Wal-Mart Buys American; now all they need to do is nurture American

Wal-Mart announced an initiative last week to buy American.  They have, according to the Huffington Post and other outlets, (“Wal-Mart Announces $50 Billion Buy American Campaign”),  pledged themselves “…to buy an additional $50 billion in U.S.-made goods over the next decade in areas like sporting goods and high-end appliances in what the world's largest retailer called a bid to help boost the U.S. economy.”

This is of course good news and should hopefully help the toy industry as well.  According to the website, “Toys Made in America,” there are over 200 domestic toy manufacturers.  A perusal of the list, however, makes you wonder how many domestic US toy companies have the capital and infrastructure in place to fulfill orders of this kind of magnitude.

Certainly companies like K’Nex, American Plastic Toys, Buffalo Games and little tikes can do it.  There are others, however, which do nice volume but are simply not ramped up for this kind of production.  They stand to gain by this initiative but will have to be cautious in how much they want to invest in capacity when Wal-Mart could, after trying the product, decide that it simply does not sell strongly enough to warrant the space.

That is why I hope that Wal-Mart does more than purchase from domestic US companies.  I hope they nurture them as well by allowing them to try their products out in a limited number of stores in order to prove the product’s volume potential.  It would also be interesting to see Wal-Mart nurture them by assisting with financing.

Yes, it is good news and one that could be even better if Wal-Mart does more than just buy American; they nurture American.

Comments

[Arnold Maggi]

Hey Richard,
good post.
This can also work in reverse if Walmart does buy from one of these small companies and they have to gear up to fulfill their order,Walmart drops them after 2 years. At this point they have lost their base customers and are now forced out of business.
Arnold

[Michael Marra]

Hi Richard,

Great ending thought about hoping Wal-Mart will nurture.

regards,

Mike