Political Crossfire Forums

[ubikk]

A "Monospony" is defined as a market situation in which one buyer exerts a disproportionate influence on the market.

Walmart has gained increasing monopsonistic powers over the market in recent years and as such is the subject of much criticism. Companies that have refused to bend to walmart's demands to meet prices have suffered severe damage. One good example is Rubbermaid, who refused to cheapen the quality of their storage containers to meet Walmart's price requirements.

Walmart stopped carrying them and they instantly lost over 60% of their market and had to lay off thousands of people and close plants. Rubbermaid was an American company who had grown substantially in the last 20 years. The plants they closed were all previously profitable American plants.

Should one retail company have the right to dictate how products are made that are to be sold in its stores? It's not that Rubbermaid's products weren't selling, they were, and making a profit. It was that Walmart couldn't make enough profit re-selling them and wanted Rubbermaid to make them more cheaply.

What effect does this have on the creativity and ingenuity of American Businesses? Can we really do our best in the world market if we have to make Walmart happy here to stay in business? Walmart is not everywhere yet...

What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?

In many towns, Walmart is becoming a monopsonistic market for people's labor and people who used to work at many different local stores are now forced to apply at Walmart.

What are your thoughts?

[perdidochas]

ubikk wrote: A "Monospony" is defined as a market situation in which one buyer exerts a disproportionate influence on the market.

Walmart has gained increasing monopsonistic powers over the market in recent years and as such is the subject of much criticism. Companies that have refused to bend to walmart's demands to meet prices have suffered severe damage. One good example is Rubbermaid, who refused to cheapen the quality of their storage containers to meet Walmart's price requirements.

Walmart stopped carrying them and they instantly lost over 60% of their market and had to lay off thousands of people and close plants. Rubbermaid was an American company who had grown substantially in the last 20 years. The plants they closed were all previously profitable American plants.

However, I would bet a significant portion of that growth was due to Wal-Mart. I know the great majority of Rubbermaid containers I've bought, from 4oz to 40 gallons, have been at Wal-Mart.

Also, from rubbermaid.com's link to "where to buy Rubbermaid products"

www.rubbermaid.com/rubbermaid/aboutus/whereToBuy.jhtml

Note that Wal-Mart is on the list? I thought Rubbermaid was not being carried by Wal-Mart? What's the truth?

ubikk wrote: Should one retail company have the right to dictate how products are made that are to be sold in its stores? It's not that Rubbermaid's products weren't selling, they were, and making a profit. It was that Walmart couldn't make enough profit re-selling them and wanted Rubbermaid to make them more cheaply.

First, your story doesn't ring true. Rubbermaid products are still sold at Wal-Mart. I've bought them there in the last few months. Second, a retailer can choose whoever they want to buy from, for whatever reason. If I own a store, and the sales rep from Acme has bad cologne, I can stop stocking Acme products. I can also do it if I think I can get him to offer me a better price.


ubikk wrote: What effect does this have on the creativity and ingenuity of American Businesses? Can we really do our best in the world market if we have to make Walmart happy here to stay in business? Walmart is not everywhere yet...

But they are on their way. They have invaded Germany, for example.


ubikk wrote: What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?

Go to Target or Family Dollar or Dollar General.


ubikk wrote: In many towns, Walmart is becoming a monopsonistic market for people's labor and people who used to work at many different local stores are now forced to apply at Walmart.

What are your thoughts?

Wal-Mart has made life better for most of rural America. It has greatly reduced the price that most rural people have to pay for their basic necessities.

[Charlie Man]

And reduced the wages in the area.

[Face Value]

perdidochas wrote:

But they are on their way. They have invaded Germany, for example.



Not to cast a shadow on some of your persuasive points that I do appreciate, but know that the Wal-Mart corporation has begun it's complete withdrawal from Germany.

Also, Wal-Mart is established in less developed nations (for example, those in Asia) as an economically healthy high-end merchandiser, purveying what are luxury goods by those nations' standards. However, it's presence as a general merchandiser in Western countries like the United States, is damaging to the model of economically strong communities that has made America an economic power. The affect of Wal-Mart on communities has been that of a weed. Its a poison, damaging the small-business fabric of American communities in an unprecedented manner. Wal-Mart presents a unique threat, not posed by any other similar merchandiser.

[perdidochas]

Face Value wrote: perdidochas wrote:

But they are on their way. They have invaded Germany, for example.



Not to cast a shadow on some of your persuasive points that I do appreciate, but know that the Wal-Mart corporation has begun it's complete withdrawal from Germany.

Also, Wal-Mart is established in less developed nations (for example, those in Asia) as an economically healthy high-end merchandiser, purveying what are luxury goods by those nations' standards. However, it's presence as a general merchandiser in Western countries like the United States, is damaging to the model of economically strong communities that has made America an economic power. The affect of Wal-Mart on communities has been that of a weed. Its a poison, damaging the small-business fabric of American communities in an unprecedented manner. Wal-Mart presents a unique threat, not posed by any other similar merchandiser.

Didn't know the Germany thing. My cousin (who is German, and loves Wal-Mart, both there and here) will be heartbroken.

I don't buy the Wal-Mart is dangerous thing. I have relatives that live in the rural South. Without Wal-Mart, they'd be paying predatory prices at small town hardware stores, convenience stores and grocery stores, and getting inferior products, or they would be driving two or three hours for decent products at decent prices. Also, the success of Target, which pretty much goes head to head with Wal-Mart, is a counter to the Wal-Mart ruining everything. Small businesses that were competitive and fair still exist. It's the predatory ones that died. I feel no sorrow for most of them.

[LostSoul3412]

Don't worry about Wal-Mart in Germany, and don't worry about corporate take overs anytime soon.

www.businessweek.com/globalbiz/content/jul2006/gb20060728_594752.htm?chan=globalbiz_europe_companies

[ubikk]

Quote: First, your story doesn't ring true. Rubbermaid products are still sold at Wal-Mart. I've bought them there in the last few months.


Some are sold there now, but not before the company had to close plants, like their Wooster Ohio plant and layoff 1000s of workers.

Quote: Second, a retailer can choose whoever they want to buy from, for whatever reason. If I own a store, and the sales rep from Acme has bad cologne, I can stop stocking Acme products. I can also do it if I think I can get him to offer me a better price.

I'm not questioning that. My question is:

Should a retailer allowed to get so large that their bying power has a disproportionate effect on the market and they can dictate how people design and manufacture products? or should we use anti-trust regulations against buyers that get too large?
[/quote]

[ubikk]

Quote:
Quote: ubikk wrote:
What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?


Go to Target or Family Dollar or Dollar General.


Walmart's influence as a monopsony buyer has already affected the types of products sold at those stores. A lot of producers selling to other stores have already changed their products to suit walmart's demands.

[ubikk]

perdidochas wrote: ... Without Wal-Mart, they'd be paying predatory prices at small town hardware stores, convenience stores and grocery stores, and getting inferior products,...

I disagree. I say the products you used to get at the small town hardware stores were superiod to the stuff you're getting at walmart. Plus, more of the money remained in the community when you shopped at the locally-owned store.

Quote: or they would be driving two or three hours for decent products at decent prices.

Again, I disagree. Big box stores have much larger service areas and cause people to drive a lot more. When walmart opened up way out at the interstate exit, everyone had to drive out there instead of just going down the street to local stores.

Quote:
Also, the success of Target, which pretty much goes head to head with Wal-Mart, is a counter to the Wal-Mart

Again, I disagree. In the majority of walmart market areas, there is no Target. Only the larger cities have choices.

Quote: Small businesses that were competitive and fair still exist. It's the predatory ones that died.

How were they predatory?

[ubikk]

Quote:
Didn't know the Germany thing. My cousin (who is German, and loves Wal-Mart, both there and here) will be heartbroken.

I don't know why. Germany has some of the best discount stores in the world. They're coming to America now with companies like Trader Joes and Aldi. German chains are used to lower profit margins and paying better wages. They compete by dealing with limited, specialized inventories.

The simple fact is that Walmart couldn't compete with them and make the same kind of profits they were used to. That's why they gave up and pulled out.

[gavnook]

Wal-mart haters irriate me. I wonder is Sears experienced this kind of negativity when it was the big dog.

Of course, Sears isn't the big dog anymore, and someday Wal-mart won't be either.

[Varyag]

Monospony is perphaps the only true example of where union power can yield net benefit.

[beachbum bob]

ubikk wrote: Quote:
Quote: ubikk wrote:
What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?


Go to Target or Family Dollar or Dollar General.


Walmart's influence as a monopsony buyer has already affected the types of products sold at those stores. A lot of producers selling to other stores have already changed their products to suit walmart's demands.

funny how people dismiss the marketing and business strategies of walmart as if walmart is some benign entity. For instance, walmart was demanding all sorts of tax incentives to build another store in a nearby city..and the city council held firm to why the world largest retail entity with billions of follars in profits need taxpayer subsidies...which what tax incentatives/abatements are, to build a complex...Walmart didn't receive a dime...and they went ahead and built their store

[Free Thinkr]

gavnook wrote: Wal-mart haters irriate me. I wonder is Sears experienced this kind of negativity when it was the big dog.

Of course, Sears isn't the big dog anymore, and someday Wal-mart won't be either.
Yes, especially irritating are those who criticize Walmart's business model and claim that other models are superior, while at the same time claiming that Walmart is some kind of omnipotent force. If Walmart's business model doesn't work, good, the market will do it in. If its business model does work, that's good too. Either way, let the market do its thing.

[perdidochas]

ubikk wrote: Quote:
Quote: ubikk wrote:
What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?


Go to Target or Family Dollar or Dollar General.


Walmart's influence as a monopsony buyer has already affected the types of products sold at those stores. A lot of producers selling to other stores have already changed their products to suit walmart's demands.

Well, actually, I think the opposite has occurred. IMHO, Target has caused Wal-Mart to upscale.

My point is that competition works. If we had been talking 40 yrs ago, nobody would have known what Wal-Mart was. My kids don't know what Woolworth is.

[perdidochas]

beachbum bob wrote: ubikk wrote: Quote:
Quote: ubikk wrote:
What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?


Go to Target or Family Dollar or Dollar General.


Walmart's influence as a monopsony buyer has already affected the types of products sold at those stores. A lot of producers selling to other stores have already changed their products to suit walmart's demands.

funny how people dismiss the marketing and business strategies of walmart as if walmart is some benign entity. For instance, walmart was demanding all sorts of tax incentives to build another store in a nearby city..and the city council held firm to why the world largest retail entity with billions of follars in profits need taxpayer subsidies...which what tax incentatives/abatements are, to build a complex...Walmart didn't receive a dime...and they went ahead and built their store

No business strategies are benign. IMHO, Wal-Mart is not much worse (and certainly not any better) than any other company. Also, pretty much all the big box stores try to demand taxpayer subsidies. It doesn't hurt them to try.

[beachbum bob]

perdidochas wrote: beachbum bob wrote: ubikk wrote: Quote:
Quote: ubikk wrote:
What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?


Go to Target or Family Dollar or Dollar General.


Walmart's influence as a monopsony buyer has already affected the types of products sold at those stores. A lot of producers selling to other stores have already changed their products to suit walmart's demands.

funny how people dismiss the marketing and business strategies of walmart as if walmart is some benign entity. For instance, walmart was demanding all sorts of tax incentives to build another store in a nearby city..and the city council held firm to why the world largest retail entity with billions of follars in profits need taxpayer subsidies...which what tax incentatives/abatements are, to build a complex...Walmart didn't receive a dime...and they went ahead and built their store

No business strategies are benign. IMHO, Wal-Mart is not much worse (and certainly not any better) than any other company. Also, pretty much all the big box stores try to demand taxpayer subsidies. It doesn't hurt them to try.

tell that to those who resist them

[Free Thinkr]

beachbum bob wrote: perdidochas wrote: beachbum bob wrote: ubikk wrote: Quote:
Quote: ubikk wrote:
What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who's to tell me I HAVE to settle for something cheaper or foreign? Where's my choice?


Go to Target or Family Dollar or Dollar General.


Walmart's influence as a monopsony buyer has already affected the types of products sold at those stores. A lot of producers selling to other stores have already changed their products to suit walmart's demands.

funny how people dismiss the marketing and business strategies of walmart as if walmart is some benign entity. For instance, walmart was demanding all sorts of tax incentives to build another store in a nearby city..and the city council held firm to why the world largest retail entity with billions of follars in profits need taxpayer subsidies...which what tax incentatives/abatements are, to build a complex...Walmart didn't receive a dime...and they went ahead and built their store

No business strategies are benign. IMHO, Wal-Mart is not much worse (and certainly not any better) than any other company. Also, pretty much all the big box stores try to demand taxpayer subsidies. It doesn't hurt them to try.

tell that to those who resist them
Like Rubbermaid, or like Costco?

Walmart haters are always telling me how Costco's model is superior. If that's the case, its but a matter of time before Walmart gives up the ghost and Costco takes the reigns; if the market is allowed to operate freely, of course.

[ubikk]

gavnook wrote: Wal-mart haters irriate me.

OK. And why does that matter whether they have too much purchasing power?


gavnook wrote: I wonder is Sears experienced this kind of negativity when it was the big dog.


Fisrst, Sears was never as big as walmart. They were never such a dominant monosponistic force in the market. Second, Small town America and small business was doing well when Sears was the big dog and they were mostly a catalogue company at first. Third, Back then, most of the people who worked at Sears and sold hardware and such could raise a family and live on their salaries.

[ubikk]

Quote: Walmart haters are always telling me how Costco's model is superior. If that's the case, its but a matter of time before Walmart gives up the ghost and Costco takes the reigns; if the market is allowed to operate freely, of course.

That's the $64 question. Is the market operating freely? Or is Walmart distorting the market?