Sam Walton: Made In America Mass Market Paperback – June 1, 1993

Great easy read. More business leaders and politicians should pick up this book. Makes you want to shop at Walmart more.

Sam Walton is really inspiring me in many ways, in living frugal and spending money wisely, in working hard committedly and relentlessly, in learning from many sources-copying idea here and there with yellow-pad notes and tape recorder-implementing it right away, in managing his teams and treating team as equal partners, and in being a family man despite of his workaholic nature.Wal-Mart proves that no single factor contributes to a company's success. It started out with a passion to compete and a love for retailing business. It is getting bigger because of its core value to always deliver the best value for the customers. It copied best practice here and there and implemented it in Wal-Mart in their own way to increase their customers' experience. They also invest heavily in their associates so that their customes get the best service at their stores. At last, they build such strong distribution centers using technology when investing in technology was not really a popular decision back then. This book released in 1993, so the tech invesment was really advance at that time.In one of the chapter, Sam said that he guessed Wal-Mart will achieve USD 100bio in sales by 2000. It did generate those revenue amount, even 30% higher, in 2000. Nowadays, in 2021, it even achieves more than 3 times of its 2000 revenues. I am really amazed with its growth although we also need to evaluate how it performs compared to Amazon these days.At last, for you who is looking for business guru, this book can be one of your inspiration. In one of the chapters, you can find 10 business rules stated by Sam Walton. If you're looking for a role model in career and in life, this is the right book for you.I couldn't find anything I dislike from this book, except that it is quite long, 317 pages, and I couldn't stay put in one book for too long. I have to admit that this book give me a lot of emotion. In the beginning, it brought out the ambitious and idealistic me. In the very end of the book, it led me to contemplate the meaning of life and make a promise to live a without-regret-life. His optimism and willingness to contribute even in deep illness brought me into tears. He is definitely one of my role model in life and career. Finishing this book felt like bidding farewell to a very inspiring mentor, very saddening. Rest well, Sam.

“With the possible exception of Henry Ford,” Tom Peters wrote in his landmark book “Search for Excellence: Lessons from America's Best-Run Companies” (1982), “Sam Walton is the entrepreneur of the century.” That’s pretty high praise – and well-deserved.The story of Sam Walton and his kingdom of giant, low-priced Walmart stores is incredible on multiple levels. First, Sam pioneered almost nothing during his half century as a discount retail merchant. “You can learn from anybody,” he liked to say, and Walton was good to his word – he shamelessly “borrowed” good ideas anywhere he found them and then just out-hustled everyone else. Second, Sam became the richest man in America by running one of the largest revenue-generating companies in the history of capitalism, and did it completely from rural Arkansas by selling cheap pantyhose at a twenty-percent markup for four for a dollar. This simple, but nevertheless astounding story is all told brilliantly in Sam’s folksy vernacular in “Sam Walton: Made In America” (1992), a smash hit that the discounting entrepreneur churned out quickly in the final months of his life with the help of John Huey. Three decades after it hit bookshelves in 1992, it’s safe to say that “Made in America” is, without a doubt, one of the greatest business autobiographies of all time alongside such classics as Alfred Sloan’s “My Years at General Motors” (1964) and Ray Kroc’s “Grinding It Out” (1977).Sam Walton was born in Kingfisher, Oklahoma in 1918. He grew up during the Depression in genteel poverty. From an early age he showed an incredible competitive streak and will to win, whether it was selling the most magazine subscriptions around town or leading his high school football team to the Missouri state championship. That relentless drive and the need to win would drive him to the very top of corporate America. Sam graduated from the University of Missouri with a degree in economics in 1940 and briefly served as a management trainee at J.C. Penney, which served as his almost accidental introduction to the retailing business, before serving stateside during World War II because of a minor medical condition.In 1943 Sam married Helen Robson, a decision that would prove fundamental for his future business success for two very different reasons. First, Sam’s new father-in-law was relatively prosperous and was able to extend his daughter’s new husband significant no interest loans (almost $500,000 in today’s dollars) so he could start out in the retail industry. Second, Helen was adamant that their new family live in towns with a population of less than 10,000 so their future children would have a rural and close knit experience like both Sam and Helen had enjoyed. The combination of easy access to no risk starter capital and homesteading in rural southern towns proved pivotal in the founding of Walmart.Immediately after the war, Sam bought a Ben Franklin variety store franchise in Newport, Arkansas with the financial help of his father-in-law. Sam increased sales from $80,000 to $225,000 in just three years. It was during this time he started to mull the idea of a dedicated discount retailing operation (i.e. a fully self-service low priced retailer who took 30 percent margins rather than the variety store standard of 45 percent), but it took over a decade to fully gestate the concept. In the meantime, Sam’s success with the previously moribund variety story was so remarkable that the landlord refused to renew his five-year lease in order to maneuver the now successful operation to his son. Getting out maneuvered and shafted like that “was the low point of my business life,” Sam later said. He would never forget the humiliation of being sent packing from Newport, but that defeat ultimately landed him in tiny Bentonville in northwest Arkansas (conveniently located with easy access to four quail hunting seasons in four states) where he embarked upon his second act in retail owning a variety store on a small southern town square.Walton’s Five and Dime opened in Bentonville in 1950. It was actually a Ben Franklin variety franchise with a thin Walton wrapper. Sam was slowly experimenting with in-store self-service and purchasing his own inventory directly from suppliers and then marking down the goods to half the margin a normal variety store would charge. “We were innovating, experimenting, and expanding,” Walton writes, by which he really means they kept incorporating any good ideas they could find at other retailers (“most everything I’ve done I’ve copied from somebody else,” he admits). Most importantly, he discovered that you could make wild profits on thin margin products if you blew the merchandise out the door. By 1960, Walton had fifteen variety stores with total sales of $1.4 million. Even those paltry numbers were enough to make him the largest independent variety retailer in the United States.The discounter concept would finally come to fruition when Sam, aged forty-four, opened the first Walton Discount City in Rogers, Arkansas in 1962. The taglines were “Everyday Low Prices” and “Satisfaction Guaranteed.” They remain unchanged over half a century later. The first Walmart was just 18,000 square feet (the average Walmart store today is 150,000 square feet). Amazingly, that same year three other major discount retailers also firt opened their doors: Woolco (owned by Woolworth’s) in Columbus, Ohio, Target (owned by Dayton Company) outside St Paul, Minnesota, and Kmart (owned by Kresge) in Garden City, Michigan. The Retail Discounter Revolution was on – and for a long time Walmart was way behind. Five years after opening, Kmart’s lead over Walmart was staggering: 250 stores driving $800 million in sales compared to Walmart’s 19 stores doing $9 million. Taken in context, Walmart’s ultimate victory has to be one of the greatest come-from-behind victories in the history of global capitalism.Two parts of Walmart’s eventually successful strategy were critical. First, they pursued a saturation strategy that slowly encompassed the full 350-mile radius around one of their regional distribution centers. Walmart kept “spreading out and filling in,” as Sam liked to say, often letting population centers build out to the new stores. Kmart took an opposite approach. They hopscotched across the country targeting communities with over 50,000 in population, creating farflung and inefficient distribution systems. Meanwhile, Walmart methodically grew adjacently and efficiently. Sam even flew his own plane around his territory scouting new locations from the air. Second, despite being an all-around low budget operation, Sam Walton invested heavily in computer systems to manage and improve logistics beginning the 1960s at the dawn of the computer age. Consequently, Walmart’s margins were significantly lower than less efficient retailers like Kmart which maintained uncomputerized supply chains that sprawled across the country. Walmart passed the savings along to customers, fundamentally beating the core competitions at the name of the game: everyday low prices.Walmart went public on the NYSE on October 1, 1970. The impetus for going public was primarily so Sam could pay down his personal debt of $2 million, which he had run up in support of Walmart’s aggressive expansion in the 1960s. In short, Sam was “tired of begging money from strangers,” so he sold twenty percent of his company to the public, kept another twenty percent for original investors and employees, and retained sixty percent for his family.Walmart had 32 stores and $31 million in sales when they hit the public markets. For many years Wall Street analysts doubted the plucky little retailer from rural Arkansas. The general consensus was that hedgehog-like Walton had developed one good and highly unanticipated trick – retailers could make good profits servicing small rural communities of less than 5,000. Sam says, “a lot of folks in the industry wrote us off as a bunch of country hicks who had stumbled onto this idea by accident.”’ Analysts expected Walmart to eventually wilt in the face of “real competition,” especially mighty Kmart, which dwarfed Walmart in terms of stores and sales during the 1970s. Most believed that Walmart would never amount to much more than a nifty little discounter serving sleepy hamlets across the South that everyone else happily ignored. Walmart didn’t come head to head against a Kmart until Walmart opened store number 52 in Hot Springs, Arkansas in 1972, a full decade after both discount retailers were established.Nevertheless, Walmart continued to grow relentlessly. Five years after going public sales hit $340 million across 125 stores staffed with 7,500 employees. Before the decade was out, Walmart surpassed $1 billion in sales with $41 million in profit from 276 stores with 21,000 employees. From 1977 to 1987, Walmart’s average annual return to investors was an astounding 46 percent. Walmart was growing by fifty stores a year when the competition was maybe putting in five or six.As Kmart and Woolco stagnated, Walmart continued to steal good ideas and expand. In 1983,Walmart opened their first Sam’s Club in Midwest City, OK, a retail model pioneered by Sol Price at Fed-Mart and then at Price Club. (“I guess I’ve stolen – I actually prefer the word ‘borrowed’ – as many ideas from Sol Price as from anybody else in the business,” Sam writes.) Five years after that, Walmart launched their first Supercenter combining groceries and general merchandise. By 1990, the little Arkansas retailer, which no one expected to leave the backwoods of the old Confederacy, had surpassed Sears to become the top retailer in the United States by revenue.What has been the secret to Walmart’s success? One reason, Sam says, is Walmart’s special relationship with their employees or “associates” as he likes to call them. “It’s the only reason our company has been able to consistently outperform the competition – and even our own expectations.” Sam says it’s important to treat all associates like owners. To that end, the single biggest regret of his professional life was not including associates in the initial managers-only profit-sharing plan when they took the company public in 1970. By 1992, roughly eighty percent of associates owned Walmart stock. In short, Sam argues that the way management treats associates will directly affect how associates treat customers, and satisfied, loyal, repeat customers are “at the heart of Wal-Mart’s spectacular profit margins.” If you treat your associates right, he goes on to say, you’ll save lots of time and money by not having to hire lawyers to fight the unions. Moreover, engaged associates are channels for new ideas inspired by grass-roots experience. Given Walmart’s notorious and persistent labor troubles over the past several decades it’s hard to tell if Sam is delusionally nostalgic, deliberately deceitful, or if times at Walmart stores has changed dramatically since the 1970s and 80s.A novel narrative device employed in “Made in America” are first-hand accounts taken from several important characters peppered throughout the Sam Walton story, including from his wife Helen, his brother Bud, his four children, and his many Walmart lieutenants and fellow retailing titans. These blurbs add context and color to a narrative often lacking the former and overflowing with the latter. One quote from David Glass, CFO of Walmart beginning in 1976 and later CEO from 1988 to 2000, is illustrative and particularly illuminating: “Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.” That tenacious desire to compete, improve and ultimately win is woven throughout the Sam Walton story. “I think my constant fiddling and meddling with the status quo may have been one of my biggest contributions to the later success of Walmart,” Sam writes. In contrast, in his recollection Kmart had become allergic to change by the 1970s. A sclerotic supply and distribution system combined with shoddy execution doomed the once high-flying discount retailer by the 1980s.So what exactly did Sam do to compete, improve and ultimately win at Walmart? The common denominator, he says, is taking care of the customer. “The secret of successful retailing is to give your customers what they want,” Sam says, “the customer is our boss.” And what Sam says the customer wants is a wide assortment of quality products at the lowest possible prices with satisfaction guaranteed at a store with free parking, convenient hours, and friendly, knowledgeable staff. I’ve never worked in retail, but I don’t know if anyone would argue that the global consumer would ever want the opposite of any of these things. Evidently the mid-twentieth century merchants with forty-five percent markups, limited selection and limited store hours saw things differently.A consistent theme in “Made in America” is that Sam loves competition. And it was the challenge of taking on and defeating the much better funded likes of Woolco, Target, and above all Kmart that drove Walmart’s dogged drive to efficiency in all facets of its business. Walmart’s sophisticated distribution network and computer-controlled inventory system, including early adoption of bar code and SKU item control and satellite communication in 1978, allowed stores to be replenished in two days or less when it was taking Kmart and others up to five days. At a company where executives are expected to share rooms at hotels on business trips and the billionaire founder flies coach, Walmart had invested over $700 million on computer systems by 1990. Sam states that costs at Walmart stores run less than three percent of goods shipped to their stores, compared to five percent at their competitors. The mathematical outcome is that if the stores charge the same prices Walmart will have a 2.5 percent better profit margin.By 1990, Walmart was generating $26 billion in sales and $1 billion in profit from 1,528 stores. Yet, for as big as Walmart had become, Sam insisted their success derived from continuing to “think small.” He notes that he encouraged management to think “one store at a time” and then think about having multiple stores within a store. “A computer can tell you down to the dime what you’ve sold,” he says, “but it can never tell you how much you could have sold.” You only learn that by keeping your ear to the ground and listening to your frontline associates. Like the German army in the interwar period, Sam relentlessly shifted responsibility and authority down to the lowest echelon, in Walmart’s case that is the department managers of each individual store. Each department manager is encouraged to be a real merchant; each department (i.e. home goods, sporting goods) is treated like a “store within a store.”“Made in America” ends with ten rules on Running a Successful Company. The recommendations are mostly simple platitudes like“COMMIT to your business, SHARE your profits, MOTIVATE your partners. It goes on with admonitions to COMMUNICATE, APPRECIATE, CELEBRATE, LISTEN, etc. The most original and likely most important rule comes last: SWIM upstream. In short, ignore the conventional wisdom and don’t be afraid to go the other way alone, the way Walmart did in pursuing a small town strategy whenever else believed that a town with less than 50,000 in population could never support a discount store for long.The book ends with Sam on his deathbed in 1992, dreaming that one day Walmart would achieve the almost unthinkable goal of achieving $100 billion in annual sales by the year 2000. As it turned out, Walmart achieved $165 billion in revenue that year. By 2002, Walmart had reached the top of the Fortune 500 list with $220 billion in sales. A quarter century later Walmart would be the largest employer on planet earth with 2.1 employees across over 10,500 stores. Sales would hit $638 billion in 2024.