As with many in Wal-Mart's high command, Don Harris, executive vice president/ general merchandise, is a child of the Ozarks and a company lifer. In other words, he knows Wal-Mart.
Step one for prospective vendors, says Harris, is to go to a Wal-Mart Super Center and figure out where--meaning precisely where, on which shelf--your product should be placed. If you think there's an open spot, proceed to step two. If not, you better have good reasons why your product is better--and can be sold cheaper--than the one that's already on the shelf.
After that, go to www.walmartstores.com and fill out the required questionnaire. The company wants to make sure you have the financial and production wherewithal to be a vendor. You'll also be instructed to pay for two Dun & Bradstreet reports on your company's finances, one for yourself and one for Wal-Mart. The company receives 2,000 inquiries a week, says Harris, and it manages to review "every single one." Almost all go to the new-supplier development division, which was started in 1994 as a venue "for women-owned and minority suppliers" but is now the starting point for all new-vendor business.
And if everything checks out?
"Next thing you know, you'll wind up in front of a buyer," says Harris. Even then, the odds are never good for a first-time vendor. But they're probably best, Harris suggests, for a niche business. The classic example, he adds, "would be a regionally important business."
And, no, it won't do you much good to show up at the Wal-Mart Super Center in your town and try to pitch your product to the manager there. "You'll still have to go through the new-supplier development division," says Harris.
In a word: Bentonville--and those infamous cubicles. There, says Harris, if all goes well, the buyer "will negotiate a price, get a vendor agreement set up covering all technicalities--ship point, method and timing of payment, so you can send it and we can pay you for it."
And after that? The buyer may decide right then or "you get a firm decision a week later."
The odds still aren't in your favor if you're a first-timer. After all, says Harris, "we've already got 21,000 suppliers." But then, he adds, "no one faults you for calling on Wal-Mart or making a pitch to us--even if you are making your product in your garage." Harris chuckles, pauses again, his voice dead serious now: "Hey! Selling to Wal-Mart, that's the American dream."
Sidebar: Bentonville: Breeding Ground for Entrepreneurs
The ultimate way to sell to Wal-Mart may just be to pick up and move to Bentonville and devote your life to the cause. In little more than a decade the area has become a breeding ground for entrepreneurs, many if not most of them catering to Wal-Mart and its vendors. One such is Patrick Sbarra of New Creature. Raised in Scarsdale, N.Y., Sbarra had had a good run in Dallas as a radio executive with a penchant for advertising and promotion when he turned 41 and told his wife, "I've reached the pinnacle! Now what?"
The Sbarras had vacationed in the Ozarks for years and loved the climate and the geography. But with more than 500 suppliers (many from major brands) having built offices in the Bentonville-Rogers area, Sbarra had other thoughts as well: "I said, 'What are the water, oil, and trees here?' The answer: Wal-Mart. I said, 'We're there! This is the Promised Land!" Founded in 1999, Sbarra's new company is a one-stop shop for Wal-Mart vendors, proffering advertising, packaging, and design "solutions."
This fall's Wal-Mart launch of Levi's jeans may well be the breakthrough deal for New Creature. Somewhat surprisingly, the launch marks Levi's first appearance at Wal-Mart. Less surprisingly, Levi Strauss is going about its new "partnership" in a big way. As part of its in-store campaign, Levi's decided to order some 5,000 floor displays for "Action Alley." Running in pairs, east and west, north and south, these are the four largest, widest aisles to be found in every Wal-Mart store. Action Alley, says Sbarra, "is the main drag, the critical point of purchase--where every vendor wants to put up a display."
Levi's held a beauty contest to decide who would win the job of making the displays. In the beginning, there were five contestants. All were given "the same homework," all invited to present a display concept and a prototype. After that first stage of the contest, two would-be suppliers were left, one of them New Creature. Sbarra isn't sure, but he thinks New Creature won because of its logistical plan: "We knew that the jeans being shipped to Wal-Mart were warehoused in Dallas, so we executed our displays there." Just as Sbarra had gone to Bentonville to work in close proximity to Wal-Mart, so he'd gone to Dallas, the better to be near Levi's. The winning formula, adds Sbarra: "Presentation, price, proximity."
"So who got the job placing those displays?" Sbarra asks rhetorically. "Your friend from Scarsdale, the entrepreneur." He pauses. "Is this a great country--or what!"
