SCALE: Walmart procures at such a massive scale that they are able to command lower prices than any competitor. Vendors will be happy to off-load most of their produce to one entity - which provides a minimum price & demand guarantee for most producers. Consider a manufacturer who needs to run the plant at a predictable level in order to maximize the Return on Capital Employed - he will be happy to earn slightly lesser per item in exchange for a predictable high volume production demand!