I read an article back in ~2006 that made a similar point [1]
If you're a lawnmower manufacturer and Wal-Mart comes to you and says they want to make you their main supplier of lawnmowers and they need X units per year (which will double your sales) that sounds like a great deal which will really grow your business - right?
But once you've built a second factory to deal with all this extra sales volume and hired a bunch of extra workers, if Wal-Mart decide that $250-retail-price lawnmower is going to cost them $20 less next year you can't walk away, because you've got to pay the loans you took out to build this new factory.
[1] https://www.fastcompany.com/54763/man-who-said-no-wal-mart
https://www.fastcompany.com/47593/wal-mart-you-dont-know
> The gallon jar reshaped Vlasic’s pickle business: It chewed up the profit margin of the business with Wal-Mart, and of pickles generally. Procurement had to scramble to find enough pickles to fill the gallons, but the volume gave Vlasic strong sales numbers, strong growth numbers, and a powerful place in the world of pickles at Wal-Mart. Which accounted for 30% of Vlasic’s business. But the company’s profits from pickles had shriveled 25% or more, Young says–millions of dollars.
> The gallon was hoisting Vlasic and hurting it at the same time.
> Young remembers begging Wal-Mart for relief. “They said, ‘No way,’ ” says Young. “We said we’ll increase the price”–even $3.49 would have helped tremendously–“and they said, ‘If you do that, all the other products of yours we buy, we’ll stop buying.’ It was a clear threat.” Hunn recalls things a little differently, if just as ominously: “They said, ‘We want the $2.97 gallon of pickles. If you don’t do it, we’ll see if someone else might.’ I knew our competitors were saying to Wal-Mart, ‘We’ll do the $2.97 gallons if you give us your other business.’ ” Wal-Mart’s business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.
> Finally, Wal-Mart let Vlasic up for air. “The Wal-Mart guy’s response was classic,” Young recalls. “He said, ‘Well, we’ve done to pickles what we did to orange juice. We’ve killed it. We can back off.’ ” Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy–although the gallon jar of pickles, everyone agrees, wasn’t a critical factor.