Sam Walton was the founder of Sam’s Club and Wal-Mart, one of the world’s largest general retail chain stores. By 2001, Wal-Mart had over 4500 stores worldwide.

Early Life:

Sam Walton was born on March 29, 1918 in Kingfisher, Oklahoma to Thomas Gibson Walton, a farmer, and Nancy Lee Walton. In 1923, Walton’s father determined that their farm did not provide enough income on which to raise a family and decided to move the family to Missouri to become a mortgage banker, his previous profession. The Walton family moved from town to town with Walton’s father, but young Sam Walton still remained focused on his studies and sports.

Sufferings:

Due to financial problem, Walton had numerous chores to help make financial ends meet for his family as was common at the time. He milked the family cow, bottled the surplus, and drove it to customers. Afterwards, he would deliver newspapers on a paper route. In addition, he also sold magazine subscriptions. Upon graduating, he was voted “Most Versatile Boy.”

After high school, Walton decided to attend college, hoping to find a better way to help support his family. He attended the University of Missouri as an ROTC officer. During this time, he worked various odd jobs, including waiting tables in exchange for meals.

Walton joined JC Penney as a management trainee in Des Moines, Iowa three days after graduating from college.  This position earned him $75 a month. He resigned in 1942 in anticipation of being inducted into the military for service in World War II.

^Initiative

In 1945, after leaving the military, Walton took over management of his first variety store at the age of 26. With the help of a $20,000 loan from his father-in-law, plus $5,000 he had saved from his time in the Army, Walton purchased a Ben Franklinvariety store in Newport, Arkansas. The store was a franchise of the Butler Brotherschain.

Image via Wikipedia

Ideas

It was here that Walton pioneered many concepts that would prove to be crucial to his success. Walton made sure the shelves were consistently stocked with a wide range of goods at low prices. His store also stayed open later than most other stores, especially during the Christmas season. He also pioneered the practice of discount merchandising by buying wholesale goods from the lowest priced supplier. This allowed him to pass on savings to his customers, which drove up his sales volume. Higher volumes allowed him to negotiate even lower purchase prices with the wholesaler on subsequent purchases. Walton’s store led in sales and profits in the Butler Brothers’ six-state region. One factor that made this store successful was its central location, making it accessible to a wide range of customers. In an attempt to limit the expansion of his main competitor, the Sterling Store, Walton leased a nearby Kroger store and opened it in 1950 as the “Eagle” department store, but it didn’t fare as well.

When Walton bought the franchise from the previous owner in 1945, the store was doing $72,000 in sales annually. By 1950, the store was doing $250,000 in sales annually, due to Walton’s ideas and practices.

Barrier:

Because of the variety store’s enormous success, the landlord, P.K. Holmes, refused to renew the lease when it expired, desiring to pass the store onto his son. The lack of a renewal option, together with the outrageous rent of 5% of sales, were early business lessons to Walton. Despite forcing Walton out, Holmes bought the store’s inventory and fixtures for $50,000, which Walton called “a fair price”.

Image via Wikipedia

^{Start of the Retail Giant:}

The first true Wal-Martopened on July 6, 1962 in Rogers, Arkansas. It was called the Wal-Mart Discount City store and located at 719 West Walnut Street. Soon after, the Walton brothers teamed up with the business-savvy Stefan Dasbach, leading to the first of many stores to come. He launched a determined effort to market American-made products. Included in the effort was a willingness to find American manufacturers who could supply merchandise for the entire Wal-Mart chain at a price low enough to meet the foreign competition.