How do companies get their money from walmart?

Question

I was just sitting here thinking and, companies like pantene or meat brands, sharpie brand or anything, how do they get their money from walmart when someone buys something? does walmart give it to them once they get a certain amount of money? how do they keep track of what theyve sold? thanks :)

Answer 1

No. Walmart and other large stores buy large quantities of goods at wholesale (cheap) prices and have them shipped to Walmart distribution centers. From there the large quantities are divided up and sent to the stores. They are marked up in price and that is where the profit comes from.

The manufacturers like Pantene get their profit from the initial sale to Walmart, not from the retail sale to you, the consumer.

Answer 2

Walmart negotiates prices with its vendors and then purchases huge quanties of product from them.  The items and quantities are entered into Walmart's computers.  Walmart keeps all of the money it charges customers to purchase the products.  When a customer buys something, the bar code is scanned into the computer (which is linked to the cash registers) and the item is deducted from Walmart's inventory of that item.

Answer 3

Wal Mart buys big amounts of goods from these companies and pays them with checks.

These companies deposit their checks in their Bank accounts and get their money back and profits.

Answer 4

Walmart is a retailer. What Walmart does is purchase a huge amount of goods (usually referred to as "bulk") from a various amount of suppliers (i.e. Coca-Cola, Kellogs etc) of whom sell it cheaper than what Walmart does. There are a variety of pricing methods that retailers take. A reknown retail method of coming to a price is a method is called cost-plus pricing. This involves adding a "markup" on the product sold and the formula is as follows:

P = (AVC + FC%) * (1 + MK%) ***

where P = Price

AVC = Average Variable cost

FC% = Percentage of allocation of fixed costs

MK% = Percentage Markup

Let's say a box of cereal costs a variable cost of $1.00. The allocation to cover fixed costs are $0.50 and you feel you need a 50% markup then that would come to:

P = (100 cents + 50 cents) * (1 + 0.5)

P = 150 * 1.5

P = 225 cents or $2.25

This isn't the only method that retailers use to come to the conclusion of what a product should be sold at. Another pricing method is called the Suggested Retail Price, of which is where the manufacturer suggests a price to the retailer to sell it at.