Wal-Mart has 138 million weekly customers.

• In 2006 Wal-Mart had annual sales of $312 billion and net income of more than $11.2 billion.
• There are about 5,300 Wal-Mart stores worldwide. During a single recent year, it planned on adding 500 more stores, and it believes that the U.S. has room for at least 4,000 more supercenters.
• During a recent year, 10,000 companies applied to be new suppliers to Wal-Mart. Of those, some 200 (about 2%) were accepted.
• Wal-Mart doesn't like to account for more than 30% of a supplier's total business for fear that changing an order can destroy the supplier.
• As shown Wal-Mart's kingdom spreads across many different countries. Recently, however, it sold all of its stores in Germany because they could not meet its desired profitability goals.

Wal-Mart continues to grow across the world, but its success varies across countries. The following chart shows total store count in various countries.

Suppose that you were Colin Roche, whose PenAgain pen was recently offered a 30-day trial period at 500 Wal-Mart stores. In order for the product to pass the trial, in one month Wal-Mart needs to sell 85% of the 48,000 pens that it ordered. If it does, it will then order pens for a much wider distribution at many more of its stores. If it doesn't, the deal is off. The PenAgain company gets between $6.49 and $12 from other retailers for the PenAgain pen, but WalMart is willing to pay only $3.76. Last year total sales of PenAgain were $2,000,000. If you were Colin Roche, would you accept Wal-Mart's offer?

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As Colin Roche the founder of PenAgain I would carefully consider WalMarts offer to carry my product ... View the full answer