The Walmart Effect: 4 Best Practices For Dealing With That First Huge Order

Christopher Koch

A boy looks at snack foods and drinks at the G...

A boy looks at snack foods and drinks at the Grand Opening of the new Walmart Neighborhood Market in Panorama City, California. (Image credit: AFP/Getty Images via @daylife)

When a small business gets its first big order it can seem like manna from heaven. But wipe those dollar signs out of your eyes because it’s really more like a shock to the system.

That’s not necessarily a bad thing—we’re at our most alert and energized during such moments—but for small businesses, getting a big order from a giant company like Walmart can be a classic be-careful-what-you-wish-for moment.

“When you get that big order, it’s often a mandate for change, because even if by nature the management team is conservative and risk adverse, it knows it has to make changes to satisfy that customer,” Mark Lehew, SAP’s national VP of strategic growth enterprises, told me and journalist Rob O’Regan recently.

You Will Need to Change the Business
In interviews with companies that have experienced the Walmart Effect, Rob is indeed finding that change—rather than champagne—is the order of the day. Orabrush, maker of an innovative tongue-cleaning device was not prepared when Walmart suddenly called in 2011 with an order for 735,000 of the candy-colored devices to be distributed in 3,500 stores.

“That was one of the big wake-up calls for me,” says Jeff Davis, an early Orabrush investor who became CEO in August 2010. “I was worried that we didn’t have sufficient capability.”

How do you deal with such a situation? Here are four best practices that have emerged from our research so far for dealing with that first big order:

  • Start with on-time delivery and work backwards from there. If that first big customer doesn’t get what it’s looking for, word spreads quickly and the chances of another big order—from them or anyone like them—is unlikely. That means prioritizing the responses necessary to scale up and hit the date, says Lehew.
  • Get help from specialists. To supplement its own warehouse capacity, Orabrush entered into an agreement with UPS Global Logistics to supply some of the Walmart stores. “UPS was a critical partner for us because they helped us to ensure that we could deliver to Walmart the way Walmart wanted it,” he says.
  • Be open to a change in the business model. “For us, Walmart’s order was a big a-ha moment,” says Marty Metro, founder and CEO of In 2009, Metro’s startup was three years into its plan to sell used cardboard boxes to individuals and local businesses. But when Metro got the call from Walmart one afternoon (100,000 boxes by the end of the week, with more needed in the following two weeks), Metro re-jiggered the business model to include building a B2B marketplace that supports delivering tractor trailers full of boxes, not just small lots to individuals and small customers via the company’s existing e-commerce site.
  • Don’t be blinded by scale.’s B2B business has taken off—with orders now averaging $7,000—but Metro learned an important lesson about what can happen when the big boys come knocking: not all of them will be profit centers. “We realized that Walmart is so huge that you have to be careful,” he says. “If you don’t want to sell at the price they want they can always find someone else who will.”

What do you think? How did your company deal with its first big order?

This post originally appeared on the SAP Community Network and has been reprinted here with permission.


About Christopher Koch

Christopher Koch is Editorial Director of the SAP Center for Business Insight. An experienced journalist and analyst, he blogs about the intersection of business and technology. Follow him on Twitter: @ckochster.

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13 Scary Statistics On Employee Engagement [INFOGRAPHIC]

Jacob Shriar

There is a serious problem with the way we work.

Most employees are disengaged and not passionate about the work they do. This is costing companies a ton of money in lost productivity, absenteeism, and turnover. It’s also harmful to employees, because they’re more stressed out than ever.

The thing that bothers me the most about it, is that it’s all so easy to fix. I can’t figure out why managers aren’t more proactive about this. Besides the human element of caring for our employees, it’s costing them money, so they should care more about fixing it. Something as simple as saying thank you to your employees can have a huge effect on their engagement, not to mention it’s good for your level of happiness.

The infographic that we put together has some pretty shocking statistics in it, but there are a few common themes. Employees feel overworked, overwhelmed, and they don’t like what they do. Companies are noticing it, with 75% of them saying they can’t attract the right talent, and 83% of them feeling that their employer brand isn’t compelling. Companies that want to fix this need to be smart, and patient. This doesn’t happen overnight, but like I mentioned, it’s easy to do. Being patient might be the hardest thing for companies, and I understand how frustrating it can be not to see results right away, but it’s important that you invest in this, because the ROI of employee engagement is huge.

Here are 4 simple (and free) things you can do to get that passion back into employees. These are all based on research from Deloitte.

1.  Encourage side projects

Employees feel overworked and underappreciated, so as leaders, we need to stop overloading them to the point where they can’t handle the workload. Let them explore their own passions and interests, and work on side projects. Ideally, they wouldn’t have to be related to the company, but if you’re worried about them wasting time, you can set that boundary that it has to be related to the company. What this does, is give them autonomy, and let them improve on their skills (mastery), two of the biggest motivators for work.

Employees feel overworked and underappreciated, so as leaders, we need to stop overloading them to the point where they can’t handle the workload.

2.  Encourage workers to engage with customers

At Wistia, a video hosting company, they make everyone in the company do customer support during their onboarding, and they often rotate people into customer support. When I asked Chris, their CEO, why they do this, he mentioned to me that it’s so every single person in the company understands how their customers are using their product. What pains they’re having, what they like about it, it gets everyone on the same page. It keeps all employees in the loop, and can really motivate you to work when you’re talking directly with customers.

3.  Encourage workers to work cross-functionally

Both Apple and Google have created common areas in their offices, specifically and strategically located, so that different workers that don’t normally interact with each other can have a chance to chat.

This isn’t a coincidence. It’s meant for that collaborative learning, and building those relationships with your colleagues.

4.  Encourage networking in their industry

This is similar to number 2 on the list, but it’s important for employees to grow and learn more about what they do. It helps them build that passion for their industry. It’s important to go to networking events, and encourage your employees to participate in these things. Websites like Eventbrite or Meetup have lots of great resources, and most of the events on there are free.

13 Disturbing Facts About Employee Engagement [Infographic]

What do you do to increase employee engagement? Let me know your thoughts in the comments!

Did you like today’s post? If so you’ll love our frequent newsletter! Sign up here and receive The Switch and Shift Change Playbook, by Shawn Murphy, as our thanks to you!

This infographic was crafted with love by Officevibe, the employee survey tool that helps companies improve their corporate wellness, and have a better organizational culture.


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Supply Chain Fraud: The Threat from Within

Lindsey LaManna

Supply chain fraud – whether perpetrated by suppliers, subcontractors, employees, or some combination of those – can take many forms. Among the most common are:

  • Falsified labor
  • Inflated bills or expense accounts
  • Bribery and corruption
  • Phantom vendor accounts or invoices
  • Bid rigging
  • Grey markets (counterfeit or knockoff products)
  • Failure to meet specifications (resulting in substandard or dangerous goods)
  • Unauthorized disbursements

LSAP_Smart Supply Chains_graphics_briefook inside

Perhaps the most damaging sources of supply chain fraud are internal, especially collusion between an employee and a supplier. Such partnerships help fraudsters evade independent checks and other controls, enabling them to steal larger amounts. The median loss from fraud committed
by a single thief was US$80,000, according to the Association of Certified Fraud Examiners (ACFE).

Costs increase along with the number of perpetrators involved. Fraud involving two thieves had a median loss of US$200,000; fraud involving three people had a median loss of US$355,000; and fraud with four or more had a median loss of more than US$500,000, according to ACFE.

Build a culture to fight fraud

The most effective method to fight internal supply chain theft is to create a culture dedicated to fighting it. Here are a few ways to do it:

  • Make sure the board and C-level executives understand the critical nature of the supply chain and the risk of fraud throughout the procurement lifecycle.
  • Market the organization’s supply chain policies internally and among contractors.
  • Institute policies that prohibit conflicts of interest, and cross-check employee and supplier data to uncover potential conflicts.
  • Define the rules for accepting gifts from suppliers and insist that all gifts be documented.
  • Require two employees to sign off on any proposed changes to suppliers.
  • Watch for staff defections to suppliers, and pay close attention to any supplier that has recently poached an employee.

About Lindsey LaManna

Lindsey LaManna is Social and Reporting Manager for the Digitalist Magazine by SAP Global Marketing. Follow @LindseyLaManna on Twitter, on LinkedIn or Google+.


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Zhena’s Gypsy Tea Brews Sustainable Growth On Cloud ERP

David Trites

Recently I had the pleasure of hosting a podcast with Paula Muesse, COO and CFO of Zhena’s Gypsy Tea, a small, organic, fair-trade tea company based in California, and Ursula Ringham from SAP. We talked about some of the business challenges Zhena’s faces and how the company’s ERP solution helped spur growth and digital transformation.

Small but complex business

~ERP helped Zhena’s sustain growthZhena’s has grown from one person (Zhena Muzyka) selling hand-packed tea from a cart, into a thriving small business that puts quality, sustainability, and fair trade first. And although the company is small its business is complex.

For starters, tea isn’t grown in the United States, so Zhena’s has to maintain and import inventory from multiple warehouses around the world. Some of their tea blends have up to 14 ingredients, and each one has a different lead time. That makes demand-planning difficult. In addition, the FDA and US Customs require designated ingredients be traced and treated a certain way to comply with regulations.

Being organic and fair trade also makes things more complicated. Zhena’s has to pass an annual organic compliance audit for all products and processing facilities. And all products need to be traceable back to the farms where the tea was grown and picked to ensure the workers (mostly women) are paid fair wages.

Sustainable growth

Prior to implementing its new ERP system, Zhena’s was using a mix of tools like QuickBooks, Excel, and paper to manage the business. But to sustain growth and ensure future success, the company had to make some changes. Zhena’s needed an integrated software solution that could handle all facets of the business. It needed a tool that could help with cost control and profitability analysis and facilitate complex reporting and regulatory requirements.

The SAP Business ByDesign solution was the perfect choice. The cloud-based ERP solution reduced both business and IT costs, simplified processes from demand planning to accounting, and enabled mobile access and real-time reporting.

Check out the podcast to hear more about how Zhena’s successfully transformed its business by moving to SAP Business ByDesign.

 This article originally appeared on SAP Business Trends.

Building a successful company is hard work. SAP’s affordable solutions for small and midsize companies are designed to make it easier. Simple to install and use, SAP SME Solutions help you automate and integrate your business processes to give real-time, actionable insights. So you can make decisions on the spot. Find out how Run Simple can work for you. Visit


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Do You Hear The Voice Of Your Customer?

Maria Morais

Try to find a company where customers bring something else other than cash, credit, or points in loyalty cards. You won’t find much. – John S. McKean

While most companies seem to have a good grasp of what “voice of the customer” means and its importance, there seems to be a big challenge around the cultural shift that the voice-of-the-customer strategy requires in order to be truly effective.

The main reason why companies don’t implement a customer-centric strategy is because they assume that they are in charge.

  • Companies give promotions to their customers;
  • Companies produce products that customers really want;
  • Companies collaborate with their customers in social channels;
  • Companies “target,” “acquire,” “manage,” and “retain” customers as if they were not able to manage their own wills.

The thinking behind all this mentality dismisses customers’ individual differences and customers’ real ability to contribute.

Many of us expected the balance of power between companies and customers to shift with omni-channel retail, but in fact companies are less involved with their customers thanks to big data, analytics, business intelligence, and programmatic marketing.

Collaboration doesn’t mean engagement

If the company is in charge, by creating methods of engagement, predicting behavior, and controlling the customer experience, the customer is not more than a number that belongs to a group of other similar “variables.” How can you really hear the voice of your customer with all this noise around you?

Improving technology to satisfy companies is not a substitute for direct knowledge voluntarily given by customers. Over the coming years customers will be emancipated from systems that were built to control them, and customer relationship management (CRM) will finally die as a software category.

Looking beyond CRM

Information mining is a key phase in any voice-of-the-customer strategy, and ethnographic methods have been proven to be the most efficient for customer-centric innovation rather than the usual quantitative methodologies. Companies need systems that aggregate raw data from all touch points affecting decision making in real time. This type of initiative typically has a significant upfront investment before measurable benefits can be realized, but even knowing that digital transformation is moving much more rapidly in some industries than in others, no one can afford to wait much longer.

Companies that invest in their customers now are the ones that will see the biggest profits in the future. The voice of the customer is rapidly evolving along with anything connected via the Web, and customers will completely stop sharing their voice with companies that simply follow legacy approaches and are obsessed with statistical inferences.

It’s time to change; it’s time to inspire your customers

Take our e-commerce self-assessment to see how you can deliver the omni-channel experience.

Learn how Technopolis is delivering a superb omni-channel shopping experience to its customers.

Find out more about the omni-channel customer experience in the SAP eBook Digital Disruption: How Digital Technology is Changing Our World.


About Maria Morais

Maria Morais is Customer Engagement and Commerce Retail Lead at IBM GBS. You can follow Maria Morais on Twitter @ceumorais.

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