Walmart vs. The World: Why They Can't Be Stopped

He started as a franchisee.

In September of 1945, fresh out of the army, he borrowed $20,000 from his father-in-law and he bought what was called a Ben Franklin Variety Store in Newport, Arkansas.

These guys aren't around anymore.

The store was losing money, and within a few years, he had turned it into the best performing Ben Franklin store in the state.

Then he lost it.

When the lease came up, the landlord refused to renew it, and Walton, who had never negotiated a renewal clause in his life, he had to hand over a thriving business that he had built from nothing.

Think about this.

How many great business strategies you know of were really born from getting burned once badly on a detail that somebody else controlled? I mean, for my business owners out there, we make mistakes.

We learn about things that we had no idea about all the time.

And the key is to understand these things are going to happen.

What matters is what you learn from them and how you avoid these pitfalls going forward.

So Walton, what did he do? He started over in Bentonville, Arkansas, around 1950.

His wife, Helen, preferred small towns, and that preference quietly became a staple strategy for Walmart.

By 1962, he ran 16 Ben Franklin stores across Arkansas, Kansas, and Missouri, the largest chain of that franchise in the whole country.

And he had also noticed something.

He had come to believe, this was his thesis, that small town customers would trade a fancier store for a lower price.

And he took the idea to Butler Brothers, the company that supplied Ben Franklin, and he proposed a discount format.

And they said, no, not interested.

So Walton, what did he do? Did he hang it up and, you know, quit and go get a W-2 job? No, he went and did it himself.

And so on July 2nd, 1962, he and his brother Bud opened Walmart Discount City in Rogers, Arkansas.

And the first year it sold $975,000 worth of goods.

Now look at the setup, okay? Kmart, the same year, was building big stores out in the suburbs with the backing of a major corporation.

And Walton's company was a handful of stores in towns that the big chains had kind of written off as too small to bother with.

And that is the first reason Walmart survived against a beast in the form of Kmart.

Walmart picked the fight that nobody else wanted.