You have a good business selling your products in independent and specialty retail shops as well as online. Your customers think your brand is one of the best in the category because of the performance and quality that comes from first class engineering and quality manufacturing. You're slogging along in this tough economy, keeping the lights on, but things have been better.
And then Walmart calls.
They want your brand because their customers want it. That's at least 200,000,000 potential new customers.
There's just one problem. They don't want to pay for it.
So, do you lower the price of your existing product because the volume potential will be so great, risking your relationships with your current retail partners? Do you reengineer your product to meet their price requirements knowing that it doesn't deliver quite the performance people expect from you, putting your reputation at risk? Or do you say no and give up millions of dollars of potential top-line growth for your company?
Every company that's been called by Walmart has to face this question. So which is best? Do you say yes and join the race to the bottom offering your goods for less and less each year, or say no and watch a competitor add that volume to their bottom line?
You'll know wether you've made the right choice in about 5 years.
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You say yes and join the race to the bottom, and figure out ways to reduce production costs.
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