Why is Wal-Mart so much cheaper on oil vs Napa etc

[4x4taco]

Something that has been bugging me. how can Wa-mart sell oil, in general, all of the oil, so much cheaper than places like Napa, Advance Auto, car quest etc?? And the 2nd thing is does wal-mart accept used oil? B/c I've been one of these guys that buys it from wally, and dumps it at Advance/autozone. Kinda bugs me doing that. Seriously debating finding the cheapest car shop around that sells the oil I'm looking for b/c they at least accept used oil. On the flip side, saving money is good. It's hard to shell out the extra money knowing/seeing all these others (like me) that buy oil from wally and dump it at the car places. Decisions...

 

[addyguy]

Economies of scale. They buy in such quantity that they basically dictate the price they pay to undercut all others.

WM TLE's should accept used oil for disposal.

 

[javacontour]

They buy a lot more oil.

I suspect Wal*Mart buys as much motor oil as does NAPA, Advance Auto and AutoZone combined.

I don't know if they buy for their TLE from the same distributors or not, but they are probably the #1 buyer of motor oil.

That gives them leverage.

So while many folks complain about Wal*Mart strong arm tactics with respect to suppliers, I suspect few have sympathy when they apply the same to oil companies.

PS many of the 5quart bottles say bring your used oil back to Wal*Mart right on the bottle. So Wal*Mart does accept used oil.

 

[bepperb]

A more efficient supply chain, and faster turnover. The biggest cost for WM or NAPA is the interest on the goods they have but haven't sold. Second to that is the cost of maintaining the space that the inventory is shown in. WM probably has five times the turnover of NAPA, their two largest costs are 1/5 of NAPA's. Not to mention WM probably pays their employees less than NAPA.

I buy at WM, and my city takes the oil and probably sells it. There is a market for the used oil, but also a cost to move it and market it. I'm sure an AutoZone pays to have it removed, but a higher volume place actually sells the used oil. I wouldn't feel too bad about it.

 

[Gary Allan]

I think they just rent out the shelf space and let the vendor set the price. They probably make them sell on consignment and extract their "rent" out of all sales before the vendor sees the first dime. The vendor sets the price and alters it based on volume/price profit yields.

There would be no other explanation for the ever increasing Orange Wall of Doom. There is (practically) no competition for them.

I could be wrong ..and even if correct ..it won't apply to all products.

 

[Nayov]

They just filter used oil from their service department and put it back on the shelf as new.

 

[mpvue]

Originally Posted By: 4x4taco
Something that has been bugging me. how can Wa-mart sell oil, in general, all of the oil, so much cheaper than places like Napa, Advance Auto, car quest etc??

you might change your query to how can they sell EVERYTHING cheaper than other places? I don't know how things operate on your planet, but here, W*M has been dominating the retail market on most things for quite a while now. maybe that didn't make the papers where you're from.

 

[CivicFan]

Gary, Walmart has been planning the renting of the shell space for some time now. If you remember, a few years ago they were big on implementing RFID technology. The reason behind it was that Walmart would not have any inventory. The items on the shelves would be owned by the supplier, Walmart would buy them from the supplier the moment the item hit the checkout lane so Walmart would own the item for an infinitesimally small time until another general ledger entry was made for the sale.

I don't think this has implemented yet and Walmart still owns the inventory. The retailers charge for the shelf space and that's why the yellow wall of doom is so prevalent. Honeywell has deep pockets and can afford large shelf space for their Fram branded products.

 

[Footpounds]

To hear some people talk, lower prices were one of the negotiated points in the deal they made with the devil.

 

[CivicFan]

Originally Posted By: mpvue
Originally Posted By: 4x4taco
Something that has been bugging me. how can Wa-mart sell oil, in general, all of the oil, so much cheaper than places like Napa, Advance Auto, car quest etc??

you might change your query to how can they sell EVERYTHING cheaper than other places? I don't know how things operate on your planet, but here, W*M has been dominating the retail market on most things for quite a while now. maybe that didn't make the papers where you're from.


Not true. They have quite a few things that are more expensive than other places. While oil is a standard quality item, their cheaper products have less features than the more expensive counterparts in other retail outlets (i.e. bottom of the barrel stuff).

 

[ARCOgraphite]

Whatever happend to busting a Monopoly? This complete market take over By Con Agra and WM wouldn't have been tolerated in the 60's for long ... Maybe it the diversification and being retail v. manufacturer?

I was employed by W.E/AT&T/Lucent and you and I know what happened there in the 80's>90's.

 

[Gary Allan]

Quote:
Gary, Walmart has been planning the renting of the shell space for some time now. If you remember, a few years ago they were big on implementing RFID technology. The reason behind it was that Walmart would not have any inventory. The items on the shelves would be owned by the supplier, Walmart would buy them from the supplier the moment the item hit the checkout lane so Walmart would own the item for an infinitesimally small time until another general ledger entry was made for the sale.


That would eliminate any inventory related "profits" at tax time. It would essentially be reduced to a service.

 

[exranger06]

Originally Posted By: javacontour

PS many of the 5quart bottles say bring your used oil back to Wal*Mart right on the bottle. So Wal*Mart does accept used oil.


It says "bring oil back to your Walmart Tire and Lube Express." Not every Walmart has a TLE. The ones that don't have one do not accept oil.

 

[tom slick]

One more point is they move so much product that they can make less product per item but sell more items. They'd rather sell 10 items at $.10 than 1 item at $1.00 because it keeps the appearance of being less expensive and in the end they'll make the same profit.

 

[4x4taco]

So I guess I'm forced/cohersed into buying the cheaper oil from wally. I'm not exactly making money hand over fist, so every dime counts. But I have noticed that a lot of the stuff wally carries is cheaper models etc. Like their computers and electronics are older, less espensive models. Other than oil, guns & bullets I don't buy much of anyting at walmart anymore. I used to be a big wally shopper but after college 2yrs ago that quit. went from buying 99% of stuff there to < 1%.I find myself at Target, and specialized shops more. My biggest gripe about wally is the clientel and the crowds. Ticks me off they have a 50 acre store and only 3 cashiers working at 6pm. but they have plenty of self checkout lanes. I'm just a very impatient person, lines burn me. Not to mention the noise levels in wally are horrific. you can't hear yourself think. If you don't have a list prior to entering forget it. Hence why the wife shops at Publix too. uh, why can't target get into redneck items like guns, bullets and oil and we'll be set.

 

[tom slick]

Originally Posted By: tom slick
One more point is they move so much product that they can make *less product per item* but sell more items. They'd rather sell 10 items at $.10 than 1 item at $1.00 because it keeps the appearance of being less expensive and in the end they'll make the same profit.


*should say "less profit per item"

 

[Gary Allan]

I just don't find the need to shop for much other than food and occasional hygiene supplies. I mean, if I wore out all of my socks I guess a bag of Wally's cheapo's would find its way into the cart. I don't paw over the weekly fliers looking for the "great deal" that I can snipe at Tru-Value ..or ACE ..or anywhere. I don't have that level of discretionary income to just ponder my next "great deal". Those days are over. Those who still have it ..GOD BLESS YOU!

 

[BrianWC]

I heard all the oil in Walmart was recyled or re-refined with poorer quality additive packs, even the Mobil1. That's why it's group III, shows higher iron levels, and increases the sound of your engine by 30.432 decibels.

 

[Gary Allan]

Word!

 

[eljefino]

Advance needs the higher base price so they can have crazy sales like BOGOF. Most of my stash is from clearance sales and I haven't had a good WM one in several years... all Home Depot (!) and AA.

NAPA discounts hard parts up to 40% off (not likely oil though) and needs to get the schlep off the street for more so their mechanic customers feel like they're getting a great deal.

Your real question should be why is a 5 quart jug of walmart oil cheaper per unit than filling your own 250 gal bulk tank with superflo or whatever adequate slop you can get delivered. Have read here of that happening.