Monday, January 31, 2011

Book Review - Sam Walton Made in America - My Story by Sam Walton with John Huey

Only took about a week to finish this book. You can see that Sam Walton wasn't trained as an author as he uses everyday language in his book. Written shortly before his death from bone cancer it is filled with anecdotes from his life and a generous amount of recollections from friends, family and colleagues. No, it's not just Sam Walton's book.

Would you believe that Sam Walton started off with a newspaper round? He was the best seller of newspapers and recruited others to do so which created some sort of a foundation for his selling abilities. He was a more than capable amateur sportsman but had a minor heart condition that perhaps stopped him from going further.

Sam Walton new the value of a dollar. Of that you can be sure. During WWII he married Helen Robson, from a reasonably well-to-do family, whose father advised Sam regarding setting up a business early on. It turned out to be remarkably good advice and he loaned some money towards setting them up.

At the conclusion of WWII Sam went to work for J.C. Penney, a large retail company. He worked there for three years before deciding to buy a Ben Franklin franchise. Now, you all know that franchisers want the franchisees to purchase their goods and resell them. Sam, knowing the value of a dollar, would find a distributor close by who could offer a better deal and so would purchase from them and pass on the savings to his customers. It did mean that the franchise wasn't too pleased with him but it meant that the business did well. He went on to create Walton's Five and Dime stores before Walmart came to fruition in 1962. The business was borrowed heavily for and Sam had his head salesmen as partners, albeit for minimal shares.

Much of the success for Walmart came about because the stores were situated in country towns of 3-10,000 people and were able to soak up much of the demand because prices were low, stock was available and the locations were well planned. Sam Walton flew his own plane, out of 18 owned none of them were new, to a site and viewed it from overhead. He's note the roads, competition and proximity from his distribution point (as far as possible). Then, if he spotted some land he fancied, he'd land the plane and seek out the land owner and make an offer right there on the spot. Once a new store was operational he would back-fill the smaller towns in between this new store and the distribution centre with additional stores. Great tactic and probably the only person to conduct business in this manner.

The early business success, in part, was due mainly to the location of his franchise close to the border in Arkansas with Oklahoma, Kansas and Missouri. It meant that he could sell in four states with differing competition in each state and didn't step on too many toes. Stroke of luck or masterstroke?

Some of the sales that they had to attract people were amazing. Tractor mowers that sold for $449 were purchased, in bulk, for $175 and sold for $199. Who could resist a bargain like that? Or how about 3600 packets of bulk washing detergent piled up some 15 feet and 100 feet long taking up a whole aisle to get people in through the door?

There was a definite culture at Walmart. Saturday morning meetings were held and people were made to attend. If the shoppers were busy on the weekend and shop staff had to work then the managers would work also. Sam Walton would be in the office at 4 am check the weekly sales figures for all stores some three hours before the staff meeting. That's dedication. If a new store was to be opened the management team worked 16-18 hours a day and had, generally, three weeks to pull it off. The people were pushed seriously but gained from an early profit-sharing scheme. How would you feel if eight of you were forced to share a hotel room or four or five slept on the floor in a manager's accommodation to save on costs? The Walmart executives did it because they knew that money wasted on looking after them was money that their customers had to find. Or maybe it was just Sam Walton who knew that.

Sam played tennis most of his life and he loved to shoot quail. He was never one of the white-gloved brigade and took his own dogs. Imagine the surprise of some very well-to-do shooters who invited him one time and met him at the airport with their Mercedes Benzes. Sam hopped out of his plane with five dirty bird dogs and hopped into their pristine vehicles. Not too many more invitations were forthcoming.

I love the way this book was written. Think what you like about Walmart and the culture of the shoppers but it's no wonder that Sam Walton was a success. He was one of the most driven individuals of the 20th century and his books makes great reading.


Iris Flavia said...

Sounds a bit like the story of Ray Kroc (Mc Donald´s)!
Too sad Wal-Mart left Germany - they had Jerky, as only shop...

Anonymous said...

Wow Walmart rules. Gil

Luke said...

I really enjoyed this book. Sam was definitely one of the most successful businessmen ever.

Thanks Hammy.

Jordan Longhi said...

Great review. Walmart, for all it's faults, is a great company. You can't help but to love the rags to riches story.

Hammy said...

He never lost sight of his roots.