Replies to post #70480 on Muscle Pharm Corporation (MSLPQ)

[Odessa99]

Walmart is notorious not just for squeezing small manufacturers, but larger ones as well. Here's one such example:

'Everything -- including the technology and corporate culture -- feeds into that ultimate goal of delivering the lowest prices possible. Wal-Mart also pushes its suppliers, some say relentlessly, to cut prices. In "The Wal-Mart Effect," author Charles Fishman discusses how the price of a four-pack of GE light bulbs decreased from $2.19 to 88 cents during a five-year period." '

link:
http://money.howstuffworks.com/wal-mart.htm

What the manufacturer gets in return is a larger market share, and significantly less competition from their competitors, because the selection choices presented to the consumer are far more limited. Just as an example, look at how few protein power brands are available in a Walmart, as compared to a GNC location.

With larger market share comes economies of scale, which strengthens the company from a cost of manufacturing perspective. Another benefit is that once niche brands can become ubiquitous.

As always, simply my opinion.

Any idea how the margins are at Walmart? Is this a decent margin sale (in your opinion) for MSLP or just good for brand exposure?

Before the faithful get their flame guns out, it's just a question out of curiosity. Walmart has a lot leverage and has been known to squeeze small manufacturers.

MSLP