How can Wal-Mart sell so cheap?

How can Wal-Mart sell so cheap?

Jordan Goodman (Personal Finance Author) gives expert video advice on: How can Wal-Mart sell so cheap?; What effect does Wal-Mart have on the small businesses?; What effect does Wal-Mart have as a business model? and more...

Wal-Mart can sell so cheap because it buys in such a huge volume. It's the largest retailer in the world, and therefore they can dictate prices they are going to pay to suppliers in many cases. And they buy such a huge amount they get much better prices than anybody else, because they have such a huge distribution network. They also have a very good sense of what customers are buying at any one moment; they have very good data processing, so as sales come in they make sure enough products get to the customer, and that efficiency drives down prices. There's a whole culture at Wal-Mart that gets their prices as low as they are. Suppliers, in many cases, are not too happy about it because they're being driven down all the time, to get their prices down. But the consumers do benefit because they get much lower prices than other places.