1572 billion dollars,
2that's how much revenue Walmart generated in 2021.
3With over 2 million people working for the company,
4it is the largest employer in the world and the biggest retailer in terms of sales.
5But building such an empire was no easy feat.
6It all started when a poor farmer who after being told he had no career in the retail business
7decided to open his own store.
8Sam Walton was born on the 28th of march 1918 in Kingfisher, Oklahoma.
9His father Thomas Walton was a farmer
10but the farm wasn't generating enough money to provide for his family.
11Because of this, the family traveled around the country looking for greener pastures,
12moving from one state to another until they finally settled in Columbia, Missouri.
13Around this time, Sam had become a teenager.
14He helped the family by working a variety of small jobs.
15He also watched his mother start up a fairly successful milk business
16that involved him milking cows and delivering the milk to customers in the neighborhood after his football practice.
17His parents taught him the value of hard work
18and also just how much work it took to make a single dollar.
19But things weren't great at home for Sam.
20His father, Thomas, was almost never with the family
21as he was always on the road trying to make extra money where he could.
22Because of this, Thomas's relationship with his wife worsened every year.
23In fact, in his autobiography, Sam described his parents as the two most quarrelsome people to ever live together.
24To escape the troubles at home, Sam engaged himself in sports,
25joined the boy scouts and took several leadership roles that kept him busy.
26Sam graduated from David H Hickman High School in 1935
27and decided to attend the university of Missouri to take his first steps into the business world.
28While in school, he worked many odd jobs to support himself
29including delivering newspapers and waiting tables in exchange for meals.
30Upon his graduation in the spring of 1940, Sam would get his first taste of the retail industry.
31He got himself a job as a sales trainee at J.C Penney,
32which back then was just a small shop in Des Moines, Iowa.
33His starting pay was $75 a week
34but this job did not go smoothly for Sam
35and he was seen as one of J.C Penney's worst employees.
36One thing counting against him was that his bookkeeping was terrible
37because he hated making his customers wait while he fussed with paperwork.
38As a matter of fact Sam's boss threatened to fire him at one point
39and even told him that he had no career in the retail business.
40The only thing that saved Walton was his gift for salesmanship
41which earned him an extra $25 a month in sales commissions.
42When the Second World War reached America in 1941,
43Walton was eager to play a role in it.
44He quit his job the following year and joined the US army.
45The army recognized Sam's natural leadership skills
46and selected him to become a member of the military's intelligence corps
47where he rose to the position of captain.
48The military stationed Sam in Oklahoma in April of 1942
49where he met his future wife, Helen.
50And after a short period of dating, they got married on valentine's day in 1943.
51By the time the war was over in 1945,
52Walton had a wife and child to support
53and so, he decided to start up his own retail business
54with a $20,000 loan from his father-in-law
55and $5000 from his own savings.
56Sam bought a Ben Franklin store in Newport, Arkansas.
57It's important to note that millions of small stores had failed during the course of the 20th century in America.
58And when Sam bought this particular store, it was losing a lot of money.
59Not only did Sam invest in a store that wasn't bringing in much money
60but he was also paying far too much for it.
61The rent for the store was 5% of the sales.
62And initially, this sounded fine to Walton
63but after signing the lease
64he discovered that it was the highest rate anybody had ever paid for a variety store business.
65Despite all of his obstacles, Sam succeeded beyond everyone's expectations.
66He studied all the typical rules of retail
67and then broke the ones he thought didn't make sense
68which for him was nearly all of them.
69When Sam bought the Ben Franklin store
70he was required to buy all his goods from company outlets
71but he knew he could find cheaper merchandise elsewhere.
72So he found a clause in his contract that allowed him to buy his merchandise from somewhere else
73and then he would reduce the cost of his goods way below what other shops were selling them for.
74He made his profit on volume rather than margin
75but it took him nearly a decade to fully appreciate the power of that idea.
76Nothing Sam did was extraordinary, neither was he a genius.
77And while there's no question that he was business smart.
78The real reason for his success was his main policy to make the lives of his customers easier.
79And because he did that, more and more people bought from him.
80Once things were going great for Sam and his business,
81he asked his brother, Bud, to join him
82and together they were able to run the store more smoothly.
83The Butler brothers, who owned the store Sam had leased
84were not happy with the fact that the Waltons were getting their merchandise elsewhere
85but they couldn't say much about it.
86Because the numbers Sam was generating were unmatched anywhere,
87his sales had increased by more than 45%
88reaching $105,000 in his first full year of ownership.
89The following year, the number increased again to $140,000.
90And by the third year his sales increased by another 25%
91reaching $175,000 after only three years in the business.
92Sam was able to repay the 20,000 dollar loan his father-in-law gave him in full.
93And two years later Sam had become the leading variety store owner in Arkansas
94and likely in the neighboring states as well.
95But the truth is, it wouldn't matter anyway
96because the business was destined to fail.
97You see, when Sam Walton signed the lease for his store back in 1945,
98it contained no renewal clause.
99Options to renew were typically standard features of leases.
100So when Walton's father-in-law found out about this oversight,
101he was shocked that Sam could have made such a mistake.
102Walton had not only built one of the most successful businesses in Newport
103but he had invested his body and soul into the business and the town.
104And his wife, Helen, equally loved the town
105as three of their four children were born there.
106In his autobiography Sam Walton is quoted saying:
107"it was the lowest point of my life, I felt sick to my stomach."
108"I had built the best variety store in the whole region and worked hard in the community,"
109"done everything right and now i was being kicked out of town."
110After being kicked out of his own store
111Sam Walton was eager to start again
112but this time he was determined to do it the right way and better than ever.
113He began to search for a new destination to buy another store
114until he found one in the tiny community of Bentonville, Arkansas.
115It was here where Walton set up his second shop in the town square
116and this time he insisted on a 99-year lease.
117Sam opened his new store in the summer of 1950 and called it Walton's Five And Dime.
118The Walton family often heard people whisper amongst themselves saying:
119"well, we'll give this guy 60 days, maybe 90, he won't last that long".
120But Sam would prove them wrong.
121At the time, there were two other variety stores in town
122but neither of them offered the consistent low prices that Walton did.
123So, when Walton finally opened his store,
124it changed the lives of the people in the Bentonville community.
125During the 50s, America's economy was looking great
126and Sam took advantage of it.
127He kept finding new ways to reduce the prices of his goods and keep his customers happy.
128One day, Walton learned about self-service in the retail industry.
129The concept was simple,
130rather than have his sales clerks get goods for his customers,
131customers could Walk into the store get the goods themselves and pay at the entrance.
132Walton immediately fell in love with the idea.
133This meant he could have fewer employees and further reduce the cost of his goods.
134Not only did this new trick work perfectly
135but it also tripled his income in less than a year.
136With more money, Sam had the funds and resources to further expand his business.
137For the next few years, Sam went on to open one store after another.
138And by the end of the 1950s, Walton was a proud owner of 15 stores
139which he had acquired using borrowed money and profits from his stores.
140But Sam still felt that he wasn't making as much profit as he should
141for the kinds of work he was putting into his business.
142So, he decided to adopt a new strategy
143and this new strategy would change everything.
144"We exist to provide value to our customers"
145"which means that in addition to quality and service we have to save them money."
146Walton's idea was to build big stores that discounted everything they stocked
147and to place them in small towns.
148By dramatically slashing his prices,
149he would undercut his competitors and make up the difference in price through a higher volume of sales.
150This idea was already being practiced across the country
151but the difference was that the discount stores tended to be small
152and were located in the cities
153and most of them only offered discounts for specific items, not their entire stock.
154It was risky and he needed a lot of money to make it work.
155Sam initially approached the company that franchised Ben Franklin stores with his idea
156but they refused to back him
157especially because his idea meant that they would have to cut their standard wholesale margin in half
158to accommodate the low prices he wanted to charge.
159With nowhere else to go, Walton decided to take a big gamble,
160he mortgaged his home, borrowed a whole lot of money
161and opened his first Walmart store in Rogers, Arkansas in 1962.
162Customers were thrilled that they didn't have to travel all the way to the city to get discount prices on goods.
163They flocked to Walmart's stores in droves and the company's sales rose tremendously.
164In those years, Sam kept learning from his competitors
165and developed new ways to further reduce the prices of his goods.
166He replaced the wooden shelves in his stores with metal ones
167as they were cheaper and more durable.
168Another strategy he came up with was to keep his stores open for longer hours than his competitors.
169This was something only Walmart was doing and it helped him generate more money.
170He also made sure his customers had big parking lots
171and unlike his competitors, he never collected a dime for parking spaces.
172Until 1969, Sam Walton had funded the expansion of his business through profits and borrowing money
173but in 1970, he decided to take the company public.
174The initial offering generated about 5 million dollars
175and allowed Walton and his family to retain about 61% ownership of the stock.
176The money afforded Walton the opportunity to pay off the debts he owed to banks
177to pay back loans from friends
178and to move forward with his next ambitious plans for the country.
179Between 1970 and 1971, Walmart added six more stores
180followed by another 13 stores in each of the next two years.
181Then 14 and then 26.
182By the end of 1980, Walmart had a total of 276 stores
183and from then on they were opening about a hundred stores per year.
184Sam believed that the rapid growth of Walmart didn't just come down to their low costs that attracted customers
185but was also due to the work of his close associates.
186Sam made his associates partners and made sure that they benefited from cash bonuses and stock options
187and this gave them a chance to take part in the growth of his business.
188Walton also made sure that his stores were close to warehouses
189in order to permit one day delivery of goods
190while also minimizing advertisement costs.
191Another innovation was the decision to buy directly from manufacturers
192rather than through wholesalers
193which allowed him to lower his prices even more.
194By the end of the 1970s,
195Walton had built his store into the fastest growing and most influential force in the retail industry.
196Things were going so great for the company
197that one investor who bought $1650 worth of Walmart shares in 1970
198saw his shares rise over $700,000 by 1987.
199In 1983 Walton made another terrific business move.
200He launched the first of his Sam's wholesale clubs
201which were aimed at small business owners and others who wish to buy goods in bulk.
202Once again Walton had struck gold
203and by 1990, Walmart had more than 1000 stores and 150,000 employees working for the company
204but Sam had his fair share of people and groups who disliked him and his retail business.
205He has often been criticized for competing with small retailers and putting them out of business.
206Sam Walton himself acknowledged this by saying:
207"the small stores were just destined to disappear, at least in the numbers they once existed"
208"because the whole thing is driven by the customers who are free to choose where to shop".
209Sam Walton died on the 5th of April 1992.
210He was 74 years old
211and at the time of his death, Walmart had annual revenues exceeding 104 billion dollars.
212Today, Walmart has grown to over 10,500 stores
213and generates well over half a trillion dollars in revenue per year.