Wal-Mart: How Good is Too Good?

I listened to a really interesting interview tonight on the local station of NPR about a recently published book entitled "The Wal-Mart Effect" by Charles Fishman.

In his book, Fishman describes the world's leading retailer and how far consumers go to find the best price. One of the many examples that was used in the interview was the fact that Wal-Mart sells lawnmowers for $99.99. To most people, $99 for a lawnmower seems like a great deal, but think about it, why would a 'quality' lawnmower only cost $99. Think about it, what if your lawnmower doesn't start 6 months after you stop using it? You have to take it in and get it repaired, which will likely cost you anywhere between $50-$60 - which is 66% of WHAT YOU PAID FOR A NEW LAWNMOWER!!

What Mr. Fishman implies in his interview that with every purchase, there is a 'quality' cost that has to be factored in. Wal-Mart does a very good job at excluding this 'quality' cost in an effort to achieve the lowest price.

Another example that Mr. Fishman included in his interview is that Levi Strauss recently introduced a line of jeans specifically to Wal-Mart. Normally, a pair of Levi Strauss jeans will set you back $33. At Wal-Mart, you can get a pair for $23? Is this a great deal? At face value, it's a great deal, but let's dig a bit deeper. What's the probability that these jeans last you more than 6 months after 'normal' use? I'd be willing to bet they wouldn't last me 3 months.

Wal-Mart has been in the news for soliciting the assistance of bloggers to help polish its image (I suppose this is there attempt at guerrilla marketing). I recently read a hilarious article indicting Wal-Mart for doing this.

You can download the podcast of the interview on iTunes, and you can purchase his book here.