Walmart was a new breed of retail department store. They, along with others, started in the early 1960s. These stores had a different concept. And, years later, many were gone but Walmart survived. Walmart went from being the smallest to the largest. Here is how it happened.
Generally, in retail you mark up merchandise a certain percentage. So if I worked on a 40% markup, something that costs 60¢ would sell for a dollar, and I would make 40% profit. Now if I got lucky and I was able to buy a shipment for 50¢, for any of many reasons, I'd still sell it for a dollar and make a higher profit.
Sam Walton sought out these special prices, then priced it at his normal markup. So, he had many items at reduced prices but still made his full markup. This is the concept of the discount store. But the others also did this.
The others located in locations with large populations. Walmart went to rural areas with small populations - just the opposite of what seemed to make sense. What happened was, they had no competition and people would come from counties away to shop. So they grew and grew by opening more and more stores in rural locations.
I see two marketing lessons here: 1. Look for markets in places your competitors aren't. 2. If you can buy at better than normal prices, you can position yourself as the discount business.
© Stephen Ghelerter, Shorty's Print and Promo 128