Essay About Wal-Mart And Low Prices

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The title of the article contrasts low prices with high costs. What this means is that Wal-Mart can provide low prices to their customers because they have the power to squeeze profit-killing concessions from their vendors. There are pro’s and con’s to this. It can be looked at as a positive because Wal-Mart truly is providing “everyday low prices” to their customers, and is helping to keep inflation down in the US; however as a negative ‘we are shopping ourselves out of jobs’, as stated in the article. In order for Wal-Mart to be able to sell their goods at such low prices they bully their suppliers into getting the prices they want from them. In order for the vendors to survive in the face of its pricing demands, they have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas. This is the cost to American workers. Wal-Mart has such awesome purchasing power that they write their own ticket. If they don’t like a vendor’s price, they’ll go vertical and do it themselves, or they’ll find someone that will meet their needs. By doing business with Wal-Mart a vendor may increase their sales and growth numbers, but decrease their profits drastically possibly to the point of bankruptcy.