Quote:
Originally Posted by roushstage2
The Wal-Mart batteries are made by Johnson Controls, who make many of the batteries for the well-known companies. It's the same battery at generally a cheaper price than a parts store or dealership. ...<snip>....
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Just as code58 posted:
While the the "cheap" batteries are made by big name companies, they are not the same.
The battery is made to the specs that the company selling it wants.
This is a well known manufacturing & private branding process that Sears started 3+ decades ago.
Provide the specifications & annual sales volume for the product and put it out to bid.
Sears had the benefit of multiple manufactures to deal with, so they would squeeze the manufacture later ( when the contract was up for renewal ), once the sales volumes were up and Sears represented 60% of the revenue for that company ( lower the price, else we take our business to the next manufacture ).
Walmart took it to the next level, provide the specs and put it out to bid with volumes that dwarf Sear's sales volumes in the hay days.
Cut throat in the highest form and the bid winner gets to go through the last round of price negotiations, squeezing every penny out of the deal. This is how Walmart had 99 quarters of profit growth, until the hammer fell on their shell game of cheap-cheap-cheap. They did the price drop game, it is figured out in the beginning that the product needs to be sold by x date, else the WACC on the product sitting on the shelf is costing them money.
If Walmart is negotiating every penny out of the deal, where do you think JC's profits come from ? By making the battery cheaper than the ones they make for Ford.
Don't fool yourself by thinking JC makes the Motorcraft battery the same as the Walmart battery, else why would Ford buy the battery from JC, they could just as easy get it from Walmart for a cheaper price.
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