A race to the bottom

April 4, 2013

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“Wal Mart is the death knell for small business everywhere they open shop. Wal-Mart is good for small business in the same way amputation is a successful weight-loss program. Wal-Mart is killing America, and if you shopped there this week, here’s hoping the American job you just shipped overseas is yours!”

So reads a comment about the money.cnn.com article “The Wal-Mart economy’s big winners,” which focused on four small U.S. businesses that “hit the big one” by securing Wal-Mart orders. There are some lessons to be learned from each of these businesses, lessons that are as basic as any in business: Listen to the market; find a need and fill it; and be persistent. There also are lessons to be learned from the comments left for this article. But it doesn’t appear that these lessons are getting through.

The article describes how Dave Sargent of Prairie Grove, Ark., grew tired of and gave up his lifelong occupation as a dairy farmer at the age of 62. When he did so, he planted a small garden on a third of an acre, and when the crops came in, he visited his local Wal-Mart and asked if the store wanted to buy the produce. The manager agreed. That was a decade ago, and Sargent now sells $1.5 million in produce each year to dozens of Wal-Mart stores throughout the country. He now has 1,400 acres, grows more varieties, and has taken on a partner. In the summer, he employs 40 people.

What did Sargent have to say about this? “I owe all of my success to Wal-Mart. Without it, I would be nowhere.” (I guess there isn't much money to be made writing children’s books.)

Then there’s Mohawk Home’s president, Bill Kilbride, who related how he knew Wal-Mart was going to be big even when it had fewer than 1,000 stores nationwide. He pitched selling the company’s area rugs and bath mats about 10 times in the 1980s. His persistence paid off when Wal-Mart placed its first order in 1989. Since then, Mohawk has grown from about 115 employees to 1,600.

Also profiled were World Kitchen, Rosemont, Ill., which used Wal-Mart customer buying information to create a highly successful line of kitchen goods sold by the retailer, and Costa Mesa, Calif.-based Project 7, a chewing gum company that plants a tree for every pack of gum sold. Today, the gum is sold at all U.S. Wal-Mart stores and sales at these stores have resulted in 2 million new trees being planted and an extra 100 manufacturing jobs.

Interesting to read some praise from small business owners about Wal-Mart. As expected, the majority of comments left for this article were anti-Wal-Mart. The majority, but not all.

R.B. said, “Is there going to be a follow up article on the Wal-Mart economy losers? So many small businesses no longer existing because of being run over by "the machine." Four winners above - glad for them, but does it make up for the loss of so many mom and pop businesses that actually knew who you were when you walked in?”

To which, W.G. replied, “And why should I pay more for the same product just to support some local business? Sorry but my No. 1 priority is my wallet, and I shop where I can save the most and get the best deal. If these "small businesses" want my business then they need to figure out a way to lower their prices.”

To which F.P. replied, “And this is, at its core, the American people's contribution to the economic collapse. I want to save 11 cents on a mop, so screw my neighbor, screw our local businesses, and screw long term financial sustainability. Greedy, unpatriotic pig. Yes, the banks and massive corporations like this one broke the law, but if it wasn't for the selfishness, ignorance, and fat, gluttonous consumption by the mind-numbingly stupid American public, who are too hypnotized by their own greed to support their own economy, this collapse would not have happened. Like all things, an economy, if not cared for, will decay and die.”

And so the discussion continued, evolving into a conversation about job loss and government responsibility—how, according to bear235, the “leadership must take on China and change trade rules so that companies will leave jobs here and bring some back. Asking companies to risk going out of business will never work. The government has to change the playing field.”

“Level the playing field” has been the mantra of manufacturing for years now, and little, if anything,
has been done in that regard. What happened to leading by example? If our leaders continue to let jobs flow to China and don’t do anything to stem the tide, why shouldn’t Americans shop at Wal-Mart, particularly when they no longer have jobs that pay enough to shop elsewhere? It’s a paradigm that, as callmecrazy said, is “a race to the bottom.” Are we close to the finish line?

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FMA Communications Inc.

Vicki Bell

Web Content Manager
FMA Communications Inc.
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