A common warning I have heard about Walmart is that they set price-points and quality levels for their suppliers that result in name-brand products being specially manufactured for Walmart with cheaper, lower quality parts.
Recently I have heard, both here on the Dope and other places, this accusation being made about other big resellers such as Amazon and Home Depot.
Does anyone have any information/evidence that this practice exists at all? If so, is it common among all large resellers?
Until someone with more knowledge on the topic shows up, I did see a difference in price and quality (and warranty) on plumbing fixtures between Big Hardware vs small plumbing supply stores that mostly sell to contractors. Like sink faucets. The ones at the small store were built differently and had lifetime warranties from the manufacturer. I’ll see if I can find the brand.
I don’t know if the practice is common, but Walmart definitely does this. Here is a link to a Fast Company article on The Wayback Machine about Walmart’s relentless cost cutting. In particular, it describes how it wanted to sell a one-gallon jar of Vlasic pickles for three bucks, aka the pickle story. The price was so low that Vlasic and Walmart made only a cent or two on each jar. And that many pickles was more than people could eat before they spoiled, so much of the product was wasted.
Yes, it happens a lot. Usually the model number of the item will be different for the model made for a particular store but not always.
Several years ago I was looking around to buy a netbook computer for my mother and found a particular model that got good reviews and found the best price was at Best Buy. I went to the local store and bought one. The package (same model number) did not contain the carry case included by other retailers and it had a lower power CPU. I don’t shop at Best Buy anymore.
Looking for a specific electric toothbrush, found one at Walmart that appeared to be the same as a highly recommended model but the model number was different; turned out the Walmart model did not have the automatic timer full retail models used. Same experience with Walmart electric razor; different model number with some missing features.
The stuff you buy at Home Depot and Lowes, faucets, for instance, is likely not the same quality a plumber would install, even though they look similar and are from the same manufacturer.
In the case of Home Depot, they have a much worse quality version of Nashua brand duct tape. I used to buy a 3 pack of this brand at CostCo, and it was excellent - nice and thick, came off of nearly any surface cleanly. But the crap Home Depot sold was thin, and was a nightmare to remove. Never again, and it has spoiled me on that brand. I’m sticking with 3M, which apparently is too big of a company to allow themselves to be pushed around by Home Depot.
It does happen, and it can happen in both directions in terms of quality. Some stores will demand better quality goods or extra perks (you will often see a vacuum, for example, with an extra caddy of parts at Costco). Note that this generally only happens for only true large stores and chains, as it is another layer of expense on the seller (different build, different paperwork, different labelling, etc). This is not a demand that just any small store is going to get met. It will happen for certain quantities of goods only and is negotiated well in advance.
Note that Walmart, Amazon, and Costco, all do a lot of reasearch to find out who shops at their stores, and what options or features their key buyers are most interested in. They are not the same target buyers.
The chains do not do this for every single item they sell. They target certain types of products, depending on a whole range of things, including time of year, volume, margin, and on, and on.
It has not been my observation that Amazon changes their products. Resellers on their site might do so, and products running on their OS (think Kindle or Fire) might be different. This could, of course, change.
Walmart uses the system to maintain their price points.
Best Buy, in part for this reason, and in larger part for some other longer supply chain reasons, has really broken their own business model.
CostCo and others make it work for them in a slightly different way.
Another place you will see something similar is in something called a “white label”, or store name model. Sears does not make Kenmore, for example. They use other companies to do it for them.
Cite, for now, decades of working in consumer sales and product marketing.
In fairness to Nashua, Home Depot carries many different Nashua duct tapes, differing by thickness, material, heat ratings, etc, clearly stated on the various labels. You have to look in the plumbing/heating section. The last time I bought some, there were a least 6 different ones in stock to chose from, and this lists 45:
But Home Depot apparently does spec cheaper products. A locksmith was telling me about the locks that Home Depot sells. Even some high end brand names are special versions with plastic internal parts instead of metal, or pot metal instead of steel, etc. He did say that if you buy their highest priced locks, they are standard internals.
Dennis
I’ve seen this done a lot with Black Friday door buster items. Retailers want a brand name item with a dirt cheap price to plaster on their Thanksgiving day ad and the vendors respond with some really dumbed down products.
Sony had a line of laptops several years ago that I had my eye on and was monitoring the prices. Lo and behold the black friday flyer at Best Buy had the laptop at a greatly reduced price. However, reading the ad more closely and looking at the specs Sony had made a special dumbed down version just for this sale.
Pickles spoil?
hp is known to make Wal-Mart only pc builds also the video game console will make advertised “exclusive” to that store versions
Back in the days when there were multiple local appliance stores, many of them would advertise something like “We’ll beat anyone else’s advertised price on the same item.” Then you found out the model number was different, and the machine was a Bizzaro-world clone. Dryers that came without power cords, ranges with different knobs, etc.
If you ever do home remodeling, your contractor will be happy to tell you all about “builder’s grade.”
See here for a detailed breakdown of the difference between KitchenAid’s Artisan and Professional mixers.
A friend of mine was an accountant at a Sears appliance supplier back in the 70’s. He mentioned that what Sears did with Kenmore was essentially the same as what Walmart does today - get to be a significant share of the manufacturer’s sales, then apply the screws when they are too big a customer for the company to tell them to take a hike. Ask for lower prices, suggest lesser quality parts, etc.
For some things, the producer will suggest extras instead of price reductions. I think it was one of the Disney or Harry Potter movies, for example, where the package came shrink-wrapped with a picture-book for the same price everyone else charged for just the movie. That way they could say Walmart shoppers got a better deal, but you didn’t have them advertising a lower price than elsewhere.
Yeah, I have to doubt that story. It says that people would eat a quarter of the jar and throw them away when they got moldy.
Pickles last for years in the refrigerator. They’re covered in salt and vinegar (and sometimes sugar)!
And if people were finishing only a quarter of the jar: a quart jar of pickles is a normal sized jar of pickles. Do people who eat pickles really go through less than a quart jar a year? My household of three people easily eats more than a gallon of pickles a year just with like, a pickle or two a week on a hamburger or cut into spears to eat with a sandwich. Finding space for such a large jar in the fridge would be the hard part.
That whole claim sounds like nonsense to me.
Regarding the pickles spoiling, it may just be that people tire of them long before consuming a gallon jar’s worth. Plus a gallon jar takes up a lot of refrigerator space, so perhaps people give up on the jar early.
As somebody who has thrown away old pickles, I’ll suggest that it’s not mold or other form of rot*. Rather it’s that old pickles (and even fresh, cheap ones) get soggy and lose their crunch. Vlasic pickles in particular are marketed for their crunch.
(/tangent)
Amazon is hard to quantify, since they’re both a retailer and a marketplace (i.e. they store, sell, and ship product owned and selected by third parties). I have seen products sold under two different descriptions, brands and prices (same product, we just change the UPC sticker). This is somewhat helped by Chinese** manufacturers shipping products with minimal labeling, and in generic packaging. Often the only description of the product and/or brand is on the outer packaging which gets removed before shipping to the customer (usually because it contains multiple units that are sold individually).
*pedants, be quiet
** according to the discreetly printed ‘made in china’ notice (and, usually, very floppy cardboard)
Thanks for all the replies.
Of all the companies I mentioned, Amazon seems the most unlikely. In my mind they are agnostic about their products. Anyone who wants to sell something goes to Amazon and specifies what they want to sell. Amazon puts it on their webpage and stocks some product in their warehouse and waits. There is very little cost to Amazon, assuming the product on the shelf doesn’t cost them much until it sells. At least that is how I thought it works. But I saw a poster here on the Dope include them in the list of suspect retailers and one other source (can’t remember where) mentioned them as well.
What do you mean, old days? I’ve looked, and I’ve never seen the same model number for pretty much identical PCs and laptops in competing stores. Or on Amazon for that matter.
That’s actually just a small portion of the products Amazon sells. The majority of their products are owned by Amazon, and purchased at their discretion.
I work at an Amazon warehouse, and most of the stuff that’s owned/sold by third parties has a different type of identifier (ASIN). It’s also usually the most troublesome to work with (cheap and/or nonstandard pallets, unstable stacks, sloppy labelling, etc.).
This is fascinating because it never occurred to me that this might be the case, yet now it seems so obvious.
Has anyone had a bad experience of this type with Costco? I love shopping there and have never had an issue with anything (well, the Epson printer was a mistake. But I blame Epson.) Now I feel wary, especially because I’m considering a new TV and don’t want to save a little to get second-rate crap.
As someone who worked in CPG for many years, it’s very common that manufacturers make custom versions of their products for individual retailers. Every company I’ve worked for or heard of does this to some degree.
As far as logistics goes, they’re usually not in inventory ongoing - retailers have to agree to taking the entire minimum order within a set period (like 30 days).
This happens for retailers that have a “beat our competitor’s price” guarantee “if you see the same model” cheaper. Commonly manufacturers will slightly change the model number (usually keeping the same SKU), so the retailer can say “Our’s is Sony ABC123-M, their’s is ABC123-R, that’s a different model, so we don’t have to beat that price”.
It’s also common for special models / packs to come out during big selling periods like Black Friday, Xmas etc. Retailers will often request a product that hits a specific “door crasher” price point. Like a 60" TV for $199. Manufacturers will “de-spec” the item with cheaper components to hit the price point that a retailer wants.
In my opinion this is very bad from a brand perspective. At companies I’ve run, I’ve either stopped this or not allowed it to start. Consumers don’t understand they bought a de-spec’d product (which may actually have been vary good value for the price), they just think your brand is junk.
Sellers add extras to create better value and obscure price comparisons and this is common on Amazon. I recently bought a brand name phone case on Amazon that included bonus screen protectors, cleaning cloth etc. included by the seller.