em, but because I was selling three times as many, the overall profit was much greater. Simple enough, but this is really the essence of discounting: by cutting your price, you can boost your sales to a point where you earn far more at the cheaper retail. Sam's adherence to this pricing philosophy was unshakable, as one of Wal-Mart's first store managers recalls: "Sam wouldn't let us hedge on a price at all. Say the list price was $1.98, but we had paid only 50 cents. Initially, I would say, 'Well, it's originally $1.98, so why don't we sell it for $1.25?' He'd say, No. We paid 50 cents for it so mark it up 30 percent, and that's it. No matter what you pay for it, if we get a great deal, pass it on to the customer.' And of course that's what we did." Moreover, that's what we continue to do - work diligently to find great deals to pass on to our customers. Some will argue that Walton's plan was, and Wal-Mart's plan even today, is to drive all competition out and raise prices for even larger profits. In essence, become a monopoly similar to the previous small-town merchants. The argument is mute though because a true free market will not allow this to occur. Someone will come in to fill the new vacuum that will be in existents. Just like Sam Walton did with Wal-Mart. Walton also saw a large segment of the country, although widely dispersed in small towns, being totally inconvenienced by the big retailers. Yet the treatment by the people who owned the small-town stores who were neighbors, and sat in the same pew on Sundays was even worse in Sam's eyes, it was unconscionable. He could not understand how neighbors could treat one another in such a way over profitability. It was not right and he would make sure people were treated like friends and family when they came into a Wal-Mart. Respect Your Competition and Steal Their Ideas Sam Walton from the very beginning would scope out his competitors. When he would go to a competitor's store, it...
