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Originally Posted by pwalker8
However, such a model is not sustainable. Most of the business world gets by fine with win/win contracts.
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It's been sustainable for centuries. Both sides negotiate and come up with a deal they can both be happy with. If not, either party can walk away. Amazon would be reluctant to send Hachette customers to competitors, even as Hachette would not want to lose a major retail outlet.
If they negotiate, they will both likely win.
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Occasionally, you run into a company that seems to get by with it. Wallmart, which really didn't hit the big time until the 80's, seems to be the poster child for that mentality. My guess is that eventually product quality will slip enough that customers start to notice and Walmart will end up falling about as fast as they expanded. We will see.
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I read "The Walmart Effect" and the poor quality of my post-Walmart Levi's jeans makes me tend to agree, but the vendors who succumb are the ones greedily seeking growth at any cost. Companies fail that way every day without Walmart's help.
Some vendors (the book mentions Snapper lawnmowers IIRC) simply said, "No deal , Walmart, you're not the only retailer, and we'll do just fine by keeping our quality high." Apple has a similar attitude.
And some companies can meet Walmart's demands without sacrificing quality, but by becoming more efficient, just as many companies do without Walmart involved.