the friction pads on the bottom of my optical mouse that I occasionally have to scrape off.

The next time you are scraping the goo off the bottom of your mouse, pause and reflect "Wow, this goo accumulation has more power over me than walmart does."

Re:Can you charge a supplier $2? (2, Interesting)

kenh (9056) | more than 6 years ago | (#22116708)

No, Wal-Mart is charging for a required service the Mfg./Supplier isn't complying with. Two dollars per Pallet is a fair price (IMHO) as they have to tag, inventory, and verify each non-RFID pallet that enters this one facility. That is an important point, BTW - this only impacts one Sam's Club distribution center. This is a reasonable business decision, much more reasonable than their previous position that untagged pallets wouldn't be allowed in their facility after a certain date (with no accommodation like the one reported being made).

IMHO, this will cause many smaller suppliers to simply abandon their RFID efforts and pay the $2/pallet fee - it will be much cheaper than an in-house effort.

And finally, let me be the first to link to proof, I say PROOF, that RFID is evil and will bring about the end of western civilization: Spy Chips, the book [spychips.com] - seen to be a major motion picture from Tin Foil Hat Productions! Check out their other titles and press reports here [spychips.com] .

Re:Can you charge a supplier $2? (0)

Aladrin (926209) | more than 6 years ago | (#22116772)

So you think it's fair to charge $2 to slap a $.20 RFID tag on a pallet? As far as I can tell, this is not 1 RFID per item, it's 1 per pallet. It is -only- used to track shipments, not individual products.

Also bear in mind that just because the RFID says there's 200 widgets on that pallet doesn't mean there actually is. Walmart still has to verify that.

Let's say a warehouse employee makes $18/hr. (They make less, I'm sure, but it makes the math easy.) $.20 goes to the cost of the tag, and $1.80 goes to the cost of putting the tag on. This means that it takes 6 minutes (1/10th of an hour) to tag a pallet? If it took 3 minutes, I'd be very surprised. That employee should be able to tag 1 pallet per minute, easily. Remember, he doesn't have to actually COUNT the product, since even the tagged ones still need to be counted. He just needs to read the manifest and enter it into the computer, and slap the RFID tag on.

And yes, this is only the 1 warehouse... For now. If you really think they won't do this to the others soon, and then the Walmart ones, you've got another think coming. TFA even says they've mandated it by 2010.

Re:Can you charge a supplier $2? (4, Insightful)

homer_s (799572) | more than 6 years ago | (#22116824)

Let's say a warehouse employee makes $18/hr. (They make less, I'm sure, but it makes the math easy.) $.20 goes to the cost of the tag, and $1.80 goes to the cost of putting the tag on. This means that it takes 6 minutes (1/10th of an hour) to tag a pallet? If it took 3 minutes, I'd be very surprised. That employee should be able to tag 1 pallet per minute, easily. Remember, he doesn't have to actually COUNT the product, since even the tagged ones still need to be counted. He just needs to read the manifest and enter it into the computer, and slap the RFID tag on.

Cost of employee to tag at 1 per min= $0.30
Cost of labour training=0
Cost of payroll tax, HR management=0
Cost of chip = $0.20
Cost of ordering the chips = 0
Cost of receiving the chips = 0
Cost of storage of the chips = 0
Cost of restocking the chips = 0
Cost of quality control = 0
Cost of equipment to affix the chip=0
Cost of insurance=0
Cost of billing the suppliers and paperwork involved =0
Interest on capital employed for the above=0

Yep, your math works out. You should start your own business instead of posting here on slashdot.

Re:Can you charge a supplier $2? (1)

Aladrin (926209) | more than 6 years ago | (#22117000)

Even if you did calculate that, most of which will be pennies because we're talking about millions of pallets, not just hundreds, they're still way over-charging.

Re:Can you charge a supplier $2? (2, Insightful)

DRJlaw (946416) | more than 6 years ago | (#22117210)

Even if you did calculate that, most of which will be pennies because we're talking about millions of pallets, not just hundreds, they're still way over-charging.

You're suggesting that Wal-Mart is charging a premium to tag pallets of deliveries that they want to have tagged by the supplier rather than tagging it themselves?

Shocking. If only there were a way for suppliers to tag their own pallets for less...

Re:Can you charge a supplier $2? (0)

Anonymous Coward | more than 6 years ago | (#22117302)

So how would overcharging for this be ANY different than any other 'cutting edge/new technology'? (Recouping cost of setting up... with possible future cost cuts) Wouldn't this give companies 2 choices: (presumably) over-pay for a service OR invest and save money in their 'own' RFID tags?

Most importantly: Why wouldn't Wal-mart want to make money off of this SERVICE they would be providing?

Re:Can you charge a supplier $2? (1)

tomhudson (43916) | more than 6 years ago | (#22117482)

If the supplier thinks WalMart is overcharging, and that the tag should only cost 20 cents, they can always do it themselves.

If, on the other hand, their cost to do it would be $5.00, why not let WalMart ding them for $2.00?

Look, WallyWorld is not my favourite store, since I'm pretty much boycotting the crap that comes out of China nowadays, and I still insist on standing in line at the grocery store to talk to a HUMAN rather than use the self-checkout machines, but rfid tags on palettes makes sense, if only from a worker safety point of view. No more need to get a jigger and move a palette to find the bill under layers of stretch-wrap, dig it out, re-wrap it, and put it back where it was. If you;re in a hurry (and who isn't) you tend to take short-cuts. Squeeze into a tight spot. Sit on the battery pack and ride the jigger around instead of walking behind it (fun to do, but taking the corners too fast is a bit of a bitch, and n00bs always end up running into something - usually a palette of something breakable or another worker).

Re:Can you charge a supplier $2? (1)

rebelcan (918087) | more than 6 years ago | (#22119426)

Funny, I worked at a warehouse for several months. They taught us to ride on the electric pallet jacks, because walking down the isles behind the pallet jack would increase the amount of time spent picking one order would increase greatly, and in a warehouse that shipped upwards of 17,000 pieces of frozen food (can't remember how much dry storage stuff they shipped in a day), order picking time is what the supervisors care about most. If you had a lot of stuff to pick in one isle, then you'd walk in front and to the left ( or right ) of the pallet jack, because you want to get to the items before the pallet jack, so that you have time to grab one, turn around and be ready to place it on your pallet and know where your next item is before the pallet jack gets to you.

We also used a computer controlled picking system, each one of us had a radio where the other end was connected to a computer. We didn't need to have sheets of paper with our picking lists, because the computer took care of all of that for us. On the occasion where something got screwed up and we did have to pick from a sheet of paper ( a very rare occurrence ), I know that the picking time for that order was horrible ( upwards of thirty minutes compared to less than ten minutes for a regular order ).

Re:Can you charge a supplier $2? (0)

Anonymous Coward | more than 6 years ago | (#22117320)

Let's say a warehouse employee makes $18/hr. (They make less, I'm sure, but it makes the math easy.)


Even if they make less, employees cost more than their salary. Benefits, extra parking spaces, managing them and payroll, whatever.

Re:Can you charge a supplier $2? (1)

whatrevolution (1022155) | more than 6 years ago | (#22117552)

He just needs to read the manifest and enter it into the computer, and slap the RFID tag on.
Not even that. The manifest is in the network at least since the order invoice, and the worker is carrying a WIFI device with a barcode reader, which queries the network for the manifest. The worker only verifies that the palette contains boxes with the expected model number(s), and then (maybe) counts them.

Re:Can you charge a supplier $2? (2, Insightful)

shark72 (702619) | more than 6 years ago | (#22117582)

Good points. I can add:

  • Overhead costs for warehousing the non-nettable inventory: zero
  • Lost sales due to inability to ship: zero

I think more Slashdotters should go into the retail business. God knows we have the music business already figured out. Too bad we're all too busy playing WoW to change the world.

Re:Can you charge a supplier $2? (3, Insightful)

Paradise Pete (33184) | more than 6 years ago | (#22117054)

So you think it's fair to charge $2 to slap a $.20 RFID tag on a pallet?

If they charged their cost, then the supplier could, in effect, "hire" the Walmart guy to put the tags on. It's much simpler - no need to buy the tags or equipment, and no chance of error. Walmart's aim is not to get the $2, it's to get the supplier to put the tags on.

Re:Can you charge a supplier $2? (3, Insightful)

shark72 (702619) | more than 6 years ago | (#22117530)

"So you think it's fair to charge $2 to slap a $.20 RFID tag on a pallet? As far as I can tell, this is not 1 RFID per item, it's 1 per pallet. It is -only- used to track shipments, not individual products."

I suppose we can add channel management, supply chain management and logistics to the areas of knowledge that Slashdotters know everything about.

Distribution centers have rules about receiving products. These rules are necessary to keep the inventory flowing and to keep costs down. Retail DCs (owned by Best Buy, Target and the like) have them, as do distributors, like Ingram and D&H.

The missing RFID tag is a McGuffin -- it could be anything. Missing RFID? Low pallet count? High pallet count? Pallet packed with unexpected dimensions? Unannounced change in the case pack quantity or outer box pack quantity? The product doesn't conform, so it needs to be segregated to another part of the warehouse, and people need to be assigned to rework the product. In the meantime, it's dead inventory that can't be sold.

As has already been mentioned, your estimate of the rework cost is low, but that's not the point -- Wal-Mart, Best Buy, Ingram et al aren't trying to build a profit center out of RFID tag reworks or any sort of rework! They pass the cost of the rework along to the supplier, and the goal is to have it not happen again. Product that's delayed in the warehouse or the DC means missed sales, and if it's a load-in for a holiday weekend or a scheduled promotion, lots of money is lost.

Re:Can you charge a supplier $2? (2, Interesting)

Bhalash (797330) | more than 6 years ago | (#22118230)

Inventorying an incoming pallet simply isn't as easy as reading the manifest. You have to physically check that the contents of the pallet match what is on the manifest or you will have stock loss (and lost money!). One major area of stock loss for many companies is transit. Either the company who shipped the goods didn't manifest them correctly, or they accidentally shipped the wrong goods, or stock was misplaced or stolen while in transit. When you receive an order you need to count what is actually on the pallet against what is on the manifest and then have another person verify this. Depending on the goods, this can take time. Big jugs of milk - easy. Clothing, small domestic appliances - not so easy. Items like small TVs, mobile phones, laptops, game consoles, MP3 players and cameras are all high-value, low-profile, and easy steal goods that need to be physically counted at easy stage of transit. After this you still need to have someone (usually a clerk dedicated to this task) add the goods to the electronic inventory of the receiving company, raise discrepancy issues, etc. I've spent ten years working in inventory, and I'm currently the inventory specialist for a national company. RFID tagging is an excellent idea for tracking stock movement and Wal-mart's initiative into this is ahead of it's time. RFID will be way that all stock control will go in the next decade, but it will never replace the need to physically inventory goods. Their charge for the both tag and labour on Wal-mart's part is actually pretty reasonable, but it only tracks pallets and not the goods on them, which is what is important for companies.

Re:Can you charge a supplier $2? (1)

bepo (709117) | more than 6 years ago | (#22119438)

When I did IT at a logistics center a few years ago the barrier to RFID wasn't the cost of the tags or the time to apply them. The tag cost was minimal and employees were already tagging them with barcodes. The solutions we were looking at only required using a new label that had the RFID chip implanted. The total amount of time to apply a standard label versus an RFID label was exactly 0. The reason we didn't do it at the time was because of the software. The software company wanted $12,000 upfront and an increased maintenance fee to add the RFID module. When we approached the client with the increased costs they declined. This was a low end warehouse management application on top of that, later they were looking at changing applications, the costs were astronomical, $150,000 to $300,000 for a basic inventory system, if you used automation of any sort you just keep adding.

Re:Can you charge a supplier $2? (0)

Casualposter (572489) | more than 6 years ago | (#22116852)

No it's not reasonable. Inventory has been done for thousands of years without a discount for well, COUNTING the stuff as it comes in. Just because walmart was to automate it's systems does not mean that this is efficient, reasonable, or cost effective for anyone else. With Walmart squeezing the suppliers on price, and the rising cost of shipping, how is this effective thing for Walmart help the supplier?

Walmart may be the big gorrilla, but as of late customer satisfaction has been decreasing. The stores have begun to look more and more like K-mart in it's final years: dingy dirty and filled with unhelpful dour employees.

Re:Can you charge a supplier $2? (1)

aix tom (902140) | more than 6 years ago | (#22117120)

RFID (or barcode identification of pallets as we do it) is great, because you don't have to count all the stuff that comes in, because the supplier has already counted it when it was loaded.

When you receive a truck with one bill of lading and ~30 pallets, it's much easier to scan each pallet, and confirm what is on there against the electronically supplied list than to try to check 30 pallets by running from pallet to pallet with the bill of lading.

And the supplier also has advantages.

For example, we often order things that are not currently available, and most suppliers are authorized to send replacement products. They now can simply slap them into the delivery with the electronic bill of lading without any additional paperwork to get their bills paid.

Of course we went the opposite way on the psychology and offered to "pay $x more" if the pallet is identifiable electronically than the other way around. ;-)

Re:Can you charge a supplier $2? (1)

that this is not und (1026860) | more than 6 years ago | (#22117912)

Walmart may be the big gorrilla, but as of late customer satisfaction has been decreasing. The stores have begun to look more and more like K-mart in it's final years: dingy dirty and filled with unhelpful dour employees.


I am not seeing this. Are you sure you didn't just cut-and-paste that out of an email your Union Boss forwarded to you?

Re:Can you charge a supplier $2? (1)

Descalzo (898339) | more than 6 years ago | (#22118170)

If you are correct, then what's going to happen is that people will stop doing business with Wal-Mart and they'll crash.

Re:Can you charge a supplier $2? (-1)

schon (31600) | more than 6 years ago | (#22116880)

Two dollars per Pallet is a fair price (IMHO) as they have to tag, inventory, and verify each non-RFID pallet
Back to the cellphone analogy.

When I bought my cellphone, I have to unwrap everything, discard the packaging, etc. This takes some amount of time. Would it be reasonable to send a bill to the place I bought it from for this, and expect them to pay it?

If not, why is it reasonable for Wal-mart to do the same?

Re:Can you charge a supplier $2? (2, Insightful)

kenh (9056) | more than 6 years ago | (#22116952)

Your analogy is asinine - let me explain...

Wal-Mart has set the bar and said that they require RFID tags by some day in the future to do business with Wal-Mart - suppliers that do not meet that requirement will not be able to sell their goods to Wal-Mart. Wal-Mart is offering an accomodation to suppliers that want to sell at Wal-Mart but either can not or will not be able to include RFID tags on their pallets to this one distribution center (and yes, it will creep into their entire supply chain).

To build an analogy for your cell phone purchase, you would have to communicate to the Cell Phone stores in your area that you were interested in getting a cell phone and offer them the chance to bid on your business. You would also have to explain to them before they reply to your RFP that your purchase is contingent on have the phone unwrapped and ready for use immediately upon delivery. Then, when none of the local stores respond to your RFP, you can tell them that if the "ready to use" requirement was too onerous, you would be willing to take a packaged, not ready for use cell phone, but you would charge them some few dollars to accommodate your effort. Then, when they agree to offer you a phone you can act accordingly. That is what Wal-Mart is doing.

Re:Can you charge a supplier $2? (0)

schon (31600) | more than 6 years ago | (#22117046)

Your analogy is asinine
No, your defense of the indefensible is what's asinine.

Wal-Mart has set the bar and said that they require RFID tags by some day in the future to do business with Wal-Mart
Yes, and I "set the bar" by saying that anyone who sells anything to me must handle disposal of the packaging.

It's really no different.

Re:Can you charge a supplier $2? (2, Insightful)

Otto (17870) | more than 6 years ago | (#22117230)

No, the difference should be obvious. You're not buying thousands of cell phones. Wal-Mart is buying thousands of items from whoever they buy from.

It's a volume thing. When you buy in bulk, you pay a different price. Wal-Mart buys enough bulk merchandise to be able to demand special terms.

Re:Can you charge a supplier $2? (0)

schon (31600) | more than 6 years ago | (#22117410)

No, the difference should be obvious. You're not buying thousands of cell phones. Wal-Mart is buying thousands of items from whoever they buy from.
So what you're saying is that bullying is OK - that the larger party deserves concessions, and can do whatever the hell they want just because they're larger, and that this is perfectly acceptable.

No wonder the American economy is in the toilet.

Re:Can you charge a supplier $2? (2, Informative)

shark72 (702619) | more than 6 years ago | (#22117634)

"So what you're saying is that bullying is OK - that the larger party deserves concessions, and can do whatever the hell they want just because they're larger, and that this is perfectly acceptable."

This is hardly something that Wal-Mart invented -- all distributors and major retailers assess charges to rework product that doesn't arrive in the expected form. RFID tags are just the latest technological item (which is why this warrants discussion on Slashdot), but if you tell a distributor or major retailer that you're going to ship your product in ten-packs, then ship it in five-packs, you'll be charged to have it reworked. While I grant that this might be surprising news to many Slashdotters, people in the retail industry will react to this story with a collective yawn.

Things like this happen in every industry, in lots of scales. No doubt you've been involved in a contract (such as a rental agreement for an apartment) which states that a late fee is charged if an invoice is not paid by the expected date. Call it "bullying," but it's rather pedestrian.

Re:Can you charge a supplier $2? (3, Insightful)

Gewalt (1200451) | more than 6 years ago | (#22117798)

"So what you're saying is that bullying is OK - that the larger party deserves concessions, and can do whatever the hell they want just because they're larger, and that this is perfectly acceptable."

That, right there, is damn near the DEFINITION of a free market.

Re:Can you charge a supplier $2? (1)

symbolic (11752) | more than 6 years ago | (#22118986)

It's a little bit different with Walmart. Yes, they buy in bulk, but the fact that Walmart has such a huge portion of the market makes it a bittersweet pill for suppliers. If the suppliers deny the discounts, it's not that they will probably lose Walmart's business, but they lose what could easily be their primary sales channel.

Re:Can you charge a supplier $2? (1)

jjohnson (62583) | more than 6 years ago | (#22117362)

And if no one sells to you, then you either go without, or drop the requirement. Yes, it's the same in kind, but different in circumstance. Walmart is the largest retailer in the world. Manufacturers fall all over themselves to *voluntarily* sign the purchase agreement mandating eventual adoption of RFID--for most, selling just one or two items in Walmart can double their revenue.

This is standard in North America: buyers have logistics requirements that sellers agree to; the contract stipulates penalties for non-compliance. Sellers who don't want to risk the penalties don't agree and don't sell. I worked for a worldwide manufacturer that turned down Walmart's invitation to become an A-list manufacturer for them because the logistics requirements were too onerous for us. We sold to Target instead. That's life.

Re:Can you charge a supplier $2? (1)

dissy (172727) | more than 6 years ago | (#22117448)

I think you are free to do that actually, however without a contract (which im sure walmart has at least one of per distributer) you would have a hard time enforcing it.

And even with a contract, you'll be hard pressed to find someone to sell you something that when asked to sign it didnt laugh you out of the store.. but even assuming you meant a higher level of buying (IE the same way walmart does, in bulk from distrubters) where you might have a contract as standard practice, then you too could get away with this.

Re:Can you charge a supplier $2? (1)

definate (876684) | more than 6 years ago | (#22117246)

Please.... oh please tell me that Spy Chips, the movie is being made by Uwe Boll.

Finally, we could put him to some good use.

My guess is this wouldn't happen, conspiracy theorists are too smart to fall for Uwe Boll's tricks.

Re:Can you charge a supplier $2? (1)

suraklin (28841) | more than 6 years ago | (#22118246)

Two dollars per pallet is not really fair. I work for a logistics company that handles the warehousing for a major cheese company. On a given week we normally send 7-10 trailers to that distribution center. Each trailer usually has between 30 and 50 pallets, so that is $60-$100 per truckload that our customer would lose. So at the high end they stand to lose $52000 per year with this initiative.

On the other hand if we were to adopt RFID tech in the warehouse we would have to run TWO systems, one for the barcode system we and all of our other retailers use and another for the RFID.

So it is really not cost effective either way we go right now. If this were a bigger push by more than one retailer it would make sense. But this is just the 800lb gorilla throwing its weight around again.

Re:Can you charge a supplier $2? (0)

Anonymous Coward | more than 6 years ago | (#22118498)

The most cost effective way: Don't ship to Wal-Mart. Get everyone in your industry to not ship to Wal-Mart. Watch them lose an entire type of product in their 'super store'

Re:Can you charge a supplier $2? (1)

rebelcan (918087) | more than 6 years ago | (#22119512)

I'm fairly sure that sometime in the near future, a company will create a barcode printer that has RFID tags embedded in the stickers it prints out. That way, scanning the barcode OR the RFID tag will enter both into one database used by both systems. That way, the distribution company doesn't have to worry about needing two systems in order to ship to all their customers.

Just a thought.

Re:Can you charge a supplier $2? (1)

nip1024 (977084) | more than 6 years ago | (#22116894)

Buy $348 Billion more in cell phone services and try it again.

nip1024

Re:Can you charge a supplier $2? (0, Redundant)

iminplaya (723125) | more than 6 years ago | (#22117478)

If you had Wal-Mart's clout, you can bet it sure would work out very well for you. I happen to think that Wal-Mart has too much clout in that a supplier could be put into bankruptcy because it depends on Wal-Mart as a client too heavily.

Isn't this a good use for RFID? (5, Insightful)

morbiuswilters (604447) | more than 6 years ago | (#22116690)

It's not being implanted in anyone, it's not being used to track personal information, it's just for inventory control. Maybe I'm missing something here, but this seems like the kind of application we should be supporting. Complaining about it seems almost as bad as the people who fought against barcodes because they contain the "mark of the Beast".

Re:Isn't this a good use for RFID? (2, Insightful)

Anonymous Coward | more than 6 years ago | (#22116712)

Seems reasonable to me. Wal-Mart has a lot of "stuff" to track. The better they can track it, the better they can move it to where it's needed, avoid waste, and (it is to be hoped) offer lower prices to consumers.

Re:Isn't this a good use for RFID? (3, Funny)

Serenissima (1210562) | more than 6 years ago | (#22116746)

Well, it's obviously NOT a good idea because it's in the "Your Rights Online" category. That has to mean there are some rights being infringed up, right? It's not like they would put in the YRO category just to make a sensationalist headline to get hits rather than actually inform people... right?

Re:Isn't this a good use for RFID? (2, Funny)

that this is not und (1026860) | more than 6 years ago | (#22117936)

I am coming to believe that YRO stands for 'rants against The Man' in some foreign language that most of us don't speak.

RFID and Walmart and more (4, Informative)

Lord Satri (609291) | more than 6 years ago | (#22116836)

Maybe I'm missing something here, but this seems like the kind of application we should be supporting.
I agree, without much analysis, to me it seems Walmart is pushing their partners in the right direction: enhanced efficiency for everyone.

Let me act as a karma whore (not that I care about virtual karma). Last May [rfidjournal.com] Walmart was announcing their embrace of the RFID tech, underlining the "green" component of this tech. Then, /. discussed in October Walmart's faltering RFID initiative [slashdot.org] . (Flash map of Walmart stores [brightcove.com] ) And today, great news, Walmart is deep into RFID. Technology itself is neutral, it is what we do with it that makes it good or bad.

Other RFID stories that I find pertinent: a successful implementation of RFID tags [ornl.gov] at the Oak Ridge National Laboratory's Washington Navy Yard. Don't forget we discussed over /. the use by Microsoft of RFID for marketing in groceries [slashdot.org] . If Microsoft is using it, it must have great potential? ;-) I won't lie that I'm amazed at passive RFID chips being as small as 0.15mm x 0.15mm x 0.0075mm (Hitachi) [slashgeo.org] , enabling rather conspiracy-theory applications of the tech. India [slashgeo.org] and China [slashdot.org] seems are seriously looking at RFID. Well, you get the idea, more stories about RFID here [slashgeo.org] . We live in interesting times. Technology is evolving at an exponential rate... now I wonder if we, as a civilization, will successfully cope with the realities of our resources-limited planet... (I'll stop here, I'm getting off-topic ;-)

Re:Isn't this a good use for RFID? (1)

homer_s (799572) | more than 6 years ago | (#22116842)

Just curious, why should "we" feel anything regarding this (unless you are a Walmart shareholder or a supplier)?

Re:Isn't this a good use for RFID? (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22118392)

Absolutely, the criminals in the UK have already used it to identify the most valuable cargoes and steal them (So much more efficient to steal a lorry load of Plasma and LCD televisions than a lot of nappies.) Shouldn't the US Homeland Security people get involved now, think of the potential damage to the economy!

Here a couple of activities for disaffected staff/loonies...

a) Scatter millions of cheap RFID chips over the depot. Watch as staff load pallets with Deodorant thinking it's soft drink..

b) Hit a Walmart depot with a zapper that kills all the RFID chips.. Remember loonies (or even disaffected staff they layoff) don't have to reprogram the chips, just wipe them out and cause chaos. No physical presence is required and nothing is left behind to track the perpetrator.

Putting it simply, you need to make sure that the "improvements" don't have a downside for everyone that's bigger than the upside for Walmart.

Re:Isn't this a good use for RFID? (2, Informative)

MagusSlurpy (592575) | more than 6 years ago | (#22118430)

Yes, it actually IS one of the few good uses for RFID, one of the things that it was actually designed for - tracking of pallets in a warehouse environment. Having worked in a warehouse in my undergrad years, I can say quite easily that our "pallet tracking system" (i.e., writing the SKU on it and putting it up somewhere in our 150,000 sq ft) needed some improvement.

I am all for legitimate uses of RFID. When Wallyworld starts demanding that individual items be tagged, then I will be upset.

Sounds like Apple (2, Informative)

cbart387 (1192883) | more than 6 years ago | (#22116698)

Apple takes a similar approach by forcing change, ie floppy drives [theregister.co.uk] , the recent Mac Air no optical drive etc. Even though Apple takes a more extreme approach (my-way-or-the-highway versus my-way-or-you-pay-extra) this being slashdot it's because Walmart is EVIL.

demanding free service (2, Insightful)

James McP (3700) | more than 6 years ago | (#22116728)

Walmart wants the RFID b/c it will lower their operational costs. RFID has one advantage over barcodes; they can be read and counted at a distance and ignore dirt. If a sticker gets dirty, the barcode is unreadable, while if the pallet invoice is facing the wall it's inaccessible. RFID will still work.

But this has a non-trivial adoption cost to the manufacturers. Walmart isn't incentivising this; no offers of cost sharing. Just a flat demand. It's not illegal AFAIK but it is abusive.

Re:demanding free service (1)

Gordonjcp (186804) | more than 6 years ago | (#22116754)

The problem is that if you've got a big stack of pallets, it can be hard to work out which one has the RFID tag you want. You either need to be reading from barcode distance, or not that bothered about which of the presumably identical pallets of boxes of breakfast cereal you're looking at.

Re:demanding free service (1)

Lally Singh (3427) | more than 6 years ago | (#22116946)

multiple antennas will get you a position.

Re:demanding free service (2, Interesting)

Casualposter (572489) | more than 6 years ago | (#22116900)

"walmart isn't incentivising this."

Exactly. For some operations, RFID makes sense, but there isn't just ONE RFID system installed. Most of these companies also supply other big chain stores who may have other requirements. This was the whole reason for going with Barcodes. Barcodes are standardized. RFID systems are not, as far as I know. Walmart hammers it suppliers for price decreases, while the shipping costs rise due to higher petroleum. The supplier has a choice: make money or go out of business. Walmart can use its huge purchasing power to drive companies out of business, so perhaps the company looks at it business and says: losing a dime on ten million units is much worse than making 50 cents on a hundred thousand, and just decides to pass on the Walmart supply agreement. That might be why the selection has been diminishing in Walmart to the point that if I want to buy everything on my list, I have to go to other stores. The only reason that Walmart has been able to bully any suppliers is that the cost of the bullying is significantly less than the cost of the delivered product. Once that changes and the supplier is forced to improvise, the Walmart account might become a liability rather than a profit center.

Re:demanding free service (2, Insightful)

jbengt (874751) | more than 6 years ago | (#22116902)

It's not illegal AFAIK but it is abusive.
<sarcasm>What, Walmart abusive to its suppliers? Incredible.</sarcasm>

Re:demanding free service (2, Insightful)

goldspider (445116) | more than 6 years ago | (#22117200)

Abusive? Please. It's the cost of doing business with Wal-Mart. Wal-Mart isn't forcing anyone to do business with them.

Re:demanding free service (1)

jhoger (519683) | more than 6 years ago | (#22117314)

Actually, there are other advantages.

Here's one: you can scan an hundreds of items on a pallet wrapped in shrink wrap, *individually*.

This turns out to be an issue because of an A/R issue called "deductions." This is where the recipient of goods deducts from the invoice saying that they didn't receive everything you claim to have shipped them. With RFID, you can count all items in the pallet right before you ship it.

-- John.

Re:demanding free service (0)

Anonymous Coward | more than 6 years ago | (#22117340)

I have worked at Slave Depot and let me tell you, every day I wish products were tagged with RFID so we could find hidden and lost stock with ease. Thank God I am not doing that anymore, but I do now believe all retail/warehouse stores should have such tech build into product management for everyone's sanity (drones, angry customers, pointy hair types, etc).

Re:demanding free service (0)

Anonymous Coward | more than 6 years ago | (#22118342)

But this has a non-trivial adoption cost to the manufacturers. Walmart isn't incentivising this; no offers of cost sharing. Just a flat demand. It's not illegal AFAIK but it is abusive.
What would you term that $2 WalMart is charging, then? That doesn't provide an incentive to tag the pallets?

WTF?

Couple of thoughts.... (2, Informative)

FooAtWFU (699187) | more than 6 years ago | (#22116734)

1. Sam's Club is a good place to try it out for starters. They tend to have a lot of big pallets and since the chips aren't cheap yet it's a good way to get the most for their money as they prove technology.

2. I understand that to not-do-business with Walmart is to await death. To do business with Walmart, however, is to invite death. (Seriously, they will put so much price pressure on you... and are not at all concerned with running you, as a supplier, into the ground, since there are plenty of other suppliers out there...)

Re:Couple of thoughts.... (1)

tepples (727027) | more than 6 years ago | (#22116856)

(Seriously, they will put so much price pressure on you... and are not at all concerned with running you, as a supplier, into the ground, since there are plenty of other suppliers out there...)
Even for patented or copyrighted goods?

Re:Couple of thoughts.... (1)

Casualposter (572489) | more than 6 years ago | (#22116918)

What does walmart sell in any large quantity that is patented to the point that there is nothing similar right next to it on the shelf? I really can't think of many things that might enjoy such a position, but that would be a unique situation and certainly not something the majority of suppliers would enjoy. I mean even though the Super soaker is patented, there are a lot of water pistols and such in the toy section competing with the Super Soaker.

Walmart's business model doesn't seem to invite the kind of pressure that a single patent holder can exert. Unless Acacia has a patent on making suppliers put RFiD tags on all incoming shipments.

Re:Couple of thoughts.... (1)

tomhudson (43916) | more than 6 years ago | (#22117398)

Board Games. Monopoly, Risk, Scrabble, etc. All trademark (not copyright) protected.

Video Games. All protected by copyright and trademark

Books. Copyrighted.

All brand name products, from electronics to food to motor oil to running shoes.

None of these are fungible. Ask any parent whose kid insists on Nike or Captain Crunch. Or any car owner who insists on Valvoline. Or EVERYONE who wants a Wii.

Re:Couple of thoughts.... (1)

cdrguru (88047) | more than 6 years ago | (#22117750)

The problem is with board games and the like, you either deal with the world's largest retailer (and therefore have access to the world's largest retail marketplace) or you go out of business. WalMart's doesn't really care. Consumers are not going to not shop at WalMart if they no longer carry Hasbro products, but Hasbro will certainly be out of business if their products are not sold at WalMart.

It is pretty simple for suppliers. You conform to the terms and stay in business or else.

WalMart has pretty much tied the US consumer market up like this, either with real or imagined savings. The consumer has little choice in the matter, and given WalMart's position, every other retailer is going to go down the same road sooner or later.

If it's supply-constrained, Wal-Mart matters 0 (1)

tepples (727027) | more than 6 years ago | (#22117858)

The problem is with board games and the like, you either deal with the world's largest retailer (and therefore have access to the world's largest retail marketplace) or you go out of business.
Nintendo could sell as many Wii consoles without Wal-Mart as with Wal-Mart.

Re:If it's supply-constrained, Wal-Mart matters 0 (1)

tomhudson (43916) | more than 6 years ago | (#22118020)

"Nintendo could sell as many Wii consoles without Wal-Mart as with Wal-Mart."

Very true. Also, I've seen games sell for less at other stores than they do at WallyWorld. This past Christmas included Cranium (bought 3 copies) and an electronic Sudoku game (5 copies).

WalMart doesn't have any sort of monopoly on lowest prices. TV DVD recorders - Worst Buy/Future Shit had the best deal - bought 3 LG-850s at $99/each. Much better than anything WallyWorld had, even at a higher price.

Also, there are manufacturers who refuse to continue to sell to WalMart because it hurts their brand. [fastcompany.com]

Re:Couple of thoughts.... (1)

that this is not und (1026860) | more than 6 years ago | (#22117990)

Mostly with real savings. I priced a bottle of Rolaids yesterday. $2.99 at WalMart. $4.29 at CVS. And CVS is another large-scale retailer. I'd be afraid to ask what a similar quantity of Rolaids would cost at some crummy 'market-up' mom and pop store. We used to have a store like that down the block. Grumpy 'get off my lawn' proprietor and obscenely marked up prices. We affectionately called the place 'Market Up.' I would be pleased to see that grumpy bastard working as a greeter at WalMart.

Stack them (3, Funny)

Fuzzums (250400) | more than 6 years ago | (#22116750)

If wallmart wants pallets with rfid, why don't they put the whole pallets of the supplyers on one of their pallets WITH rfids...

Problem solved. NEXT!

Re:Stack them (1)

Wesley Felter (138342) | more than 6 years ago | (#22118160)

You should have patented that idea and licensed it to Wal-Mart for $1.99 per pallet.

Does this really help? (1, Interesting)

vodevil (856500) | more than 6 years ago | (#22116764)

Does this really help with controlling inventory? The RFID is not on the product, but on the pallet. So, they're going to be able to track how many wooden pallets they have, but not the product that is sitting on top. Until it's implemented in the product, I don't see how this will help them.

Re:Does this really help? (1)

Jeff DeMaagd (2015) | more than 6 years ago | (#22116816)

I think the idea is that the stock comes in already strapped to a pallet such that it makes it easier to find a given pallet of stock. In the warehouse, the stock isn't removed from the pallet, the pallets aren't opened until the items are already placed in the area for sale to the customer. I think it might make it a lot easier to locate misplaced pallets. It might also be that the supplier electronically sends the tag ID and a bill of lading for that tag so it reduces paperwork. It might even greatly increase the scan speed vs. bar codes.

Re:Does this really help? (1)

toddhisattva (127032) | more than 6 years ago | (#22117156)

Does this really help with controlling inventory? The RFID is not on the product, but on the pallet. So, they're going to be able to track how many wooden pallets they have, but not the product that is sitting on top. Until it's implemented in the product, I don't see how this will help them.
This is as silly as requiring each line of code to have its own identifying number!

Re:Does this really help? (1)

jjohnson (62583) | more than 6 years ago | (#22117234)

The idea is that the pallet tag is a unique number that can be matched with the electronic paperwork sent by the manufacturer. Scanning the pallet tag matches the physcial skid of product to a pending inventory transaction that lists all the product; after that, the products themselves are in the DC's system, and handled by logistics software.

Why the pallets??? (0)

spiritraveller (641174) | more than 6 years ago | (#22116804)

Wouldn't it make more sense to just have an rfid on each package?

Pallets are just a bunch of wood. That doesn't give you a direct indicator of your product. It just tells you that that pallet is sitting there. Someone could have removed half of the product from it already, but the rfid reader would indicate that the whole shipment is right there.

I'm looking forward to this so that I can shop at walmart again without having some annoying person ask to see my receipt as I leave. If it's embedded in the actual product, they can make sure that any item from their inventory going out the door has been paid for. That reduces shrinkage costs (aka theft losses), lets them reduce the number of employees dedicated to loss-prevention, and lets me leave without either being interrupted or telling someone to shove off.

Re:Why the pallets??? (1)

jbengt (874751) | more than 6 years ago | (#22117012)

Wouldn't it make more sense to just have an rfid on each package?
Even at $0.02 per tag, that would significantly impact the price or profit of a lot of small items, not even counting the initial cost of creating the infrastucture.

Re:Why the pallets??? (1)

spiritraveller (641174) | more than 6 years ago | (#22117260)

not even counting the initial cost of creating the infrastucture.
The infrastructure is already there. Many of their products already have rfids, and they already use them to deter theft.

Re:Why the pallets??? (1)

Todd Knarr (15451) | more than 6 years ago | (#22117380)

Not the same technology. Those theft-deterrent tags are just a small piece of metal foil shaped/sized so it's resonant frequency falls at a particular RF frequency. Broadcast on that frequency near it and it "pings" back with a signal. Hit it with a strong enough signal, the heat generated melts the foil and the tag no longer reacts. Notice that there's no data at all here, the tag's just a reflector. The gates near the store doors transmit a low-power signal and sound an alarm if they hear an echo from a theft-deterrent tag, while the pads at the registers transmit a higher-power short-range signal to disable the tags (the cashier runs the item across the pad after they've rung it up and before putting it in your bag).

The RFID tags Walmart wants aren't just a piece of foil, they've got an actual antenna, a few bytes of data storage and an RF transmitter inside. When presented with a radio signal they leech power from the RF field and transmit the data stored inside them for a receiver to pick up. This can be done fairly cheaply, but it's still much more expensive than the simple passive theft-deterrent tags. One tag per pallet is probably not too bad. One tag per item, though, even at a nickel per tag is probably in a lot of cases costing more than the distributor's profit margin on that item. Combine with the distributor's knowing that Walmart expects the distributor's prices to go down year-over-year and some distributors are undoubtably going to decide they can't afford to do business with Walmart anymore. It may be better to make a penny an item on a million items than a dime on a thousand, but it's not better to lose a penny an item on that million.

Re:Why the pallets??? (1)

spiritraveller (641174) | more than 6 years ago | (#22117452)

I stand corrected. Thank you for the informative response.

Re:Why the pallets??? (1)

jjohnson (62583) | more than 6 years ago | (#22117214)

Four years ago, when I was working for a manufacturer that was facing Walmart's first attempt to require RFID, the tags cost $0.60 apiece, and the equipment to print and program them was in the tens of thousands of dollars. They also failed to read up to 30% of the time. For a company already driving manufacturers out of business on price, adding that much to the cost of each package of product was impossible, even for Walmart.

It's probably been in their Ts & Cs for years (5, Interesting)

originalhack (142366) | more than 6 years ago | (#22116922)

They've probably had this in their terms and conditions on their purchase agreements for years.

Imagine you run a monster distribution center. You order from a zillion vendors and pallets of merchandise appear. Some pallets have a nice list attached to them describing what is in them so you can route them to the store without unpacking them. Others just show up with a pile of boxes and you have to, at least partially, unpack and re-wrap them to confirm the contents.

1. Your next version of your terms and conditions require a packing list.

Then, you find that most of the lists have the PO number on them and list the items by part number, but a few just say something like "Here's 10 cases of green shirts." Most have the packing list printed on a label on the side of the wrapped pallet. Some have it inaccessible from the outside.

2. Your next revision of your terms and conditions require the list to be on the outside and dictate the format.

After a few rounds, you realize that these lists are very expensive to produce and to read and all of your suppliers have (or should have) computers anyway, so you have them electronically send you the packing list and specify a shipment number. That number goes on a bar-code label at a specific place on the shipment. On your receiving dock, you have someone dance around each pallet to scan it and then it disappears into your warehouse.

3. Your next Ts and Cs require the bar-code

You find that the bar-code requires stopping the flow of items in all sorts of places. You invest in RFID readers for your whole distribution line. You tag all the incoming shipments as they arrive, and you find that it works.

4. Your next Ts and Cs require RFID labels.

A grace period comes and goes. Tagged shipments fly right through your distribution center smoothly, but you have some suppliers who still don't comply with your agreements with them and you have to stop each of those shipments on your dock and slap an RFID label on them yourself. The industry gets to the point where labels with tags are down to 40 cents in tiny quantities and the equipment to program them is down to under a thousand. There are also companies that will sell tags preprogrammed for a dollar or two. Still, some of your suppliers who were eager to sell to you and signed the Ts and Cs the day they took the order, fail to follow through.

5. You start to either refuse to accept shipments that don't comply with the contract or you charge a fee to fix the sloppy shipments.

Now, a legitimate issue is where the power in the relationship is. WM is well known for holding all the power and that really can be viewed as being all about price and accepting the Ts and Cs in the first place. That's an issue that comes up anytime they meet with a supplier. If your Verizon service stinks, you cannot do anything about it because, when you "negotiated" your contract, you could either sign THEIR terms or you could go to one of a tiny number of serious competitors who seem to have conspired to have equally onerous terms. (This is exactly why legislators keep looking at things like "customer bill of rights" legislation... the individual customer doesn't have the ability to choose a better contract).

Re:It's probably been in their Ts & Cs for yea (1)

HEbGb (6544) | more than 6 years ago | (#22116972)

You are exactly right; most on this forum really don't understand this at all. Good job clearly explaining it.

Re:It's probably been in their Ts & Cs for yea (1)

kenb215 (984963) | more than 6 years ago | (#22117456)

Pressed the wrong button when moderating, oops. Undoing now, sorry.

Speaking of Wal-Mart (-1, Offtopic)

FudRucker (866063) | more than 6 years ago | (#22117116)

i recently purchased a bicycle (mountain bike with 26 inch tires) for 30 dollars on clearance, and the new bikes being restocked were all expensive (close to 200 dollars) than the previous pricing scheme which used to be just under 100 dollars, normally i avoid purchasing Chinese made products but for 30 bucks i bet China and/or Wal-Mart took a loss, so if you want a bike for yourself or someone else (kid's birthday) now is a good time to look for the clearance items on the bicycle rack next to the toy dept...

Word of the Day... (3, Insightful)

RealGrouchy (943109) | more than 6 years ago | (#22117284)

When a retailer is able to charge/coerce the people it buys its merchandise from, that retailer is a monopsony. [wikipedia.org] (I'm by far not the first to label Wal-Mart as such)

- RG>

In Bulk (1, Funny)

Anonymous Coward | more than 6 years ago | (#22117308)

I wonder what would happen if a supplier decided to get a bunch of rfid tags in bulk... that all returned the same data. Technically, they were tagged...

Yawn (2, Informative)

Anonymous Coward | more than 6 years ago | (#22117328)

This practice is known in the industry as Expense Offset. When I worked for them 10 years ago, Federated (now just Macy's) assessed their vendors Expense Offsets for a whole host of things. Basically the merchandise was supposed to come as pre-prepped for the floor as humanly possible, and checklists for each type of item came with a dollar amount for each omission (no barcode tag, not on hanger, wrong creases that had to be ironed out, etc.)

loool (0, Troll)

mestar (121800) | more than 6 years ago | (#22117574)

Wallmart charges its suppliers?

"The charge is to cover Sam's Club's cost to affix tags on each pallet, says a Wal-Mart spokesman."

Hey, Mr. Wallmart, you bought it, nobody forced you, too late to start complaining now.

Will they sell (1)

houghi (78078) | more than 6 years ago | (#22117606)

something like this [coolest-gadgets.com] ?

So where does all their money come from? (0)

Anonymous Coward | more than 6 years ago | (#22119400)

I work for a company that has done business with Wal-Mart on their distribution centers. I've now worked on a couple of their DCs, and they seem to be by far the most difficult company to do business with that I have ever worked with. In all areas they demand suppliers comply with their standard way of working for efficiency. Even when you've done a good job for them, they seem to have a policy of attempting to bleed any profit for the supplier out of the contract. We just have to start out by increasing the prices of our services to 2-3 times the amount we charge other companies. I think the only way of working with them is to not be greedy. Don't ever see the dollar signs of increasing your business 300% a year because you're selling to Wal-Mart.

They make a hell of a lot of money from somewhere. When you look at the prices they charge in store, that money isn't coming from their customers.
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