Several years ago, I worked with a company that felt the answer to
all its problems was to sell to Wal-Mart. They felt that if they could
just knock over this one customer, all their dreams would come true.
After all, Wal-Mart buys millions of dollars worth of product every
year. What could be the down-side to that?
My client had spent a huge amount of time and energy wooing Wal-Mart
and was close to getting the job done. They had purchased equipment
and hired staff to be able to produce to Wal-Mart’s lofty numbers.
They had secured and increased line of credit at the bank to fund the
raw materials. They had installed special “Wal-Mart-required” software
on their system. They had done everything necessary to get this
business.
So it was no surprise to me when they got it. They immediately began
to weed out their smaller customers in order to be able to feed the
voracious appetite of Wal-Mart. It was a heady time. The business was
going up like a rocket. Life was easy.
The surprise came to my client about 15 months later when the weekly
Wal-Mart order didn’t arrive. The next week, when it wasn’t there
either, they called Wal-Mart, where a secretary explained they had
decided to use another vendor, and would no longer need my client’s
services / products. No notice, no warning, no nothing. They just
shut off the faucet one day without any indication whatsoever they
might do so.
So here my client is — several million dollars worth of equipment
(they don’t need any more) to pay for, over a million dollars in
perishable raw materials in the warehouse, and basically no client
base to buy their products.
It was one of those defining moments in the business.
My client managed to get through the mess they had created for
themselves. Their business emerged battered, but intact. They came
away with an education they paid dearly for. It took them many years
to recover fully from what happened.
Now this post is not intended as a Wal-Mart bashing post. I like
Wal-Mart. I don’t necessarily think doing business with them is the
best way for a small business to grow, but I do like them.
No. This post is to make you stop and think about what you’re
wishing for (and working towards.) Sometimes the worst thing that can
happen is your prayers can be answered. Take time today to think about
what it is you want in your business. Is it really in your best,
long-term interest? Remember, as you think about these things, all
that glitters is not necessarily gold.
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