A story about Wal-Mart and dropshipping

(1)
Knife on the site

(2)
We have ordered knife

Dropshipping - not just for the small

Wal-Mart (Wal-Mart Stores, Inc.) is one of the largest corporations in the world, estimated to be worth billions of dollars - WMT. Wal-Mart is a retail company - and if the numbers are to be believed, it's the best retail company on the face of the Earth.
As of the end of February 2010, the website www.walmart.com offers a rare product - a knife by Kershaw, 4.5 diameters in length, with a fixated blade, for $34.88 + delivery. (1)
It is worth stating that the aforementioned product is only carried online: the offer clearly states that this knife is impossible to obtain within the regular Wal-Mart outlets. (2)

(all images are clickable for large version)

(3)
We got
the knife

(4)
Post label

Uncertainty: Wal-Mart and I - who is the third party?

Adhering to the given address, the package arrived within the given time frame in the city of Voorhees, NJ. Delivered by FedEx (FedEx Corporation), everything was done by the book: merchandise, packaging, invoice. A large "Wal-Mart" sign was plastered on the invoice, the logo of the retail giant. In other words, everything was as it should be. (3)
There was no doubt that the package was really from Wal-Mart, from their warehouse - there was just one interesting detail on the postage stamp: On the upper right side, in large letters, stood the words BILLED THIRD PARTY.
Personally, I know very well what this phrase stands for, but even if you don't - the obvious question should instantly pop into your head: I'm the buyer - that's one. Wal-Mart is the seller - that's two. Then, who is the third party? Let's take a closer look at the label. (4)

(all images are clickable for large version)

(5)
We trace order

Trailing the postage stamp

Any buyer willing to delve deeper will find out that the package was originally shipped from Bentonville, AR. Using Google, we easily find the confirmation: Bentonville does in fact have many companies connected to Wal-Mart.
The next step is to analyze the FedEx tracking number (422715268422), which will allow us to trace the package from the very beginning by going to the FedEx website. (5)
This is where it gets interesting! If you want to trust the tracking number, the package was not handed off to FedEx in Bentonville, or even Arkansas for that matter: the original location is somewhere in Shreveport, LA - around a 350 mile difference! The mysterious third party is located somewhere in Shreveport, the location from which the knife was originally shipped.

(all images are clickable for large version)

(6)
Vendor's contacts

Does Wal-Mart have a lot of partners in Shreveport?

Shreveport is a small town with a population of around 200 thousand people. It seems unlikely that a town like that could hold that many potential partners of a giant like Wal-Mart -retailing knives by Kershaw. I would beg to differ, however, and say that finding them is quite simple. To put it plainly: this is an unusual conglomeration of lucky events. But let's start from the beginning.
First, I simply employed the help of the omnipotent Google: " Find me all of the wholesale tourist shops in Shreveport," - in other words, I performed the following search: http://maps.google.com/maps?q=wholesale%20outdoor%20in:shreveport,%20LA
To tell you the truth, this method rarely produces decent results, but being that outside of this story I possess a certain level of experience - I knew that Shreveport was large enough to hold a FedEx warehouse (the fact that both the vendor and the warehouse were located in the same point, however, was an especially lucky occurrence for this type of search!)
In addition, the merchandise is somewhat rare - no less rare then the given circumstances. Finally, the vendor turned out to be quite open to the public, having a freely accessible catalogue - even without registration. This is how I managed to find the company Sports South LLC (www.internetguncatalog.com), which was located in that very same, tiny Shreveport. (6) And, according to the commentaries on the addresses, its warehouses were located in the very same spot.

(all images are clickable for large version)

(7)
The same knife
in catalogue
of company

Online catalogues and the role they play

As mentioned before, the company Sports South has an online catalogue - which proved to be quite useful. While looking through it, I easily found the aforementioned knife (7) -with the same exact name and picture that's on the Wal-Mart website. Strangely, a simple Google search would find the same knife sold under a different name and with completely different pictures as well!
Was it another coincidence that Wal-Mart and Sports South use the same exact name and pictures? That seems like one too many, if you ask me. In my opinion, the obvious answer is dropshipping: Sports South simply ships the merchandise to Wal-Mart's clientele.

(all images are clickable for large version)

(8)
If small firm
in Shreveport does not have
a knife in stock
then this knife
is "out of stock"
on Walmart site

The final verdict

Actually, there is one other possibility: what if both Wal-Mart and Sports South directly purchase the knives from Kershaw and receive the same exact descriptions and pictures? This version seems plausible enough, but there is a problem. Why would Kershaw feel the need to ship its merchandise to Voorhees all the way from Shreveport, when it's located in Oregon?
Now we need to add one final touch to fully paint the picture we want you to see: we need to know that if one day Sports South does not have this particular knife in stock, then Wal-Mart won't have it either. So here it is, the final touch, at your service: March 2nd, 2010, 23:51:26. (8)
As you can see, if Sports South LLC does not have the Kershaw knife in stock - Wal-Mart cannot ship it. I suppose there is no need to elaborate: even billion dollar companies actively use dropshipping.

It's possible that the inquisitive reader will want to know how common of an occurrence this is. Maybe this is a single example, which the author accidentally heard about and now uses to demonstrate his point?
Well, it's not a hard thing to check - just look for the phrase "Not Sold In Stores" on the Wal-Mart website. Google will determine how prevalent this phrase is. The top, right-hand corner reads as follows: "Results 1-10 of about ....:"

(all images are clickable for large version)