The benefits of ‘Vendorville’

guest commentary by Cameron Smith
Cameron Smith is the owner of Cameron Smith & Associates, an executive recruitment firm that has worked to lure Wal-Mart suppliers to Bentonville since 1992.

Editor’s note: More than 20 years after the death of Sam Walton, nearly 1,300 suppliers have set up offices within a 27-mile radius of Wal-Mart’s home office in Bentonville. The supplier community provides roughly 5,800 high-income jobs and brings further socio-economic development and cultural diversity to the region. Link here for stories and commentary about the Supply Side of the Wal-Mart world in Northwest Arkansas.

Years from now when they write the story of Northwest Arkansas’s economic boom, research will show that it was ignited by folks we have come to know as “the vendors.”

Consumer products companies realized that being close to Walmart headquarters gave them a competitive advantage. Before long, companies were sending their best people to Bentonville to take care of their largest customer.

Many came to Northwest Arkansas kicking and screaming, uprooted from big cities and packed off with children in tow to small-town Arkansas. The influx 20 years ago was like watching the pioneers circling their wagons on the frontier to protect their cargo. Today vendors (also known as suppliers) literally circle their offices around Walmart to protect their biggest customer (and market share) from Amazon, Target and Dollar General, among others.

To be successful in Vendorville, suppliers are selling all the time – to move more product through Walmart, to get a new job, or to move up in their current organization. No matter what company you work for or how much you sell to Walmart every year, most sales go through the little 15’ x 15’ cubes at the Walmart home office. You see ladies rolling tires into these rooms or international execs setting up inflatable swimming pools that have to be filled by hundreds of trips to the water fountain, or sales teams representing breakfast cereal while dressed in Armani suits.

Salesmanship is king and the prize is the most valuable real estate in America: a shelf at Walmart or positioning online.

These days Bentonville produces vendors like Napa Valley grows grapes. California vintners understand that putting grape vines close together makes them compete for nutrients in the soil. The plants work harder and increase the quantity of the grapes.

Likewise, studies show that when similar businesses flock together in one place, they get better results. This is partly because the physical proximity of companies facilitates the exchange of information and talent among the competing firms.

For years Walmart frowned on vendors fraternizing with buyers as business was not supposed to be about relationships. Well guess what? It is about relationships. Proximity and networking are important. The consumer product movers and shakers network tirelessly during their time on the ground here, be it 1, 2, 5, or 10 years.

Nowhere else in the world will a food company executive live next door to an electronics company executive, coach soccer with a shopper marketing manager, run into a retail buyer while buying milk, and play in a golf tournament in a foursome with a packaging engineer, website coder, PR specialist, and a media buyer.

Then, once someone leaves Vendorville to work on another retail account, an amazing rolodex of multiple industries will forever follow him or her.

If you ask any of the 6,000 plus vendors who are here, they will tell you when people live here, they are not worrying about the next flight in, whether the luggage made it, when the rental car is returned or if there is an earlier flight out. Being based in Northwest Arkansas lets people focus on the business at hand.

Most of the Walmart vendors you meet wear glasses, contacts or bifocals, in part because they spend their days crunching data. They have to tell the story the data presents. Walmart calls it looking at how the customer voted yesterday. Savvy vendors look not only at how customers voted at the registers, they also look ahead at customer needs through social, mobile, and localized data trending. They connect the dots in very sophisticated ways on what the numbers really mean to the world’s largest retailer.

The suppliers are by nature “students of success.” None of them would have been selected for the top job in their company’s retail lineup (a killer job on the Walmart team) if they were not already successful. Now these “students of success” strive to learn from their core team members, peer friends at other suppliers and the retail customer itself.

As they flourish at work, they become part of the community. For the first few years, don’t expect them to stand up and call the Hogs. Still feeling like transplants, they might have little interest in statewide elections. Despite their reluctance to move to Arkansas, when their tour of duty is over, that’s when reality hits. They love Northwest Arkansas and drop the anchor.

In Northwest Arkansas, the vendors have discovered a great place to live and raise a family. Vendors have taken leadership roles in the community, raising unprecedented sums for cancer research, the arts, health care, education – you name it.

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Just as grapes planted close together are more productive, vendors in Bentonville’s Vendorville make each other better. Being gathered in Northwest Arkansas has allowed them to work with the best of the best, and by making this their home they have made Northwest Arkansas a better place to live.

The future of the region is brighter because the vendors are here.

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