I have been an assistant manager for Walmart for the past 2 1/2 years, I have overseen several areas of the store including toys. Before I came to Walmart I spent 3.5 years selling on eBay to support my family (not exclusively Lego). Since working at Walmart I use Amazon FBA as my method of selling. Due to financial constraints my Lego experience is only of the quick flip variety (problematic to some of you, I know).

I would be more than happy to try to answer any questions or clear up any confusion you may have regarding Walmart and how it affects our lives as investors and collectors. I can only answer based on my experience and I certainly am not speaking for the company. I have gained a great deal of knowledge from this site and would be happy to give back.

I have disclosed my name and the store I work for to Jeff & Ed but I will not be posting that info here. I also have a wife and two kids so I likely will only be able to answer questions nightly.

I'm sorry man

I'm a former ASM with walmart. It's a tough, underpaid, underappreciated role. I understand your exact struggle that you have to do quick flips.Best wishes to you and your family! 

Are clearance toys like Lego only at certain points every year..and at the same time every year?  For example.  After Christmas in late January. Late summer before fall Christmas toys arrive etc,.. 

Why do some stores mark things off like the minimum falcon for 35$ when it could obviously be sold for much more.  

 

In in other words. What is the Lego clearance strategy here? 

I really think it depends on the store. Sometimes clearance periods are synced, other times, they are not. It varies store to store. I'm not an insider by any means, this is just my experience.

Is it true that clearance comes from corporate on a printout and is store specific? It explains how stores are so different but why not standard 

I did 20 years in various management and non management roles at Target, I feel your pain, even if I wore a different color shirt.

3 hours ago, meowingthings said:

 

I have been an assistant manager for Walmart for the past 2 1/2 years, I have overseen several areas of the store including toys. Before I came to Walmart I spent 3.5 years selling on eBay to support my family (not exclusively Lego). Since working at Walmart I use Amazon FBA as my method of selling. Due to financial constraints my Lego experience is only of the quick flip variety (problematic to some of you, I know).

I would be more than happy to try to answer any questions or clear up any confusion you may have regarding Walmart and how it affects our lives as investors and collectors. I can only answer based on my experience and I certainly am not speaking for the company. I have gained a great deal of knowledge from this site and would be happy to give back.

I have disclosed my name and the store I work for to Jeff & Ed but I will not be posting that info here. I also have a wife and two kids so I likely will only be able to answer questions nightly.

Thanks for volunteering some insider knowledge. I served a twelve year sentence as an assistant for Sam's Club so I am somewhat familiar with store policies and practices, but never served any time on the Wal-Mart side. My question is regarding the mythical storage trailers located behind some stores. What's in them? Who decides what to put in them and when? How often are they gone through? Why spend money to store old product that will eventually be sold at a loss? Why not just slash prices and get rid of it right away instead of spending money on labor and storage? Any insight you can offer on this is much appreciated and will hopefully benefit us all. Thank you!

Thanks for your input. Looking forward to your insight regarding your personal experiences. 

7 hours ago, CoastaLego said:

Are clearance toys like Lego only at certain points every year..and at the same time every year?  For example.  After Christmas in late January. Late summer before fall Christmas toys arrive etc,.. 

Why do some stores mark things off like the minimum falcon for 35$ when it could obviously be sold for much more.  

 

In in other words. What is the Lego clearance strategy here? 

What's this thing called "Minimum Falcon" you speak of?

11 hours ago, CoastaLego said:

Are clearance toys like Lego only at certain points every year..and at the same time every year?  For example.  After Christmas in late January. Late summer before fall Christmas toys arrive etc,.. 

Why do some stores mark things off like the minimum falcon for 35$ when it could obviously be sold for much more.  

 

In in other words. What is the Lego clearance strategy here? 

Twice a year Walmart resets all the toys (periodically they send additional updates, but nothing major). Those times of year are February & August. 30 days before they changeover you can view the Addition & Deletion list. This list says everything going to be added and deleted to/from the shelves. When this happens stores are encouraged to identify the newly deleted items and mark them down 10% at the store level. They are "supposed" to be left in the section they belong (called the home from here on) until the changeover happens.

Shortly before the changeover the home office will then send price changes for the deleted items. Because the number of price changes number in the thousands, they usually download them over the course of a week. Dept managers are supposed to make the changes within 48 hours. many times they don't sometimes days or weeks pass by.

Stores didn't proactively markdown the deleted items will be sitting on higher quantities and will likely see additional home office markdowns (usually no more than 3 total markdowns at the home office level).

The small updates I mentioned above are why you see a random item suddenly show up in clearance. For example say Lego releases a product line too late for the February changeover but all they can have it on the shelf in April. Sure enough April will roll around and a update comes through. Everything I said above applies to these updates

Walmart likely ordered the Millennium Falcon for all stores before Christmas knowing a $150 item would only sell in select stores after Christmas. Once the changeover occurred it got the axe in many stores. I never saw a $35 Falcon but the fact that everyone saw the same $35 tells me it was a home office markdown. I am not sure if it saw multiple drops or went straight to $35. The Spaceport is a similar concept which went to $89, $59 and then $30. Walmart just wants what it views dead inventory gone.

From our standpoint we see a $150 awesome item for $35. Walmart sees a big boxed item that won't sell taking up space of something that will sell. It also doesn't want these items taking up its valuable backroom space. This past year Walmart did the same thing with the Meccano Mechanoid robot. A $159 item ended up at $40. In my opinion since the new CEO took over we have seen faster and lower clearance prices. It seems like they are actually trying to move out old inventory.

Individual Store Price Changes

The above covers what is supposed to happen, now I will address a few good and bad things stores do.

Each store is allotted a certain amount of money for in-store markdowns (not home office changes). It is up to the store manager how this money is spent. Some store managers don't want to spend it since it counts against the bottom line. So when a changeover occurs they ignore the 10% markdown idea, they wait for the home office price change to come which doesn't count against the bottom line.This is why some stores have clearance with only a $.02 discount (or even $.01).

Some stores go the opposite direction, 30 days ahead of the changeover they do 10%, then each week or every other week they will do an additional amount.  Problem for us investors these stores usually never have much for big markdowns since they methodically marked down the items. It would have sold at the 10,20 or 30% off. Nothing is left for a second or third home office markdown.

Some stores ignore the 10% thing and just start marking down clearance to whatever the feel like. These are the stores that cause us all the confusion but provide the best deals. They strictly want freight gone. You will notice the biggest markdowns are literally on the biggest boxes.

The general rule is department managers are supposed to take care of their own clearance merchandise. Some stores have one person in charge of clearance. You can usually tell the difference by how well organized it is and how often the markdowns are down. Department managers have other priorities, they often neglect to change prices or even bother with clearance.

Sometimes a one shot cardboard display will arrive (usually on a pallet). They call this a feature, it comes in deleted. Some stores mistakenly immediately clearance it. Other stores may actually carry a few of the items. Last fall there was one of these for Lego Friends. Some of the items stores carried, some didn't. Since this was a feature, there wouldn't be any home office markdowns to get rid of it. Any price changes were at the store level.

While we all think Walmart could make more money by dropping prices slower and certain items, they aren't collectors. They strictly look at moving through product and getting something in that will sell. Saving $1000 by slowly selling Legos and jamming up clearance sections and backrooms while waiting for them to sell is not their model. The average Walmart does $70-110 million a year, they have bigger fish to worry about than clearance. The headaches associated with clearance are not worth the extra money in slowing down the sales to get every cent of profit. Ever seen the items that have been in clearance for months, they are damaged, ripped or open. Walmart get no credit if these get claimed out (aside from a tax credit).

 

9 minutes ago, meowingthings said:

In my opinion since the new CEO took over we have seen faster and lower clearance prices. It seems like they are actually trying to move out old inventory.

 

Remember this folks and I'm sure he'd accept a fruit basket or something during the holidays...

9 minutes ago, meowingthings said:

 

While we all think Walmart could make more money by dropping prices slower and certain items, they aren't collectors. They strictly look at moving through product and getting something in that will sell. Saving $1000 by slowly selling Legos and jamming up clearance sections and backrooms while waiting for them to sell is not their model. The average Walmart does $70-110 million a year, they have bigger fish to worry about than clearance. The headaches associated with clearance are not worth the extra money in slowing down the sales to get every cent of profit. Ever seen the items that have been in clearance for months, they are damaged, ripped or open. Walmart get no credit if these get claimed out (aside from a tax credit).

 

thanks for the post. that last part can't be emphasized enough. 

So why the storage trailers? If Walmart wants the old product gone so much why do they waste time and money storing it out back? Do other large retailers do this? From what I've noticed Walmart is the only one that has trailers year round. Can you offer any insight on the reasoning behind this practice? Thank you.

I'm sorry man

I'm a former ASM with walmart. It's a tough, underpaid, underappreciated role. I understand your exact struggle that you have to do quick flips.Best wishes to you and your family! 

I am sorry for all underpaid, underappreciated americans who need to find another way of income because many of us cannt do it with just one job...

11 minutes ago, terrymc4677 said:

So why the storage trailers? If Walmart wants the old product gone so much why do they waste time and money storing it out back? Do other large retailers do this? From what I've noticed Walmart is the only one that has trailers year round. Can you offer any insight on the reasoning behind this practice? Thank you.

Trailers are kind of like your garage, you put things in it with a plan to take care of it later and then one day you realize you have on overwhelming problem.

The store I work for rents the trailers at about $500 per month. An average Walmart store will generate around $500,000 in profit per month, on sales of 6-11 million. Trailers costs are a trivial  (assuming you only have a few). The manpower involved in taking care of the problem once you created it is huge.

There are a few legitimate reasons for trailers. Anytime there is a remodel you will get 10-30 trailers, Black Friday is 5-10 and layaway is 5-10. I know of one nearby store that owns its own trailer and it uses it to store fixtures. I suppose its possible that some stores own their trailers. I imagine that if Walmart builds a location that is much busier than the building was designed for they will need additional space in perpetuity. The backroom of my store has slots for around 400 pallets. Each truck gives you another 26 slots, though highly inefficient space.

Lets use Black Friday as an example. You have 10 truckloads of freight that need to be in the store by Thanksgiving day. These are currently stored outside in trailers (legitimately due to space issues). That means you need to clear space in the store for 260-400 pallets (assuming some came double stacked). Two weeks before Black Friday you start thinning out the main aisles of the store (called action alley) but the reality is you can't clear that much space. You put as many as you can in the backroom but that clogs aisles so it is rather limited. The easy answer is to pull the Black Friday freight out of trailers and put the inventory currently on the sales floor into the trailers.

If you have great sales on a Black Friday then you will sell through the product and can pull your freight back to the floor. If not, you have a serious space problem. Given the sales at Christmas, the freight doesn't stop coming in. You barely have enough staffing to process the new freight let alone 5 trailers of old. If you don't get those trailers emptied Black Friday weekend it is too late. Its quite possible that space or time become an issue in the run up to Christmas and additional pallets are put into the trailers.

So the trailers sit with a mess of freight until January. Now in January your staffing is dramatically cut for about 3 weeks, not to mention the sales are lower so not as much merchandise is moving. Now you are looking at February. I assume you see where I am going. February & March the priority is resetting shelves (called mods). Now you are looking at 4 months of merchandise getting older. The stuff in the trailer just isn't that valuable to the company.

An interesting note is everything in the trailers needs to be listed (called trailer listing) or it is not covered by insurance. This is rarely done because it is time consuming and because no one was planning on leaving the trailer full for 4-400 months. This is why a store shows 20 in stock but has no location.

Usually the trailer problem is an indicator of bigger problems in the store. So when a Market Manger (like a District Manager) finds out what is going on, his/her priority is not emptying trailers that cost a few thousand a month. It is fixing the overall store and the management. Eventually the merchandise will be split up between all the stores in the market. So our 5 trucks of freight is spread out between 10 stores. The 13 pallets one store got is likely completely different merchandise than anyone else got. This is one of the reasons why we randomly find old stuff in one store but not others.

You asked if other large retailers do this, I don't know but I do know there are no retailers as large as Walmart. There may be some Targets that rival sales of specific Walmarts, but as a whole Walmart is in a different volume category. Sam's Club, Costco and Home Depot have sales numbers per store as high but don't deal with anywhere near the volume of freight.

15 hours ago, tgdxowned said:

I'm sorry man

I'm a former ASM with walmart. It's a tough, underpaid, underappreciated role. I understand your exact struggle that you have to do quick flips.Best wishes to you and your family! 

 

37 minutes ago, brickolodon said:

I am sorry for all underpaid, underappreciated americans who need to find another way of income because many of us cannt do it with just one job...

I honestly can't complain about how I have been treated by Walmart. I don't have a college degree and they gave me the opportunity to earn nearly $50k a year. I certainly agree that it is tough and might agree that is is under appreciated. There are a lot of positions in Walmart that I feel associates are underpaid, I am just not one of them.

Great insight meowingthings. Always curious why Walmart do things that it does.

My question to you is, does Walmart own the inventory it carries or does it all belong to the vendor? Does Walmart take the hit on its profit when it put things on discount/clearance or do they make suppliers take the hit? I always wonder why big companies like Walmart/Costco/Amazon now a days want to own the inventory when it can transfer to risk to the suppliers and operate like FBA style. Just create a market place and just collect commission. When you need space, force the supplier to either price drop to clear it out or pay to remove it out of their stores/warehouses. Just my small potato opinion lol. Which is why I am not an executive for a multi-billion dollars corp lol.

Trailers are kind of like your garage, you put things in it with a plan to take care of it later and then one day you realize you have on overwhelming problem.

The store I work for rents the trailers at about $500 per month. An average Walmart store will generate around $500,000 in profit per month, on sales of 6-11 million. Trailers costs are a trivial  (assuming you only have a few). The manpower involved in taking care of the problem once you created it is huge.

There are a few legitimate reasons for trailers. Anytime there is a remodel you will get 10-30 trailers, Black Friday is 5-10 and layaway is 5-10. I know of one nearby store that owns its own trailer and it uses it to store fixtures. I suppose its possible that some stores own their trailers. I imagine that if Walmart builds a location that is much busier than the building was designed for they will need additional space in perpetuity. The backroom of my store has slots for around 400 pallets. Each truck gives you another 26 slots, though highly inefficient space.

Lets use Black Friday as an example. You have 10 truckloads of freight that need to be in the store by Thanksgiving day. These are currently stored outside in trailers (legitimately due to space issues). That means you need to clear space in the store for 260-400 pallets (assuming some came double stacked). Two weeks before Black Friday you start thinning out the main aisles of the store (called action alley) but the reality is you can't clear that much space. You put as many as you can in the backroom but that clogs aisles so it is rather limited. The easy answer is to pull the Black Friday freight out of trailers and put the inventory currently on the sales floor into the trailers.

If you have great sales on a Black Friday then you will sell through the product and can pull your freight back to the floor. If not, you have a serious space problem. Given the sales at Christmas, the freight doesn't stop coming in. You barely have enough staffing to process the new freight let alone 5 trailers of old. If you don't get those trailers emptied Black Friday weekend it is too late. Its quite possible that space or time become an issue in the run up to Christmas and additional pallets are put into the trailers.

So the trailers sit with a mess of freight until January. Now in January your staffing is dramatically cut for about 3 weeks, not to mention the sales are lower so not as much merchandise is moving. Now you are looking at February. I assume you see where I am going. February & March the priority is resetting shelves (called mods). Now you are looking at 4 months of merchandise getting older. The stuff in the trailer just isn't that valuable to the company.

An interesting note is everything in the trailers needs to be listed (called trailer listing) or it is not covered by insurance. This is rarely done because it is time consuming and because no one was planning on leaving the trailer full for 4-400 months. This is why a store shows 20 in stock but has no location.

Usually the trailer problem is an indicator of bigger problems in the store. So when a Market Manger (like a District Manager) finds out what is going on, his/her priority is not emptying trailers that cost a few thousand a month. It is fixing the overall store and the management. Eventually the merchandise will be split up between all the stores in the market. So our 5 trucks of freight is spread out between 10 stores. The 13 pallets one store got is likely completely different merchandise than anyone else got. This is one of the reasons why we randomly find old stuff in one store but not others.

You asked if other large retailers do this, I don't know but I do know there are no retailers as large as Walmart. There may be some Targets that rival sales of specific Walmarts, but as a whole Walmart is in a different volume category. Sam's Club, Costco and Home Depot have sales numbers per store as high but don't deal with anywhere near the volume of freight.

Very insightful. It's good to get some confirmation on some things that many of us already suspected. I guess my next question would be is there any process that you can recommend where we can get access to some of the goodies in those trailers? I know when some of us use the Walmart app to search specific store inventories we come across a store showing many low priced items as in stock, but never to be found on the sales floor. After several weeks, the same items continue to show in stock at the same prices. Popular opinion is that in this scenario those items are buried in a trailer out back. Is there a certain person within the store we should talk to? Is there any Walmart jargon we should use to help gain access to these goodies, or are we simply at the mercy of each store? It would be nice to have access to some of these items instead of having to rely on pure luck and being in the right place at the right time. Your willingness to shed some light on Walmart procedures has been very helpful so far, and we all appreciate it.

31 minutes ago, tacsniper said:

Great insight meowingthings. Always curious why Walmart do things that it does.

My question to you is, does Walmart own the inventory it carries or does it all belong to the vendor? Does Walmart take the hit on its profit when it put things on discount/clearance or do they make suppliers take the hit? I always wonder why big companies like Walmart/Costco/Amazon now a days want to own the inventory when it can transfer to risk to the suppliers and operate like FBA style. Just create a market place and just collect commission. When you need space, force the supplier to either price drop to clear it out or pay to remove it out of their stores/warehouses. Just my small potato opinion lol. Which is why I am not an executive for a multi-billion dollars corp lol.

For the most part Walmart owns the inventory. Companies like Coca Cola, Pepsi, Nabisco, Hallmark, American Greetings, Beer companies and handful of others are serviced and owned by vendors.

Walmart takes the hit for markdowns however from my experience companies usually have additional deals that us at the store level would never know about. Before Walmart makes a purchase from a vendor they likely arranged some sort of % back if items don't sell, % of future orders for non sellers or the may have received an additional % off for accepting for ownership of the items. Similar deals are usually negotiated for damages as well.

Your comments regarding creating a marketplace are quite interesting. Walmart seems to be pushing more and more in that direction. Above I named a few of the big vendors but there are probably another 30 in each store that are maintained by vendors but not owned (stores also maintain in absence of vendor). Examples of this are Energizer, Verizon, Samsung, Nintendo.

 

 

Where does the inventory go after it does not sell? Do they send it back to Lego or does it just get stored in the back?

40 minutes ago, terrymc4677 said:

Very insightful. It's good to get some confirmation on some things that many of us already suspected. I guess my next question would be is there any process that you can recommend where we can get access to some of the goodies in those trailers? I know when some of us use the Walmart app to search specific store inventories we come across a store showing many low priced items as in stock, but never to be found on the sales floor. After several weeks, the same items continue to show in stock at the same prices. Popular opinion is that in this scenario those items are buried in a trailer out back. Is there a certain person within the store we should talk to? Is there any Walmart jargon we should use to help gain access to these goodies, or are we simply at the mercy of each store? It would be nice to have access to some of these items instead of having to rely on pure luck and being in the right place at the right time. Your willingness to shed some light on Walmart procedures has been very helpful so far, and we all appreciate it.

The stores that have physically have none in-stock but the system shows they do, probably don't have any in reality. If there on hand count is wrong (stolen, returned and not properly taken out of inventory. never received but billed) then in order to get that inventory on hand adjusted to zero the department manager or assistant manager enter it in into system, they then have to have a co manager (direct supervisor of assistant manager) "finalize" (approve) the count. Items with large quantity changes or dollar amounts generally are refused by upper management. They do this for a variety of reasons I won't bother getting into here other than to mention anytime you have inventory in trailers not accounted for you deny everything. Eventually department managers give up and stop changing the on hands for certain items.

As far as accessing the trailer merchandise, I wish I could help you or myself on that one. If it is outside Christmas time and the store has trailers you can bet it is a mess. There is rarely any organization when loaded into trailers. The best person to speak to would be the Co-Manager of the GM (General Merchandise) side. They have far more power than an assistant manager. I can't imagine they would be able to help you much other than it is the best person to build a relationship with in the store. If they are honest they will tell you the truth about the trailers. Perhaps the store owns 10 trailers to be used for Christmas and they sit empty 10 months a year.

3 hours ago, damnsanders said:

Where does the inventory go after it does not sell? Do they send it back to Lego or does it just get stored in the back?

Clearance will usually sit on the shelf until it is sold. In rare cases it is transferred to other stores. If the merchandise becomes damaged or otherwise is not able to be sold it would be sent to that stores claims department. This is where all returns, damaged, transfers or stolen merchandise is processed out of the system. The claims department would either trash the item or send it back to the claims center. This decision is not made at store level, we strictly do what the system tells us to do with it.

I have never gotten a concrete answer as where the claims center send the merchandise, but I have seen Walmart price tags on merchandise at close out stores. My guess is it is just sold to salvage buyers.

Edit: Sometimes old merchandise is stored out back. This should never happen, in fact there is a report that prints weekly of all deleted items stored in the backroom, The report prints so it can be fixed, Many department managers ignore the report. At some point though, these items come back to clearance land.

Edited April 10, 20169 yr by meowingthings

22 minutes ago, meowingthings said:

Clearance will usually sit on the shelf until it is sold. In rare cases it is transferred to other stores. If the merchandise becomes damaged or otherwise is not able to be sold it would be sent to that stores claims department. This is where all returns, damaged, transfers or stolen merchandise is processed out of the system. The claims department would either trash the item or send it back to the claims center. This decision is not made at store level, we strictly do what the system tells us to do with it.

I have never gotten a concrete answer as where the claims center send the merchandise, but I have seen Walmart price tags on merchandise at close out stores. My guess is it is just sold to salvage buyers.

Edit: Sometimes old merchandise is stored out back. This should never happen, in fact there is a report that prints weekly of all deleted items stored in the backroom, The report prints so it can be fixed, Many department managers ignore the report. At some point though, these items come back to clearance land.

"clearanceland" is not a mythical place, but the name of a county on the border between Ohio and Pennsylvania ....... just ask @exciter1

Thank you for such an informative bite of information. I frequently become puzzled as to the why's of what Walmart does. I shop a few different stores in my area and have found that they are very different in how they stock their shelves. I have found that most of the people that work at Walmart are kind and hard working. I hope you all get a raise in pay for your efforts. Thanks again. (It would be fun to be able to explore and see what is hidden in those trailer's).

I have a Walmart down the road from me and will more likely start making trips there to check for clearance. My question is is there a certain clearance aisle or place for these Legos? I went to B&N the other day asked "is this where ALL the Legos are even clearance?" The girl replied yes. So I couldn't find anything (despite their site showing inventory) so for giggles I called the next day asked the guy to Check 2 skus for me. Sure enough "yes sir I found them in our clearance section"....I don't want the same issue at Walmart. So I figured I would ask. Is it in the regular Lego aisle? Another toy aisle that is the "clearance aisle" or is it in a complete different part of the store? I'm sure it can be store by store but I'd like an overall idea on "where to check" for this stuff. Thanks

The honest answer is, clearance is all over at Wal-Mart.  Some stores have clearance sections, but the people in California look at you like this when you describe it.

I would ask at your store.