Sam Walton: Made In America

by Sam Walton

But I think more than anything it proves there’s absolutely no limit to what plain, ordinary working people can accomplish if they’re given the opportunity and the encouragement and the incentive to do their best.

I learned from a very early age that it was important for us kids to help provide for the home, to be contributors rather than just takers.

say I bought an item for 80 cents. I found that by pricing it at $1.00 I could sell three times more of it than by pricing it at $1.20. I might make only half the profit per item, but because I was selling three times as many, the overall profit was much greater.

One of the reasons Helen insisted all along on our living in a small town, I’m sure, is so we could raise the kids with the same values she and I had been exposed to in our youth.

Just fifteen years ago, the market value of the company was around $135 million; today it’s over $50 billion.

along with increasing our sales, we increased our profitability—from $1.2 million in 1970, to $41 million in 1980.

Folks in small towns in Iowa and Mississippi are more likely to want to work for what we can pay than folks in Houston or Dallas or St. Louis.

Another important ingredient that has been in the Wal-Mart partnership from the very beginning has been our very unusual willingness to share most of the numbers of our business with all the associates. It’s the only way they can possibly do their jobs to the best of their abilities—to know what’s going on in their business.

Sharing information and responsibility is a key to any partnership. It makes people feel responsible and involved, and as we’ve gotten bigger we’ve really had to accept sharing a lot of our numbers with the rest of the world as a consequence of sticking by our philosophy.

We share that information with every associate, every hourly, every part-time employee in the stores.

But a culture like ours can create some problems of its own too. The main one that comes to mind is a resistance to change. When folks buy into a way of doing things, and really believe it’s the best way, they develop a tendency to think that’s exactly the way things should always be done.

Our fifty-plus Wal-Marts and eleven variety stores were doing about $80 million a year in sales compared to Kmart’s five hundred stores doing more than $3 billion a year.

Reports like that one didn’t help us much, but the truth is that her analysis of the situation wasn’t necessarily as wrong as it looks today.

I was impressed with the giant Carrefours stores in Brazil, which got me started on a campaign to bring home a concept called Hypermart—giant stores with groceries and general merchandise under one roof. I checked them out in Europe and came back pushing the concept hard.

Our 640 Wal-Marts were earning almost $200 million a year on sales of more than $4.5 billion, we were still growing like wildfire, and we were underway with Sam’s.

For a long, long time, Sam would show up regularly in the drivers’ break room at 4 A.M. with a bunch of doughnuts and just sit there for a couple of hours talking to them.

acres. Fill it high to the roof with every kind of merchandise you can imagine, from toothpaste to TV’s, toilet paper to toys, bicycles to barbecue grills.

Here’s a chart that completely amazes me:

A computer is not—and will never be—a substitute for getting out in your stores and learning what’s going on. In other words, a computer can tell you down to the dime what you’ve sold. But it can never tell you how much you could have sold.

Our district managers are doing the job that I did back in 1960—the real hands-on, get-down-in-the-store stuff.

We share everything with them: the costs of their goods, the freight costs, the profit margins. We let them see how their store ranks with every other store in the company on a constant, running basis, and we give them incentives to want to win.