FedMart

Before Walmart.

He was so influential that his company was called Fed Mart.

Walmart is called Walmart because Sam Walton wanted to make a tribute to Sol Price.

Yeah?

Uh, and so yeah, I don't, I don't think DTC brands actually have much D, T or C in them, you know? I just think it's a, it's a total misnomer, but they could be.

They could be so powerful.

Do you know of other great examples, just like Fed Mart, in the modern day who go out of their way to give their customers a great experience?

I'll give you an example of a company, Costco.

But the overall enterprise is often liquidated as a result of the betrayal.

So, you know, in the book, I tell the story of FedMart, the famous original discount retailer in America created by Sol Price, the great Sol Price.

He built that company for more than 20 years and then one day found he could no longer enter his office because they had changed the locks on his door.

And it took the new investors who ousted him only seven years to drive the company into liquidation.

Why? Why do they want to change the person if that person is doing them a solid? What is that perversion? Yeah,

yeah, yeah.

In the case of FedMart, Saul Price, he believed in low prices and high wages.

That was his ethos.

So first I listened to the Costco one, which everyone said is like one of the best ones, which is amazing.

Like, you know a lot about Costco, but it goes into like how it really, really started like in the 20s, like the guy who started it, who started Price Club and FedMart, and how it evolved and became Costco and the DNA that's still in it and all of their... philosophies and like how they made the model work which I thought was fascinating and also like I do think there's some learnings for us um

okay

which I don't know so if you haven't listened to it totally recommend it it's like like the Costco model there's so many things about it but um one of the things that was kind of sticking to me was they limit their skew count which you know like they don't have a lot of options like you have one option

So to get a sense of how influential he was, when Sam Walton was thinking of getting into retail, he named his company Walmart.

As an intentional tribute to Saul's company, FedMart.

FedMart was a company that Saul started in the 1950s.

He had trained as a lawyer before he became an entrepreneur.

And as a lawyer, he was trained.

He was an early opponent of segregation.

He did so many things that are just the way we wish business would be.

And of course, as a result, customers trusted FedMart.

And we have many real-life natural experiments, including the predecessor to Costco.

The modern Costco is actually a spiritual descendant, if you will, of a company created by a guy named Saul Price, who founded something called FedMart.

And FedMart is the ultimate natural experiment.

to prove that this theory is true, because he built the company for like 20 or 25 years on this simple formula, fiduciary to the customer, not to shareholders, 14% capped margins, so lowest price, and treating everybody in such a way that you would be seen as trustworthy.

Trustworthiness as an asset is how I talk about in the book.

So it goes back to the company's founding.

The precursors to Costco, which were these companies called FedMart and Price Club, were started by a guy named Sol Price.

He just believed that there was gonna be this virtuous cycle.

If you paid workers more than competitors, so you would hire better people and you would engender more loyalty, your labor costs would actually go down.