FedMart

For years, he's been crisscrossing America, piloting his single-engine plane from town to town, scouting out new discounters that are starting to pop up in remote corners, drawing in customers who crave cheap goods.

and in Hope on the East Coast, and saw a price out in San Diego with his FedMart store.

Drilling them with questions, Sam writes in his yellow legal pad.

Flipping the page, he fills it up with everything that he sees.

From Sam's book, we do get an inside advantage into what he's thinking.

You see, 45 pages later, he says, the reason I went for it right away wasn't that the sign was cheaper.

I really like Sol's FedMart name.

So I latched right on to the Walmart sign.

He was the first to figure out the formula.

So FedMart was a company he started in the 1950s, and before Sol Price was an entrepreneur, he was a lawyer, and when he was a lawyer, he said, "I am a fiduciary to my client.

That's how I was trained." Being a fiduciary means you put the client's interest before your own.

So when you would shop in a FedMart, sometimes he would put up signs with his competitor's advertisements in them to let you know that you could get a certain product cheaper from somebody else, and every time he did that, people thought he was crazy.

"He's giving up money.

He's helping a competitor.

They wanted more profit.

They got what they wanted.

The benefit of this is that Costco warehouses have much, much lower prices than grocery stores, drug stores, pharmacies, and things like that.

James Sinegal was born in nineteen thirty-six in Pittsburgh, Pennsylvania, and at the age of eighteen, he became a grocery bagger at FedMart.

He actually really enjoyed grocery bagging, and he sort of set it forward as what he wanted to do.

From FedMart, he eventually worked his way up to be the vice president of the company.

Then from there, he started bouncing around from business to business, acting as a vice president, helping them with marketing and management.

In nineteen eighty-three, he founded Costco.

Price Club really didn't have all those options.

And it may be confusing as to why Sol Price helped start Costco when he was running Price Club.

He is so influential, just to get a sense of it, when Sam Walton was thinking about getting into retail.

He named his company Walmart as an intentional tribute to Saul's company, FedMart.

Saul started FedMart in the 1950s with a very simple concept.

It was a membership store for members only, discounted prices, 14% cap margins.

He believed in paying high wages, low prices.

So there's a lot of these famous Sol stories.

They're like, they're awesome.

One of my favorites is that if a competitor would try to drive FedMart out of business by undercutting Sol on price, Saul would put up signs inside his own store saying, don't buy this product from me.

Sam, he didn't know Cunningham at the time, but their two paths will weave back and forth over the top of one another for decades.

On the other side of the country is Saul Price, who had started FedMart five years before in 1955 and is also a great inspiration for Sam.

For two years, he flies coast to coast, visiting every store and talking to anybody who would respond, filling up his yellow legal pad, idea after idea.

Now, raising the stakes closer to home, a gentleman by the name of Herb Gibson.

They've never marketed.

The only time that they marketed was pre their history when Sol Price was at FedMart and he started marketing.

I mean, Price Club didn't do it afterwards, and Costco, I mean, it was afterwards they merged with Price Club, but they've never marketed.

They've been able to do it because the way they operate allows them to do such a good job that's so different and unique from everybody else, the value proposition I'm talking about, that everybody who's a customer, I mean, they just sing the company's praises.