Entrepreneur Stories
Walmart: How It Grew From A One Room Store To An International Success
Back in the year 1940, when Sam Walton was just a Ben Franklin franchise owner in the nondescript town of Newport, Ark., he had a tiny blip of an idea. At that point, he did not realise his still developing idea was going to become such a huge success and he had no intention of working on it. Until at that point. Like any retailer worth his salt, Walton also looked at how to make the best out of deals from retailers.
Even though Walton was ranked as the richest man in the United States by the year 1980, looking for deals came naturally to him. In fact, he would refuse to go for a haircut that cost more than $ 5! When Walmart was founded, Sam realised he could basically double his profit by making his consumers happy and increasing the sales output in his company. At the time, his employees were required to deposit ten cents a cup in the jar as “coffee tax.”
Sam founded Walmart in 1945 with $ 20,000 borrowed from his father in law and a world changing idea in hand. Back then, his first store started with low priced goods and longer timings as compared to any of his other competitors. His margins were small, but he sold large quantities, which meant he could bargain for even lower prices from wholesalers. Essentially, Walton’s policies were those which drive smaller local stores out of business.
Even when he was worth close to $ 24 billion, Walton drove around in a pickup van and often borrowed money from his employees (it should be the other way around, but this seemed to work for him.) “Some people try to turn it into this ‘Save the Small Town Merchants’ deal, like they were whales or something that have a right to be protected,” he wrote in his autobiography.
From being a simple, one store operation in Newport, Walmart now has close to 4000 outlets in the United States and more than 3000 in countries outside the US. If frugality was a regime his employees protested, it was never brought to light. To make Walmart’s vision known to the public, Walton launched a “Made In America” campaign in the year 1945, as per which he sold American made products if suppliers could get within 5% of the price of a foreign competitor. This may have compromised the bottom line in the short term, but Walton understood the long term benefit of convincing employees and customers that the company had a conscience as well as a calculator.
To make his employees feel like they belonged to the company as a whole, Walton further ensured every employee a long term stake in all the profits and loses alike! At Walmart, to ensure team spirit and employee building, all the staff are required to take the pledge every morning as a sign of respect and belonging! Despite the company having tough times post Walton’s demise, the employees took matters into their own hands and ensured the long and successful run the company had had in the years before.
While Walmart seems ruthless and over bearing now, it started off with a very simple story and an idea to make it big in an ordinary world. If you think we missed out some parts of Walmart’s story to the big leagues, feel free to comment and tell us and we will add it to the list!
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