SmallBusinessNewz

David A. Utter Writes..

Quote..

"Smith, like thousands of other small business owners, has no love of the global retailing behemoth that wrecked mom and pop businesses across the country."

End Quote..

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Before I lend my two cents to this topic, let me preface any statements that I "propose in this post" by saying that I do not consider Wal-Mart to be the patron saint of the retail community.

Sidenote..

I don't work for Wal-Mart, and I am not a Cheerleader for their corporate policies. 

In addition, I hate petty lawsuits and I am more then glad that the owners of Walocast and Wal-Qaeda were not legally harmed in anyway by their corporate lawyers.

And no, I am not a fan of their hiring practices either. One can make prominent points about their hiring and employment policies, but that is for another post, and a completely different discussion.

You can find all of the negativity you want about the Arkansas based retail giant by visiting this list of sites dedicated to the evils of all the stores that Sam built, by clicking here: Alexa: Sites In: Wal-Mart

I know that their buyers are tenacious negotiators and will try to get to the bottom - of your bottom line. You have to be on your game if you are a seller.

You need to know your price points and resist the temptation to cave into selling your product to them at cost or below, just to get your foot in Wal-Mart's door.

If your merchandise is considered "shelf worthy" then you better make sure it reaches their designated central distribution warehouse with little margin for error.

Experience a few lapses in your on time delivery performance and faster then you can say boomerang, they will send the product back to it's original destination. To add insult to injury, they can cancel your contract at anytime.

However, while the negative aspects of Wal-Mart are always highlighted, I would like to explore a road less traveled.

The positive contributions that Wal-Mart has made to the overall economy, and why, in the end, the consumer, is the ultimate winner in the "retail scheme of things".

While the gigantic presence of a Sam's Club, or a Wal-Mart store does lay waste to some independent retail merchants, their presense offers value and savings to the greatest number of people within every economic strata.

Wal-Mart stores are successful not because they can occupy a large swath of real estate.  They are popular retail destinations because they offer the largest variety of products under one roof, combined with a cheap price tag..

Not many people these days want to run to a dozen independent businesses to buy general merchandise products...

In addition, I would like to share my casual observation about WM's non-destructive power to American retail landscape.

I have seen Wal-Mart's come into one particular area of my region, and actually increase the number of customers to the independent business population that was within it's sphere of influence..

This maybe an unusual set of circumstances, and I hope that is not unique, but there is what I would like to call a "spill over" effect that Wal-Mart can produce under the right circumstances.

For instance, not to far from where I currently reside, there is a Wal-Mart that decided to insert itself into a small outdoor mall that has several privately owned retailers attached to it.

The large "anchor" store they built is front and center for all to see once you enter the parking lot. You would think that with "Wally World" moving into the neighborhood, that the retailers in the area would call it a day, take their ball and go home, leaving the buildings up for lease..

Stores such as a hair stylist, pizza parlor, Subway, sports bar, and a clothing store, who were all within firing range of Wal-Mart's big guns, could have thought of themselves as David, to Wal-Mart's Goliath, and deside it was too big a giant to slay.

But, that was not to be....

The amount of traffic that Wal-Mart produced, "spilled" into the perview of their stores, resulting in additional commerce for their owners.

It has been over ten years since Wal-Mart broke ground and built their store, in that mall.

Surprisingly, all but a few have changed hands and business models. Most are still in the same space they occupied when WM first arrived on the scene. No retail space, as of this writing, are looking for renters.

Grant it, not all things in business, or in life, can produce that positive an outcome. However, my point is - not everything Wal-Mart does is a "death sentence" for independent business owners who hover within their orbit.

For those privately store owners who lost their business under difficult circumstances, or experienced real monetary loses because of Wal-Mart malfesense, my deepest sympathies...

The flip side is that some idependent store owners may carry products or deliver services that are no longer attractive to the population that they serve. Others, may have poor customer service, or a limited choice of products.

I remember the days when there was no Wal-Mart, and the largest "category killers" in my retail world was Two Guys From Harrison, and Modells.

Sneakers, baseball mits, clothing, shoes, and just about anything non-perishable came from those two stores almost exclusively.

If you wanted plumbing, hardware, or your car fixed, the independent business owner within your town was sometimes your only option.

Mechanics were mostly independent, and it was considered too expensive, or not in the best form - to go to a dealer. Sometimes, dealer repair shops were worse then an independent mechanic in terms of customer service.

Turn around times for most service or repairs had vague time tables. Oil changes could take days. Major repairs could take weeks.

The local hardware store, which was owned by Mom, Pop, and Son, was, at times, ill tempered and short staffed. Finding items that you needed for your own home improvement project, could be an exercise in futility on a crowded Saturday.

As strange as it may be for some to conceptualize, the small business owner of  "lore" might have had a hand in creating the giant category retailers and services we see today.

Some points to ponder..

To borrow a few words from Rod Serling of the Twilight Zone...

Imagine if you will..

" A world, without Costco, Lowe, Wal-Mart, Jiffy Lube, Midas, Home Depot, Office Depot, Office Max, Big Lots, or just about any large category killer you can think of...

What if franchising and corporate expansion were illegal and outlawed by our government? So now the only enterprises left standing are the independent business owner, who controls everything from food to car repair.

The IBO can carry all products, but cannot have a product or service specialization. Mechanics perform every function, from minor oil changes to transmission repair. They cannot perform any one service independent of the other.

Food shopping is limited geographically. There is only one supermarket in your town, and you cannot shop anywhere else.

Since the argument has been framed that Wal-Mart is destroying IBO's, then you have to ask yourself one simple question. Are you willing to pay higher prices and endure limited choices to support your local business?

Are you willing to pay 50% more for food, when you know you could get the same food stuffs for 50% less at Sam's Club?

How much exactly are you willing to pay for food, or any other merchandise to keep the IBO in business?

How about bulk food savings? Will small indpendents have the buying power of a Wal-Mart or Costco to give you competitive prices?

What about car maintenance? Will you drop off your car and wait three days for an oil change, instead of an hour in a quick lube shop?

How about computer equipment? Suppose your local office supply store does not carry all the computer accessories you want? Are you willing to wait days, maybe even weeks to get blank CD's on order?

If you answered yes to anyone of those questions, then you are a much better person then I am. Congratulations. You just might see the world through clearer eyes then I do..

Admittedly, I may be a bit more selfish, or practical, depending on your point of view. I would not wait three days for an oil change. I do not want to pay more for food then what the market price will bare. 

I do not want to live in a world where markets are restricted and product choices are limited. With all due respect to IBO's I want the cheapest price I can find, with the best service available. Sometimes, you don't deliver.

Today, I get my oil changed in about 30 minutes depending on the crowd. If they are too busy, and I want to go elsewhere, within my county I have a choice of seven different quick oil and lube shops.

I have been going to just one for a few years now, and they are rarely crowded. When I first started driving, (some years ago - not going to reveal how many) they did not exist.

When I needed a oil change and lube, it was whenever the mechanic got around to doing it. I could not imagine going back to the days of "I'll get around to it" oil changes.

For major repairs, I am lucky. I have a very good independent mechanic, with good turn around time. I have relatives that are somewhat older, and have been taken when it comes to car repair.

Needless to say they spent a lot of money car repairs, GM car inparticular. I finally convinced one of them to try a Toyota, and five years in, it has been a gem of a car.

The local Toyota dealer has a great customer service program. They have a drive in system with service representatives who greet you once you drive in.

He takes your repair order and enters it through an electronic pad, like a large PDA. He calculates the price and the time needed to repair the car.

They show you estimated time, and cost before you approve the work order. If it is more then the time alloted, they can take you home in their shuttle if you do not have alternate transportation.

No excuses, no vague time table for estimated repairs. Just good customer service..

The bottom line here is this. Most people want to have more choice, not less. No one wants to be restricted to just one store or service.

Not addressing customers needs, or finding an unfilled niche in the market place is the reason why we have Jiffy Lubes, Wal-Marts, Costco, and the corporate entities that are currently doing what some small IBO's cannot..

There will be certain business evironments where large corporate sharks can swim in the same retail ocean as small business without eating them alive.

Not every business will fair that well, and will be overcome by the largess of their corporate competitors.

I am sure that the man who invented the buggy whip was not all that happy when the automobile came along, and probably considered Henry Ford the Wal-Mart of his time.

But, the horse and carriage was part of an era that was fading, and a new form of transportation was beginning.

Business cycles, like life, go through birth, death, and rebirth..

And to create new business life, you must appeal to the needs and wants of your customers.

The corporate power of Sam's Club, while distasteful to some, provides 4 dollar drug perscriptions on some medicines to senior citizens, discounts on gas, and great prices on food that I cannot find in my local grocery stores.

And that is what it comes down to. Offering the best value to your customers bottom line. Maybe there is a business genius who has not been born yet who can threaten Wal-Mart's presense as a corporate empire.

In the meantime, I am heading to Sam's Club to save 40 percent on a case of Pellagrino spring water imported from Italy!

That is my long, and tortured rant..

Robert C - The Wholesale Guy