Walmart Ice Cream Scoop

Folks,

A wee story on how things work...

An acquaintance of mine recently retired after 30 years of building a housewares import biz,
and sold his company to some New York investors. He walked away with a tidy sum.

He had always sold to upscale stores, and therein the investors assumed an opportunity. He
had never sold to Walmart, so the NYC investors believed they would take his products and
manufacturing resources, and exploit the mass markets.

The best selling item for this company is an ice cream scoop, made of metal and plastic. The
new owners approach Walmart with the ice cream scoop, by way of introduction.

The Walmart buyers were very interested. “Tell us the composition of the metal part, the
precise metallurgy, and the exact process by which you achieve the end-product of the metal
part, and then do the same for the plastic part, and how they are connected together.”

“Why?” asked the NYC investors?

“Because we share the precise instructions of how to make anything we intend to buy with the
rest of the world, by live worldwide reverse-auction to assure we get the very lowest price
possible.” says Walmart.

“But what is someone ahs a lower price than us?” asked NYC investors?

“We buy from the lowest price source.” says Walmart.

“But we have the patent on this item, so you cannot buy it from anyone else but us!” says the
NYC investors.

“Then we will not buy it at all.” says Walmart.

“But ours is the best in the world...!” say NYC investors.

“No” says Walmart, “our is, the one we have on the shelf of our stores already, is the best in
the world. And we can prove it, because we sell millions more of ours than anyone sells of
theirs.”

The deal did not go through, and the investors are sorely disappointed in their investment.
Of course, Walmart defines best as “sells most due to lowest price.” This company never
competed on price before, and is in no position to do so.

The NYC investors certainly would not be in a position to be the least expensive, and their
patents did them no good. Simply irrelevent.

John

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