Sol Price, every mention
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every year anyone David Rosenthal 123Ben Gilbert 18Charlie Munger 11David Senra 7
Verbatim, from the transcripts: the passages where Sol Price comes up
Vanguard: The communist capitalist who saved investors a trillion dollars (Audio) · Acquired
- ▶ 1:34:54 David Rosenthal Even Saul Price and Jim Senegal were not this fanatical.
10 Years of Acquired (with Michael Lewis) · Acquired
- ▶ 1:50:33 David Rosenthal Read that book, uh, Saul Price's Autobiography.
Trader Joe’s: Hawaiian shirts and counter positioning (Audio) · Acquired
- ▶ 5:28 David Rosenthal The same hotbed of American retailing innovation that produced Salt Price, Price Club, and everything that would become Costco.
- ▶ 1:37:42 David Rosenthal Like, I genuinely think they feel that way, and it's another take on the same thing that Costco and Saul Price and Jim Sinegal had about why they don't do sales, and Trader Joe's also doesn't do sales and doesn't have coupons.
- ▶ 2:07:25 David Rosenthal He really is like Sol Price.
- ▶ 2:07:41 David Rosenthal Saul Price did the same thing at Costco, but Saul Price isn't the one who really built Costco.
IKEA (Audio) · Acquired
- ▶ 13:35 David Rosenthal Jim Senegal, Saul Price, Jeff Bezos, Ingrid Comrade.
- ▶ 2:56:25 David Rosenthal I think they're a merchant at heart, and Ingvar was a merchant at heart in the same way that Sam Walton and Jim Senegal and Saul Price and Jeff Bezos were and are.
Holiday Special 2023 (Audio) · Acquired
- ▶ 17:05 Ben Gilbert It's almost like a discovery of laws of physics, the way that Saul Price and Jim Senegal and the rest of the crew have sort of built that business over the years.
- ▶ 1:51:08 David Senra And Brunello, along with Sol Price and Ed Thorpe, is really up there with how I want to pattern my own life.
- ▶ 1:55:36 David Senra And the episode I made on sole price, I titled purposely the most influential retailer to ever live.
- ▶ 1:56:18 David Senra Soul was a poster child for the American dream.
- ▶ 1:56:24 David Senra Soul was the first in his family to graduate college.
Charlie Munger (Audio) · Acquired
- ▶ 8:45 Charlie Munger Rod Hills somehow knew Saul Price and knew what he was doing.
- ▶ 8:52 Charlie Munger So I drove down and went through his store and talked with Saul.
- ▶ 8:57 Charlie Munger And of course, Saul was a very intelligent man.
- ▶ 8:59 Charlie Munger Saul was an ordinary lawyer until he was 39 years of age.
- ▶ 14:28 Charlie Munger Saul kind of liked it.
- ▶ 14:29 Charlie Munger He was kind of a financier.
- ▶ 14:31 Charlie Munger He liked deals.
- ▶ 14:32 Charlie Munger He liked this miscellaneous real estate.
- ▶ 27:45 David Rosenthal And famously, Bernie Marcus came out to visit Saul before he started.
- ▶ 27:51 David Rosenthal Saul was like happy to share the playbook with everybody, right?
- ▶ 27:57 Charlie Munger Saul was a, not a crazy, he was domineering and so on, but he was also very intelligent.
- ▶ 52:06 Charlie Munger No, so price had that figured out to announce.
- ▶ 52:12 Charlie Munger He always wanted the rich man trying to save money.
Costco (Audio) · Acquired
- ▶ 5:59 David Rosenthal To someone that we talked a lot about on our Walmart episode, the legendary Saul Price and his two companies, FedMart and Price Club.
- ▶ 6:25 David Rosenthal And Price Club is really, of course, the actual result of Sol's previous company, FedMart, which FedMart itself really came out of, FedCo, in the 19 forties.
- ▶ 6:37 Ben Gilbert In some ways, we sort of have to tell a whole industry history here, but in other ways, these kind of are all the same company because they're all stacked learnings from Sol Price and his various brain children over the years to create the…
- ▶ 6:54 David Rosenthal We start, History and Facts, in January, 1916, in New York City, in the Bronx, where one, Solomon, Saul, Price, is born.
- ▶ 7:07 David Rosenthal Now, Saul's parents were Jewish immigrants from Belarus.
- ▶ 7:23 David Rosenthal Saul's parents, like many Jewish immigrants around then in New York, ended up getting jobs in the garment factories in the Lower East Side, and the conditions in these factories were, like, terrible, just absolutely terrible.
- ▶ 8:13 David Rosenthal So, Saul's parents didn't work at Triangle, but they worked at other factories just like this.
- ▶ 8:22 David Rosenthal Saul, maybe the most influential American retail capitalist in history, comes out of the Triangle Shirtwaist Factory movement and communism and socialism and everything that's happening in New York and the Jewish community at this time.
- ▶ 8:40 Ben Gilbert I do think he's top two, top three with Sam Walton, of course.
- ▶ 8:47 David Rosenthal That he stole more ideas from Saul than anyone else in his business career.
- ▶ 8:52 Ben Gilbert All right, so very credible argument that he is the most important American retail capitalist.
- ▶ 9:00 David Rosenthal Jim tells the story that a reporter once asked him if he learned a lot from Saul, and Jim replied, no, that's inaccurate.
- ▶ 9:12 David Rosenthal Absolutely everything I know I learned from Saul.
- ▶ 9:20 David Rosenthal Biography of Sol that's like really rare.
- ▶ 10:14 David Rosenthal So, back to Saul's growing up years.
- ▶ 10:28 Ben Gilbert So it really illustrates where Saul's political ideology comes from.
- ▶ 11:23 David Rosenthal When Saul gets out there to San Diego, in a parallel moment to Sam Walton's early life, Saul meets his future wife while he's in high school, and it turns out that
- ▶ 11:34 David Rosenthal Saul's future wife's first name is Helen, just like Sam's wife name is also Helen, and Sam's wife would be very influential on him, along with her family.
- ▶ 11:43 David Rosenthal Same thing with Saul.
- ▶ 13:12 David Rosenthal So from a 150,000 people, when Saul moves there after the war, San Diego is on a path to becoming today.
- ▶ 13:37 David Rosenthal But before then, Saul goes to USC and gets his law degree, they come back to San Diego, and he starts practicing as a lawyer.
- ▶ 13:47 David Rosenthal Now, Saul's timing is just, I mean, you could not script this any better.
- ▶ 14:12 David Rosenthal So after the war, Saul starts counseling all these entrepreneurs with these new retail concept startups that are emerging in San Diego.
- ▶ 17:48 David Rosenthal So Saul and the jewelry guys, they see what's happening with all of the wholesale business that they're sending to Fedco up in LA.
- ▶ 18:04 David Rosenthal And Saul's like, actually, I might have just the location.
- ▶ 18:27 David Rosenthal So if Saul were Sam Walton,
- ▶ 18:36 David Rosenthal No, this is how Saul is different than Sam.
- ▶ 19:10 David Rosenthal And Saul, God bless him, he calls them back and he's like, no, no, no, guys, we really want to do this.
- ▶ 19:34 Ben Gilbert Yeah, on the one hand, you might think, Saul Price, not a very savvy business person, just take the gift and go with it.
- ▶ 19:43 David Rosenthal There's a really funny Saul quote from, uh, later in his life.
- ▶ 20:00 Ben Gilbert Oh, Saul.
- ▶ 20:14 David Rosenthal So, after this second rejection, Saul and the guys are like, I guess we now can go do it ourselves.
- ▶ 21:30 David Rosenthal That is the industry that Sol births here.
- ▶ 22:12 David Rosenthal And so, just like all capitalist for-profit companies, Sol and the jewelry guys and FedMart have the impetus to expand.
- ▶ 23:28 David Rosenthal Well, Saul kind of stumbles into figuring out that if you are a membership club, you're not open to the general public, so you can skirt these laws and sell below the manufacturer's minimum price.
- ▶ 23:45 David Rosenthal So this is crazy, and this is why I think there's a strong argument that Saul really is the goat among American capitalist retailers.
- ▶ 23:58 David Rosenthal He also invents that later.
- ▶ 24:00 David Rosenthal First, he invents the discounter, which then Sam Walton, Kresge with Kmart, Dayton with Target, copy, and becomes the dominant retail form of America.
- ▶ 24:14 David Rosenthal He invents both of them.
- ▶ 24:16 David Rosenthal So, when Saul and the guys opened the first FedMart in 1954 in San Diego,
- ▶ 25:26 David Rosenthal One, Saul fully stops practicing law and goes full-time with FedMart.
- ▶ 25:45 David Rosenthal And Jim would end up working for the next 22 years at FedMart directly for Sol.
- ▶ 28:21 David Rosenthal As Saul is running the company during these first few years, he starts to codify some retail management philosophies, and he, uh, famously sort of canonizes these as FedMart's four priority order principles, and he teaches every new…
- ▶ 29:39 David Rosenthal There are some very, very clear trade-offs that Sol is gonna make with FedMart, that Costco makes today, that are very different from what their competitors do.
- ▶ 30:21 David Rosenthal If you're Sol and Costco today, you're absolutely not gonna do this stuff.
- ▶ 31:00 David Rosenthal This is anathema to Saul.
- ▶ 34:24 David Rosenthal Sol came up with them.
- ▶ 34:59 David Rosenthal Sol and FedMart, they don't really have the firepower to compete.
- ▶ 35:12 David Rosenthal In the biography, Saul comments to his son, Robert, who had also joined the company, joined FedMart at this time.
- ▶ 38:05 David Rosenthal So like you say, by the time we get to the end of the sixties, early seventies, Saul's burned out.
- ▶ 39:35 David Rosenthal So as Saul and Robert are looking for partners to take FedMart to the next level and going across Europe, they're meeting with all these hypermarket operators.
- ▶ 39:51 David Rosenthal The idea was that Mann was gonna help Saul and FedMart
- ▶ 40:16 Ben Gilbert In practice, what ended up happening is this weird thing where Sol Price was an innovator and a great merchant,
- ▶ 40:45 David Rosenthal Yeah, Saul is looking for a growth investor, and he ends up getting a buyout.
- ▶ 40:52 David Rosenthal So, within a few months of when the deal actually closes, perhaps predictably, Saul and Hugo get in a huge fight.
- ▶ 41:08 David Rosenthal Man fires Saul, literally fires Saul, I think, and Robert too, and changes the locks on their office doors.
- ▶ 41:18 David Rosenthal Literally boots Saul out of his own company.
- ▶ 41:53 Ben Gilbert And what Sol and Robert wanted was operating capital from the parent company, from Hugo Mann, to invest more in aggressively opening more FedMart stores.
- ▶ 42:09 David Rosenthal Had this not gone down like this, I think Saul probably would have just retired as new management took over at FedMard and all would have been amicable.
- ▶ 42:52 David Rosenthal So Saul and Robert together, they get a lease on an office literally the next day after they're booted out, and they're like, we're doing it again.
- ▶ 43:28 David Rosenthal So, Sol and Robert are sitting around in their new office, brainstorming, what's their angle of attack here?
- ▶ 48:05 David Rosenthal So, once they hit on this business plan, Saul and Robert poach a few people from FedMard and elsewhere, including they hire this super bright young guy from Harvard Business School named Giles Bateman as their CFO, and then they go get…
- ▶ 52:45 David Rosenthal Saul and Robert start getting calls from local hot dog vendors that wanna set up carts at the store's exit.
- ▶ 53:13 David Rosenthal So, Saul calls up Hebrew National Hot Dogs and asks them if they can supply them with hot dogs to sell at the stores.
- ▶ 55:41 David Rosenthal So, on the back of this wild success in San Diego, once again, Sol and Price Club quickly expand, just like with FedMart, first to Arizona and then beyond.
- ▶ 1:01:57 Ben Gilbert For this particular episode on Costco, this is .2, we mentioned that there's basically one book about Costco and Price Club, and it is self-published by Saul Price's son, Robert Price.
- ▶ 1:05:08 David Rosenthal Also in 1982, Saul gets a call from his old buddy Sam Walton.
- ▶ 1:05:15 David Rosenthal He wants to come out, he wants to see Saul, wants to have dinner with the two Hellens, get the families together.
- ▶ 1:05:30 David Rosenthal And Saul is like, sure, come on out.
- ▶ 1:05:43 David Rosenthal Saul tells him all about Price Club, how the model works, the cash flow dynamics, everything.
- ▶ 1:05:58 David Rosenthal And this is really the major difference here between Saul and Sam.
- ▶ 1:06:02 David Rosenthal Saul doesn't care.
- ▶ 1:06:26 David Rosenthal Saul ends up just mailing it right back to Sam and he's like, keep your notes.
- ▶ 1:06:35 David Rosenthal Right around the same time, another person comes out to San Diego to visit Saul and Price Club.
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