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Thread: Understanding Walmart logic

  1. #16
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    Quote Originally Posted by Maurice Mcmurry View Post
    Our town is having to find new revenue sources. Retail sales tax covers less and less of the city budget every year. We have 3 big Walmart's and a Sams Club. We also have two gigantic warehouse / shipping facilities. Midway USA and American Outdoor Brands, they strategically built their sprawling complexes just outside city limits. My business license fee jumped from $20 a year to $125 this year. There is one little family owned hardware store left in the next town over. I shop there every chance I get. I hope they can survive.
    Doesn't your state require ecommerce sellers to collect and remit sales tax no matter what state the seller is in? I suppose the town would lose out on sales taxes from those who used to drive into town to shop at the big box stores.

  2. #17
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    Quote Originally Posted by Jerry Bruette View Post
    I read an article yesterday that Wal Mart is going to electronic pricing in 2300 of their stores. It will allow them to change the price on an item every 10 seconds. Part of the reason for doing so was so that the price on the shelf would better match the online pricing, other reasons being to increase prices on higher demand items and lower prices on items in lesser demand. They won't have to wait for the price change to be ordered and then wait for an employee to go on the floor and physically change the price tag.
    A local grocery store was using digital price tags over a decade ago until they closed and got bought out by another chain. Menards went the opposite way and no longer has prices on most stuff in the outside yard. They just have signs with QR codes to scan with your phone. Most people know what they are getting and the price(s) before they head out to the yard. For those without smartphones they have the prices posted inside for most stuff in the yard. I bought some lumber from Menards Saturday and never looked at the price. I needed it so I ordered it and picked it up from the yard. I had a rough idea of the prices from buying lumber over the past month.

    I doubt Walmart is going to really change prices all that often. It would cause all kinds of issues at the register if the price went up between the shelf and the register. A number of states would probably sue Walmart if they changed prices too often. It saves a lot of labor changing price tags, plus it should stop the issue of a price tag not getting updated with the correct price.

  3. #18
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    I doubt Walmart is going to really change prices all that often. It would cause all kinds of issues at the register if the price went up between the shelf and the register. A number of states would probably sue Walmart if they changed prices too often.
    That was my first thought, put something in my cart that cost $1 and when I go to check out it's $1.10. One Super Market here uses a hand held scanner to scan items as you put them in your cart. When you go to check out you somehow read the hand held scanner and pay. You don't have to scan each item and put it on the scale like current self check-out stations. I guess they audit peoples carts periodically to keep them honest but I have never used one so I'm not sure how they really work.

  4. #19
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    Quote Originally Posted by Brian Elfert View Post
    Doesn't your state require ecommerce sellers to collect and remit sales tax no matter what state the seller is in? I suppose the town would lose out on sales taxes from those who used to drive into town to shop at the big box stores.
    There are annual dollar minimums for revenue before the requirement kicks in for state sales tax in some cases (by state), so some small sellers may still get away with not charging for it. (It's still owed by the buyer, however) It can also be pretty complex where there's is both state sales tax and local sales tax involved...there are literally thousands of sales tax jurisdictions that the service providers who shuffle the money around have to account for in their software systems that resellers use, either directly or indirectly via some other platform.
    --

    The most expensive tool is the one you buy "cheaply" and often...

  5. #20
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    there are literally thousands of sales tax jurisdictions that the service providers who shuffle the money around have to account for in their software systems that resellers use, either directly or indirectly via some other platform.
    I think this is taken care of mostly by zip code of the buyer or where the item is shipped.

    jtk
    "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
    - Sir Winston Churchill (1874-1965)

  6. #21
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    Quote Originally Posted by Keegan Shields View Post
    What seems counter productive?
    In my opinion spending money on labor to do this and charging a higher price if I get it off the shelf myself. Brian
    Brian

  7. #22
    Quote Originally Posted by Brian Elfert View Post
    Doesn't your state require ecommerce sellers to collect and remit sales tax no matter what state the seller is in? I suppose the town would lose out on sales taxes from those who used to drive into town to shop at the big box stores.
    Those big shippers do pay some sales tax I am sure. We pay 7.975 % in town. My town business license is the lowest tier at $125 a year based on gross revenue. As the gross revenue goes up the fee goes up. Quaker windows considered building a window factory in town. They went to Freeburg, a small rural town, instead where "Its less expensive to do business". A lumber yard owner was advocating to get Quaker here. He even recommended that City Council offer Quaker some incentives. No go.
    The recent addition of dispensary business is giving the city budget a boost. A stiff sales tax on dispensaries was voted down. I am not sure how to bring this back to Walmarts Logic. E-commerce is certainly having an affect on where and how business gets done.

  8. #23
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    I bought an item at Wally world that was marked $3.82 when I rang it up it rang up at $5.82 I didn't catch it till I was home and my wifw said that I must have been wrong about the price. I did a price check on line and it was $3.82. How many times does it happen without people knowing it. The only reason I checked was a news feed that a women was over charged $30.00 on her order that she had been keeping a running total.

  9. #24
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    First, I have list...in my head for fewer than a dozen items, on paper if more than a dozen.
    I have prices marked (mentally or written) for all items, and I total them up BEFORE I start shopping; that way I have an idea of what I will be spending (including figuring the tax).
    I shop, ticking off each item.
    I get to checkout (either self scan or via cashier), and watch the total. I'm almost always within a dollar of my pre-figured amount.
    Any error is usually due to an "impulse buy" I that I have to add in "on the fly", plus the associated tax for it.
    However, I am not, by temperament, an impulse buyer, so that happening is a rarity.
    I cannot ever recall having a "Receipt Review Surprise."

    (For those who know what I'm referring to...I'm an ISTJ )
    "What you see and what you hear depends a great deal on where you are standing.
    It also depends on what sort of person you are.

  10. #25
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    Quote Originally Posted by Brian Runau View Post
    In my opinion spending money on labor to do this and charging a higher price if I get it off the shelf myself. Brian

    Brian, I think of it like this (made up numbers below).

    Let's say a Walmart can do a maximum of $1M / month in sales through their in-store checkout line. And adding online order fulfillment (delivery to your car) adds another $500K in sales per month to that store.

    Assuming you had to hire more people to fill those orders, your profit would be less for your online orders. However, your store now does $1.5M in sales / month. At 20% margin that's $200K / month vs. 300K / month with online sales.

    Your profit margin % may go down slightly, but your profit margin dollars goes up.


    Other factors to consider - online orders may capture new sales that would not have been placed otherwise (a customer decides to buy a few items because they don't have to go into the store rather than buy it from Amazon).

    Also, a store may not need to hire any additional employees to handle the online orders. At my local Home Depot, the return counter employees handle online orders. I'm not sure who goes and gets the items off the shelf (I think they may do this as well), but the customer service employees run the orders out to cars.


    For retail businesses, its a no-brainer. I believe sales / sqft is still an important metric. Additional online sales increases this.

    Hope that helps.

  11. #26
    IMHO, their big picture goal is to drive sales to online as much as possible. Online sales have a much lower overall cost to the company. Not on each and every item, but on average.

    They would love to find a way to drive store costs as low as possible while maintaining sales volume.

  12. #27
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    Quote Originally Posted by Ken Combs View Post
    IMHO, their big picture goal is to drive sales to online as much as possible. Online sales have a much lower overall cost to the company. Not on each and every item, but on average.

    They would love to find a way to drive store costs as low as possible while maintaining sales volume.
    Please explain how an online grocery order at Walmart costs less than someone buying in the store? For an in store order an employee puts the item on the shelf and I take it off the shelf to buy and I take it through self checkout. For an online order an employee puts the item on the shelf. A second employee takes the item off the shelf and a third employee takes the order out to the car. That is now two additional employees touching the order.

  13. #28
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    Quote Originally Posted by Keegan Shields View Post
    Also, a store may not need to hire any additional employees to handle the online orders. At my local Home Depot, the return counter employees handle online orders. I'm not sure who goes and gets the items off the shelf (I think they may do this as well), but the customer service employees run the orders out to cars.

    For retail businesses, its a no-brainer. I believe sales / sqft is still an important metric. Additional online sales increases this.
    Walmart has many employees dedicated to their online program. I would bet there are least a dozen employees pulling orders at peak times plus three or four employees taking orders out to cars. Probably a manager or two too. There are more than just 16 employees for online orders since there are multiple shifts. I often swear there are are as many Walmart employees handling online orders as there are Walmart employees handling in store shoppers. I have to imagine they do more in store volume considering the number of cars in the parking lot and the number of shoppers in the store.

    The order pickers piss me off a lot of times. They aren't like a normal shopper whose cart blocks a shelve for 30 to 60 seconds. Their cart will be sitting in the same spot for five to ten minutes while the online shopper is picking items all over the aisle. I think it is bad form to move someone else's cart so I won't touch their cart. Sometimes they will be in another aisle. One time I wanted an item in the deli that is on the low shelves in front of the glass cases. There was an order picker there filling online customer deli orders. I waited a couple of minutes and then went to buy other stuff. I came back ten minutes later and the same online order person was still picking up customer deli orders and still blocking the shelves. I left without that item.

    Walmart is looking to create a second grocery area within their existing grocery area just for their online shoppers. That will just make the experience even worse for in store shoppers. I bet the online customers will get priority. Fast moving items will probably go to online customers first and retail customers will leave empty handed even if there is plenty of stock for online customers. Good luck finding a Walmart employee to go look in the online order area to see if there is stock back there. Walmart policy will probably be that items in the online area are for online customers only even if there is no stock for in store customers. I am also worried that Walmart will reduce their offerings for in store customers to make room for the online area. Of course, online customers will probably still get the full selection.

    I never do pickup at a retail store unless the online price is less. I don't buy groceries online because there is usually an order size minimum that is more than I buy at one time. A big issue with ordering groceries online is the horrible websites. I know the store carries a particular item, but the website doesn't show it. Other times I can't recall the particular brand name of an item I buy, but I know right where it is in the store. I have actually ordered a single grocery item online from Walmart because their website says it is in stock at the store, but I can't find it and I can't even find a spot on the shelf in the aisle the website says it is in. I have even asked employees and they can't find it. However, I order it for pickup and the order picker managed to find the item.

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