As stated earlier, Walton founded Wal-Mart not out of some grand vision of reinventing the retailing world, but to avoid being run over by a new breed of competitor. Although Walton had never operated a "pure" discount store before founding Wal-Mart, he had learned many lessons about how the game was played, including the paradoxical nature of discounting: Lower prices lead to higher profits.
He knew, in other words, that if he charged $1.00 for an item rather than $1.20, he would sell three times as many units. The higher volume and revenue more than made up for the reduced profit margin, leading to an increase in overall profits. Walton often experimented with different items and prices, and felt that his constant tinkering was a key success factor:
I could never leave well enough alone, and, in fact, I think my constant fiddling and meddling with the status quo may have been one of my biggest contributions. ... I have always been driven to buck the system, to innovate, to take things beyond where they've been. ... I have always been a maverick who enjoys shaking things up and creating a little anarchy.
Here are some additional Walton lessons that are worth incorporating into your own business:
CONSIDER LOWERING YOUR PRICES TO BOOST YOUR VOLUME. Think about experimenting with lower prices, particularly during rough economic times. Of course, your ability to do this will depend on the price elasticity of your industry and your product niche. During economic downturns, buyers are more price-sensitive than ever. The lower prices may very well increase sales enough to offset the lower margins.
DON'T BE AFRAID TO SHAKE THINGS UP. Walton said he liked to create "a little anarchy." Try that at your own organization. For example, consider giving some of your best people new and unexpected assignments or challenges. Ask them to come up with a new product idea, or an idea for making the organization more productive or streamlined. Or, if your department or unit seems particularly complacent, consider moving people around so that they have new challenges.