Walmart bases its product pricing on EDLP, or Every Day Low Prices policy. The extensive selection of products, including those offered in the real Walmart shops, on the Walmart app, and on Walmart.com, are all priced per this EDLP policy.

The EDLP policy has aided Walmart’s growth and appeal because customers can always get the goods they need at the lowest costs at Walmart. Let’s examine this EDLP policy’s rationale and how it enables Walmart to maintain low product prices consistently.

What is Walmart’s Every Day Low Prices (EDLP) policy?

Every Day Low Prices or EDLP is a strategy followed by Walmart that helps the retail giant keep product prices low daily. Walmart’s low product prices are without promotional offers, discounts, coupons, or deals. Walmart around the year offers low product prices.

To clearly understand the concept, let’s consider a product of $100, and during promotional offers, its price reduces to $60. So the store following EDLP will neither sell the product for $100 nor $60. It will consistently price the product somewhere between the two prices, say $80.

Walmart’s mission is to Save people money so they can live better. The EDLP policy helps Walmart align itself with its mission statement. This pricing policy assures customers of the low product prices and helps them save more from shopping at Walmart.

Benefits of Evey Day Low Prices (EDLP)

Walmart’s EDLP marketing strategy offers several benefits for customers and sellers. Some of the benefits of every day low prices (EDLP) are listed below:

Helps make quick decisions

Walmart’s EDLP pricing strategy helps customers in making quick shopping decisions. With EDLP, they don’t need to wait for time-bound sales and promotional offers. They can shop from Walmart anytime and any day since they will get the lowest price every day at Walmart.

Saves Time

Customers want products at the best prices. And so they spend time and search for products to buy at the best prices. Walmart’s Every Day Low Prices (EDLP) strategy saves customers’ time. Following EDLP assures customers of the lowest product prices, so they don’t need to spend time and effort searching for the products at the best prices or need to be involved in comparing the product prices from different stores.

Low marketing costs

Not only for the customers, but EDLP is also beneficial for the stores (like Walmart) following it. Those who don’t follow the EDLP strategy need to get involved in tasks like running promotional offers from time to time, updating product prices as per the deals, putting in time, money, and resources, etc., to efficiently run the offers. Following EDLP relaxes Walmart from all such tasks and makes its operations smooth and fast.

How EDLP helps Walmart reap high profits?

Walmart has a wide range of products that helps customers buy anything they want. The rationale behind following EDLP Walmart relies on the massive sales volume of Walmart. Instead of earning a lump sum amount on the sale of a single product, Walmart believes in multiplying the profits by earning a small amount on its enormous sales volume. This large sales volume makes up for the loss and helps Walmart make big profits.

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How Walmart keeps low prices for its products with the EDLP policy?

EDLP policy does not favor all stores. The following factors have helped Walmart in keeping low product prices and abiding by the Every Day Low Prices policy:

High sales volume

Globally, Walmart’s net sales amounted to 567.76 billion USD in the fiscal year ending January 31, 2022. This massive sale of Walmart in 2022 and the likewise figures earlier help it achieve economies of scale. With a small profit margin on selling the products, Walmart achieves profits by the massive sales volume.

Direct bulk buying

Instead of sourcing products from the middlemen, the retail behemoth sources bulk products directly from the manufacturers. This helps Walmart in getting products at the lowest costs.

Low running costs

Walmart has always focused on keeping low running costs. Removing the unwanted layers in operations and the inventory management techniques of Walmart have made way for Walmart to keep its prices low. Walmart passes the savings thus produced by its low operational and inventory storage costs to its customers.

Bargain power

Because of Walmart’s massive purchasing volume, it significantly influences its suppliers. This influence helps Walmart bargain and bring down the product prices that match its mission- Save people money so they can live better.

To Sum Up

Walmart’s competitive advantage is its EDLP pricing strategy. Since Walmart was founded, it has always focused on offering low product prices. The EDLP strategy has been the foundation of pricing products at Walmart and has helped it attract more and more customers to its offerings, whether online or at stores.

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