Monday, August 27, 2007

We WANT to Compete with Walmart

Many people have posted comments on various postings on this site relating how they love the exclusive products (mostly the old Amway products), but can no longer afford to use them.

Personally, I regularly use Double X (as well as most of the other supplements), SA-8 (as well as most of the laundry products), XS, shampoo and deoderant. I love the products. I just don't know if I love them *that* much, given the price differential.

The first tape I ever heard from a "system" was "From Air Force Recruiter to People Builder" (DY60) by Ron & Toby Hale. I remember Dexter Yager once said "Sell to the classes, live with the masses. Sell to the masses, live with the classes." My mentor has stated recently that Quixtar has come to be an opportunity for the middle class and above. These points come together. Could a Ron & Toby Hale make it in the business today? They retailed like crazy. Much more difficult today to do the same.

Quixtar did sales of $901 million in 2002 (found here). Impressive if it didn't have a 40 year history behind it. However, just 5 years later they did $1.118 billion in 2007 (found in this PDF document). That is a 24% increase over 5 years, or about 4.4% per year. Given that the inflation rate over the same years (Quixtar tends to raise their prices with inflation) was around 3% (found here). That means an average of 1.5% growth per year during the majority of Quixtar's existence.

Walmart, by contrast, did $10.2 billion in 2002 (found here) and
$17.6 billion in 2007 (found here). That is a 72.5% increase over the same period, or 11.5% per year average. Not only is the growth rate higher, the number of dollars are higher.

Quixtar says they are not trying to compete with Walmart. Who are they trying to compete with? Other euqally expensive stores that are going out of business? Wouldn't it be wise to try to compete with a business that has great growth and great revenue than trying to chase a dinosaur (didn't the dinosaurs become extinct?).

Orrin and Chris, please give us something that can compete with Walmart.

UPDATE: Analysis of Quixtar's numbers


rdy4battle said...

Amen!! Well said, I can't wait to see whats next.

lm said...

Last time I checked there were no sales people at Walmart. What part do plan to play with that business model?

Tom Morris said...

But Walmart does have enormous overhead that can be eliminated by not having land, store, utilities, stocked shelves, shoplifters, utilities for stores, etc.

I'm not saying follow the Walmart model to a T, just try to compete with them. They seem to be doing something right.

I for one hate going into Walmart. Its crowded and there is no one to help you find what you want in the gigantic store. There are long lines and parking is terrible.

If all Walmart customers could be converted to get more-or-less the same prices, but avoid all the hassles (that are part of the large expenses for Walmart), a large amount of volume could be moved.

I'd rather have 1% of a million peoples purchases than 25% of a thousand people's purchases, to misquote the famous quote.

Amway and Quixtar - an opportunity for anyone said...

if i'm not mistaken you're comparing walmart global sales to alticor north american sales. Would be best to compare the same markets.

Tom Morris said...

Good point. I am comparing Quixtar, which is North America only, to global Walmart.

Ed Manley said...
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