Suppliers of both large and small brands said Target has demanded unprecedented price concessions during the past year, in addition to beefing up what some call an uncompromising strong-arm tactic not even seen in Bentonville: an online reverse auction buying system considered by some suppliers as a margin-busting, no-win option for them.The reverse auctions seem to be a particular sore point with suppliers:
The auctions, they said, tip the scale in favor of private-label manufacturers ahead of branded manufacturers by forcing suppliers to blindly bid on price alone.The thought of some suppliers is that Target is concerned that Wal-Mart may catch up to them on the cheap-chic front, which would force Target to compete on price.
There's also a lot of grumbling about Target's poor logistics and inflexibility:
“The problem is the barriers,” said one frustrated supplier. “If you had found the cure for cancer and wanted to sell it over-the-counter, it would take you five years to get it on the shelf at Target.”This can't be pleasant reading in Minneapolis.