Sam Walton's secrets of retailing success

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Armed with a dream, set up a little shop and sell to all comers is one of the most popular route to get into business for yourself. Unfortunately, It also happens to be the easiest to lose your shirt. So it is helpful to learn from Sam Walton's early experience of retailing and how he guided Wal-Mart to phenomenal success.

Just as in Sam Walton's time, even today, there is always a better way to retail goods, which incumbents are not willing to entertain as they enjoy their sweet profit spots or are just simply too lazy to change. These are opportunities for insurgents to enter the business. Retailing is no small potatoes, contrary to popular belief, the biggest fortunes are not in Real Estate, Oil or Technology. It is in Retailing.

This book is a good example of how successful people like Sam Walton viewed problems as the source of opportunities.

Patience, Perseverance, Persistence

Like every serious retailer you must have a business value system (box 1), which consist of your beliefs in products, services and the customer segment you are trying to serve. These beliefs direct you to how you set up and conduct your retail business. But you are also bound to face a lot of resistance (box 2) trying to realize your vision because people are creatures of habit and are used to a certain way of selling and buying that may not be friendly to your innovation. It is now up to you to win them over, and it is not easy to achieve. This is what the solid arrow from Box 1 to Box 2 means. You must view this early friction as the chance to learn and strengthen your business by making it more realistic and adaptable - This is the return solid arrow from Box 2 to Box 1. This tough reinforcing loop between Box 1 and Box 2, if you take it with the right attitude eventually will cause you to "swim upstream" (box 3) like Sam Walton did to overcome the resistance (box 2). "Swim upstream" was just the term Sam Walton used for going against the current that improves on current best practice. You cannot learn how to "swim upstream" successfully until you have spun several rounds around the reinforcing loop of Box 1 and Box 2. Do not pass up the chance to view the Flash movie, "Patience, Perseverance and Persistence". Let it imbue you with the optimism and confidence to succeed.

Note the dashed arrow from Box 3 to Box 2. Dashed arrows reads "More of Box 3 leads to less of Box 2". Anyone can try to "swim upstream" but we are talking about "swimming right" that is the by product of perseverant trying to overcome Box 2 in a manner consistent with your core business beliefs (box 1).

Sam Walton started his business in the age of mass production. His idea was to "pile them higher and sell them cheaper" than the retail leaders of the day. This is no longer the formula of success for most retailers because Wal-mart currently executes this formula massively better than anyone else. The lesson to take home here is that to do survive and do well your formula for success must create a virtuous cycle for yourself as it did for Sam Walton.

Sam Walton's formula is to give more and more value for less and less money. He did it by passing the savings back to the customer. This is the virtuous cycle between Box 1 and Box 2 in Map 2. This result in another virtuous cycle appearing that involves Box 3 - Keep gaining more customers.


The logic for Map 3 is unquestioned. Business is a team sport. Many times to "swim upstream" successfully, you will need partners, including employees and external parties. Map 3 can be connected to Map 1, i.e., Box 4 in Map 3 is the same as Box 3 in Map 1.

Sam succeeded because he was also resilient. He was very inexperienced (box 1 in Map 4) when he started and made many mistakes (box 2). The more mistakes he made, the less inexperienced he became as shown in Map 4 - See the dashed arrow from Box 2 to Box 1. However to keep llving Map 4 in his life and so that he keeps getting better, he has to be resilient (box 3). He has certainly gained experience in learning from mistakes, but he would still possess a humble attitude and view himself as inexperienced beause there is always more to learn and new ways to make things better. Only a resilient person who doesn't tire can keep going. Box 1, 2 and 3 is a virtuous cycle a winning retailer must own as things move fast and change quickly in this industry.

Keeping Map 4 in mind, Sam Walton continued to visit competitors stores even when he was the most successful retailer. Even as the king of retail he was always eager and believed there was much to learn (box 1) and one of the most fertile places to pick up new knowledge are competing stores everywhere (box 2).

In retailing, the details are, if not more important than the big picture. The virtuous cycle in Map 5 helps you stay on top of what is happening. There is no substitute from going down to where the action is to see it for yourself because a lot of useful information cannot be captured in written reports and numbers. Similarly there is more to learn from Sam Walton's biography than these five maps are able to offer you. You can download a fuller set consisting of two more maps (right click here to download). This larger map(in pdf format) shows how these five maps and two more not discussed here are connected each other to explain why Wal-Mart is so powerful. Pick up the rest from the man himself in his biography from and help me earn the commission to keep this site going as well.

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