Walmart Can Give You Cheap Prices Because of Logistics 5/5 (2)

walmart logistic

Walmart Logistic is the reason why their comes with cheapest.

Walmart can give you cheap prices because of logistics. Many people wonder how Wal-Mart can charge a low price and continue to make a profit. There are several factors in their business model that contribute to this capability, but the big thing is their ability to adapt to the ever-changing global market. Some criticize Wal-Mart’s efforts to provide quality products to customers at low prices, but in reality, Wal-Mart is able to provide low prices by being efficient. This efficiency is present in several regions but one of the most important places is how they are able to produce products around the world and bring them to retail outlets, which are also worldwide. This capability requires a flawless logistics system that allows the product to be sent anywhere at the time of notification.

One of the keys to Wal-Mart’s effective logistics system is the flexibility that is possessed when choosing suppliers. When Wal-Mart negotiates with suppliers and suppliers it knows that Wal-Mart will only pay the most competitive prices. This is because it is very easy for them to find other suppliers of special materials at lower prices and very few logistical problems. This gave Wal-Mart a big influence when dealing with suppliers. If certain suppliers know that the company has found a lower price, it will reduce the price. However, if the supplier also knows that it will be very difficult for companies to make appropriate adjustments to ensure a smooth transition to different suppliers, they will be less likely to reduce their prices as much as possible. This is not how existing suppliers deal with Wal-Mart; when they saw that Wal-Mart had found suppliers who would give them lower prices, the current suppliers reduced their prices. They knew that the Wal-Mart logistics system could handle the transition smoothly and therefore they did not get additional levers because it would not be difficult or expensive for Wal-Mart to choose another supplier.

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Another reason why Wal-Mart prices are so competitive is because they buy in large quantities so that transportation from one end of the supply chain to another supply chain is not very expensive for additional units. This aspect of the logistics system does not come from skills or expertise, but comes from the size of the company, but this is still a factor. Wal-Mart buys so much inventory from various places around the world, that they have the luxury of using larger trucks and using less fuel to go back and forth. Also if they happen to have to use shipping services to transport material from one location to another, Wal-Mart will give them so much business that they will get a big discount.

The logistics system used by Wal-Mart is very effective because it is very flexible. This is why Wal-Mart is able to offer things that are far cheaper than other companies. Wal-Mart has a reputation for being able to offer these things cheaply because of low employee wages and human rights violations, but this is not true. https://bit.ly/2VPsTAU

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