Tami L. Knotts firstname.lastname@example.org is an Associate Professor of
Management, Missouri State University. Stephen C. Jones is an Assistant Professor of
Management, Arkansas Tech University. Gerald G. Udell is the Director of the Center of
Business and Economic Development, Missouri State University.
Becoming a Wal-Mart supplier is not easy, especially for smaller firms. This
paper explores the critical factors for small sporting goods manufacturers who want to
be mass merchandising suppliers. Using results from a supplier screening program, we
find that product/market risk (e.g.— payback period, investment costs), market
readiness (e.g.— market demand and acceptance), and management experience in key
functional areas are the factors that satisfy the most basic qualities that Wal-Mart and
similar mass retailers demand. Successful firms in this study: those sent on to Wal-Mart
for buyer review, had products that were less risky, less dependent on marketing, and
more competitive in the marketplace than their unsuccessful counterparts.
“Power retailers” are a dominant force in the retail industry due to their large
market share, low prices, and distribution capabilities (Raju and Zhang 2005). These
power retailers are typically classified as category killers, such as Home Depot, or non-
category killers, such as Wal-Mart. While category killers focus on a large selection of
specialized products for a single market segment, non-category killers or mass
merchandisers offer their customers a one-stop shopping experience with a variety of
general products at low prices (Rogers 1996).
As the largest retailer in the world, Wal-Mart has demonstrated the impact that
non-category killers can have on the mass retail environment. With sales of more than
$310 billion (www.moneycentral.msn.com 2006) and a growth rate of 10 percent (2002-
2006), the Bureau of Economic Analysis report shows that Wal-Mart’s total revenues