Rebirth of America, this is my era

Chapter 228: Your territory is under my control!
"The history of Wal-Mart can be traced back to four or five years ago, when Sam Walton opened a store in Bentonville, Arkansas, and did some small business. Later, when Sam Walton found that normal operations could not give them an absolute competitive advantage, he began to use a low-price strategy to seize the market and get more sales by discounting goods. When they started doing this, they achieved great success in a short period of time, and the surge in customer traffic allowed them to open branches."

"At the beginning of the business, Sam Walton did not want to absorb external funds and only used his own assets for expansion, so their development was very slow. They were founded in 1966 and 1967, but they really dominated Arkansas. But doing business is like a snowball. After taking the first step in starting a business, the subsequent expansion was very simple. Starting in 1968, they invaded abroad and entered Missouri and Oklahoma. By 1972, they extended their tentacles to Louisiana and Kansas. Perhaps it was because the expansion of the territory made them see the hope of becoming bigger, so that year they also chose to go public and start financing."

"In 1973, they entered Tennessee. In 1974, they expanded to Kentucky and Mississippi. In 1975, they began to occupy Texas. Last year, they made their first acquisition since the company was founded, buying the largest chain of department stores in Illinois."

"So far, they have completely occupied eleven states in northeastern America and own two hundred and seventy-six supermarkets. According to the plans they have announced, they plan to enter Alabama, Georgia, and South Carolina in the next three years, Florida and Nebraska in five years, and Indiana, Iowa, New Mexico, and North Carolina in seven years. In the next ten years..."

“Spread the name of Wal-Mart to every corner of America.”

Steve Ballmer closed the paper in his hands.

His report also made Ethan nod his head.

To be honest, when Ethan learned that the guy who wanted to obtain the exclusive mall franchise for Johnson's home console was Wal-Mart, he almost jumped out of his seat!
There’s no way around it, the name Walmart is too famous.
If Bill Gates is the king of the computer age, and Microsoft, which he founded, is the Roman Empire in the IT field, then Walmart is the god in the department store chain field!
They are the largest supermarket in the world!

There are more than 5,000 stores in America alone!
And such a guy wants to cooperate with their Destiny Game?

Oh No!

Doesn't this mean that their Destiny game can sell home consoles all over the world in a short period of time?

This fact made Ethan very excited!

If Wal-Mart is very interested in their products, why would they build their own sales channels? Even if they spend a lot of money and negotiate with each store, it will not be as smooth as selling directly through Wal-Mart!
However, before Ethan could be happy for long, he realized something was wrong.

Put yourself in his shoes. If he were Sam Walton, the founder of Walmart, when his business had spread all over the country, he might indeed go to negotiate business in person for the exclusive franchise of a hot product, but he would most likely not show his eagerness to his partners by using backdoor methods.

Since placing products in the largest retail store in America is the best option for target customers, Walmart, which takes the initiative, should maintain its identity in this case.

Because only in this way can they get more sales commission in negotiations.

Thinking of this, Ethan, who smelled something unusual, called over the bald-headed Ballmer.

Let Ballmer collect information on Walmart.

Then he learned about Walmart’s current operating status.

When the structure of 276 supermarkets appeared in 11 states across the United States, Ethan knew that Sam Walton was eager to find him because he wanted to take advantage of his popularity!
They want to attract more customers by introducing Johnson's home console!

They want to crush their competitors by obtaining the exclusive franchise for Johnson's home console!
And this idea——

"How come our console is so popular?"

Ethan asked knowingly.

Because when he found out that the giant in global business in his previous life wanted to lick his shoes at this moment, a smug smile immediately appeared on his face.

"Yes." At this moment, Ballmer fully demonstrated what an excellent subordinate is.

The bald man pretended not to understand and explained to Ethan: "After the live broadcast ended, major American media outlets reported on our home console products in all aspects, including sales forecasts after they were launched on the market."

"According to estimates from the Wall Street Journal, approximately 40 million Americans have spent money on our arcade machines each year over the past three years, with an average annual spend of $15 per person and an average annual visit of 60 times per person."

"When our fan base is 40 million and the average spending per person is $15, even if the proportion decreases by the same amount, the number of people willing to pay for the console will exceed 5 million."

"Coupled with the excellent gameplay of Starfield, after our console is launched, at least 8 to 10 million people in America will buy it."

"Although this number is still not as impressive as the annual customer flow of Quanmi Shopping Mall, no business can refuse the sudden surge in customer flow of tens of millions."

"Because they came for the home console and didn't want to leave empty-handed."

"As long as there is a conversion rate of 10%, 5%, or even 1%, it will put them a big step ahead of their competitors! At the same time, this customer flow will also make their expansion easier!"

"Oh——" Ethan suddenly realized.

But the big tail behind it appeared and wagged happily.

Although Ethan thought most about making money when developing the home console, wouldn't it be better if he could make money and gain huge commercial influence at the same time?

No one can refuse the praise from others!

And if the guy you are chasing after is a top star in another industry...

That would make people even happier!

"Cough cough cough-"

After laughing for a while, Ethan, feeling relieved, cleared his throat and said, "So——"

"What do you think of this matter?"

He wanted to know what this guy Steve Ballmer had to say.

As he stared, Ballmer also said: "Boss, we can cooperate with Wal-Mart, but they can't take over our North American exclusive rights for home consoles."

“I think they understand this.”

“So the words they’re sending through the governor of Arkansas are kind of interesting.”

"In my opinion, Walmart wants to establish a long-term cooperation with us and obtain the exclusive franchise rights of our home consoles in places where they have opened superstores. In places where they are not involved, we can still connect with other stores."

"And once they open their own stores in cities that they have never been to, they may ask us to supply them separately."

"This approach can help their newly opened stores gain huge customer traffic in a short period of time."

"It can also have a huge impact on local shopping malls."

This idea made Ethan's eyes light up, and he asked curiously: "Are you really studying mathematics?"

"Of course!" Steve Ballmer nodded.

"But you are very sensitive to business performance," Ethan said.

"Oh - maybe it has something to do with my parents?" Ballmer smiled and said, "After all, they gave me a very good living environment. Our family has never lacked money."

Since Ballmer felt that Walmart was not able to take over the exclusive rights to the home console of their Destiny game, then what Ethan wanted to do most was to invite Mr. Walton to come to Palo Alto. In other words, if he could connect with the growing Walmart, the future business would be better.

After all, before the advent of e-commerce fostered by the Internet, Walmart's channels were unrivaled.

When Ethan told Michael Blanco that he could meet with Walton, Sam Walton, who got the news, flew from Little Rock, Arkansas to San Jose, California on a special plane overnight.

When Ethan walked into his company on the morning of December 9, he was surprised by the figure waiting for him in a suit, tie and with gray hair.

Before he could even say hello, Sam Walton, who was already over 60 years old, took the initiative to extend his hand and greeted him, "Mr. Jones, it is really my honor to receive your invitation."

"Thank you for taking the time out of your busy schedule to meet with me."

"Oh - you're so polite -" Ethan smiled and shook hands with him. "Mr. Walton, thank you for coming all the way from Arkansas. It's really hard work."

"It's what I should do for a living." The old man shook his head and smiled to show that it was not hard.

This action also made Ethan laugh out loud, "For a living? Oh - that's a great point. Since everyone is busy just to live, there's really no need to talk about the hard work."

After a few words, Ethan led the other party upstairs, into the reception room and sat down. The two men, who did not have much acquaintance, started talking about business directly.

Just as Steve Ballmer guessed, what Sam Walton wanted was indeed an exclusive operating clause. They wanted to obtain the exclusive operating rights of home consoles within the coverage area of ​​Walmart, and in the future, when they opened new shopping malls in the areas that were not covered when the contract was signed, they would automatically obtain the exclusive sales rights of Destiny home consoles. Destiny needed to terminate cooperation with other shopping malls within six to twelve months, and for this, they were willing to bear all related expenses.

In order to get this project, they were willing to pay the lowest commission rate in the industry. Sam Walton was willing to pay a commission price of % in exchange for a ten-year cooperation contract.

To be honest, from the perspective of future generations, the terms proposed by Sam Walton were already full of sincerity, because Walmart did not charge any display fees, monthly fees, or hidden fees from its cooperating brands. It only took a direct commission after each transaction based on the product category and unit price.

According to the reports Ethan had seen in his previous life, when the price of goods was over a thousand, Walmart's commission rate was the lowest, at 6%, while for ordinary goods, they could get 15%.

Now, Sam Walton offered 4 percent, which was basically no money.

But the price...

"Mr. Walton, I don't see any sincerity in your offer." Ethan shook his head.

"Why?" Sam Walton was a little surprised. "A 4% commission is the greatest sincerity we can show." He said, "This price is actually equivalent to renting a place and hiring people to sell goods. We, Walmart, cannot make any profit from it."

"But the problem is that our Destiny game is more famous in America than your Wal-Mart." Ethan lazily leaned on the sofa and said with a smile: "Now, in the whole of America, everyone knows the name of our company and my game."

"When Snake, Pac-Man and Star Wars caused screams again and again in America, everyone knew that destiny games could bring happiness to people."

"In this case, putting our products in your shopping malls is actually attracting traffic to you. I should be charging you a headcount fee, not you asking us for management fees."

That's right!

When Ethan discovered that there was no monopoly in America's department store industry, he decided not to pay any mall management fees to these people!
According to normal business processes, if a merchant wants to promote its products to more people, it needs to work on multiple platforms and use the flow of people in major shopping malls and stores to sell goods and make profits.

But now?

Ethan Jones’s goods have no trouble selling!
Their games are unique!

Not to mention the entire industry, there is no similar competitor in the entire world!

In this case, he is the one who provides the traffic!
And when a product seller can in turn bring traffic to major stores...

You merchants want to charge me venue fees?

nonexistent!

Unless there is a merchant who monopolizes the entire market industry and I have to sell goods through you! Otherwise, you have to pay me!
"Mr. Jones, your idea--" Sam Walton laughed.

He wanted to retort, but Ethan didn't give him a chance.

"Mr. Walton, if you think my idea is outrageous, please listen to the next two reasons I will give." Ethan held up two fingers.

"First of all, I want to say that after Walmart and we cooperated, the first reaction of the people in the area controlled by Walmart was that they could only buy our games by entering your Walmart. This is an excellent value protection for your brand."

"Secondly, in areas where Walmart doesn't control, when you enter those cities and gain exclusive access to our products, the public's reaction will change dramatically."

"Before, they thought that they could buy our games in a certain shopping mall in their city, but with your presence, they can only buy our games at Walmart. This not only indirectly hints at your strength to the public, but is also a huge promotion for your brand."

"If you think all this is wrong, then I can only tell you with regret—"

"See, goodbye."

"And if this all makes sense to you, then we can continue to talk."

"My requirements are not high. You give me fifty cents for each order."

"can you accept?"

When Ethan offered the price, Sam Walton smiled and said he needed to think about it.

Ethan expressed his understanding for this behavior, shook hands with him, and sent him away.

After Sam Walton left in the car, Steve Ballmer, who had witnessed all this, said cautiously: "Boss, isn't your idea a little too bold?"

The question made Ethan grin.

He turned his head to look at the bald man who was learning modestly, shook his head and said, "The development of all companies is inseparable from advertising. Television, newspapers, radio, magazines... these media are their preferred promotional channels. At the same time, word of mouth, activities, and coupons are also ways of acquiring customers that they will never give up."

"Since they can get more traffic by paying the media and passing on the profits to the public, why can't they pay a capitation fee to merchants with unique goods?"

"I dare to charge them, not only because I am famous enough, but also because my products are strong enough. When your powerful opponents can't keep up with you, then you can set the rules of the game for the entire industry!"

"!" Steve Ballmer's eyes were dull.

Ethan smiled and patted his shoulder, asking him to pay more attention to the company's phone calls.

because--

“Sam Walton is a smart guy.”

"Since he dares to plan for the full operation rights of our host computer when he only controls eleven states, it means that he has the courage to accept all my conditions."

"Or, he would discuss the matter with his family immediately."

Ethan guessed correctly. When Sam Walton ambitiously wanted to obtain the exclusive rights to the Destiny game home console, he was already prepared for Ethan to ask for the big shot.

After leaving the Game of Destiny, he immediately flew back to Arkansas on a special plane to discuss the franchise with his brother Bud Walton.

After listening to Sam Walton's story, Bud Walton's brows furrowed instantly.

"Sam, are you saying that Ethan Jones sees his product as a form of advertising? He thinks that putting the home console in our mall is advertising for us?"

"Yes." Sam Walton nodded.

At the same time, he asked, "Do you think this idea is reasonable?"

"Uh..." Bud Walton hesitated for a moment, then shook his head and said, "I think..."

"That doesn't make much sense."

"If placing goods in a department store is considered advertising, then there would be no department store industry in the world, right?"

Bud Walton expressed his opinion, "Ethan Jones said their product is famous? Coca-Cola is even more famous! If he wants a per capita fee, what will Coca-Cola think?"

Bud Walton threw up his hands.

His attitude was very clear.

Sam Walton smiled and nodded, seeming to agree with his words, but also more like he found this idea a little funny. "Coca-Cola has competitors, and Pepsi will compete with them for the market." He said: "In this case, Coca-Cola dare not ask merchants for headcount fees."

"But the thing is, Pepsi tastes as bad as urine, doesn't it?"

Bud Walton asked rhetorically.

"Yes." Sam Walton nodded, admitting that his brother was right, but the next second he said, "But is there any competitor between Johnson's home console and Starfield?"

"Milova Apollo and Atari Next Generation?"

Bud Walton immediately mentioned two names.

"Their stuff is worse than piss," Sam Walton shrugged.

When these words came out, Bud Walton's face suddenly froze.

The fact that there was no opponent in the game of fate made him take a deep breath.

After a while, Bud Walton spoke again, "Isn't this a monopoly?"

“He hasn’t even started selling the machines yet.”

“But he is already using his industry-leading position to influence other companies to make choices!”

"Oh - then let's take this matter to the Ministry of Justice? Do you think they will accept it?"

Sam Walton said: "Don't even mention that Destiny Game has connections with the Department of Justice. Even if it doesn't, the people in the Department of Justice will think we are fools! Because everyone in America knows that the enemies of Destiny Game are Philips, Warner Communications, Paramount, MGM and Disney!"

"We're saying Ethan Jones is using his industry leadership to influence the department store industry when they're already fighting each other in the video game market?"

“If we can’t use the industry advantages gained through natural competition, who in this world is willing to innovate? You? Or me?”

Bud Walton was somewhat discouraged by his brother's attitude.

"So you want to work with him?"

"Didn't we go there for his influence in the first place?"

"But fifty cents a piece is a bit too much!"

"I think it's okay, because based on the 10 million customers, we only need to pay him 5 million, and this price is much lower than the discount promotions we usually do."

“…” Bud Walton was silent.

Because Walmart's annual net profit is only 30 million now.

Give one sixth to Ethan Jones?
This is a special code——

"Oh! Sxxt! He's already so rich! Why does he still want to make money from us!"

Bud Walton waved his fist in anger.

But he made a decision the next second, "Let's cooperate!"

"When we open Wal-Marts all over America—"

"We can collect money from him in return!"

Sam Walton was pleased with the decision.

The old man sighed lightly, then supported himself on the table with both hands, stood up and walked towards the door.

"What are you doing?" Bud Walton was a little surprised.

"Go home?" he asked.

"No, I'm going to California overnight."

"Why? So urgent?" Bud Walton was a little surprised.

Sam Walton raised his right hand and waved it lightly, "I'm going to negotiate a contract because I have a feeling that the Starry Sky that everyone is looking forward to will be a good opportunity for us to expand."

Perhaps because this statement was too unrealistic, before leaving, Sam Walton leaned on the door frame again and said with a smile: "You may think my idea is a bit outrageous, but I want to say that Ethan Jones has won countless times in the past three years."

"He probably made more cash in three years than we've made in decades."

"I can't think of any other words to describe this miracle except the coming of God."

"so--"

“Seize the time and seize the opportunity.”

Sam Walton clenched his right fist and waved it at his brother.

Then he turned around and left in big strides.

Note: ① Which company was the first to realize traffic monetization? The query results on major search engines are basically Google. Because the word traffic was born in the Internet era, the definition of monetization related to it is in the Internet era. But before the birth of traffic, there were actually many people who made money through traffic, such as Ray Kroc, the father of McDonald's. Before he ran McDonald's, he started a milkshake mixer business, which was to monetize the traffic brought by the sales of paper cups in his earlier job, but people at that time called it influence. ② Walmart did not monopolize the store industry in the United States in the 1970s. It was not until 1990 that they opened the company in California and became the largest retailer in the United States. During the expansion period in the 1970s and 1980s, they did spend money to buy volume, or in other words, Walmart made its fortune by buying volume through low-price promotions. For example, he negotiated a sales commission of 10 points with a company, and then he gave 2 points to consumers to attract people to buy. ③ Before 1985, Walmart's influence was indeed not good. They were synonymous with low prices because they offered discounts every day, and they could not enter real large cities. Although their revenue looked good, with the official website stating that it exceeded $1 billion in 1980, making it the fastest company in the US to do so at the time, this record only lasted two years. It was recorded in the UPI archives that in 1982, Warner's operating revenue exceeded $4 billion, of which $1.2 billion was contributed by Atari. Atari became the fastest company to break the $1 billion revenue mark at the time. Video games are just that perverted.

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(End of this chapter)