I enjoyed the book Sam Walton: The Inside Story of America’s Richest Man.
Every morning for the past few weeks I’ve been reading a few pages from it. Now that I finished it, here are some interesting things I remember:
Sam’s favorite phrase and one that he credited his success to was “MBWA,” or “Management By Walking Around.”
Disdain for Opulence
For many years Sam Walton was the absolute richest man in the world. But Walmart never had a fancy headquarters office, Sam drove an old battered pickup truck, and he wore suits and clothes purchased from his stores.
Sam Walton was extremely good at selling things to people. He changed the face of American retail. In the 1970s, Sears was #1 and K-Mart was #2. Sam cut his teeth in the small-town cities of Arkansas. As soon as they had a formula for mass merchandising in Walmart, they scaled it across America.
Estate Planning by Sam Walton
In the 1950s, when Sam was just beginning his retail empire with a few five-and-dime stores, he gave each of his children equal shares in his business. Sam divided up his tiny empire into five parts, giving each child 20%, and keeping 20% for him and his wife.
“The transfer of ownership [in the partnership] was made so long ago that we didn’t have to pay substantial gift or inheritance taxes on it… The principle behind this is simple: the best way to reduce paying estate taxes is to give your assets away before they appreciate.”
Married Very Well
Sam’s father-in-law helped him several key times with business advice and loans in his early days as a merchandiser. He also gave Sam the estate planning advice which saved the Walton family billions of dollars in taxes.
Use of Private Planes
Wal-Mart would never have taken off without private aviation. Sam Walton was a private pilot and used his airplane to travel around Arkansas and neighboring states to visit his stores, scout new locations, and recruit staff.
Walmart was based in Bentonville, Arkansas, and in the early days there was no interstate highway there. An early road trip to visit another store could take 8 hours, but a short plane flight could cut that down to 1 hour.
Sam flew a lot in his own Cessna 414, which looks like this:
Ben Franklin Variety Stores
Sam got his start by first owning a franchise location of a Ben Franklin variety store, which was a five and dime small-town convenience store. (Maybe similar to a large bodega or CVS.)
Sam Walton’s Predictions in 1990 for 2000
Sam made some predictions in 1990 for the year 2000 that were remarkably accurate.
- Prediction: In the year 2000, there would be 3335 total locations / discount stores and $129 billion in annual sales.
- Reality: In the year 2000, Walmart’s total sales were $165 billion dollars. They had 3,477 locations: 1104 of these were Supercenters, and 512 Sam’s Clubs.
- This unauthorized biography was released in 1990, three years before Sam Walton’s official biography came out.
- This book was written around the time that Walmart was first experimenting with selling food in “Hypermarts” and “Super Walmarts.”
- Made in America, Sam’s official biography, is awesome. Everyone with an interest in business should read it. I should re-read it.
- Wal-Mart vs Walmart: I believe they removed the hyphen a few years ago, for logo and branding purposes.
- I found this book in a small coffee shop in Charleston, South Carolina called Black Tap Coffee. It was available for free as a part of a distributed library / community share system. Thank you to whoever set this up!
I greatly enjoyed Inside Info about Sam Walton. I would recommend it to anyone who is interested in business.
Sources and More Info
- Sam Walton died in 1992. His official biography, Sam Walton: Made In America, came out in 1993. It is a great book!
- Great article about Wal-Mart’s use of business aviation.