0:02 we knew so little about the variety
0:04 store business we had to take the book
0:06 that was written by ben franklin
0:09 and and apply the principles but of course
0:10 course
0:12 we added on didn't we and we were
0:14 started doing strange things like
0:16 cranking up ice cream machines on the
0:19 sidewalk on saturday night
0:21 popcorn on the other end of the sidewalk
0:24 hawking anything we could hawk on that
0:25 looked like it might have a chance to
0:26 sell wherever [Music]
0:28 [Music]
0:32 572 billion dollars that's how much
0:35 revenue walmart generated in 2021
0:37 with over 2 million people working for
0:39 the company it is the largest employer
0:41 in the world and the biggest retailer in
0:44 terms of sales but building such an
0:47 empire was no easy feat it all started
0:49 when a poor farmer who after being told
0:51 he had no career in the retail business
1:01 sam walton was born on the 28th of march
1:05 1918 in kingfisher oklahoma his father
1:08 thomas walton was a farmer but the farm
1:09 wasn't generating enough money to
1:11 provide for his family
1:13 because of this the family traveled
1:15 around the country looking for greener
1:17 pastures moving from one state to
1:19 another until they finally settled in
1:22 columbia missouri around this time sam
1:24 had become a teenager he helped the
1:26 family by working a variety of small
1:28 jobs and watched how his father survived
1:30 by turning a small profit on each
1:32 business deal he made he also watched
1:34 his mother start up a fairly successful
1:36 milk business that involved him milking
1:38 cows and delivering the milk to
1:40 customers in the neighborhood after his
1:42 football practice his parents taught him
1:44 the value of hard work and also just how
1:46 much work it took to make a single
1:48 dollar but things weren't great at home
1:50 for sam
1:52 his father thomas was almost never with
1:54 the family as he was always on the road
1:56 trying to make extra money where he
1:58 could because of this thomas's
2:00 relationship with his wife worsened
2:01 every year
2:04 in fact in his autobiography sam
2:06 described his parents as the two most
2:09 quarrelsome people to ever live together
2:11 to escape the troubles at home sam
2:13 engaged himself in sports joined the boy
2:16 scouts and took several leadership roles
2:17 that kept him busy
2:20 sam graduated from david h hickman high
2:23 school in 1935 and decided to attend the
2:25 university of missouri to take his first
2:28 steps into the business world while in
2:30 school he worked many odd jobs to
2:32 support himself including delivering
2:34 newspapers and waiting tables in
2:37 exchange for meals upon his graduation
2:40 in the spring of 1940 sam would get his
2:42 first taste of the retail industry he
2:44 got himself a job as a sales trainee at
2:47 jcpenney which back then was just a
2:50 small shop in des moines iowa his
2:53 starting pay was 75 dollars a week but
2:56 this job did not go smoothly for sam and
2:58 he was seen as one of jcpenney's worst employees
2:59 employees
3:01 one thing counting against him was that
3:03 his bookkeeping was terrible because he
3:06 hated making his customers wait while he
3:08 fussed with paperwork as a matter of
3:10 fact sam's boss threatened to fire him
3:12 at one point and even told him that he
3:15 had no career in the retail business
3:17 the only thing that saved walton was his
3:19 gift for salesmanship which earned him
3:23 an extra 25 a month in sales commissions
3:24 when the second world war reached
3:27 america in 1941 walton was eager to play
3:29 a role in it he quit his job the
3:32 following year and joined the u.s army
3:34 the army recognized sam's natural
3:36 leadership skills and selected him to
3:38 become a member of the military's
3:40 intelligence corps where he rose to the
3:42 position of captain the military
3:45 stationed sam in oklahoma in april of
3:48 1942 where he met his future wife helen
3:50 and after a short period of dating they
3:55 got married on valentine's day in 1943 [Applause]
4:02 by the time the war was over in 1945
4:04 walton had a wife and child to support
4:06 and so he decided to start up his own
4:09 retail business with a twenty thousand
4:11 dollar loan from his father-in-law and
4:12 five thousand dollars from his own
4:15 savings sam bought a ben franklin store
4:18 in newport arkansas it's important to
4:20 note that millions of small stores had
4:22 failed during the course of the 20th
4:25 century in america and when sam bought
4:27 this particular store it was losing a
4:28 lot of money
4:30 not only did sam invest in a store that
4:32 wasn't bringing in much money but he was
4:35 also paying far too much for it the rent
4:37 for the store was five percent of the
4:40 sales and initially this sounded fine to
4:42 walton but after signing the lease he
4:44 discovered that it was the highest rate
4:46 anybody had ever paid for a variety
4:49 store business despite all of his
4:51 obstacles sam succeeded beyond
4:53 everyone's expectations
4:55 he studied all the typical rules of
4:57 retail and then broke the ones he
4:59 thought didn't make sense which for him
5:01 was nearly all of them when sam bought
5:04 the ben franklin store he was required
5:06 to buy all his goods from company
5:08 outlets but he knew he could find
5:10 cheaper merchandise elsewhere so he
5:12 found a clause in his contract that
5:13 allowed him to buy his merchandise from
5:15 somewhere else and then he would reduce
5:17 the cost of his goods way below what
5:19 other shops were selling them for
5:21 he made his profit on volume rather than
5:24 margin but it took him nearly a decade
5:26 to fully appreciate the power of that idea
5:27 idea
5:29 nothing sam did was extraordinary
5:31 neither was he a genius and while
5:33 there's no question that he was business
5:35 smart the real reason for his success
5:38 was his main policy to make the lives of
5:41 his customers easier and because he did
5:43 that more and more people bought from him
5:44 him
5:46 once things were going great for sam and
5:48 his business he asked his brother bud to
5:50 join him and together they were able to
5:52 run the store more smoothly
5:54 the butler brothers who owned the store
5:56 sam had leased were not happy with the
5:58 fact that the waltons were getting their
6:00 merchandise elsewhere but they couldn't
6:02 say much about it because the numbers
6:04 sam was generating were unmatched
6:06 anywhere his sales had increased by more
6:11 than 45 percent reaching 105 000 in his
6:13 first full year of ownership the
6:14 following year the number increased
6:17 again to 140 000
6:19 and by the third year his sales
6:22 increased by another 25 percent reaching
6:25 175 000
6:27 after only three years in the business
6:29 sam was able to repay the 20 000 loan
6:32 his father-in-law gave him in full and
6:34 two years later sam had become the
6:37 leading variety store owner in arkansas
6:39 and likely in the neighboring states as well
6:40 well
6:42 but the truth is it wouldn't matter
6:44 anyway because the business was destined
6:47 to fail [Music]
6:55 you see when sam walton signed the lease
6:58 for his store back in 1945 it contained
6:59 no renewal clause
7:02 options to renew were typically standard
7:03 features of leases
7:05 so when walton's father-in-law found out
7:08 about this oversight he was shocked that
7:10 sam could have made such a mistake
7:11 walton had not only built one of the
7:14 most successful businesses in newport
7:16 but he had invested his body and soul
7:19 into the business and the town and his
7:21 wife helen equally loved the town as
7:23 three of their four children were born
7:26 there in his autobiography sam walton is
7:28 quoted saying it was the lowest point of
7:32 my life i felt sick to my stomach i had
7:33 built the best variety store in the
7:36 whole region and worked hard in the
7:39 community done everything right and now
7:41 i was being kicked out of town
7:44 after being kicked out of his own store
7:47 sam walton was eager to start again but
7:49 this time he was determined to do it the
7:52 right way and better than ever he began
7:54 to search for a new destination to buy
7:56 another store until he found one in the
7:59 tiny community of bentonville arkansas
8:01 it was here where walton set up his
8:03 second shop in the town square and this
8:07 time he insisted on a 99-year lease
8:09 sam opened his new store in the summer
8:12 of 1950 and called it walton's five and
8:15 dime the walton family often heard
8:17 people whisper amongst themselves saying
8:20 well we'll give this guy 60 days maybe
8:23 90. he won't last that long but sam
8:25 would prove them wrong
8:27 at the time there were two other variety
8:29 stores in town but neither of them
8:31 offered the consistent low prices that
8:34 walton did so when walton finally opened
8:36 his store it changed the lives of the
8:39 people in the bentonville community
8:41 during the 50s america's economy was
8:44 looking great and sam took advantage of
8:47 it he kept finding new ways to reduce
8:48 the prices of his goods and keep his
8:50 customers happy
8:52 one day walton learned about
8:54 self-service in the retail industry
8:56 the concept was simple rather than have
8:58 his sales clerks get goods for his
9:00 customers customers could walk into the
9:03 store get the goods themselves and pay
9:06 at the entrance walton immediately fell
9:08 in love with the idea this meant he
9:10 could have fewer employees and further
9:13 reduce the cost of his goods not only
9:15 did this new trick work perfectly but it
9:18 also tripled his income in less than a
9:20 year with more money sam had the funds
9:23 and resources to further expand his business
9:24 business
9:26 for the next few years sam went on to
9:29 open one store after another and by the
9:31 end of the 1950s walton was a proud
9:34 owner of 15 stores which he had acquired
9:36 using borrowed money and profits from
9:39 his stores but sam still felt that he
9:40 wasn't making as much profit as he
9:42 should for the kinds of work he was
9:45 putting into his business so he decided
9:47 to adopt a new strategy and this new
9:59 we exist to provide value to our
10:01 customers which means that in addition
10:03 to quality and service we have to save
10:05 them money
10:07 walton's idea was to build big stores
10:09 that discounted everything they stocked
10:12 and to place them in small towns by
10:14 dramatically slashing his prices he
10:16 would undercut his competitors and make
10:18 up the difference in price through a
10:20 higher volume of sales this idea was
10:22 already being practiced across the
10:24 country but the difference was that the
10:26 discount stores tended to be small and
10:29 were located in the cities and most of
10:30 them only offered discounts for a
10:34 specific items not their entire stock it
10:36 was risky and he needed a lot of money
10:38 to make it work
10:39 sam initially approached the company
10:41 that franchised ben franklin stores with
10:44 his idea but they refused to back him
10:46 especially because his idea meant that
10:47 they would have to cut their standard
10:50 wholesale margin in half to accommodate
10:52 the low prices he wanted to charge
10:55 with nowhere else to go walton decided
10:57 to take a big gamble
10:59 he mortgaged his home borrowed a whole
11:01 lot of money and opened his first
11:04 walmart store in rogers arkansas in 1962.
11:06 1962.
11:08 customers were thrilled that they didn't
11:10 have to travel all the way to the city
11:12 to get discount prices on goods they
11:14 flocked to walmart's stores in droves
11:16 and the company's sales rose
11:19 tremendously in those years sam kept
11:21 learning from his competitors and
11:23 developed new ways to further reduce the
11:25 prices of his goods he replaced the
11:27 wooden shelves in his stores with metal
11:29 ones as they were cheaper and more
11:32 durable another strategy he came up with
11:34 was to keep his stores open for longer
11:36 hours than his competitors this was
11:39 something only walmart was doing and it
11:41 helped him generate more money he also
11:43 made sure his customers had big parking
11:46 lots and unlike his competitors he never
11:48 collected a dime for parking spaces
11:52 until 1969 sam walton had funded the
11:53 expansion of his business through
11:56 profits and borrowing money but in 1970
11:59 he decided to take the company public
12:02 the initial offering generated about 5
12:04 million dollars and allowed walton and
12:07 his family to retain about 61 ownership
12:09 of the stock the money afforded walton
12:11 the opportunity to pay off the debts he
12:13 owed to banks to pay back loans from
12:15 friends and to move forward with his
12:20 next ambitious plans for the country [Applause]
12:20 [Applause] [Music]
12:29 between 1970 and 1971 walmart added six
12:31 more stores followed by another 13
12:34 stores in each of the next two years
12:38 then 14 and then 26 by the end of 1980
12:41 walmart had a total of
12:44 276 stores and from then on they were
12:47 opening about a hundred stores per year
12:49 sam believed that the rapid growth of
12:50 walmart didn't just come down to their
12:53 low costs that attracted customers but
12:55 was also due to the work of his close
12:57 associates sam made his associates
12:59 partners and made sure that they
13:01 benefited from cash bonuses and stock
13:04 options and this gave them a chance to
13:06 take part in the growth of his business
13:08 walton also made sure that his stores
13:10 were close to warehouses in order to
13:13 permit one day delivery of goods while
13:16 also minimizing advertisement costs
13:18 another innovation was the decision to
13:20 buy directly from manufacturers rather
13:22 than through wholesalers which allowed
13:25 him to lower his prices even more by the
13:28 end of the 1970s walton had built his
13:30 store into the fastest growing and most
13:33 influential force in the retail industry
13:35 things were going so great for the
13:38 company that one investor who bought 1
13:42 650 worth of walmart shares in 1970 saw
13:45 his shares rise over 700 000
13:48 by 1987.
13:51 in 1983 walton made another terrific
13:53 business move he launched the first of
13:55 his sam's wholesale clubs which were
13:57 aimed at small business owners and
14:00 others who wish to buy goods in bulk
14:03 once again walton had struck gold and by
14:06 1990 walmart had more than 1 000 stores
14:09 and 150 000 employees working for the
14:12 company but sam had his fair share of
14:15 people and groups who disliked him and
14:18 his retail business he has often been
14:20 criticized for competing with small
14:21 retailers and putting them out of business
14:22 business
14:25 sam walton himself acknowledged this by saying
14:26 saying
14:28 the small stores were just destined to
14:30 disappear at least in the numbers they
14:32 once existed because the whole thing is
14:35 driven by the customers who are free to
14:37 choose where to shop
14:39 sam walton died on the 5th of april
14:42 1992. he was 74 years old and at the
14:45 time of his death walmart had annual
14:49 revenues exceeding 104 billion dollars
14:52 today walmart has grown to over 10 500
14:55 stores and generates well over half a
14:58 trillion dollars in revenue per year
15:00 that's all for today hope you enjoyed
15:02 the video and don't forget to like and
15:04 subscribe until then i'll see you next time
15:05 time [Music]
