Sol Price Part III: "The Business World Hates Change"
The creation of Fedmart proved the opening shot in a multiyear battle with the San Diego establishment. As the New York Times recalled in 1988: "Manufacturers and local merchants were outraged. . . . Newspapers refused to carry Fedmart's advertisements; the Better Business Bureau refused its application for membership."
Today, the discount department store seems commonplace and undramatic; it's the idea behind every Walmart or Target.*
How nasty was the fight?
In California, merchants have what's called an "automatic license" to sell bedding. Anyone can sell bedding, but if there's a complaint, an inspector can check to see if you're observing the relevant laws.
Shortly before Fedmart opened its doors, a state bedding inspector didn't have any bedding questions. He wanted to know where Fedmart was getting its money, who was running it--everything, in short, that could be useful to people who wanted to pressure Fedmart out of business.
Sol Price threw the inspector out of the store, told him his questions were baloney and he wasn't going to answer them---and then told him to "take his best shot": file suit, press charges, or whatever.
The inspector never called again. But for years the business community kept trying to freeze out the threatening new competitor. At one point Sol Price's own accountant headed the local Better Business Bureau--and Fedmart still couldn't get its membership approved.
With time, opposition dissolved, partly because discount retailing became commonplace nationwide, and largely, we suspect, because Fedmart worked unswervingly on what Sol Price calls "a fiduciary relationship" with the customer--that is, a relationshilp of special duty and moral obligation--and so won widespread support in the community.
*Indeed, in his autobiography, the late Sam Walton admitted quite frankly that he borrowed many of his best ideas from Sol Price.
Excerpted from:
The Great American Idea Book: How to Make Money from Your Ideas for Movies, Music, Books, Inventions, Businesses and Almost Anything Else!
Authors: Bob Coleman & Deborah Neville
Publisher: WW Norton
Copyright: 1993; 1995
All Rights Reserved
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