Like any retailer, Walton was always looking for deals from suppliers. Typically, though, a retailer who managed to get a bargain from a wholesaler would leave his store prices unchanged and pocket the extra money. Walton, by contrast, realized he could do better by passing on the savings to his customers and earning his profits through volume. This insight would form a cornerstone of Walton's business strategy when he launched Wal-Mart in 1962.
Today, Sam's gamble is a global company with more than 1.9 million associates worldwide and nearly 6,500 stores and wholesale clubs across 13 countries. The "most admired retailer" according to FORTUNE magazine has just completed one of the best years in its history: Wal-Mart generated more than $312.4 billion in global revenue in the fiscal year ended January 31, 2006, establishing a new record and an increase of 9.5 percent. The company earned almost $11.2 billion in net income in fiscal 2005.
But it all started with an understanding of what consumers want from a retailer.
"The secret of successful retailing is to give your customers what they want," Sam wrote in his autobiography. "And really, if you think about it from the point of view of the customer, you want everything: a wide assortment of good quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience.
"You love it when you visit a store that somehow exceeds your expectations, and you hate it when a store inconveniences you, or gives you a hard time, or pretends you're invisible."