How To: Beat Wal-Mart in 2009
by Christina Lee on December 29th, 2008
Three years ago, Marc Joseph – president of wholesaler and closeout company Dollar Days – responded to hundreds of his customers’ calls with one book. With “The Secrets of Retailing: Or, How to Beat Wal-Mart,” he wanted to teach any small business owner how to establish a unique presence in their neighborhood, even with a Wal-Mart down the street.
But in 2008, Wal-Mart emerged as the sole big-name retail winner against a number of contenders. While its competitors slashed prices out of necessity, Wal-Mart discounted to make profits. The company’s net sales totaled $374.5 billion, an 8.6 percent increase from last year.
Still, small businesses have no reason to fear, Joseph says, when they can adapt to economic conditions quicker than any bureaucratic big-name retailer. In an e-mail interview, he shared with goWholesale how they can beat Wal-Mart in 2009:
While Wal-Mart can buy in very large quantities, and therefore, get the benefit of substantial volume discounts, they cannot buy in small quantities. They can never benefit from purchasing broken lots, or small amounts left over in a manufacturer’s warehouse after a huge discounter’s buying spree ends, or – as in the case of the last three months – cancellations of orders, because there is no room to put them onto the retail selling shelf.
There are many, many products the discounters cannot sell because they cannot buy them in sufficient quantity to fill all their stores. The supply is simply too limited. Often, small manufacturers cannot even get an appointment to see a Wal-Mart buyer – so small retailers are still their bread and butter.
Small retailers can beat the giants [with] another price-related factor: their overheads may be considerably lower. Instead of a whole management superstructure – teams of buyers, batteries of lawyers, cadres of store designers, layers of accountants, passels of marketers and public-relations spokespeople, as well as all the store clerks, supervisors, merchandisers, managers, vice presidents, executive vice presidents, and who knows what – as an independent retailer, you may get by with a fraction of these expenses by outsourcing only when you need accounting or public relations, etc.
Don’t lose sight of the basics we all need to do during a recession.
Manage your inventory. Everyone today carries too much inventory, which ties up cash flow and open to buy. Be smart going into 2009, and don’t over-commit to goods. Find vendors who can ship you in small quantities and as a frequently as you need product. … Have products flow into your warehouse all month long, rather than all at once.
Be careful of your operating costs. Can your employees wear several hats and do many different functions rather than have one person doing one thing? Do you really need to spend for half a page in the newspaper when you can get your message across in a third of a page?
If you are located near a Wal-Mart or any other bigger chain, they will continue to spend huge sums to bring customers to their doorsteps. And if you play it right, the bleed-over will come to your doorstep. Once there, they are yours for the taking.
Offer them: unique merchandise they cannot get at the giants, lower prices – if necessary, even loss leaders – on a few limited-supply closeouts, and impeccable customer service . If you establish yourself now during these hard times with these customers, then once this country breaks out of these poor economic times, these very same customers will make your business stronger than ever.
For more information about Joseph and Dollar Days, call 1-877-837-9569 or visit www.dollardays.com.