Access to smaller quantities and unique products, more personalized customer service, and a controllable overhead are a few of the advantages that can help small retail businesses succeed in a big-box retail climate.
A new book titled “The Secrets of Retailing…or How to Beat Walmart” by Marc Joseph, President and COO of DollarDays, a premier Internet-based product wholesaler to small businesses and local distributors, details how small businesses can compete and even win against Walmart and other giant retailers that come to their towns.
“The Secrets of Retailing…or How to Beat Walmart” hits store shelves in spring 2005 but is now available for pre-publication orders at www.dollardays.com.
“Let’s admit upfront that there may be some truth in the low price complaints for run-of-the-mill goods, because it is true that the giant discounters do buy them at lower prices than any independent can obtain,” said Joseph. “However, when it comes to more specialized and not necessarily more expensive merchandise, Walmart and the other giant discounters are actually at a disadvantage to the small retail store.”
According to Joseph, while Walmart can buy in large closeout quantities, they can’t buy in small quantities, which give independents the huge advantage of selling opportunistic products showing great value. In addition, because of a limited supply of unique and different items, the chains can’t buy them in sufficient quantity, giving the independent a chance to really be different.
Joseph also adds that small retailers can control their overhead and be significantly lower because they do not need to support a whole management superstructure, and it’s easier for them to offer customers personalized service and attention that always beats the impersonal feeling in a chain store.
“None of this is to say that the discounters do not offer serious competition. Of course they do. But then I don’t know of any business, retail or otherwise, that is without competitive pushback,” said Joseph. “The point is that, contrary to the complaints you hear from retailers driven out by Walmart, even the largest, most aggressive discounter is nowhere near strong enough to stop a small retailer if they know what they are doing.”
Joseph says the retailers who have been driven out by Walmart were capitalizing on their local monopoly by selling ordinary merchandise at exalted prices. When Walmart came in, these small retailers were undersold.
Joseph was inspired to write [his book] as a result of counseling hundreds of DollarDays customers, small retailers who worried about facing increased competition when big-box retailers opened in their towns. Although many small retailers complain that big-box retailers like Walmart lure customers with “loss leader” pricing on some merchandise, Joseph says small retailers can triumph in the long run.
“Every chapter in my book talks about the fundamentals of entrepreneurial retailing, whether it is hiring the right people, selecting the right location, working with the right vendors or running the right promotions,” Joseph said. “This book is based on my experiences in competing against Walmart and also being a supplier to Walmart. When you finish this book, you will have that edge to not only survive and thrive in the shadow of Walmart, but to go up against any chain store.”
Joseph often speaks to retail associations about how small-business owners can ensure their own success by applying the principals of entrepreneurial retailing.
As a support system for entrepreneurs, DollarDays offers a program called DollarDays Independent Distributors (DDID) that helps people open their own product wholesaler businesses on the Internet. After paying an annual fee of $199, DollarDays’ professionals set up the independent distributor’s website, where the distributor’s business contacts can order DollarDays’ famous small case-load quantities of supplies. Every time a customer orders, the independent distributor receives a commission of 5%. Based on yearly sales volume, commission earned can increase to as much as 15%.