What Wal-Mart Looks for In a Supplier

Three characteristics Wal-Mart looks for in a supplier, and has found in Rubbermaid, Hershey Foods and The Stanley Works

Executives at Levi Strauss are hoping business process changes to support their relationship with Wal-Mart will spark a turnaround. But who wins with the number-one retailer? Consultants at Bain studied 20 Wal-Mart suppliers and found that those growing their revenue and profits through business with the giant retailer share three things:

They use technology and better business practices to control their costs and slash the price Wal-Mart pays for their products. Example: Rubbermaid.

They create new products. Bringing back the same product year after year won’t cut it with Wal-Mart. The retailer will either whittle away at your margins, make its own version of your product or look elsewhere for a cheaper version. (For instance, Wal-Mart started its own laundry detergent line.) Example: Hershey Foods.

They know their products better than Wal-Mart. They know who’s buying their products and what other products land in the shopping cart with theirs. And they know what draws customers to their displays. Example: The Stanley Works.