Alex is what you would call an all American guy. He grew up in a small town in Oklahoma with a population of 22 people. He worked on his father's farm growing crops and selling them to the local market. Since Alex was a young boy he had dreams of owning his own company. Never did he think his dreams would be ruined by one company.
When Alex was 19 he left his father's ranch and attended a college in South Texas. He graduated with a degree in chemical engineering. As soon as he graduated he landed a job with Procter and Gamble. He was responsible for developing their detergent category. Alex was always coming up with new and inventive products. One of his products he developed was a special detergent that his company was not willing to market. Alex decided to quit his job and market the product on his own. He knew he had a great product but did not know how to sell his product to mass retailers.
When Alex quit his job he only had his 401(k) and some other money he saved up while in college. He cashed in his 401(k) and used that money to mass produce his detergent. Since Alex had experience in manufacturing he was able to rely on some of his industry contacts. He thought if he was going to put all he had into this product he was going to sell it to the largest retailer.
Alex picked up the phone and proceeded to call his local Walmart.
Wal-mart is the largest retailer in the world. The company has more than 4,200 stores in the United States with more than one store opening every month. Walmart's headquarters are located in a small town in Arkansas. If you have ever been to their headquarters you would not be amazed
Alex was able to speak to the store manager which directed him to their company website. He received all the information he needed to become a Walmart vendor. He completed all the tedious paperwork they required and waited for a buyer to respond. Unlike most potential vendors he was excited to receive an invitation to meet with their household buyer.
On a hot summer day in July Alex met with Jim the household buyer. Jim looked like he just graduated from high school until he started to speak. Jim asked Alex all kinds of questions like what is your production capabilities and if he was financially able to supply a mass retailer the size of Wal-mart. Alex was able to answer all of Jim's questions but he did not really understand the volume a mass retailer like Wal-mart could demand.
Three weeks later Alex was approved to become a Wal-Mart vendor and a week later received his first purchase order. Alex could hardly believe the size of his first order. The amount of the purchase order was more than Alex made working for Procter & Gamble's during his first year. The only thing that made Alex's heart stop was when the delivery needed to be made. Wal-Mart had given him a two-week window to deliver his first order.
During Alex's meeting he was sure he told the buyer that he needed at least four weeks to deliver the first order. Since this was Alex's first order he did not want to seem as if he could not handle the demands of being a Wal-mart vendor. Alex did all he could to make sure the order was delivered at the specified time and that meant even taking a loss on the first order.
Now Alex finally has his product on Wal-mart's shelves. Alex was able to monitor the sales of his product via retail link. The sales of his product was not what Alex or the buyer had expected.
His weekly sales were below the categories average. Alex did all he could with the small budget he had for marketing but to no avail. Alex was not able to compete with the name brand products on the shelf.
After five months of low sales the buyer decided to cancel the product. Alex was devastated because Wal-mart was his only account. Alex put all his time and money in developing his product but did not consider the amount of time and money it would take to build the awareness of his product. You can have the best product but if people are unaware of it your sales will suffer. Alex was stuck with the left over inventory and no account to sell his product in. He never thought Wal-Mart would ruin his dreams.