the Byzantine management atmosphere at first Rexall and then Hughes Aircraft had convinced me that the only real security lies in having your own business, and this left-hander was well ahead of the curve on that one. Also, I was convinced that I was on a holy mission in preserving a company owned significantly by its employees. My

Trader Joe’s buying objective was to get just one, dead-net price, delivered to our distribution centers. This was quite similar to the policy that Sam Walton was developing at about the same time, a practice called “contract pricing.”

We never had “closeout” sales. What a terrible practice! You train your customers to wait for the “sale.” Any product that failed to sell was given to charity. We were developing new products all the time; sometimes they didn’t pan out. So we gave them away. I do not believe in “market testing” new products.

My point is that a businessperson who complains about problems doesn’t understand where his bread is coming from. So by hairballs I don’t mean those fundamental issues such as demand, supply, competition, labor, capital, etc., which create the matrix of a business. By hairballs, I mean those wholly unnecessary thorns that come unexpectedly. Their

adopted a rule: Screw me once, shame on you. Screw me twice, shame on me. The vendor who screwed us twice was through, forever. During all my years in the company, I can recall only a couple of instances of permanent banishment. One thing that never failed to astonish me was how well samples from vendors actually matched the delivered products.

An entire chapter, “Crime Side Retailing,” could be written because that’s how I spent half of my time: dealing with crime with before-the-fact controls, and after-the-fact with detection and action.

Equally important was our practice of giving every full-time employee an interview every six months. At Stanford I’d been taught that employees never organize because of money: they organize because of un-listened-to grievances.

For example, by the time I left Trader Joe’s, we were selling 45 percent of all the Jarlsberg cheese sold in California. Our price was $3.49. The going price in the supermarkets was $6.00. The “cost” of the supermarkets into their stores, however, was about $3.49. Why? Because the supermarkets insisted on advertising allowances, which were credited

We really didn’t pay more per hour than union scale, but we gave people hours. Because union scale is so high, the supermarkets are very stingy with hours and will do anything to avoid paying overtime. I simply built overtime into the system: everyone was to work a five day, forty-eight-hour week. Actually, because of fluctuations in the business,