Why Walmart Has the Ability to Offer the Lowest Price

708 Words3 Pages
Price of Music Part 1 One of my favorite artists is Lyle Lovett, and he releases a new CD titled Release ME on February 28, 2012. I can pre-order this CD at various locations, including a local privately owner music store, a discount retailer, a Web site, and a national chain like Sam Goody. The price for this CD varies from location to location. On Amazon.com on February 2, 2012, the price to pre-order the CD was $12.85, plus shipping and handling. However, because I am an Amazon Prime member, I pay no shipping and handling. At Wal-Mart on February 2, 2012, I can pre-order the CD for $10.88 to pick up in the store on its release date, so that I pay no shipping and handling. At Sam Goody, which is now FYE, on February 2, 2012 I can pre-order the CD at a price of $14.99, with a member price of $13.49. At the locally owned music store, called The Book Nook, which sells books and new-release CDs, I can preorder the CD and she will sell it to me for the list price, which is $17.99. Wal-Mart has the ability to offer the lowest price for several reasons. First, it is a major retailer, not only the largest company of its kind in the world, but the largest company of any kind in the world. Therefore, it can buy in bulk and great discounts from its suppliers. Furthermore, because its business is a bulk business, it can profit even if it spends that same amount on a product as another retailer would spend, particularly when one factors in its money-saving distribution chain.

More about Why Walmart Has the Ability to Offer the Lowest Price

Open Document