The Wall Mart Effect by Charles Fishman

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Wal-Mart’s tagline is “Always Low Prices” and they actually live up to this and have low prices all the time.

Everyone is always curious, “How do they do that?” That’s exactly what I wanted to know.

The Wall-Mart Effect { book cover }So, a week ago I finished reading one of the best books on Wal-Mart, The Wall-Mart Effect by Charles Fishman.

The book explores the impact of Wal-Mart’s ‘Always Low Prices’ in depth on employees, customers, suppliers and even competitors. Each chapter covers case studies from real life experiences of people who have been directly or indirectly affected by Wal-Mart. The book also tries to answer questions, such as: Is Wal-Mart good or bad for us? How does Wal-Mart always get low prices? How does Wal-Mart affect you even if you did not shop there? How do businesses cope with the low prices on their premium products at Wal-Mart? How does Wal-Mart impact US inflation? These are just some of the questions Fishman tries to answer.

The book also does an excellent job in covering the history, mission and vision of Sam Walton and his stores. Sam Walton emphasized ‘efficiency’ and always having low prices even if it hurt the business in short-term. Eventually the stores made profits from repeat customers, because customers loved these low prices. What about Wal-Mart’s efficiency? The efficiency of Wal-Mart is no much to its competitors. Wal-Mart knows ‘efficiency’ better than any other company. You either match up to their speed of business efficiency, or else you will be left in the dust bleeding to death.

Wal-Mart trivia: How much does Wal-Mart make in a month (gross profit)? Take a guess…

Answer: $20,000 per minute. That’s right, per minute. So let’s do a little math, $20,000X(24 hours*60 minutes) = $28,800,000/per day. Per Week = $28,800,000X7 days=$201,600,000. Per month=$201,600,000X4 weeks=$864,000,000.

So, Wal-Mart makes roughly $864 million a month. Is that good or bad for us? Is that good for Wal-Mart? These are some of the questions that you will come across in this book.

You can read some excerpts from the book at Fishman’s web site. For example, there is a book excerpt: “Chilean Salmon for $4.84 a pound?” or “The Man Who Said No to Wal-Mart” which you might want to read before spending any money on buying the book.

I highly recommend it, if you are interested in getting to know the largest and the most powerful company in the world history (in 2006 they fell to #2 because of ExxonMobile’s profits from rising oil prices) and the largest employer in the US after the U.S. government — Wal-Mart.

Note: My previous calculation of Wal-Mart’s monthly gross profit was screwed up. Thanks to Mr. Fishman for pointing this out. The correct figures are now incorporated to this post. Note to self: gotta freshen up on math. :) { 8/17/2006 }