MERCHANDISING 
 
THE MACMILLAN COMPANY 
 
 MXW YORK BOSTON CHICAGO DALLAS 
 ATLANTA SAN FRANCISCO 
 
 MACMILLAN & CO., LOOTED 
 
 LONDON BOMBAY CALCUTTA 
 MELBOURNE 
 
 THE MACMILLAN CO. OF CANADA, LTD. 
 
 TORONTO 
 
MERCHANDISING 
 
 BY 
 ARCHER WALL DOUGLAS 
 
 CHAIKMAN, COMMITTEE ON STATISTICS OF THE UNITED 
 STATES CHAMBER OF COMMERCE 
 
 
 fork 
 THE MACMILLAN COMPANY 
 
 1918 
 
 All rights reserved 
 

 COPYRIGHT, 1918 
 
 BY THE MACMILLAN COMPANY 
 Set up and electrotyped. Published September, 1918. 
 
PREFACE 
 
 This book is the result of forty years' experience 
 and service in one of the largest distributing houses in 
 the country, and consequently it reflects methods and 
 processes which are in constant daily use. The outlines 
 of teaching some phases of Merchandising are those I 
 found necessary to employ in the pursuit of my duties. 
 Hence this work is still further the expression of my con- 
 viction that all economic subjects need both study and 
 practical experience for their proper elucidation and 
 
 understanding. 
 
 ARCHER WALL DOUGLAS. 
 
 St. Louis, Mo., 
 , April, 1918 
 
 382517 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 I. THE NATURE AND FUNCTION OF MERCHANDISING ... i 
 
 II. BUYING 6 
 
 III. TURNOVER OF STOCK 10 
 
 IV. THE CARE OF STOCK 22 
 
 V. ORDERING REGULAR GOODS 31 
 
 VI. ORDERING REGULAR OR STAPLE GOODS, CONTINUED 45 
 
 VII. ORDERING SEASONABLE GOODS 57 
 
 VIII. HOLIDAY GOODS 76 
 
 IX. SELLING 83 
 
 X. FILLING ORDERS AND OTHER RELATED FACTORS 93 
 
 XI. FINANCIAL FACTORS, CREDIT, COLLECTING, ACCOUNT- 
 ING 101 
 
 XII. DISTRIBUTION no 
 
 XIII. ADVERTISING 128 
 
 XIV. THE HUMAN EQUATION 140 
 
 INDEX : 149 
 
 vfl 
 
MERCHANDISING 
 
MERCHANDISING 
 CHAPTER ONE 
 
 THE NATURE AND FUNCTION OF MERCHANDISING 
 
 The matter of merchandising is the fundamental factor 
 in all commercial activities, which have distribution for 
 their principal purpose. In this respect it differs in- 
 herently from all productive enterprises, such as manu- 
 facturing, mining, agriculture and similar pursuits, which 
 have production for their first endeavor. 
 
 It does not necessarily follow from this statement that 
 a factor which is primal is consequently the most im- 
 portant of all the various phases of the business in ques- 
 tion, but rather that its problems must first be solved 
 before the successful prosecution of the other factors can 
 be undertaken. As a matter of fact it is a common cus- 
 tom, founded upon a curious and ineradicable trait in 
 human nature, for those engaged in any particular phase 
 of business to exalt its importance in relation to the 
 general whole. The truer point of view is that each 
 component of any business is a necessary adjunct to the 
 whole, and also that it involves different treatment and 
 different capabilities from its co-ordinate pursuits. It 
 
2 - MERCHANDISING 
 
 is none the less true that the broad principle of merchand- 
 ising is probably the least understood of any one factor 
 in the business of distribution, and the one to which the 
 least intelligent and scientific study has been given. It 
 is unduly burdened with the ways and methods of the 
 past, which rest upon no more logical basis than that of 
 custom, and which are often out of touch with modern 
 conditions. It is likewise the victim of antiquated axioms 
 and rule of thumb procedures, which hamper its useful- 
 ness and obscure its real purpose. It inherently pos- 
 sesses far reaching and most important possibilities, as 
 an intelligent study of it will plainly demonstrate. It 
 is likewise capable of the application of much scientific 
 analysis, as the ensuing chapters will endeavor to make 
 clear. 
 
 In its treatment, the various factors which make up 
 the general whole will be considered in the priority of 
 their application in practical use. Briefly stated, the 
 purpose and function of merchandising is the providing 
 of merchandise, or "goods" as they are generally known 
 in trade, in such quantities, of such quality, and in such 
 assortments as will supply the wants, desires and tastes 
 of the ultimate consumers for whose use they are in- 
 tended. 
 
 This definition must be understood to include and 
 comprehend all the various operations of business which 
 result in the transfer of the goods from manufacturer to 
 
NATURE AND FUNCTION OF MERCHANDISING 3 
 
 the consumer. There follows later on in this chapter a 
 statement of these different operations or factors, with 
 a brief statement of their various functions, which will 
 be treated at greater length under their appropriate head- 
 ings in succeeding chapters. These factors are considered 
 in general from the standpoint of the practices of the 
 jobber or wholesaler distributer, as this offers a broader 
 field for consideration than the retail trade only. To- 
 day, however, in some sections, especially in the South, 
 it is difficult to make a sharp distinction between the 
 wholesaler and the retailer, as many large merchants 
 combine both functions. Also in some large cities there 
 are merchants who, while doing a strictly retail business, 
 are none the less large distributers. The usual distinc- 
 tion made between a wholesaler and a retailer is that a 
 wholesaler sells only to retailers, and not directly to the 
 users or consumers, while the retailers sell only to users 
 or consumers. Yet this distinction is not invariable, 
 since some wholesalers sell to such consumers as railroads, 
 mines, manufacturers and contractors. 
 
 It will be seen thus that merchandising is one of the 
 inherent parts or factors of general commerce, as is 
 manufacturing, transportation, mining, banking, agri- 
 culture, fishing, lumbering and each of the various com- 
 ponents of production and distribution which constitute 
 the world of business. Lest there be any confusion of 
 thought as to the meaning of the terms employed in this 
 
4 MERCHANDISING 
 
 book, it must be borne in mind that in business circles of 
 the workyday world the term "production" means in its 
 elemental and primitive sense, the making of something 
 entirely new, either by change of form, as in mining and 
 manufacturing, or by change of nature, as in agriculture, 
 where the elements of the earth, air and water are com- 
 bined by natural processes into new and different prod- 
 ucts, while in economics the term "production" is often 
 applied to the creation of values, as for instance in the 
 case where the merchant transports articles from a place 
 where there is no call for them to other localities where 
 a demand for them exists, and thus gives them new 
 values. In this book the term "production" is used in 
 the sense in which it is generally understood in the 
 everyday business world. 
 
 The various chapters taken in their sequence treat the 
 subject of merchandising, as follows: 
 
 Buying: The initial performance is that of buying 
 the goods, which are to be the object of merchandising. 
 
 The Turnover of Stock: An essential element of that 
 phase of merchandising which directly has financial 
 profit for its object. 
 
 The Care of Stock: The economical and efficient han- 
 dling and care of the goods when received. 
 
 Ordering: The placing of specifications or orders for the 
 goods when once bought and how this shall best be done. 
 
NATURE AND FUNCTION OF MERCHANDISING 5 
 
 Selling: The sale of the goods to customers, since all 
 previous operations lead up to this important climax. 
 
 Filling Orders: The shipment of the goods to the cus- 
 tomers to whom they have been sold. 
 
 Financial Factors: Their important bearing on the 
 results of merchandising. 
 
 Distribution: How merchandising is vitally affected 
 by the problem of getting goods to the retail distribu- 
 ters and the ultimate consumers. 
 
 Advertising: How it affects merchandising by increas- 
 ing the sale of the goods. 
 
 The Human Equation: How in the last analysis suc- 
 cessful merchandising depends upon the efficiency of 
 the human unit. 
 
 The ultimate purpose of merchandising is that of all 
 commercial pursuits, namely, financial profit through the 
 observance of intelligent and efficient business methods. 
 
CHAPTER n 
 
 BUYING 
 
 Obviously the beginning of merchandising is the 
 purchase of such goods as form the basis of the mer- 
 chandising policy. Although it is true that practically 
 every phase of buying has either a direct or indirect 
 effect on merchandising, yet it is more convenient 
 to treat some of the minor elements of buying in 
 connection with the various factors in merchandising, 
 as the latter occur in their proper sequence. It must 
 also be noted that at times the policy of buying is totally 
 at variance with some of the vital principles of order- 
 ing, especially when such departures indicate a greater 
 promise of profit than by following the general axioms of 
 merchandising. This is especially the case in periods 
 of advancing prices when the wise policy is to make 
 conmitments farther ahead and to carry much larger 
 stocks than are needed to supply only the immediate 
 wants of customers. For after all, the successful policy 
 of every commercial organization has thoughtful op- 
 portunism for its guide rather than cast iron, fixed 
 
 principles, like unto the law of the Medes and the Per- 
 
 6 
 
BUYING 7 
 
 sians which altereth not. The truth is that there are 
 comparatively few policies in business, save those 
 of honesty and fair dealing, which cannot safely and 
 wisely be made to conform to ever changing conditions. 
 
 In most large jobbing or wholesale concerns, the 
 element of buying is apt to have undue importance at- 
 tached to it, especially in comparison with ordering 
 and selling. For instance the axiom that "Goods well 
 bought are half sold" for many years was unthinkingly 
 accepted as a fundamental truth until the art and sci- 
 ence of selling came to be more generally and intel- 
 ligently understood. Suffice it to say that buying is 
 a pursuit whose success demands the most careful study 
 and analysis, especially from the human side, although 
 it is foreign to the purpose of this book to treat of it 
 save in relation to merchandising. 
 
 In most business organizations, both wholesale and 
 retail, the functions of buying and ordering of goods 
 are usually combined in the same persons. Of late years, 
 however, and in concerns large enough to make the 
 practice economical, it has been found wise to separate 
 entirely the two duties. The reasons for this are largely 
 psychological. The buyer is naturally a "bull" on 
 prices, since the profit he directly shows as his share of 
 the business gain is largely the result of an advance 
 
8 MERCHANDISING 
 
 in the prices of goods bought at lower figures. This 
 point of view often has a tendency to cause him to pur- 
 chase more heavily than conditions warrant, and con- 
 sequently to be loaded up with overstocks of goods, 
 thus involving the expense of heavy carrying charges. 
 He is also apt to buy from the manufacturer making 
 the lowest prices rather than the one rendering the best 
 service. Furthermore he is constantly tempted by a 
 special price for large quantities to order more goods 
 than results show to be either wise or profitable. 
 
 The instinct of ordering is the reverse of all this. For 
 the orderer of goods, who is not at the same time a 
 buyer, has for his main purpose the constant "turnover 
 of stock," and this confines his commitments as far as 
 possible to immediate wants. 
 
 This apparent conflict between buying and ordering 
 policies often assumes a phase somewhat as follows: 
 
 A jobber in a large city finds that he can purchase 
 some article made in the city more cheaply from a manu- 
 facturer in another city than from the local maker. 
 If it be a staple item, such for instance as nails, or car- 
 riage bolts, it is often more profitable to buy from the 
 local manufacturer, provided the cost of doing so be not 
 too great. The components that determine this prob- 
 lem are about as follows: that the advance in price 
 
BUYING 9 
 
 charged by the local manufacturer be not too great, 
 also that he give prompt service. With these requisites 
 the resultant small stock carried and the consequent 
 rapid turnover of stock, more than offset the lower 
 price of the far away manufacturer. The latter suf- 
 fers also the additional handicap of not being able to 
 deliver his goods as promptly as the local manufacturer, 
 consequently the jobber is forced to carry a larger stock 
 when buying from him. The wholesaler is thus enabled, 
 when buying from the local or nearby manufacturer, 
 to fulfill one of the fundamental principles of ordering, 
 namely, carrying the smallest possible amount of stock 
 by placing constant small orders at frequent intervals. 
 The continuing aim of buying is to purchase at lower 
 figures than those generally prevailing on the market, 
 and thus to make a profit over one's competitors because 
 of this special concession in prices. This is accomplished 
 only when this special price is reserved as net profit, 
 and not reflected in a lower selling price to customers. 
 What actually happens in the great majority of cases 
 is a lower selling price, because of a lower cost, and an 
 endeavor thus to obtain additional business on this 
 basis. It is this latter phase only which directly affects the 
 policy of ordering, and will be treated under the subject 
 of selling. 
 
CHAPTER m 
 
 TURNOVER OF STOCK 
 
 The most fundamental and important factor in mer- 
 chandising is that of the "turnover" of the stock of 
 merchandise on hand. Its purpose is the employment 
 of the least possible amount of capital in the business, 
 as shown hi its investment in the stock of goods on 
 hand, consistent with having enough goods always to 
 fill orders promptly. Its value as a money making fac- 
 tor of prime importance can only fairly be judged in 
 % 
 full measure in normal times when speculation is largely 
 
 absent and when goods are plentiful and can be had 
 readily. Under such conditions not only is the element 
 of speculative profit absent, but competition is most 
 severe and consequently there is not the usual percentage 
 of gross profit or the difference between the cost of the 
 goods and what they are sold for. The turnover of the 
 stock, then, becomes a most necessary component in the 
 problem of obtaining sufficient net returns on the volume 
 of business. Theoretically all money invested in the 
 
 stock of merchandise on hand must have charged against 
 
 10 
 
TURNOVER OF STOCK It 
 
 it the current rates at which mercantile loans are usu- 
 ally obtained, or say an average of 6% per annum. So 
 far as results are concerned, it does not matter whether 
 the capital so invested in a stock of goods is all owned 
 by the concern in question, or whether a part of it is bor- 
 rowed from the banks. For the logic of the situation 
 is that if the money owned by the concern was not thus 
 locked up in stocks of merchandise, it could be loaned 
 out at the current rate of interest and thus be earning 
 6%, when now it is not earning anything. 
 
 As a matter of fact it is rather an advantage for a mer- 
 cantile concern to own only the large portion of its cap- 
 ital, and to be a borrower for the remainder needed to 
 finance its operations, rather than to own outright the 
 entire capital it employs. In the former case the bor- 
 rowed capital can often be obtained on demand and 
 repaid in dull times when there is no immediate use for 
 it, thus doing away with interest charges for the time 
 being. On the other hand, when the concern owns all 
 of its capital, there are times when the trade is quiet 
 and the volume of business small, and when the surplus 
 capital cannot be loaned out on demand save at a low 
 rate of interest. For it is seldom safe to loan it on time 
 at current rates, since it may be needed at any moment, 
 and practically must always be available as liquid cap- 
 
12 MERCHANDISING 
 
 ital. Besides it is rarely ever practicable for a mercan- 
 tile concern to loan money in this fashion, and it must 
 therefore generally be content with the small rate of 
 interest which banks give on deposits. All money in- 
 vested in stock is therefore subject to an interest charge, 
 and it is consequently a matter of necessary profit that 
 only as much of it should be so invested as is needed 
 for the safe and successful conduct of the business. 
 In addition to interest charges against the stock on hand, 
 there are also to be considered insurance, rent and depre- 
 ciation, and taxes, and the sum of all these expenses of 
 having stock on hand are what are known as carrying 
 charges. 
 
 Insurance varies according to the nature of the goods 
 and the building in which they are stored. Rent depends 
 largely upon location and the character of the building. 
 In a wholesale business its cost bears less heavily pro- 
 portionately upon the total cost of doing business than 
 almost any other item of expense because of its very 
 small ratio to the entire expense, as it does not usually 
 run any higher than i or ij^%. In a retail business, 
 however, it is a serious factor, because often retail stands 
 are in the most expensive portions of the city, and it be- 
 comes a great burden if the volume of business be not 
 in proportion. 
 
TURNOVER OF STOCK 13 
 
 Depreciation varies much according as to whether the 
 goods are perishable or not, and the extent to which they 
 are affected by the weather. In general in most branches 
 of business it is of minor importance. It will therefore 
 be seen that only a general statement can be made as 
 to the ratio of carrying charges to the amount of money 
 invested in stocks of merchandise. For the sake of 
 our argument, the sum of all these carrying charges is 
 reckoned at an average of i% per month or 12% per 
 annum. That is to say, that $10,000.00 invested in a 
 stock of goods costs $100.00 per month, or $1200.00 
 per annum. 
 
 Let us take a case of a jobber whose average stock 
 of merchandise is $100,000.00 and who does a business 
 annually of $300,000.00 at cost figures. He has there- 
 fore turned his stock three times, that being the relation 
 of the total sales to the average stock on hand. Mean- 
 while another jobber in the same line of business has an 
 average stock on hand of only $75,000.00, but does the 
 same volume of business as the first merchant, namely, 
 $300,000.00. His turnover is four times per annum. 
 Consequently, other things being equal, the second mer- 
 chant saves the carrying charges on $25,000.00 (the less 
 amount of stock on hand), or $3,000.00 per annum, be- 
 cause of a greater turnover. There is also another 
 
14 MERCHANDISING 
 
 factor in the situation, namely, that the $25,000.00 
 thus saved because of more rapid turnover can be 
 invested in stock on hand if desired to increase 
 the stock to that extent, and thus be earning 
 whatever is the average rate of profit of the con- 
 cern. 
 
 It is well to understand that in figuring the turnover 
 of an average stock of merchandise that there must first 
 be established an equality of value between the merchan- 
 dise stock on hand and the amount of sales. For the 
 value of a stock of merchandise is always the cost price 
 paid for it, while sales are reckoned in the selling prices 
 obtained for this same merchandise. For instance the 
 distributer finds that he gets on the average 20% more 
 for his goods than he pays for them. This 20% is his 
 "gross profit." If his average stock of merchandise is 
 $100,000.00 and his annual sales are $360,000.00, in 
 order to have an actual comparison of values in esti- 
 mating his turnover he must reduce his sales to the 
 same common denominator as his stock of merchandise 
 by deducting i6 2 /s%, from them. For if $100.00 be the 
 cost value of any article of merchandise, and the gross 
 profit between sales figures and the cost be 20%, then 
 the equation is: 
 
TURNOVER OF STOCK 15 
 
 $100.00 + 20% (or $20.00) =$120.00 
 and deducting i6 2 /s% = 20.00 
 
 brings it back again to the 
 cost value $100.00 
 
 The examples in paragraph above have sales values 
 reduced to the same common denominator as merchan- 
 dise stock. 
 
 In the matter of individual items or lines of goods, the 
 same profitable result of an increased turnover is easily 
 apparent. Let us take for example two lines of goods in 
 the hardware business, entirely distinct in their nature 
 and uses wire nails and old style razors. Let us assume 
 arbitrarily, in order to make the demonstration clearer, 
 and without any relation to the actual facts in the case, 
 that old style razors bear the merchant a gross profit of 
 50%, while the gross profit on wire nails is only 7^%. 
 The average merchant is apt to assume that because of 
 the great difference in the gross profits of the two articles 
 that old style razors are very profitable and wire nails are 
 not. Facts do not bear out this assumption, provided 
 both articles be subjected to the same intelligent system 
 of merchandising. The cost of handling and selling wire 
 nails is much less than that of old style razors. Wire 
 nails can be stored in cheap warehouses where rent and 
 insurance are small. Nor is there any depreciation in 
 
16 MERCHANDISING 
 
 them when kept in stock for some time. They can be 
 handled by cheap labor. Moreover, the cost of selling 
 wire nails is very low. They are bought by the dealer 
 or consumer when needed and without any special effort 
 on the part of the salesman. On the other hand, old style 
 razors have to be kept where they are not exposed to mois- 
 ture and where they are secure from theft. This implies 
 higher rent and insurance charges than on nails. They 
 require higher priced labor in handling than wire nails. 
 They do not "sell themselves" as in the case of the 
 nails, but are usually sold from samples carried by the 
 salesman, and often require much art and time to effect 
 their sales. If therefore the average cost of doing business 
 of any concern is 18%, it is probable that the total cost 
 of handling nails is only about 5%, while that of old style 
 razors is 25%. 
 
 The percentage cost of doing business is arrived at by 
 the relation of the total sales to the total expenses. If 
 the annual sales of a concern are $1,000,000.00 and the 
 total expenses for the same period $180,000.00, then the 
 percentage cost of doing business of that concern is 18%. 
 It is evident that it costs more to handle some lines of 
 goods than others, and consequently that the percentage 
 cost of doing business on some lines is greater than the 
 average of 18% and on others it is less. In general, how- 
 
TURNOVER OF STOCK 17 
 
 ever, any attempt to differentiate more than approxi- 
 mately the cost of doing business among all the different 
 lines which make up the assortment of a mercantile store 
 is too complex and moreover is rarely of any practical 
 value. 
 
 As an example, however, of the value of the turn- 
 over in affecting profits, let us assume that the gross 
 profits of old style razors are 50% and the cost of han- 
 dling them about 25% while the cost of handling wire 
 nails is 5% and their gross profit 7/^%. Wire nails 
 are supposed to be made by a nearby nail and wire 
 mill, who can ship orders promptly and can also make 
 quick deliveries, so that there is no need of the jobber 
 carrying a large stock of these goods, thus rendering 
 possible a frequent turnover of stock. On the other 
 hand, old style razors are mostly imported, or rather 
 they were before the European war. So it takes some 
 time for the order to reach the manufacturer, and 
 some time for shipment to reach this country after it 
 is once made. In the case of wire nails if any one 
 size runs out unexpectedly, it is a very simple matter 
 to wire or telephone the nail mill and get prompt ship- 
 ment. Obviously this cannot be done in the case of 
 old style razors, so a complete stock must be ordered 
 some time in advance, and of such assortment and quan- 
 
i8 MERCHANDISING 
 
 tity as will keep the stock intact for many months. 
 We assume, then, that it is only necessary to carry 
 a little over three weeks' stock of wire nails on hand at 
 any one time, while six months' stock of old style razors 
 is the least it is safe to provide for. The problem then 
 assumes the following phase: If we invest $10,000.00 
 in wire nails and turn the stock over 14 times annually, 
 we have a total investment of $140,000.00 on which we 
 make a gross profit of 7}^% or $10,500.00, but this 
 gross profit is practically on $10,000.00, which was re- 
 invested some 14 times. If we invest the same amount, 
 $10,000.00, in old style razors, and turn the stock over 
 twice annually, or once every six months, and have a 
 gross profit of 50%, then we have a total investment 
 of $20,000.00, and a gross profit of $10,000.00. Assum- 
 ing that the cost of doing business on wire nails is 5% 
 and on old style razors is 25%, we then have the fol- 
 lowing conclusion: 
 
 Wire Nails, gross profit $10,500.00 
 
 Less cost of doing business, 5% on 
 $140,000.00 7,000.00 
 
 3,500.00, 
 
 or practically a net profit of 35% on the $10,000.00 we 
 have so constantly invested. 
 
TURNOVER OF STOCK 19 
 
 Old Style Razors, gross profit ...... $10,000.00 
 
 Cost of doing business, 25% on 
 $20,000.00 ..................... 5,000.00 
 
 5,000.00 
 
 or a net profit of 50% on the $10,000.00 so constantly 
 invested. 
 
 It will thus be seen that old style razors, with a gross 
 profit of more than 600% greater than wire nails, are 
 only able to show, because of a smaller turnover, a net 
 profit of about 40% greater. The real purpose of the 
 turnover in the case of wire nails is to obtain a satis- 
 factory profit on an article with a low rate of both gross 
 and net profit but with possibilities of a high turnover. If 
 for instance, through lack of intelligent attention and 
 ordering, the turnover on wire nails is only 7 times per 
 annum, we have the following situation: 
 
 7 times $10,000.00 ................ $70,000.00 
 
 total capital employed. 
 Gross profit 7^5% ................ $ 5> 2 5- 
 
 Cost of doing business 5% on 
 $70,000.00 ..................... 
 
 1,750.00, 
 
 or a net profit of one-half of that when the turnover was 
 14 times instead of 7. 
 
20 MERCHANDISING 
 
 It is essential, however, that the gross profit on any 
 article shall exceed the cost of doing business on that 
 article, for frequent turnovers cannot create a profit 
 where none exists. The amount of capital constantly 
 reinvested is not exactly the same amount each time, 
 but somewhat larger on the whole. This because of 
 what may be called the "laps and slams" of business. 
 In the case of a wholesaler, for instance, while he pays 
 cash promptly on 10 days' time for wire nails he pur- 
 chases from the manufacturer, he does not receive this 
 money back as promptly from his customers, the retail 
 trade. Probably not over 50% of them discount their 
 wire nail bills within ten days' time. The remainder 
 take from 30 to 60 days before remitting for them. 
 Therefore as the wholesaler does not receive his money 
 back as promptly as he pays the manufacturer, in order 
 to bridge this gap he has to add something to it. To this 
 small extent which it is not possible to estimate with 
 any approach to accuracy, there is somewhat more 
 capital invested than the original $10,000.00, and con- 
 sequently the favorable showing as to the per cent of 
 earnings by quick turnover is that much affected. 
 
 The rate of turnover is found by the relation of aver- 
 age stock on hand to the total annual sales. If the sales 
 of wire nails are 140,000 kegs per annum, and the aver- 
 
TURNOVER OF STOCK 21 
 
 age stock 10,000 kegs, then the annual turn over is 14 
 times. 
 
 The unit employed in merchandising in estimating 
 the .turnover on lines of goods or individual articles is 
 usually that of quantity, rather than dollars and cents, 
 though the result is practically the same in both cases. 
 In the following chapter we will consider the methods 
 by which the turnover of stock is accomplished. 
 
CHAPTER IV 
 
 THE CARE OF STOCK 
 
 The general principles of merchandising are equally 
 applicable to wholesale and retail distribution, but the 
 methods of application often differ in degree rather than 
 in kind. 
 
 Many systems in merchandising are necessitated in 
 the wholesale or jobbing trade because of the size of 
 the business, whereas to attempt to apply such systems 
 in their entirety to retail business would be both unfit- 
 ting and expensive. This is the case in less degree with 
 the smaller jobber, as compared with the larger dis- 
 tributer. By force of circumstances and difference in 
 environment the lesser business must often substitute 
 the human equation for mechanical methods and systems. 
 
 The plans and policies outlined in this book are in- 
 tended in their primary application for the large whole- 
 sale distributer, though in essence they are equally ap- 
 plicable to the retail dealer with such modifications as 
 the difference in surroundings and the size of the busi- 
 ness render necessary. 
 
 All successful merchandising is predicated on the 
 
 22 
 
THE CARE OF STOCK 23 
 
 proper care and handling of the stock of goods on hand. 
 There must be an accurate system which registers the 
 receipt and shipment of goods so far as they affect the 
 amount and volume of stock on hand. There must also 
 be always available the knowledge whether goods on 
 orders have been shipped; that is, are "on the road" 
 as it is usually called. Above all there must be a reliable 
 method of accurately "taking an account of stock," as 
 it is generally known. In other words, it must be pos- 
 sible to know on specified fixed dates just how many 
 items of all goods are on hand. The first purpose of such 
 knowledge is to determine what the sales have been for 
 a certain period just passed, and thus decide whether to 
 place additional orders; and if so, in what quantities. 
 The details of this system will be fully treated in the 
 chapter on "Ordering." 
 
 Taking stock of any long line of goods, as for in- 
 stance carriage bolts, demands both care and experience. 
 The man counting the goods must be familiar with 
 them and must likewise be very accurate. To fail to 
 count all the goods and thus report fewer goods on hand 
 than is really the case means showing larger sales than 
 actually exist and consequently the placing of a larger 
 order than should be the case, with resulting overstocks. 
 If, for instance, the account of stock on a certain date 
 
24 MERCHANDISING 
 
 reports 200 kegs of 8d common wire nails, when the 
 real stock is 500 kegs, there may result something like 
 this: the sales, say for the past 30 days or the date 
 when the previous account of stock of nails was taken, 
 would show 300 kegs greater than was really the case. 
 The new order which is placed will therefore be for 
 more nails than are actually needed and will consequently 
 be an overstock to that extent. On the other hand, 
 if the stock on hand is reported at 800 kegs when 
 it really is 500 kegs, the sales are wrong to the extent 
 of the error and the order placed will be just that much 
 too small. A shortage of goods will consequently soon 
 develop, unless the error be discovered in time. It is 
 therefore very important that the stockman, whose duty 
 it is to take account of stock, shall have this made 
 his first duty, and shall not, as is often the case, be 
 forced to neglect taking accounts of stock because of 
 being called away in very busy times to assist in getting 
 out goods for shipment. 
 
 In most large jobbing houses stocks of long lines of 
 goods are carried in two ways, or what is known as 
 " duplicate " and "open" stocks. In the case of wood 
 screws, for instance, it is found that the stock of staple 
 sizes is too large to go in the bins from which they are 
 to be taken out to fill orders, so a full case of a staple 
 
THE CARE OF STOCK 25 
 
 size is opened and the bin filled with all it will hold. 
 This may mean only 200 .'gross of a staple size, say 
 i x 10, whereas the total stock of that particular size 
 on hand may be 2000 gross. The remainder, or 1800 
 gross, are stored away in the original cases, as they 
 came from the manufacturer, in the cellar of the same 
 building or in some adjoining or nearby warehouse. 
 Whenever the bin containing the open stock needs re- 
 plenishing, a case is opened in the duplicate stock and 
 the necessary amount sent to the open stock, so when- 
 ever the account of stocks of wood screws is taken the 
 stock must be counted in both open and duplicate 
 stocks. To save this unnecessary labor there is often 
 used in duplicate stock what is known as "a perpetual 
 inventory," where the account of stock is kept up to 
 date by the simple process of addition and subtraction. 
 For instance, on the card which is attached to each bin, 
 there is a constant record of the shipments received 
 from the manufacturer, and of the amounts sent to open 
 stock to be shipped to customers. The difference be- 
 tween these figures shows the stock on hand at any 
 given period. This perpetual inventory must be veri- 
 fied from time to time by an actual taking of the stock 
 in duplicate, for, owing to human forgetfulness in not 
 putting down on the cards all the additions and sub- 
 
26 MERCHANDISING 
 
 tractions, the stock record on the card will otherwise 
 become very inaccurate. The perpetual inventory sys- 
 tem is confined to duplicate stocks only, as the amounts 
 in the open stock are small enough to be easily 
 counted. The dual system open and duplicate is like- 
 wise applicable only to complicated lines of much volume 
 and in large quantities. Other stocks, with lesser as- 
 sortments and smaller quantities are all kept in open 
 stocks. The dual system necessitates extra care and ac- 
 curacy hi keeping track of the goods on hand, and 
 emphasizes the need of trained and experienced help 
 for such purpose. This is brought out very succinctly 
 in the matter of what is known as "Low Reports " and 
 "Shortage." The accounts of stock tell the story at 
 the time of the condition of the stock, and whether 
 there is sufficiency of goods or whether more need to 
 be ordered; but they do not cover the daily changes in 
 the intervals between the taking of these accounts. No 
 amount of care and foresight in placing orders hi ad- 
 vance for the wants between these intervals of stock 
 taking can possibly provide all the needed goods and 
 prevent some of the goods from being exhausted. This 
 is due to the uncertainty and inequality of sales which 
 vary constantly from day to day, owing to new and 
 unexpected demands and constantly changing con- 
 
THE CARE OF STOCK 27 
 
 ditions of business. To cover these conditions there 
 is frequently used a system of what is known as "Maxi- 
 mum and Minimum Quantities." A memorandum is 
 taken from the records of sales of the average sales of 
 each item in stock, say for 60 days during a period of 
 several years. There is then established a maximum 
 quantity of about the full sixty day sales, and a mini- 
 mum quantity representing 30 days' sales. These quan- 
 tities, of course, need to be revised at long intervals so 
 that they may be in accordance with changes in the 
 volume of sales. The maximum quantity represents the 
 figures above which the stock must not be allowed to go, 
 since all stock in excess of such figures is regarded as an 
 overstock. The minimum figures are those below which 
 the stock must not be allowed to fall, since to do so in- 
 curs the risk of the goods running out entirely before the 
 supply can be replenished. Both maximum and mini- 
 mum figures are placed on a card upon the bin containing 
 the stock of the item in question. In goods having both 
 open and duplicate stocks, this is done upon duplicate 
 stocks only, and in those having open stocks upon the 
 open stocks. It then becomes the duty of the man in 
 charge of the stock to report to the Merchandise Depart- 
 ment whenever the maximum or minimum figures are 
 reached on any particular item. In the case of maximum 
 
28 MERCHANDISING 
 
 figures the Merchandise Department must prevent any 
 further accumulation of stock of such item by either can- 
 celing orders due for such goods, or else holding up and 
 deferring shipment of them for the tune being, and by 
 not placing any further orders for the item in question 
 until the stock on hand falls below the maximum fig- 
 ure. In the case of the minimum quantity having been 
 reached, a memorandum usually known as a "low re- 
 port" is sent by the Stock Department to the Mer- 
 chandise Department, and it is then the duty of the 
 latter to provide the necessary goods before the stock 
 runs out entirely. The ways and means of doing this 
 will be discussed under the head of "Ordering" in suc- 
 ceeding chapters. In spite of the most complete sys- 
 tems, well and intelligently administered, and the most 
 careful and far-sighted ordering, it is impossible to pre- 
 vent goods running out entirely, and this becomes a 
 "shortage" and is one of the most expensive happen- 
 ing in business. 
 
 The greater part of the machinery of business is di- 
 rected to effecting sales; and all the expense of operating 
 this machinery is incurred to no purpose in case of inabil- 
 ity to fill the order on goods because these are "short;" 
 that is, not in stock and have to be omitted from the order 
 in question. There is the further disavdantage of the dis- 
 
THE CARE OF STOCK 29 
 
 couragement of the salesman who takes the order and 
 finds that the goods are not shipped and hesitates, there- 
 fore, to make further sales of them. Worst, and most 
 fatal of all, is the likelihood of the customer becoming dis- 
 satisfied when he finds that his orders are not filled com- 
 pletely and transferring his business to some other concern 
 in hopes of receiving better service. For the foundation 
 stone of selling goods is not price, but good service, as will 
 be shown later on. If the matter of minimum quantities 
 is watched closely the chance of shortages is materially 
 reduced, since opportunity is thus given the Merchan- 
 dise Department to prevent shortages by ordering goods 
 promptly when the Low Report is received from the 
 Stock Department. The weakness in the plan is that 
 which pervades every department of human existence, 
 viz., the carelessness, the indifference, the thoughtlessness 
 and the superficiality of human nature. In most whole- 
 sale houses the stock clerks who "work orders" (that 
 is, get out goods to be shipped on orders) are supposed 
 to report shortages of goods in the bins as they dis- 
 cover them in the routine of their duty. This is more 
 or less automatic, as naturally the shortage must be 
 reflected in the absence of the goods which are short on 
 the order, or "bill" as it is termed, which the stock 
 clerk is working. But a case may occur where the 
 
30 MERCHANDISING 
 
 stock clerk takes all the goods in the bin to fill exactly the 
 order he is working, and leaves there a shortage which 
 he fails to report so long as his order is satisfied. As a 
 rule, the stock clerk works under pressure, as his effici- 
 ency and consequent chance of promotion and higher 
 salary is based upon the volume of goods he gets out. 
 His interest, therefore, is in getting out many orders 
 and not in reporting shortages. Discovering and re- 
 porting shortages is also a part of the duty of the head 
 stock man on each floor of the building. But in spite 
 of these systems, shortages will often not be reported 
 promptly because nothing in the regular routine of 
 business brings them to the attention of the Stock 
 Department, and thus valuable time is lost in replacing 
 the goods. 
 
 The most efficient method of proper care of stock in 
 all the details that relate to merchandising is by close 
 cooperation between the Stock and Merchandise De- 
 partments in such fashion that the Stock Department 
 realizes that it shares equally with the Merchandise 
 Department the responsibility of keeping up the stock 
 in such measure, as far as humanly possible, that orders 
 may be filled promptly and completely. 
 
CHAPTER V 
 
 ORDERING REGULAR GOODS 
 
 The first requisites of ordering in merchandising are 
 accurate and intelligible records, which show the stock 
 on hand and the sales of every article in stock at stated 
 intervals throughout the year. There are various sys- 
 tems which produce these results, but the most effective 
 are those which combine all this necessary information 
 in a short space so that it can be seen and comprehended 
 at a glance. 
 
 The real value of all systems in business consists in 
 their simplicity and economy, and not in their com- 
 plexity. Most systems unfortunately essay to convey 
 too much information and are consequently confusing 
 rather than helpful. The most effective system in 
 ordering is that which tells on a card, or the page of a 
 book, what the stock on hand is on certain specified 
 dates; what are the sales of the article in question be- 
 tween those dates; where goods were ordered and in 
 what quantity: and whether the goods so ordered have 
 been shipped. Entries of stock on hand on such records 
 
 naturally vary as to the frequency of their entry accord- 
 
 31 
 
32 MERCHANDISING 
 
 ing to the nature of the goods, but they should always 
 be made as nearly as possible on the same dates each 
 year, that the comparisons of sales from period to pe- 
 riod may thus be absolute. Staple goods, namely, those 
 which are bought and sold in large quantities, should be 
 entered on the records oftener than those which are 
 comparatively small sellers. In the former case it is 
 much easier and more intelligible to order moderately 
 and for goods as needed, by ordering frequently. Thus, 
 also by close and constant watching there is less danger 
 of accumulating overstocks. In the latter case, that 
 of slow selling goods, it is quite sufficient and more 
 economical to order at longer intervals and thus save 
 the expense and labor of taking accounts of stock and 
 of clerical work. 
 
 There should be a regular schedule arranged for the 
 entire year as to when each line of goods and each 
 article shall be entered. Both Stock and Merchandise 
 Departments should have this schedule constantly be- 
 fore them, and see that it is strictly adhered to. Staple 
 goods do not need to be entered on this record oftener 
 than once every 30 days, while on slow selling goods 
 once every 60 to 90 days is usually sufficient. These 
 rules apply to goods such as are in demand more or less 
 all the year around. The story of seasonable goods, or 
 
ORDERING REGULAR GOODS 33 
 
 those which sell only at certain seasons, is a different one, 
 and will, form the subject of a separate chapter. 
 
 The principle of the record is very simple. It shows 
 that on certain set periods of each year there were cer- 
 tain quantities of stocks on hand of all the various ar- 
 ticles carried in stock; that between the periods there 
 were certain quantities of these same articles ordered 
 and received. If to the amount on hand at one period 
 there be added the amounts received into stock be- 
 tween this, period and the next succeeding period, 
 and there be deducted therefrom the amount on hand 
 (or in stock) on this next succeeding period, there will 
 be shown the sales between these two periods. It, 
 therefore, is very simple when ordering goods at any 
 one period to refer to the same period for a number 
 of years past as a guide for the quantities to be ordered 
 for the coming period, since the sales for that par- 
 ticular period are shown in the records of the past. This 
 record must also show all goods previously ordered which 
 have been shipped and not yet received in stock, or 
 which have not yet been shipped and are still due, since 
 both of these quantities figure in the amount needed 
 for the next succeeding period. If, for instance, the 
 sales records indicate that 800 dozen of any one article 
 are needed for the next succeeding period, and there are 
 
34 MERCHANDISING 
 
 200 dozen of this article in stock, 200 dozen in transit 
 (or "on the road," as it is usually called) and 200 dozen 
 ordered from the manufacturer and not yet shipped 
 and still due, it is obvious that it is only necessary to 
 place an additional order for 200 dozen. These records 
 are easily kept up, though they require that this be 
 carefully done to insure their full efficacy. They are 
 absolutely invaluable in ordering, but must be accom- 
 panied by intelligent thought and study, or else they may 
 prove seriously misleading and consequently very expen- 
 sive. 
 
 In a large wholesale distributing organization there 
 is usually such a large stock of merchandise on hand, 
 of such varied assortment, embracing so many dif- 
 ferent and varied articles, that some of them are con- 
 stantly being affected, both in demand and supply, by 
 the thousand and one things which occur daily in the 
 social and political, as well as in the economic world. 
 This has been made most manifest by the European 
 War, which in many ways upset all previous conditions 
 in commercial life, because of a profound and far reach- 
 ing influence exerted in many instances on the most 
 apparently insignificant articles of merchandise in daily 
 use. He, who is in charge of merchandising, should 
 therefore possess both analytical ability and vision; the 
 
ORDERING REGULAR GOODS 35 
 
 power and insight to analyze each problem and every 
 article in merchandising, and the vision to see its likeli- 
 hoods and possibilities, for ordering goods is far from being 
 the dull, prosaic drudgery which it is usually accounted. 
 Instead, it is an extraordinarily complex and interesting 
 matter and a liberal education when properly compre- 
 hended. To be done accurately and efficiently it needs 
 constant thought and study, and consequently demands 
 for its full accomplishment that trained mind which is the 
 best product of education. In every case when ordering 
 there should be in the beginning an answer made to 
 the following queries: what is the article to be ordered 
 used for, by whom and under what conditions? How 
 is its use affected by the weather, by changes in public 
 taste and in education, by the price at which it is sold, 
 and by the introduction of other similar articles? Can 
 it be readily had for shipment from the manufacturers? 
 Will a more or less long delay occur? Will it be delayed 
 in transit, or will prompt delivery be made? Is the pur- 
 pose for which it is being used going out of fashion; and 
 if so, from what cause? Is it essentially suitable for the 
 purpose for which it is intended, or is it a temporary 
 matter with only brief life for its portion? 
 
 How these and other vital and incidental questions 
 which occur in ordering may be answered is best illus- fj 
 
 \ 
 
36 MERCHANDISING 
 
 trated by concrete examples. The first supposititious 
 case is that of a certain blue and white enameled ware 
 to be ordered at the present time. This general style 
 of household wares is largely the product of compar- 
 atively recent time, but has grown greatly in favor 
 and general use. It is a household affair, and used 
 largely in the kitchen and consequently by women. 
 It comprises a great many articles and a large assortment 
 of many different items and of many different sizes. It 
 shares its use with all other varieties of enamel ware, and 
 all other wares used for similar purposes. The question 
 of ordering therefore brings up not only its own likeli- 
 hoods and possibilities in the way of future sales, but 
 likewise those of all its competitors, as affecting its own 
 future sales, since all these matters must be taken into 
 account in considering the amount to be ordered. The 
 sales records give the figures of sales not only for the suc- 
 ceeding period of last year and other years, but also the 
 periods of the present year, so that the problem then be- 
 comes one of an examination of such records to note any 
 f ailing off or increase in sales, and also what an intelligent 
 analysis of the present situation indicates as to the future. 
 It will be readily seen then that this procedure must take 
 into account the examination and tendency of the future 
 sales of all the various wares, enameled and otherwise, 
 
ORDERING REGULAR GOODS 37 
 
 which are used for the same purpose as blue and 
 white. 
 
 The first question is the extent to which the demand 
 among the different household wares will be affected 
 by each other. Among the earliest varieties of enameled 
 ware was gray colored ware, serviceable and compara- 
 tively cheap, so that it came to be in general use among 
 the poorer classes, or those to whom economy in such 
 matters is all important. It can be set down as an axiom 
 in merchandising that there will always be a large and 
 steady demand from the great mass of consumers for ar- 
 ticles of this nature, because of their low price and effi- 
 ciency. They may not be attractive in appearance, but 
 so long as they satisfactorily fill the purpose intended, they 
 will be in constant demand. The two factors which ad- 
 versely affect their sales are deterioration in quality or 
 a serious advance in price. The first case gives con- 
 tradiction to the rather universal impression not only 
 among the merchants, but among economists, that the 
 cheapness alone of an article is the most convincing 
 factor in its sale. This impression is distinctly erroneous 
 in any article which is a matter of daily use. The common 
 sense of the consumer soon perceives that a cheap ar- 
 ticle which does not sufficiently wear or endure is not 
 cheap after all, because it requires such constant re- 
 
38 MERCHANDISING 
 
 plenishment. It has been well said by an exceedingly 
 shrewd business man of great experience and keen 
 insight that "The recollection of quality remains long 
 after the price is forgotten." The real truth is that the 
 compelling reason for the purchase of such cheap com- 
 modities as have low prices for their principal attraction 
 is the comparative lack of funds on the part of most of 
 the buyers of such goods, so that they are unable to 
 pay for more expensive articles. 
 
 The second consideration, that of an enhancement 
 in price, is usually a serious handicap to the sale of this 
 class of articles. For then the thought of the buyer 
 turns to somthing cheaper that will serve his purpose 
 equally well. In this particular instance such thought 
 shifts entirely away from the line of enamel wares to 
 that of tin ware. Tin ware constitutes a large and 
 varied line, and is probably the most democratic and 
 generally used of all wares, although during the past 
 quarter of a century its use has been largely trenched 
 upon by the growing demand for enameled ware. The 
 reason for this is partly physical, partly psychological. 
 
 In the severe " cut throat" competition which for many 
 years prevailed between the manufacturers of tin ware 
 there inevitably ensued that short-sighted and fatal mis- 
 take of deterioration in quality, which usually marks and 
 
ORDERING REGULAR GOODS 39 
 
 distinguishes such commerical warfare. The natural 
 consequence was the shifting of a large class of con- 
 sumers to better grades and qualities of other wares, 
 notably enameled wares, which not only gave satisfaction 
 in use but were attractive in appearance. This latter is 
 something which is rarely true of tin ware, since its shiny 
 and unfinished appearance is not prepossessing. So 
 obvious did the serious and far reaching effects of the 
 deterioration in tin ware become to the manufacturers 
 that some of the wiser and far-seeing ones made and 
 advertised a higher grade of tin ware, of heavier mate- 
 rial, better and more abundantly tinned, and thereby 
 established a large and permanent trade, though the 
 prices of such a grade of goods were appreciably higher 
 than those of the depreciated articles. The psychological 
 problem involved is one not generally recognized, usu- 
 ally for lack of intelligent analysis, but is none the 
 less important. In fact the mental side of buying and 
 selling is often as important and compelling as the 
 physical facts involved. 
 
 As before stated tin ware is essentially an elemental and 
 democratic commodity. It was the natural accompani- 
 ment of pioneer life in this country, because of its wearing 
 and enduring qualities. Likewise it finds great use 
 among the poorer cjasses to-day, with whom ready money 
 
40 MERCHANDISING 
 
 is scarce, and to whom appearances in such matters are a 
 minor consideration. Its use in any part of the country 
 can be predicated in advance by a knowledge of the 
 habits, tendency of thought, traditions, customs and 
 modes of living of the people. Its use in the East is pro- 
 portionally small, and this percentage of use compared to 
 other wares increases progressively as you go West and 
 South. It is much used among the negroes in the South 
 and among the poorer classes of farmers in the West. 
 Yet in the Great Plains States, Kansas, Nebraska, and 
 Oklahoma, as examples, the use is very large even among 
 the better educated and comparatively well to do. Nor 
 is the reason far to seek. The inhabitants of these states 
 are not only unusually educated and intelligent on the 
 whole, but they are entirely devoid of that affectation 
 and loss of simplicity which unfortunately often accom- 
 panies the acquirement of knowledge. They are most 
 elemental and direct in all their ways of thought, and are 
 characterized by a breadth and scope of mental horizon, 
 which is in keeping with and is largely the product of 
 their physical environments. Appearance with them 
 counts for but little compared with intrinsic merit. Thus 
 any study of the mental peculiarities of a people fore- 
 casts largely in what direction their material wants are 
 likely to tend. So tin ware, when of good quality, 
 
ORDERING REGULAR GOODS 41 
 
 appeals to them because of its simplicity, economy and 
 serviceability. The story of tin ware, therefore, points 
 the way to an intelligent study and analysis of the 
 ways, manners and mental attitude of the people of 
 any section as to the kind of goods they are likely to 
 use. 
 
 The study of comparative prices discloses at once 
 that if the cheapest form of enameled ware has ad- 
 vanced in price, those of tin ware have done likewise 
 and that the proportion of cost between them re- 
 mains much the same. Under these conditions ex- 
 perience shows that there will be comparatively small 
 shifting of demand from the higher priced to the cheaper 
 line of goods. 
 
 The next problem as to how the various enameled 
 wares in the future will sell compared with each other 
 is that of choice of colors, as this is of equal importance 
 between them as compared with prices. The solution 
 to this problem lies in the fact that the users are largely 
 women. Now it is a matter of common knowledge and 
 experience that on the whole women possess a truer and 
 more instinctive sense of the harmony of colors than men, 
 all theoretical psychologists to the contrary notwithstand- 
 ing. It is not surprising, therefore, that the sales hi 
 general of blue and white enameled ware are larger than 
 
42 MERCHANDISING 
 
 those of any other color or combination of colors. And 
 the compelling reasons for this seem to be not alone the 
 natural association of white and blue in harmonious 
 blending, but the fact that most women possess a set of 
 blue and white china and like things "to match." In 
 defiance and apparent ignorance of the fact that the 
 woman's taste in colors was the principal factor to be 
 consulted in this matter there have been essayed at 
 times new combinations of incongruous colors in enameled 
 ware, combinations that in feminine phrase "screamed 
 at each other," so utterly did they refuse to blend. Pat- 
 terns of this description were inevitably failures from 
 the beginning and the unfortunate manufacturers never 
 realized why, nor were conscious of their lack of insight 
 and perception. It must be remembered, however, 
 that good taste is a progressive affair and a matter of 
 education, and that a generation which knows much 
 cultivation demands something more picturesque than 
 the simple combinations of colors, such as blue and white. 
 Hence there arose new combinations of two or more 
 colors, not sharply defined nor mottled, but gradually 
 shading into each other. It was obvious from the be- 
 ginning that there would be some demand for such 
 colored wares, but it was not a difficult forecast for 
 those who ordered these goods to do so in moderation, 
 
ORDERING REGULAR GOODS 43 
 
 without danger of overstocking (being careful not to 
 get overstocked), because any intelligent analysis of 
 the situation brought our two fundamental facts one, 
 that those who desire something more picturesque and 
 striking are necessarily much in the minority compared 
 to the many who prefer homelier and simpler combina- 
 tions. The other analysis discloses the elemental fact 
 that in the things of life that are in daily practical use 
 among the many it is not safe to attempt to carry the 
 matter of decoration and picturesqueness to the same 
 degree that is befitting articles of luxury, whose in- 
 trinsic value does not lie so much in their practi- 
 cality as in their appearance. The furniture and be- 
 longings of a kitchen are not intended to be so appealing 
 as those of the dining room and to attempt to make 
 them so is apt to create in time a weariness of their 
 very picturesqueness. 
 
 Hence the practical conclusion as to the comparative 
 quantities to be ordered of blue and white and of the 
 " shaded" wares is that while the shaded wares have a 
 place of their own, it is one of less importance and not 
 so popular as the less pretentious blue and white. Still 
 another and comparatively new factor arises in the 
 ordering of what is known as white and white enameled 
 ware, that is, a ware that is white both on the outside 
 
44 MERCHANDISING 
 
 as well as on the inside, since the blue and white 
 shaded wares are colored on the outside, and are white 
 only on the inside. This subject will be treated in the 
 next chapter. 
 
CHAPTER VI 
 
 ORDERING REGULAR OR STAPLE GOODS, CONTINUED 
 
 For a number of years the sale of white and white 
 ware had a checkered career in this country. Most of 
 it was imported, as it is difficult? and expensive to make 
 because of the large proportion of "seconds" or im- 
 perfect goods. This is due to the fact that all stains or 
 discolorations or flaws of any character show very 
 plainly upon the outside white surface, and the goods so 
 affected cannot be sold as first class articles. This high 
 cost limited their use to a comparatively narrow range 
 of demand. The dominant factor in such demand was 
 largely psychological and based upon their cleanly and 
 sanitary appearance. The fact that any defect or discol- 
 oration could not be hidden was constant testimony as 
 to the thoroughness of the manufacture and to careful in- 
 spection. Naturally these wares found ready reception 
 in hospitals, sick rooms, and all places where their high 
 grade appealed to the more intelligent taste. They were 
 sold largely on their merit, rather than on their price, 
 and not being used by all people for all purposes, the as- 
 sortment was naturally smaller and for comparatively 
 
 45 
 
46 MERCHANDISING 
 
 few uses. Save in the hands of careful housewives, their 
 discoloration when used for stove purposes often became 
 such as militated against their general use for such pur- 
 poses. The problem then became an understanding of 
 their natural limitations as to use, since to order such 
 items as are not likely to sell save spasmodically is to ac- 
 cumulate useless and dead stock. Furthermore, because 
 in the past, they were largely imported, it became 
 necessary to anticipate wants further in advance, so that 
 orders for them had to be given in larger quantities, 
 and with a longer time allowed for filling and receiving 
 them than in the case of domestic goods. 
 
 In such cases there naturally cannot be the same 
 turnover of stock as on domestic goods, and therefore 
 this relative loss in money making capacity must if 
 possible be recompensed by a greater percentage of 
 gross profit. 
 
 The problem of their future sales whether greater or less 
 than in the past, becomes simply one of the increase of 
 good taste and the spread of ideas and habits of sanitation 
 in this country. In other words, they are one of the many 
 evidences to be found in merchandising of the steady 
 growth of education and intelligence among the people 
 and, consequently, it is entirely safe to predicate the in- 
 creasing use of these goods within certain limitations. 
 
ORDERING REGULAR OR STAPLE GOODS 47 
 
 Of an entirely different character and for an entirely 
 different reason is the use of nickel-plated on copper 
 ware, and yet the basis of this use is also largely 
 psychological. It is true that the ware is substantial and 
 enduring, but that is not the only compelling cause of 
 its employment. That cause is to be found largely in 
 the tastes and fancy of modern civilization in the 
 "swell" hotel and restaurant life of the great cities, 
 in the afternoon teas, and midnight suppers of fash- 
 ionable and would-be fashionable society, in shapes of 
 the articles, sometimes quaint, sometimes graceful, some- 
 times grotesque. Its various vessels appeal equally to 
 the bizarre and the artistic in human nature. Its com- 
 paratively high price and its very appearance bars it 
 from use by the hydra-headed many. It does not lend 
 itself to universal use for kitchen and household pur- 
 poses, but rather to the things of the table, the elegancies 
 of coffee and teapots, of casseroles, and chafing dishes, 
 of trays and samovars. 
 
 Moreover, anything nickel-plated, to be presentable, 
 has to be constantly polished, and the busy house- 
 wife is not seeking any extra labor in that direction. 
 Books, poems, and essays, always written by men, tell 
 of the industrious housewife delighting in the toil of 
 constantly polishing all household utensils and keeping 
 
48 MERCHANDISING 
 
 them immaculately clean. This sentimentality may 
 have passed muster in the Mid-Victorian period, but we 
 know to-day that women dislike useless drudgery as 
 much as men and gladly seek means of escape from 
 such vain labor. This is easily apparent in the steadily 
 growing sale of all those various labor saving devices in 
 household affairs, which have done so much to make the 
 housewife's job more tolerable. 
 
 The story, therefore, is one of careful watching of 
 the various styles of the more ornamental items of 
 nickel-plated ware, since nothing is more fickle and 
 unreasoning than the tastes and fancies of those to whom 
 " style" in anything is an important characteristic. On 
 the other hand, there will probably always be a steady 
 demand for the staple items, because they serve a useful 
 and enduring purpose. Naturally enough, however, 
 the demand for this class of goods was much curtailed 
 by the abnormally high prices which prevailed among 
 them as one of the effects of the European War. This is 
 a problem which constantly confronts the orderer of 
 goods as to the opposite effects of low and high prices 
 upon the demand for different articles. 
 
 It is perfectly true as a general statement that low 
 prices increase consumption and high prices curtail it, 
 but like all generalities such a statement is often mis- 
 
ORDERING REGULAR OR STAPLE GOODS 49 
 
 leading, and the only safe course is to analyze all the 
 conditions surrounding each particular article. As a 
 matter of experience eras of high prices are always those 
 of great demand, while the prevalence of low prices is 
 invariably coincident with much curtailment of business 
 activities. The answer to this apparently contradictory 
 statement is that demand and supply are practically 
 the controlling factors in price fluctuations. It is the de- 
 mand which causes high prices. Equally is it the lack 
 of demand which causes low prices. There is likewise 
 the element of speculation in times of advancing prices, 
 when merchants buy not only for their wants, but also 
 that they may reap a profit from the appreciating prices. 
 In such a condition the surest way to check the busi- 
 ness activity which causes prices to rise, and which con- 
 sequently stimulates production, is to reduce prices. 
 This invariably marks the end of a "boom" period, 
 and the result is at once a cessation of all buying save 
 for absolute necessities. The buying attitude on the part 
 of the merchant becomes that of caution. He hesitates 
 to purchase, lest he find a lower price prevailing be- 
 fore he disposes of the goods thus purchased. So the 
 situation drifts steadily downward because of general 
 caution and lack of confidence in the future, until the 
 bottom is reached and this point is characterized by 
 
50 MERCHANDISING 
 
 a plentiful lack of buying power in general and the 
 almost universal opinion that still lower figures por- 
 tend. Yet in normal times, when there is no decided 
 general drift of prices, low prices as a rule increase de- 
 mand, while high prices have the opposite effect. This 
 is an important fact in merchandising, which will be 
 treated at more length in the chapter on Selling. 
 
 The consideration of the final variety of household 
 wares Aluminum ware has many analogies to white 
 and white ware, in that one of its principal appeals lies 
 in its sanitary and cleanly appearance. Added to this 
 is its extreme lightness combined with great strength. 
 There was originally a generally prevalent idea that it 
 would not discolor or oxidize, which of course is not 
 true of any metal, since oxidation in metals differs 
 in degree and not in kind. This oxidation and dis- 
 coloration in aluminum ware is but slight, yet when fully 
 realized exercises a somewhat unfavorable effect upon 
 the users. The exceedingly high price which this ware 
 attained during the European War was also a deterrent 
 upon its sales for the time being. A feature of this 
 ware, which is common to most merchandise, is the 
 value to the merchant of an advertised line as one 
 easily sold, because better known. 
 
 In ordering such lines there has always to be borne 
 
ORDERING REGULAR OR STAPLE GOODS 51 
 
 in mind that while liberal orders can safely be made for 
 them while the advertising campaign continues and 
 thus furnishes a stimulant to demand, experience shows 
 that demand will begin to fall off perceptibly if the ad- 
 vertising be discontinued. This will be treated more 
 fully in the chapter on Advertising. 
 
 The conclusion about ordering aluminum ware is 
 much the same as to white and white ware and for much 
 the same reason, only that it has a much more extended 
 and varied use, and will probably grow faster and in 
 general favor. 
 
 Reverting to some of the other elements of the sup- 
 posititious order, which is to be placed for blue and 
 white ware, there arises the question as to the ease or 
 difficulty of getting prompt and complete shipments. 
 The answer to this involves a knowledge of the facts 
 that before the European War there was much enameled 
 ware imported from Europe, and that such importa- 
 tions have practically ceased, thus casting the burden 
 of supplying this demand entirely upon the American 
 manufacturers, that the latter have had great difficulty 
 in procuring adequate machinery and material for new 
 buildings where they desired to enlarge their plants; 
 also that the scarcity of labor has largely prevented such 
 additions to their productive capacity; that they have 
 
52 MERCHANDISING 
 
 experienced much trouble and delay in procuring ade- 
 quate supplies of sheet steel, which furnishes the body 
 of the utensils on which the enameling is then coated; 
 that the railroads in general, because of inadequate 
 facilities and insufficient equipment, and because of 
 the great congestion of traffic, have been unable to 
 furnish cars promptly to manufacturers, or to trans- 
 port them, when loaded, expeditiously to their destina- 
 tions. It is evident, therefore, under these conditions 
 that the shipments of enameled ware by the factories 
 will be much delayed, as will also their receipt when once 
 shipped. It, therefore, is the part of wisdom to place as 
 liberal orders as the previous sales indicate to be proper 
 and for immediate shipment, and for a longer period in 
 advance than if the conditions were such that prompt 
 and complete shipments could be expected from manu- 
 facturers and quick transportation by the railroads. 
 Nor must there be an unreasoning placing of such 
 orders on the exact basis of sales for any comparative 
 period, either in the near or distant past. For there 
 must be an intelligent analysis of the general busi- 
 ness conditions existing at the time the order is placed, 
 and those in the past which have been selected for pur- 
 poses of comparison, and the orders must be greater or 
 less, according as to whether the present business con- 
 
ORDERING REGULAR OR STAPLE GOODS 53 
 
 dition and outlook is better or worse than in times 
 preceding. This implies the possession of such knowl- 
 edge as makes the comparison of genuine value. There 
 must also be an intelligent study of the conditions and 
 likelihoods surrounding each individual item in the line 
 of blue and white enameled ware which is being ordered. 
 It will be found as a matter of general observation 
 that cups are more and more being used in place of 
 dippers, probably because cups are handier and do not 
 occupy so much space. It will be noted that stove 
 furniture articles used in connection with Number 7 
 cook stoves shows a steady decrease from year to year. 
 This is caused by the fact that Number 7 stoves are 
 the small size and not so convenient and comprehensive 
 in their service and possibilities as the larger sizes, 
 Numbers 8 and 9. Consequently, because of the growth 
 of the country in wealth and its consequent general 
 desire for better things, the small stove, restricted in 
 its service possibilities, is being replaced by the larger 
 and more efficient stoves. In such cases, however, 
 ordering the Number 7 stove furniture must not be 
 on the basis of the decreasing proportion of sales shown 
 in the past, but on a much smaller ratio. The reason 
 for this is that fewer and fewer Number 7 stoves are 
 being made each year and that much of the demand for 
 
54 MERCHANDISING 
 
 Number 7 stove furniture comes from old stoves al- 
 ready in existence, and that when those stoves are used 
 up the great majority of them will be replaced with the 
 larger numbers. 
 
 It is an axiom in merchandising when an article be- 
 gins to go out of use that the part of wisdom is to order 
 it more and more sparingly as it approaches its final 
 dissolution, and thus to anticipate its end, and not be 
 finally caught with a large stock of unsalable goods on 
 hand. It must also be learned in what section there 
 still persists a demand in this case for this small sized 
 stove. The result as ascertained indicates the South 
 and the immediate answer is that it is only a question 
 of a short time when there will be but few of these stoves 
 made or used. The reason for its use in the South tells 
 in a few words the history of that section. Stricken 
 and impoverished by the war and the ensuing Re- 
 construction, its buying power for many years was con- 
 fined to the cheapest and most necessary things of life. 
 Moreover, this was accentuated by the presence of a 
 vast number of negroes, whose wants were the simplest. 
 The Number 7 stove instance also points to the curious 
 fact that apparently because of inherent conservatism 
 the use of certain articles, called "old fashioned" for 
 lack of a better name, perseveres in certain districts, 
 
ORDERING REGULAR OR STAPLE GOODS 55 
 
 notably portions of the South, the Philadelpha dis- 
 trict, some sections of the Appalachian Mountains 
 and some of the rural districts in New England, long 
 after they have died out in other parts of the country. 
 Consequently this must be considered in ordering so 
 long as this use continues. In this instance, it is an easy 
 prophecy that the day of tradition and conservatism in 
 economic matters is fast passing in the South, because 
 of the great advancement of that section in wealth and 
 development, and this fact must also be taken into ac- 
 count in ordering "old fashioned" goods, formerly much 
 in favor in that part of our country. 
 
 This same study must be given to each article in the 
 long line of blue and white enameled ware before the 
 order can be intelligently placed. It will be seen from 
 what has gone before that the ordering of so apparently 
 insignificant a matter as a pattern and style of house- 
 hold utensils involves a far reaching and comprehensive 
 study of many matters. Such a conclusion is not the 
 result of a single sitting, but the gradual evolution of 
 experience and study. Most of all it is the consequence 
 of a constructive analysis which endeavors to exhaust 
 the possibilities of each situation by the processes of in- 
 duction and deduction. In time the application of such 
 results to the problem in hand of ordering becomes as 
 
56 MERCHANDISING 
 
 ready and instantaneous as the deft handling of a dif- 
 ficult operation by the skilled surgeon. Moreover, 
 every line of goods in every business offers the same op- 
 portunity, in more or less degree, for like intelligent 
 analysis and study. 
 
CHAPTER VH 
 
 ORDERING SEASONABLE GOODS 
 
 All the phases of ordering regular goods and many 
 more besides are found in seasonable goods, because of 
 the peculiar nature of the goods themselves. Season- 
 able goods are those which are used entirely, or largely, 
 at certain seasons of the year. In the last analysis the 
 reason why they are seasonable and in demand being 
 due to the weather prevailing at such seasons. 
 
 Lawn mowers are used in spring and summer, be- 
 cause warm weather and spring showers cause the grass 
 to show. Tennis goods are used in spring, summer and 
 fall, because the severity of winter usually puts an end 
 to this form of exercise. The selling, buying and order- 
 ing of these goods, however, far antedates their use, for 
 between their manufacture, distribution, and use by the 
 consumer a long period of many months necessarily 
 elapses. No sooner does one season end than prep- 
 arations for another commence. This and all succeed- 
 ing actions are best illustrated by concrete examples 
 of what are known in the hardware business as "Plow 
 
 Goods" and " Steel Goods" which broadly comprehend 
 
 57 
 
58 MERCHANDISING 
 
 those hand agricultural tools, implements and nec- 
 essary appurtenances, such for example as scythe stones 
 for sharpening scythes, used in the planting, culti- 
 vation and harvesting of the crops. The season for the 
 use of these goods varies, first according to latitude and 
 secondly according to the nature of the goods. 
 
 Cotton hoes are used in the far South late in Feb- 
 ruary, while hay forks are used in Northern latitudes 
 as late as August. The season however for the sale 
 of all these articles is practically over in August, and 
 manufacturers from that time on make preparations for 
 the coming season by presenting to the jobbers a schedule 
 of prices and terms on all lines of these goods. There 
 is usually a contract entered into between the man- 
 ufacturer and jobber, not only as to prices, which 
 generally prevail unchanged throughout the coming 
 season, but also as to approximate quantities of dif- 
 ferent items, since the manufacturer endeavors to 
 arrange as far as possible in advance for the disposal of 
 his entire possible output, or else to get some idea as to 
 how many goods it will be necessary for him to pro- 
 duce during the coming season. The jobber's prob- 
 lem is much more complex, for into it there enters 
 not only all the factors affecting the sale and ordering 
 of regular goods but likewise such unknown quantities 
 
ORDERING SEASONABLE GOODS 59 
 
 as the nature of the weather and the probable price of 
 farm products from six to eight months in the future, all 
 of which must be anticipated and given consideration. 
 The record of past sales is less approximately correct 
 as a guide than in the case of regular goods. For in 
 some items, notably lawn mowers, the sales vary as 
 much as 50% from one season to another because of 
 like variations in the weather. A matter of much moment 
 in this connection is that of "terms and datings." 
 It is necessary for the manufacturer to make seasonable 
 goods many months in advance of their actual use by 
 the consumer. The jobber (or wholesaler) in turn must 
 have them in stock next, in order that he may sell to the 
 retail dealer in time for the latter to have them on hand 
 for the consumer when the proper season for their use 
 comes around. Practically no manufacturer can afford 
 the warehouse space necessary for the storage of agricul- 
 tural implements and plow goods and similar bulky 
 goods, from the time he commences their manufacture 
 in early summer until they are put into use the next 
 spring. So he ships the goods to the various wholesalers 
 in these lines, beginning in early fall and continuing into 
 early winter, thus distributing their storage over a large 
 time and area. The jobber accepts the goods only with 
 the understanding that he does not have to pay for them 
 
60 MERCHANDISING 
 
 when received, and thus avoids having his capital locked 
 up unproductively until the time comes for him to sell 
 the goods to the retailer. He realizes, moreover, that 
 the prime object is to get the goods early so as to be sure 
 to have them when needed. The manufacturer therefore 
 gives the jobber what are known as special terms and 
 datings. They vary greatly in different branches of 
 business, according to the nature of the goods and pre- 
 vailing custom. One of the simplest, as related to hand 
 agricultural implements, is that the goods shall be shipped 
 during the fall and early winter, but shall not be payable 
 until the following March or April, or May, as the case 
 may be. The wholesalers then shift the burden of storage 
 and of financial responsibility to the retail dealers by 
 giving them practically the same terms and datings as 
 the wholesalers receive from the manufacturers. The 
 retailers, however, do not take the goods from the jobbers 
 until late fall and into early spring. The wholesaler can 
 afford to order these goods, under the terms and datings, 
 for earlier shipment and in larger quantities than if he 
 paid cash for them when received, and thus bought 
 them in the regular way. From the time shipments 
 commence until the bills fall due in the following spring, 
 there is no expenditure of capital involved and the only 
 "carrying charges," as they are called, are those of in- 
 
ORDERINGSEASONABLE GOODS 61 
 
 surancej rent and taxes for in such cases because of the 
 short period, depreciation in the quality of the goods 
 is a negligible quantity. 
 
 Among the seasonable goods earliest used by the con- 
 sumer are cotton hoes, for cultivating cotton. They are 
 consequently ordered earlier by both jobber and retailer 
 than those implements, whose use comes later in the 
 year. . Their sale depends primarily upon the probable 
 amount of acreage which will be planted to cotton during 
 the coming spring. For it must be remembered that 
 this supposititious order is being placed by the jobber in 
 August, or six months before the goods are to be used. 
 The acreage likely to be devoted to cotton will naturally 
 depend upon the probable demand, not only when cotton 
 is planted, but also when it is picked and marketed many 
 months later, or practically a year and even later from 
 the time when the order for cotton hoes is placed. 
 Any large prospective demand for cotton naturally 
 creates a good price for it when the demand materializes, 
 and this is the compelling cause which induces the farmers 
 to plant a large acreage of cotton in the spring. The 
 fluctuations in the amount of acreage devoted to cotton 
 year by year received striking illustrations within the 
 past ten years as the price of cotton rose or declined. 
 The invasion of the boll weevil caused much less cotton 
 
62 MERCHANDISING 
 
 to be planted, and this tendency reached its lowest ebb 
 in the spring of 1915 when the European war shut off 
 a large export demand for cotton, and the resulting 
 acreage planted in the spring of 1915 was the smallest 
 in many years. Consequently orders for cotton hoes 
 placed in the late summer and fall of 1914 recognized this 
 easily perceived tendency and were correspondingly re- 
 duced in quantity. The steady rise in the price of cotton 
 during 1915 clearly presaged a larger acreage in the spring 
 of 1916, and therefore called for larger anticipatory 
 orders for cotton hoes. This rising price of cotton con- 
 tinued during 1916 and 1917, with consequent increased 
 use of cotton hoes as a result of a larger planting of cotton. 
 At this writing, September, 1917, the problem of the 
 amount of cotton hoes is exceedingly simple, there being 
 no doubt that the acreage to be planted in cotton in 
 the spring of 1918 will be unusually large, thus calling 
 for a very large use of cotton hoes. Cotton is now selling 
 at very high figures, because of two short crops in succes- 
 sion. It is very certain that the present growing crop 
 will not be more than one of moderate yield in any event. 
 If the war continues, the situation will remain practically 
 unaltered as affecting the price of cotton. If peace comes, 
 the price of cotton will probably reach unprecedentedly 
 high figures, because of the reopening of old export 
 
ORDERING SEASONABLE GOODS 63 
 
 channels, and consequently a large demand from those 
 European nations who were unable to obtain cotton 
 during the war. These facts are constantly present in 
 the minds of the farmers, who therefore will be eager 
 to take advantage of an unusual opportunity for profit 
 by raising as much cotton as possible. It will be seen, 
 therefore, that the amount of cotton hoes to be ordered 
 in advance demands for its intelligent determination a 
 careful study of all the world wide factors affecting the 
 price of cotton, and likewise the probable trend of these 
 factors during the six months and more to come. 
 
 It will be thus apparent as a broad principle that the 
 demand for agricultural implements used in the great 
 staple products is largely affected by the price of these 
 products, and whether such prices are remunerative or 
 otherwise to the farmers. One of the distinctions in hoes 
 is that most of them are sold complete with handles, 
 while a small minority used mostly in the South and 
 Latin-American countries are without handles, and 
 are generally known as eye hoes. In ordering the lat- 
 ter, study and investigation reveal the fact that they are 
 an inheritance from the crude ways of the past, when 
 the user of the hoe preferred to "handle" his own 
 hoe. Obviously an "unhandy" matter of this kind 
 must give way to the convenience and simplicity of 
 
64 MERCHANDISING 
 
 the handled hoe, and consequently in ordering eye 
 hoes, the records of past sales are not a safe guide, 
 unless the orderer always bears in mind the facts of the 
 situation, and each year orders a smaller proportion then 
 the year before. In a case of this kind, there finally 
 comes a tune when it becomes wise to "close out" such 
 goods, as the trade phrase goes, by ceasing to order 
 them, and by disposing of those on hand. It is very 
 expensive to be caught with a large stock of goods of this 
 nature on hand when the demand for them has fallen 
 to small proportions, since the sale has to be forced and 
 the goods sold at any price that can be obtained for them. 
 The farsighted policy consists therefore in anticipating 
 the inevitable and "closing out" such goods while op- 
 portunity still offers, rather than waiting for them to 
 die a natural death. It is an axiom of good merchan- 
 dising to take such losses early, for the longer the mer- 
 chant waits the more difficult it is to dispose of such ar- 
 ticles, and the severer the loss. 
 
 One feature of ordering seasonable goods is of the ut- 
 most importance to the jobber, but is often overlooked. 
 It consists in learning as the extent of unsold stocks of 
 seasonable goods in the hands of the retailers, which 
 were carried over from the previous season. For to the 
 extent that the retailers have such goods, to that ex- 
 
ORDERING SEASONABLE GOODS 65 
 
 tent they will not make purchases of new goods for the 
 coming season. If for instance, for any cause, there is at 
 present a large stock of cotton hoes in the hands of re- 
 tailers, which they bought for last season's business and 
 failed to dispose of, then they will buy a correspondingly 
 smaller number of cotton hoes for the coming season 
 than if they had not carried over any at all. This fact 
 brings up another in its train. The prospective sale of 
 goods which does not eventuate because of unfavorable 
 weather during a portion of the season, practically never 
 takes place, no matter how favorable the season may be. 
 In the language of the trade, it is "water over the dam" 
 and is lost for that season. If for instance the month 
 of May is so very dry that the sale of lawn mowers is 
 restricted accordingly, that restricted sale will not be 
 made up to any extent no matter how wet and favorable 
 June may be. The dealer who orders his goods on a 
 basis of merely delayed sales will be apt to have them on 
 his hands at the end of the season. 
 
 Among hand agricultural implements, which illus- 
 trate two interesting phases of ordering in seasonable 
 goods, are grain scythes. The principal factors in their 
 case are the weather and their growing disuse. Taking 
 the latter phase first, they are steadily being supplanted 
 by the reaping machine until their use is largely one of 
 
66 MERCHANDISING 
 
 very small farms, and certain conditions of weather, such 
 as rainfall during harvesting. In ordering, their growing 
 disuse must be taken into account by a lessening propor- 
 tion of quantities. The weather would seem to be an insol- 
 uble problem, seeing that the United States Weather Bu- 
 reau does not attempt to forecast weather conditions 
 beyond a week's time, and in this latter case only in a 
 tentative and approximate way. All would-be prophets 
 who confidently foretell the details of the weather months 
 in advance are mere conscienceless fakirs, trading on 
 the credulity and ignorance of human nature. Yet in 
 the ordering of goods in the August of one year to be 
 used from the spring to the summer of the next year, 
 the weather plays an imporant part in the use of these 
 goods, and as long therefore as the quantities of goods 
 in these orders are based largely upon the weather, 
 there should be some intelligent effort to approxi- 
 mately forecast such weather, at least within the bounds 
 of probability. Such an effort in the first instance 
 necessitates a careful study of weather records for 
 a period of fifty years back, as that seems to be the 
 cycle, roughly speaking, in which all phases of weather 
 occur with uncertain, yet relentless irregularity. This 
 study dispels the prevalent yet erroneous impression of 
 a permanent change in climatic conditions during any 
 
ORDERING SEASONABLE GOODS 67 
 
 period of human history. Both geology and astronomy 
 tell of a steady though imperceptible change in the 
 weather as one of the phases of our earth's existence, 
 but it is so slow as to be inappreciable in recorded time. 
 This study also develops the natural, though generally 
 unnoticed tendency, common to all things in nature, 
 of similar kinds of weather to flock together. It is much 
 the story of the dream interpreted by Joseph in the 
 Old Testament of the seven lean years followed by 
 seven fat years. In certain sections of the West it 
 can be foretold with a fair degree of certainty that 
 there will not be more than three years of dry weather, 
 nor more than two years of wet weather in succession, 
 though this rule is not invariable. It also develops in 
 certain other sections if the June rains continue along 
 well into the early part of July, that the danger of a 
 severe prolonged drought is remote; while on the con- 
 trary should they cease early in July, the likelihood is 
 for a succeeding long, dry, hot spell. Again, though 
 wet years are apt to be associated, as are dry 
 years, in such years there is much variation in the 
 amount and quantity of the wetness and the dryness. 
 If for instance in North latitude 40 in the Middle 
 West there was unusual precipitation during the har- 
 vesting of winter wheat in one year, the strong prob- 
 
68 MERCHANDISING 
 
 abilities are that it will be in much less amount the 
 next season. This fact has for instance to be taken 
 into account in the amount of grain scythes to be ordered. 
 An actual happening in the matter of another line of 
 seasonable goods, ice cream freezers, illustrates an- 
 other phase of the problem. A few years ago a drought 
 commenced early in July, when the spring rains ceased, 
 and continued well into August, being very hot and 
 dry throughout the greater part of both months. The 
 consequence was an unusually heavy and late sale of 
 ice cream freezers far into August, when generally the 
 season for them is over by August ist. Next year was 
 also a dry year, but the drought commenced early in 
 May in the latitude in question. From experience and 
 study of the weather records the orderer of ice cream 
 freezers was able to fqrecast with great deflniteness that 
 the sales of ice cream freezers would be much earlier 
 than the preceding season, and would cease much sooner, 
 as the rains which in the previous years came in Sep- 
 tember would this year probably come early in August, 
 consequently the sales records of heavy sales of ice 
 cream freezers in August must be disregarded entirely 
 this season. The facts bore out faithfully the truth of 
 his forecast. It was merely a case of shifting the time 
 of the drought of which the dry May gave him timely 
 
ORDERING SEASONABLE GOODS 69 
 
 warning. The same orderer was also able to forecast 
 a much larger sale of corn knives another seasonable 
 article, because of this same experience with the weather 
 happenings. 
 
 Corn knives are used to cut corn, generally before it 
 matures and for the purpose of using the stalk, ears, 
 leaves and all as feed for livestock, instead of utilizing 
 only the grain on the ears as is generally done. It is 
 also frequently cut when a drought threatens to be 
 unduly prolonged, and prevent the corn from coming 
 to maturity. Consequently corn knives are used more 
 in dry than in wet summers. The factor of weather, 
 however, is not the only one, nor the one of most moment 
 in the use of corn knives, and correct and intelligent 
 ordering of these simple implements is a salient example 
 of the necessity of the orderer keeping posted in all the 
 progressive matters relating to the goods he orders. Of 
 late years, corn is being largely cut by machinery in the 
 shape of a corn binder, which is more effective and more 
 economical than doing this work of cutting and binding 
 by hand. The use of corn knives is thus gradually 
 being curtailed. Other factors in the use of corn knives 
 are the growing use of silos, where the entire corn plant 
 is cut up and packed into the silo as feed for livestock 
 during the winter, thus saving the waste which results 
 
70 MERCHANDISING 
 
 from allowing the plant to die and dry up in the field, 
 leaving only the grain as feed. The use of silos con- 
 sequently increases the practice of cutting corn, and 
 thus to some extent the use of corn knives. 
 
 Another factor is the yield of hay. When hay is cheap 
 and plentiful, corn is not cut so freely, because the other 
 principal food for livestock hay makes this cutting 
 of corn less necessary. When the hay crop is short, 
 then recourse is had to corn cutting to supply the de- 
 ficiency. It will thus be seen that the intelligent order- 
 ing of comparatively unimportant implements, such as 
 corn knives, implies the study and knowledge of certain 
 weather conditions, agricultural conditions, and indus- 
 trial conditions as expressed in farm machinery. 
 
 The ordering of refrigerators, or ice boxes, or chests, 
 as they are often called, is primarily dependent upon 
 the weather, and in the respect of seasons they are 
 strongly akin to ice cream freezers, though their season 
 is somewhat longer, and they sell in a scattered way all 
 through the year. As in the case of ice cream freezers 
 the demand for them is greatest in hot, dry weather, 
 and least in cool, wet weather, so that orders placed 
 
 far in advance of their actual use must forecast as far 
 
 
 
 as possible the likelihood of the coming summer. Not 
 so long ago the character of the weather in the winter 
 
ORDERING SEASONABLE GOODS 71 
 
 preceding their use was a vital factor in their use. If 
 the winter was cold and ice plentiful, and consequently 
 cheap, the demand for refrigerators during the coming 
 summer was consequently increased. If, however, the 
 winter was open or the snowfall so heavy that the 
 gathering of natural ice was accordingly hampered, 
 the use of refrigerators was more or less restricted 
 by the ensuing high price of ice. This factor has be- 
 come one of diminishing importance, since the great 
 and growing output of artificial ice. As they are re- 
 ceptacles and storage places for a brief time for food, 
 the factor of sanitation is an important one in their use 
 and demand. When the white tiled and white inside 
 painted refrigerators came into vogue, it was evident 
 to the intelligent orderer that the appeal of cleanly and 
 sanitary appearance in the new style refrigerators would 
 bring them into general favor, as compared with the 
 older styles lacking in such an appeal, and he changed 
 the proportion of his orders accordingly. 
 
 The use of screen wire cloth is based largely to-day 
 on this appeal to modern sanitary instincts. It is not 
 alone the relief from the annoyance of insects, which 
 the use of this article brings, but the cultivated instinct 
 that we are also avoiding a serious danger by excluding 
 the germ-bearing fly and mosquito. When it was dem- 
 
72 MERCHANDISING 
 
 onstrated beyond question that the mosquito was the 
 sole method of transmission of malaria and yellow 
 fever, then it was at once apparent to the intelligent 
 orderer, who was using his head, that the use of screen 
 wire cloth must increase and multiply in the South of 
 all sections, because there swamps are most abundant, 
 and protection from malarial diseases most needed. It 
 was further evident, therefore, that it was an article 
 whose use must grow from year to year, as the ideas of 
 sanitation and hygiene became more widespread, and 
 he must place his orders on this basis. 
 
 The correct ordering of steel traps, another line of 
 seasonable goods, involves not only a study of the 
 weather, and of natural history, but most intricate and 
 difficult of all, of the tastes and fancies of womankind in 
 the matter of fashions. The uninformed and unthinking 
 orderer will naturally conclude that as steel traps are 
 principally used for catching fur-bearing wild animals, 
 that they will gradually decrease in use and sales, because 
 everything he hears and reads is to the effect of the rapid 
 extermination of all wild animals. This belief is one of 
 many prevalent and most misleading impressions, be- 
 cause it is a half truth, the worst form of all false state- 
 ments. The orderer who investigates finds that the 
 larger fur-bearing animals are in truth becoming rarer 
 
ORDERING SEASONABLE GOODS 73 
 
 each year, but that this is not true of the smaller quad- 
 rupeds, such as musk rats, coons and skunks, which are 
 still very plentiful. He also finds, contrary to all pre- 
 conceived opinions, that the annual catch of these 
 smaller animals is especially heavy in some of the most 
 thickly settled states of the Middle West. He therefore 
 orders steel traps liberally under favorable conditions, 
 with the full conviction that the extinction of small fur- 
 bearing animals is not forbiddingly imminent. He like- 
 wise consults the weather records of the winter just 
 passed, as he places his orders in the Spring for the coming 
 winter's sales. This is for the purpose of noting whether 
 such a winter had much snows and many floods, for in 
 such an event, he knows that many traps were lost, or 
 washed away, and consequently need to be replaced the 
 coming winter. The crucial matter, however, is the price 
 of furs. He learns that professional trappers are not so 
 numerous as amateurs, especially farmer boys, with 
 whom trapping is more or less of a side issue, and who 
 do not trap to any extent unless there is the incentive 
 of profit in the shape of the high price of furs. This 
 price in turn depends upon a demand, whose sustaining 
 force is found in the fancy of women for adornment. 
 The connection is so obvious that it was well illustrated 
 in the case of the head of an ordering department to whom 
 
74 MERCHANDISING 
 
 " two and two made four, not sometimes, but all the 
 time," as the Thinking Machine said, and who conse- 
 quently went through life noting and applying everything 
 he saw to the business he was engaged in. Early one 
 Spring he noted especially that two out of three women 
 he met on the street wore fur adornments of some des- 
 cription, and that many riders in automobiles had fur 
 coats. He figured out that automobiles were constantly 
 increasing in use, and that fur-coated riders would con- 
 sequently be more numerous. So he called up a large fur 
 merchant, and asked what was the outlook for the fashion 
 in furs among women during the coming winter. He was 
 told that furs would probably be worn more than ever. 
 It was, therefore, an easy deduction that with a heavy de- 
 mand, there would ensue high prices, the best incentive 
 to trapping, and consequently that many traps would 
 be used. So he placed larger orders for traps than ever 
 before and had the goods, when his less far-sighted com- 
 petitors were entirely out of them. 
 
 In a similar, yet contrary way, he felt the effect of 
 the great use of automobiles upon another line of season- 
 able goods. 
 
 He realized the sale of hammocks to be steadily de- 
 creasing, and was unable to account for it. The two pre- 
 ceding summers had been warm and dry, and the price 
 
ORDERING SEASONABLE GOODS 75 
 
 of hammocks had not advanced. Walking in the park 
 one summer night the compelling cause in the great 
 procession of automobiles flashed suddenly upon him as 
 an example of how a new industry often affects an old 
 one in a most unexpected manner. So from that day on 
 he began to reduce the size of his orders for hammocks, 
 for riding in automobiles was fast displacing swinging 
 in hammocks. These illustrations are used as analogies, 
 since the same general principles apply to merchandising 
 in all lines of business. 
 
CHAPTER VIII 
 
 HOLIDAY GOODS 
 
 Holiday or Christinas goods are essentially one form 
 of seasonable goods, only that the matter of the season 
 or weather in determining the demand and sale of these 
 goods is not so much the dominant factor as is the Christ- 
 mas or holiday tradition and spirit, so that the psycholog- 
 ical phase is one of peculiar importance. 
 
 Some of the goods, such as skates and sleds, are 
 used in cold weather. But others, such as books, 
 jewelry, toys, high-priced cutlery, carving knives 
 and forks, are used and sold all the year round, 
 though by custom and tradition some of them, as for 
 instance, carving knives and forks, practically have come 
 to be sold almost entirely during the Christmas or hol- 
 iday season. From the nature of the situation, there 
 can be no hard and fast definition of what constitutes 
 holiday goods. Especially is this true, because many of 
 them, Christmas cards as an example, ebb and flow in 
 popular favor, and are the subjects of changes in pop- 
 ular taste to an extent that makes intelligent ordering 
 
 of them a very "difficult, and delicate, not to say, danger- 
 
 76 
 
HOLIDAY GOODS 77 
 
 ous operation/' as Koko in the Mikado remarked of self- 
 decapitation. 
 
 As a rule they are luxuries rather than necessities, and 
 in this respect differ essentially from the regular lines of 
 seasonable goods. As a matter of fact almost anything 
 that can be given as a present, and can be used in cold 
 weather, may be classed under the head of holiday goods. 
 
 So far as the sales of the manufacturers to the whole- 
 saler or jobber, and of the jobber to the retailer are con- 
 cerned, the large volume of such sales is made early in 
 the season, in some cases as far back as the preceding 
 spring. These are known as " futures," and in the case 
 both of the manufacturer and the jobber involve a com- 
 plete and accurate record of the amount of such sales, 
 that they may be ready for shipment on the dates spec- 
 ified. The manufacturers of ice skates, for example, 
 make contracts with jobbers along in February for ship- 
 ment in July and August of such skates as the jobbers 
 may specify. The jobber in turn takes orders from his 
 retail customers for shipments in August and later on. 
 He depends upon the manufacturers shipping promptly 
 on dates specified, that he, the jobber, may in turn be 
 able to ship to his own customers, the retailers. Un- 
 less this matter is handled intelligently, especially un- 
 less the jobber ships promptly to his customers, much 
 
78 MERCHANDISING 
 
 dissatisfaction is apt to be created. The jobber, 
 through his salesmen, solicits future business on ice 
 skates from his customers on the basis that if such orders 
 be placed early with him, say in April and May, for ship- 
 ment in August and later, he will thereby be enabled to 
 provide himself in advance, because he will then know 
 through the medium of these orders the extent to which 
 he will be required to provide goods sufficient to take 
 care of such orders. He advises his customers, the re- 
 tailers, when it is the part of wisdom for them to place 
 their orders for ice skates that they may thus follow the 
 example of the April strawberry and be early so as to 
 avoid the jam. He thus tacitly commits himself to take 
 care of such orders in the rotation of their receiption. For 
 instance, he may take 100 orders for shipment of ice 
 skates on August ist. These orders, however, may have 
 been taken all the way from May to June. It is there- 
 fore incumbent upon the jobber to keep such accurate 
 record of the orders, that when the time comes for ship- 
 ment, the orders taken earliest shall be rilled first. This 
 is not so necessary save when there is difficulty in getting 
 sufficient goods at the time required for shipment. As 
 an example, suppose the jobber sells 10,000 pairs of ice 
 skates to his customers for shipment August ist, but on 
 that date finds that he has received only 9000 pairs 
 
HOLIDAY GOODS 79 
 
 from the manufacturer. Unless he has accurate records of 
 the dates of the different orders given by his customers, he 
 is likely to fill first some of the later instead of the earlier 
 orders, and thus those of his customers who placed their 
 orders the earliest fail to receive that benefit of their fore- 
 thought, which he tacitly promised should be their portion. 
 The extreme shortness of the actual holiday or Christ- 
 mas season renders the merchandising of holiday goods 
 a matter of great difficulty. It is true that a large per- 
 centage of the goods are sold earlier in the season on 
 "futures" for later shipment. But there is always a 
 considerable volume of business, or "fill in" orders as 
 they are termed, which must be reckoned with when the 
 season is really on. In many lines this season is scarcely 
 more than three weeks in extent, and the problem then 
 becomes one of supplying this brief but insistent de- 
 mand, and yet not carrying over too many goods be- 
 yond the season, which practically ends abruptly on 
 Christmas day. It is very difficult to get orders rilled 
 promptly by the manufacturers during this short period, 
 as they are usually crowded beyond their capacity. The 
 danger lies in allowing the manufacturers to retain the 
 orders so long that they are not shipped until the season 
 is over, and are therefore useless for the original purpose 
 intended. There has always been a division of opinion 
 
8o MERCHANDISING 
 
 among merchants as to the best and most profitable 
 plan of handling seasonable goods towards the end of the 
 season. On the one hand it is held that it pays to carry 
 a fairly good stock to the end of the season even at 
 the risk of carrying over some goods, since the main 
 issue is not to lose sales and the profits which thus accrue, 
 as well as not to disappoint customers who depend upon 
 you to supply their wants in such emergencies. The 
 contrary practice, is to run the stock down to the vanish- 
 ing point at the end of the season, even at the risk of 
 failing to fill some orders. The argument for this latter 
 procedure is that customers as a rule are conscious of the 
 situation, and do not expect too much at the tail end of 
 the season in the way of getting their orders filled com- 
 pletely. It is argued further that the carrying charges 
 on the goods carried over more than offsets the profit 
 made on the comparatively few sales made when a fairly 
 good stock is kept up till the end of the season. Goods 
 thus carried over are often completely dead stock for 
 from eight to ten months, and are not only subject to 
 interest, rent insurance and taxation charges, but likewise 
 to the chance of depreciation and the risk of decline in 
 price. It is not good merchandising to carry over beyond 
 the season more than 5% in value of the total value 
 of the seasonable goods, sold during the entire season. 
 
HOLIDAY GOODS 81 
 
 It is peculiarly expensive and risky to carry over holiday 
 goods, because of the uncertainty of the demand for 
 them from one season to another. This is especially 
 true of such articles as Christmas cards, toys, gift books, 
 and similar articles. Some of them have the brief span 
 of one or two seasons as their portion in life, and are dead 
 thereafter for all time to come; To carry these goods over 
 at the end of their existence is to lose practically their 
 entire value. 
 
 The part which the weather plays in the sale and de- 
 mand of holiday goods is often most effective in advance. 
 A cold spell late in November or early in December will 
 occasion an immediate and large demand for ice skates, 
 sleds, boys' wagons, and the like. If this happens again 
 just before Christmas, the same effect will be observed, 
 only accentuated. On the other hand, if warm weather 
 continues through the fall, and up to Christmas day, 
 there will be a noticeable lack of demand for all Christ- 
 mas articles affected by the weather. It makes no dif- 
 ference if the weather grows very cold the day after 
 Christmas, for the demand is over and past. The most 
 potent factor in the demand for holiday goods is the com- 
 parative purchasing power of the many, according as to 
 whether the times be prosperous or otherwise. So the 
 amount of probable demand must be made the subject 
 
 
82 MERCHANDISING 
 
 of intelligent study and analysis many months in ad- 
 vance. The nature and amount of harvest yields, 
 whether manufacturing and other industries are em- 
 ployed, and such like elemental facts are the principal 
 components in the equation. 
 
 As an example, in 1914 it was easy to forecast as early 
 as August 1 5th of that year after the European War 
 began, that the trade in holiday goods would be com- 
 paratively poor, while a year later when the recovery 
 from the effects of the war was well under way, an exactly 
 contrary prophecy was sure of fulfillrnent. 
 
 Holiday goods are much differentiated from other 
 kinds of seasonable goods by their very high birth rate, 
 and equally high death rate, since there are constant new 
 accessions to their ranks, and a correspondingly large 
 mortality. They offer a great field for the exploitation of 
 goods which depend largely upon appearance rather 
 than their merit for their appeal to the purchaser. So 
 inevitably they represent the constant passing away and 
 brief tenure of life of such articles, which in turn are suc- 
 ceeded by others equally ephemeral and transitory. 
 They are likewise a source of sale of many high-priced 
 luxuries of questionable value and small usefulness, which 
 would find no market save for the optimistic psychology 
 of the season. 
 
CHAPTER DC 
 
 SELLING 
 
 What is known in trade as the "Selling end of the 
 business" is after all the most difficult, and one whose 
 real importance has been perceived only of late years. 
 Salesmenship is both an art and a science, one whose real 
 import we are but dimly discerning. The salesman is 
 the last word of an organization to its customers, and 
 success in selling goods is the final end to which most all 
 the energies and the various factors of the business finally 
 tend. So salesmenship is a subject far too comprehensive 
 to be discussed in a single chapter, and consequently 
 must be the subject of a separate volume. Therefore, 
 in this chapter only such phases are treated as bear more 
 directly upon the subject of merchandising. 
 
 The first thought in buying and ordering goods is as 
 to how they will sell, for obviously the whole purpose and 
 intent of the merchant in buying and ordering is to pro- 
 vide such articles as find ready or certain sale. It makes 
 much difference, for instance, whether salesmen carry 
 samples of certain articles or lines as to how they sell. 
 It is practically impossible to sell to any extent most of 
 
 83 
 
84 MERCHANDISING 
 
 the items which comprise the line of cutlery unless the 
 salesmen carry samples. Every purchaser of a pocket 
 knife or a carving knife, if he be a good buyer, wishes to 
 examine and inspect the article before he buys it. You 
 cannot describe it to him, nor even photograph it so that 
 he can visualize it so well as when he sees the thing it- 
 self. It is, therefore, essential that the orderer know 
 whether the salesmen of his organization are carrying 
 samples of certain lines of goods. It is usually entirely 
 unnecessary for the salesmen to carry samples of such 
 staple lines of goods as carriage bolts, strap and T hinges, 
 tin wash basins, and the like. But salesmen can largely 
 increase their sales of padlocks by carrying samples of 
 them. 
 
 There is no sharp dividing line to determine where 
 carrying samples ceases to help the sale of the goods. 
 There may be in stock a line of goods, which the con- 
 cern has carried for a long time and has illustrated in 
 their trade catalogue, and with which the trade pre- 
 sumably are familiar, such, for instance, as a line of 
 mortise door locks in some design of bronze goods. 
 Yet the salesman who carries samples of these goods and 
 shows them industriously will probably thereby swell 
 his sales of these articles. 
 
 It is almost essential that the salesman carry samples 
 
SELLING 85 
 
 of all new goods, sometimes even very staple goods, so 
 that the trade may thus become familiar with them. 
 
 The necessary thing in carrying samples is that the 
 salesman show them to his customers. Otherwise, if 
 the salesman be lazy or indifferent and merely carry his 
 samples around in his sample trunk, and only show them 
 occasionally because of the labor and trouble involved, 
 then the samples become an unnecessary expense as 
 excess baggage and merely hamper the movements of 
 the salesman. 
 
 A most important factor in selling goods is the matter 
 of price. If a concern asks more for its goods than they 
 can be bought for from others, then the sales will be 
 in smaller proportion accordingly. If on the contrary 
 the price of any article is less than the competitors of 
 a concern are asking for it, the sales will be unduly 
 large. It is the business, therefore, of the buyer and 
 the orderer to know the prices his house asks for goods, 
 and to govern his purchases accordingly. It is a fact 
 of experience, however, that low prices do not always 
 sell goods, especially if they be of high quality and merit, 
 but often have the contrary effect. If, for instance, 
 a certain high grade hand saw has always been sold to 
 the carpenters by the retailer for $2.00, and the re- 
 tailer reduces his price to $1.50, the chances are that 
 
86 MERCHANDISING 
 
 he will sell fewer saws than before. The psychology of 
 this, as confirmed by long experience, is that the reduc- 
 tion in price, especially if made without any apparent 
 reason, immediately raises in the mind of the carpenters 
 the impression that there has been a reduction in the 
 quality of the saw, corresponding to the reduction in 
 price. As they always bought the saw on its merit, and 
 because it was an effective tool, any suspected or even 
 imaginary reduction in the quality of the saw causes 
 them to cease purchasing it altogether and to seek some 
 other saw which fulfills their requirements of merit. 
 As a matter of fact in the case of tools, especially those 
 by which men make their living, the largest sellers by 
 far are those of merit and of higher grade rather than 
 those which are cheaper both in price and quality. 
 
 There is another curious convention which obtains 
 in all lines of goods. Certain prices of certain articles 
 to consumers become well known, and the consumers 
 and users are apt to refuse to pay more than these well- 
 known prices. For instance, the price of one-quart tin 
 fruit cans was usually ten cents to the user prior to the 
 European War. If the dealer asked more than that, 
 the housewife was very likely to refuse altogether to 
 buy it and to endeavor to use something, say a glass jar, 
 in its place. In the same manner a certain high-grade 
 
SELLING 87 
 
 shovel was sold by a wholesale hardware concern to the 
 retailer at a price which enabled him to sell it in turn to 
 the consumer for $1.00 per shovel. The wholesale con- 
 cern advanced their price to the retailer, because the 
 manufacturer of the shovel in question raised his price 
 to the wholesaler. The retailer followed suit and 
 advanced his price to the consumer to $1.25 per shovel, 
 and in consequence the sales of the shovels fell off ap- 
 preciably. This is another instance of the necessity of 
 the buyer and orderer keeping in constant touch with the 
 prices at which articles are sold, that he may regulate 
 his ordering accordingly. 
 
 Again, there are styles of padlocks which are sold 
 to the consumer at certain prices. Unless the buyer 
 for the jobber can buy them at a certain figure, which 
 will enable him to sell them to the retailer at a price 
 which permits the retailer to make the conventional 
 price to the consumer, then the chances are that the 
 retailer will buy them only in very small quantities or 
 else not at all. If, for instance, he cannot buy for $2.00 
 per dozen a style of padlock which he usually retails to 
 the consumer at 25 cents a piece, he will probably, in 
 the phrase of the trade, "pass them up." So the buyer 
 for a wholesale house when buying an article, especially 
 a new article, usually reasons backward from the price 
 
88 MERCHANDISING 
 
 the consumer will pay, to that which the retailer can 
 consequently afford to pay and still have a sufficient 
 profit, to that which he, the wholesaler, can in turn 
 afford to pay the manufacturer. A concrete case, one 
 of actual occurrence, illustrates this point. A certain 
 brass padlock was sold by the manufacturers to the 
 jobbers at a price which forced the retailer to sell to 
 the consumer at 20 cents each. The sales were dis- 
 tressingly small, because the padlock was not worth 
 20 cents to the average consumer. So the buyer of 
 a large jobbing house offered the manufacturer of 
 this padlock an order of many thousand dozen if the 
 manufacturer would make the jobber a price which 
 would permit the padlock to be sold to the consumer 
 for 10 cents each. The manufacturer accepted the 
 offer, and the jobber thenceforth sold thousands of 
 dozens where he formerly sold hundreds. Where the 
 styles of the goods change from season to season, there 
 is practically no effective way of selling them save by 
 samples. Photographs are often used, and in some 
 cases small models where the articles are too bulky or too 
 heavy to be carried. Where goods are expensive or 
 very stylish and attractive, there is no way of so im- 
 pressing the customer with their value as by samples. 
 It is a custom in both retail and wholesale houses to 
 
SELLING 89 
 
 have "compaigns" or " drives" on certain lines of goods 
 at certain times and for a specified time. It is the duty 
 of the orderer of these goods to accumulate a sufficient 
 stock to take care of the unusual sales. In wholesale 
 houses this campaign often takes the form of what are 
 known as "Mascot" months. A certain line of goods, 
 say padlocks, are selected as mascots for the month of 
 August. The salesmen are instructed to " push the 
 sale" of padlocks during August, and sometimes 
 prizes or rewards are offered as incentives to the 
 salesman who makes the best showing. The part 
 of the orderer of the padlocks is not only by due diligence 
 and forethought, to provide sufficient padlocks to take 
 care of all the orders that may come in for them, but 
 likewise not to overdo this and thus have an overstock 
 when the mascot month is past. It is an interesting fact 
 of experience, however, that there is rarely any appreci- 
 able reaction in sales subsequent to the mascot campaign, 
 and that the month following the mascot generally shows 
 a normal sale of the article selected as a mascot for the 
 month previous. 
 
 There is sometimes a peculiar feature in selling, in 
 which the human equation " plays the lead," and which 
 no system of records can cover. A salesman will take 
 a fancy to some article and sell many more of such 
 
90 MERCHANDISING 
 
 article than is his proportion of those used in his territory. 
 If the salesman leaves the house, or is transferred to 
 some other territory, the sale of that particular article 
 falls away to almost nothing, and the stock on hand 
 may prove very difficult to dispose of. It is always 
 well for the orderer of such goods, when noting their 
 abnormal sales, to inquire into the cause, and to have 
 it understood with the salesman in question that he 
 must dispose of any goods which are ordered because of 
 his peculiar bent. 
 
 New goods are frequently ordered by a business 
 organization because a salesman finds a demand for 
 them in his territory, but the orderer will find from 
 experience that the salesman unconsciously is apt to 
 overestimate the amount of them sold, and should pro- 
 ceed cautiously until his records of sales give him a 
 substantial basis for ordering. 
 
 One effect of rising prices on the sale of goods is the 
 shifting demand from one article to another, and unless 
 the orderer of the goods be perpetually "on his job" he 
 is apt sometimes to be caught "asleep at the switch " 
 with an overstock of high-priced goods on his hands. 
 Recently in the rise of prices caused by the European 
 War there were numerous instances of this. One case was 
 typical. Brass shoe nails are large sellers in the hard- 
 
SELLING 91 
 
 ware trade, but brass plated shoe nails are still larger sel- 
 lers, because cheaper in price. During the advance in 
 copper, and consequently in things made of brass, the price 
 of brass shoe nails became so high that the sale of them 
 practically ceased, and the demand shifted almost en- 
 tirely to brass plated. 
 
 Following is a very common instance of the manner 
 in which selling affects buying and ordering in merchan- 
 dising. There will be an article, on which the patent has 
 expired, but which has become well and favorably known 
 both to the distributing and consuming trade. Another 
 article, not so well known but similar in appearance and 
 apparently answering the same purpose, appears upon 
 the market. The larger sale still goes with the original 
 or "genuine" article as it is apt to be called, though the 
 " imitation" is sold at a somewhat less price. Appar- 
 ently it is necessary to carry in stock only one of these 
 articles, and that the best seller, since the goods are so 
 closely related. Experience often shows, however, that 
 the contrary practice is the better paying one in many 
 instances, and all because of a peculiar psychological 
 fact. It the house carries only one article, and that the 
 original, the salesman learns that his customers often 
 call for the cheaper article, and finding that the sales- 
 man's house cannot supply it, demand that the sales- 
 
92 MERCHANDISING 
 
 man make them the same price on the original article 
 that they can buy the imitation for, on the plea that 
 the imitation answers their purpose equally well. The 
 salesman often finds that he has Hobson's choice of 
 not getting the order, or else of reducing his price on 
 the original to meet the price of the imitation. Whereas 
 if he has both genuine and imitation to offer, he meets 
 the demand for a cheaper article with the imitation, 
 and for better quality with the genuine at his regular 
 price. The interesting and very peculiar feature of 
 this is that when the customer finds that the salesman 
 has the imitation article, he rarely buys it, but takes 
 the genuine at the regular price. So to have both 
 articles in stock is often wise policy, since the carrying 
 of the imitation "sustains" as it is called, the price of 
 the genuine article. 
 
CHAPTER X 
 
 FILLING ORDERS AND OTHER RELATED FACTORS 
 
 Service is the keynote of success in modern merchan- 
 dising. By service is meant primarily complete filling 
 and prompt shipment of orders received from customers. 
 Complete filling of all orders in actual practice is found 
 to be impossible, because it is not possible always to have 
 on hand such an unbroken stock of goods as will take 
 care of those wants in the shape of orders from customers. 
 Obviously no system of records, however accurate and 
 intelligently kept, can anticipate such wants. Especially 
 is this true because of constant variation in demand due 
 to those ceaseless changes in the taste of buyers, and in 
 general conditions, both material and psychological, which 
 alter from day to day. Moreover, manufacturers usually 
 are unable to ship goods at sight to supply the wants of the 
 jobbing and retail trade, and there are often delays in 
 transit which cannot be avoided. All these factors cause 
 shortages, that is, there are items on some orders of which 
 the stock is either exhausted or else not in sufficient quan- 
 tity to fill the orders. These shortages should be reported 
 
 promptly by the stock department to the ordering depart- 
 
 93 
 
94 MERCHANDISING 
 
 ment, as outlined in the chapter on "The Care of Stock." 
 It then becomes the part of the ordering department to 
 obtain the goods as quickly as possible. If the needed 
 goods are already due on orders from some manufacturer, 
 then either by letter, telegraph or telephone the manufac- 
 turer should be urged to make prompt shipment. Often 
 the goods are of such nature that they can be ordered 
 by express without undue expense. The usual method 
 of detennining whether or not it is profitable to do so 
 is to find out the relation between the express charges, 
 the cost of the goods and the price at which they are 
 sold. If, for instance, a concern is short an article which 
 costs $1.50 per dozen, is sold for $2.50 per dozen, weighs 
 25 pounds to the dozen and the express charges from 
 place where made to the concern in question are $2.00 
 per 100 pounds, then it is seen that the cost of the article 
 per dozen when ordered by express is 50 cents per dozen, 
 which added to the $1.50 per dozen cost makes a cost 
 delivered by express of $2.00 per dozen against a selling 
 price of $2.50 per dozen, leaving a gross profit of 50 
 cents per dozen. It is, therefore, good business to have 
 the goods come by express rather than await the slow de- 
 lay of freight, since the sooner they are in stock, the sooner 
 they can be used to fill orders, and thus give good 
 service. The best rule to adopt is to order by express 
 
FILLING ORDERS 95 
 
 in case of shortages, where the total cost of so doing does 
 not exceed the price at which the goods are sold. It is 
 better to sell the goods at cost than to be out of them 
 and thus disappoint customers. It is not necessary to 
 order the entire lot by express, but only such proportion 
 as will bridge over the difficulty until a freight shipment 
 may arrive. Obviously some goods are too heavy and 
 the express charges bear too great a relation to the cost 
 of the goods to permit coming by express without a 
 serious loss. It would be foolish, for instance, to order 
 wire nails by express. 
 
 When the shortage is reported, if goods are very 
 staple and are called for constantly, it often pays to 
 telegraph the order for them to the factory, so as to 
 save the delay which would be occasioned by sending 
 the order by mail in the usual way. An order placed 
 for goods that are short should always contain a request 
 to the manufacturer to advise the sender of the order 
 on receipt of said order when shipment will be made, 
 so that there may be some knowledge of when the goods 
 will be received. In some cases, where such goods are 
 shipped in car loads, it is well to have the factory tele- 
 graph routing and number of the car, so that the railway 
 transporting it may be instructed to watch it and bring 
 it through as quickly as possible. Where goods can be 
 
96 MERCHANDISING 
 
 ordered in full car loads, with due regard to turnover 
 of stock and the amount of money invested, it should be 
 done, as car loads always come through more promptly 
 than less than car loads, with the goods usually in better 
 condition. Small orders of light weight goods can often 
 profitably be ordered by parcel post. 
 
 A memorandum should also be kept in a diary to 
 look frequently into the question as to whether the 
 manufacturers have shipped the goods needed so badly, 
 since manufacturers, being human and fallible, are not 
 always able to ship promptly on the dates they agreed 
 to. Where shipments have not been made, then man- 
 ufacturers should again be urged to make them. 
 
 Sometimes there may be found in stock similar goods, 
 which may be substituted temporarily on orders for the 
 goods which are short until the required goods come in. 
 If, for instance, a certain pocket knife is short there may 
 be another one in stock, similar in looks, design and 
 appearance, which can safely be substituted for the one 
 short. Always, however, the article substituted must 
 be at least equalin quality and appearance to the one 
 for which it is substituted, and never inferior. Sub- 
 stitution is a risky performance, though constantly 
 done, since there is always the chance of offending 
 the customer by sending something different from 
 
FILLING ORDERS 97 
 
 what he ordered. In the case of the pocket knife 
 mentioned, as an example, the customer may have all 
 he wants in his own stock of the substituted article sent 
 him, which thus may prove a source of irritation. The 
 " substituter," the one who does the substituting, should 
 be a man of experience and judgment, and thoroughly 
 familiar likewise with the goods in general, so as to know 
 when and what to substitute. Also he should know 
 something of the nature and peculiarities of the cus- 
 tomers, so as to determine those on whose orders it is 
 safe for him to substitute, and those who "will not stand 
 for it." Substituting has a double purpose, the first, 
 not to lose the sale altogether, and the second, to give 
 the customer something which may answer his purpose 
 rather than not ship him anything at all. Whatever 
 may be the various theories on this subject, the facts of 
 experience seem to indicate that most substitutions 
 "get by" and apparently are satisfactory. 
 
 "Buy outs" are another form of getting goods quickly 
 to fill shortages on orders. They consist in buying out 
 such goods as may be had in the city or town in which 
 the wholesaler is situated, to such an extent as will suffice 
 temporarily to take care of the shortages. In large 
 cities, where there are several wholesalers in the same line 
 of business, this is a frequent practice, and it usually re- 
 
98 MERCHANDISING 
 
 suits from the law of chance that all the wholesalers are 
 not likely to be out of the same goods at the same time. 
 It is rather an expensive method, since usually compet- 
 itors charge each other very nearly the same prices that 
 they charge their own customers. Consequently such 
 buying is usually done in very small quantities, and only 
 to satisfy immediate and pressing needs in the way of 
 shortages. 
 
 Another system is what is known as "back orders." 
 This consists in making a transcript or "back order" 
 of the items which are short, shipping the remainder 
 which it is possible to fill complete, and advising the 
 customer that the goods short have been back ordered 
 and will be shipped to him as soon as they arrive from 
 the manufacturer. The back order is then held, and 
 filled and shipped from the first goods which come in, 
 being given preference in this respect over all other orders. 
 Back ordering goods is done under several conditions 
 when the goods are in transit or "on the road," as is the 
 trade term, and will be in shortly, so that the customer 
 will get thus them as quickly as if he ordered them anew 
 from some other concern; or when the goods, which are 
 back ordered, are very scarce, and the customer is likely 
 to get them as quickly by having them back ordered as 
 if he ordered them from some other concern, who would 
 
FILLING ORDERS 99 
 
 also probably be out of them; or when the goods back 
 ordered are in some manner peculiar to the house from 
 whom they are ordered and cannot be obtained from 
 any other concern. The policy of back ordering is to 
 prevent the loss of sales, as is the case when the goods 
 short are omitted entirely. But the interest of the cus- 
 tomer must always be borne in mind, and it is not only 
 manifestly unfair to the customer, but likewise poor 
 business, to back order shortages when it means that 
 there will be a long delay in shipping those goods, which 
 meanwhile the customer might get more quickly from 
 other sources of supply. 
 
 Promptness in filling orders depends first upon having 
 a well-assorted and sufficiently large amount of goods on 
 hand to take care of the orders; secondly, upon a working 
 system, efficiently administered, which makes the 
 "getting out" and shipping of the goods so ordered a 
 matter of comparatively short time. In a concern which 
 carries large stocks and large assortments, much in- 
 telligently administered system is necessary to prevent 
 all the innumerable details from hampering and delaying 
 shipments. The variety of assortments when carried 
 too far is often a handicap in filling orders, because it 
 introduces undue details, and makes it more difficult 
 to keep up the stock. Obviously it is easier to keep up 
 
ioo MERCHANDISING 
 
 a stock of two items than of one hundred. Yet the gen- 
 eral policy of American merchandising still tends to the 
 one hundred item policy rather than to the two. Every 
 whim and fancy, as well as every real need, is consulted 
 in the matter of assortments, until the variety of assort- 
 ments has been raised to the Nth degree. At this writing 
 there seems to be a healthy reaction among manufac- 
 turers, jobbers and retailers towards smaller assortments, 
 which yet answer every reasonable purpose. 
 
CHAPTER XI 
 
 FINANCIAL FACTORS, CREDIT, COLLECTIONS, ACCOUNTING 
 
 It is a common, yet true, saying in the business world 
 that money is the life blood of trade. All the processes 
 of merchandising are directed to making or conserving 
 money, since this is the ultimate measure of success. 
 No business can be said to prosper which does not show 
 a profit. How the money is made, and what is done 
 with it, is another matter, that of ethics. Incidentally, 
 no business even with the highest code of ethics can 
 ever keep in successful operation for any length of time 
 unless the business itself be a success financially. The 
 financing of a business is a mixed matter of Financiering 
 and Merchandising, and so will be treated in this chap- 
 ter only as it relates to Merchandising. 
 
 In ordering goods one seeks to have on hand only that 
 stock which is needed, else there results a locking up of 
 idle capital and the expense of carrying charges, so that it 
 may become necessary to sell these overstocks at a small 
 profit or even at a loss and thus to "turn them into 
 money." The turnover of stock has for its purpose the 
 employment of as small an amount of capital as is consist- 
 
 101 
 
102 MERCHANDISING 
 
 ent with the due filling of orders. The intent of buying is 
 to procure low-priced goods that selling may thus make a 
 satisfactory profit on them. The aim of credit is to 
 offer no obstacle to the wide prosecution of business, 
 save such caution as will prevent undue loss of money. 
 
 The extending of credit to customers is largely a mat- 
 ter of judgment, which has for its basis a knowledge of 
 the customer's financial condition, of the general business 
 conditions in the customer's territory, and finally, and 
 most of all, the standing and personal character of the 
 customer himself. For in the last analysis, credit, 
 whether extended by a bank or a mercantile concern, 
 finally rests upon the character of the recipient. In most 
 large wholesale concerns, the principal difficulty about 
 extending credit is that the credit man usually has little 
 or no knowledge either of the customers or of their ter- 
 ritory. His information is generally derived from the 
 traveling salesmen of his house, the reports of mercantile 
 agents, and such stray gleanings as he gathers from all 
 other sources. If the credit man could and would travel 
 more among his customers he would secure a much clearer 
 and more intelligent view of his customers and of their 
 credit risks. 
 
 Much the same thing is true of the matter of collec- 
 tions, though in most houses credits and collections are 
 
 
 
FINANCIAL FACTORS CREDIT, ETC. 103 
 
 associated in one department. The collection man 
 in a large house, is usually remote from the scene of 
 action, and has only the point of view that the money 
 is due and should be paid. It is the true point of view, 
 and logically an unanswerable argument. It is also 
 equally true that often the collection man, like Pharaoh 
 of old, must constantly harden his heart, and also like 
 Shylock, exact his pound of flesh, lest he be found an 
 "easy mark" and have bad debts "put over on him." 
 But there are times and circumstances where leniency and 
 forbearance and consideration pay well in the long run. 
 In such cases the best guides to good judgment are, if 
 possible, a knowledge of the customer, and the con- 
 ditions and surroundings under which he does business. 
 For instance, in the Great Plains States of the West 
 and the Southwest the climate is the keynote of the 
 business situation, for agriculture and grazing are the 
 principal industries and revenue producers for the com- 
 mercial world. Nature is by turns both cruel and kindly. 
 There are wet seasons when the clouds drop fatness, 
 and dry years when, as related by Elijah, "The sky is 
 as brass and the earth as iron underneath," and when 
 hot winds destroy all crops and all vegetation, as with 
 the breath of a furnace. During the wet season busi- 
 ness is good, for crops are plentiful and livestock fat 
 
104 MERCHANDISING 
 
 and abundant on the great grazing ranges; also credit 
 is easy to obtain and collections good. In the years of 
 heat and drought, business is a forlorn affair and lives 
 largely upon its own fat, save in those progressive sec- 
 tions where the growing of drought-resisting plants and 
 forage crops has changed the face of nature. In such 
 troublous times the retail dealers have nothing to pay 
 with, for the farmers, their best customers, have but little 
 to sell, and sometimes must be supplied with the bare 
 necessities of life until another and better crop comes 
 around. In such cases it does little good to crowd 
 the retail dealer hard for collections, as it may 
 only result in his bankruptcy, from which few creditors 
 reap anything but a heavy loss. If the customer be 
 honest, square, industrious and economical, it is often 
 wiser to carry him along through his troubles, allowing 
 him to pay up from time to time as best he can, and 
 even to extend him moderate credit on such com- 
 paratively few goods as he may need. It is the custom 
 of the country, and those who follow it with judgment 
 and discretion and due knowledge of the situation, 
 usually have then* reward in time, in the shape of back 
 debts paid up, and a continuing business from the cus- 
 tomer who thus has been tided over his troubles. 
 While consideration of this nature may often be the 
 
FINANCIAL FACTORS CREDIT, ETC. 105 
 
 best method of making collections, it must be always 
 borne in mind that the chief factor in successful collect- 
 ing is tireless industry in watching accounts, and in 
 pressing demand for payment for those which are due or 
 past due. It is much the case of the Unjust Judge and 
 the clamorous Widow as recited in the New Testament. 
 Those who are most persistent and untiring in asking 
 for payment are apt to receive it in preference to those 
 who fail to make their wants known. There is no spe- 
 cific rule nor form for handling customers so as to get best 
 results. Each one must be the subject of a separate 
 study, according to the conditions which surround him 
 and his own peculiarities. It is well and often nec- 
 essary for the credit man to consult the salesmen who 
 visit customers as to the nature of the customers, and 
 the state of their environment, though it must always 
 be borne in mind that the natural tendency of the sales- 
 man is to be lenient with his customers, lest he lose their 
 trade. So this factor must be discounted in such sug- 
 gestions as the salesman gives as to how to handle the 
 customers. A very large proportion of the retail trade 
 are unfortunately poor collectors, because they are 
 afraid of offending their customers and losing their 
 trade. It is a fatal mistake, for there is an aphorism 
 in trade that no merchant ever failed because of being 
 
io6 MERCHANDISING 
 
 a good collector, but a very large number have gone 
 to the wall because of the opposite characteristic. The 
 smaller the town, the more apt the dealer is to be slack 
 in his collections, since the social factor enters largely 
 into the problem. The dealer does not wish to incur 
 the ill will of those with whom he is in daily contact 
 by the imputation of being hard-hearted and unfeel- 
 ing. He fails to realize that close collections are 
 his salvation in business, and that undue leniency 
 in this regard will inevitably bring him close to the 
 ragged edge of disaster. Being a poor collector, and 
 having idle money locked up in overstocks that they can- 
 not readily convert into liquid assets, are the principal 
 causes of the inability of retail dealers promptly to meet 
 their obligations to wholesalers and manufacturers. 
 
 The psychology, which is at the root of the importance 
 of being a good collector, is expressed in the saying of 
 a very shrewd business man, who was also very rigid 
 in his ideas of right and wrong, "I want a remittance 
 for the account now due," he was accustomed to write 
 to slow-paying customers, "because it is due." In 
 effect it was his own money that he was asking for, and 
 save for inability, there could be no valid reason for 
 not paying it back to him. However, much as a slow- 
 paying merchant may bluff, pretend indignation and 
 
FINANCIAL FACTORS CREDIT, ETC. 107 
 
 make excuses, he knows in his heart that he is wrong, 
 and that not paying debts when due, unless for absolute 
 lack of means to do so, is after all a species of dis- 
 honesty, however much custom may gloss over the 
 fact. Being slow pay is a habit, easily gotten into, 
 but fatal in its final effects. 
 
 The story of accounting is a short one in its direct 
 relation to merchandising. One of its phases is that 
 of showing the cost of doing business not only as a whole, 
 but also as relates to the separate divisions of each 
 business organization. In a large wholesale house, 
 this should be known, unless this knowledge involves 
 too much labor and expense, and whether the different 
 departments are profitable, and if not what is the reason. 
 The larger the house, the easier it is for leaks and use- 
 less expenses long to escape detection. If, for instance, 
 in a hardware jobber's organization it be found that 
 the cutlery department is very profitable and that the 
 sporting goods department is not, then the reason for 
 the failure of the latter department to contribute its 
 share of profit towards the general welfare should be 
 the subject of searching investigation. It may develop 
 that the causes can be remedied when once found. 
 Such an investigation may bring to light a lack of suf- 
 ficient gross profit in some leading lines, or an undue 
 
io8 MERCHANDISING 
 
 selling expense in others, or lack of close enough buying 
 in the matter of obtaining low prices from the man- 
 ufacturers, or a failure to turn the stock over properly. 
 It may also be found that the causes of the lack of 
 profit in this particular department are due to peculiar 
 conditions in the trade, which it is not possible to rem- 
 edy. Yet it may wisely be concluded to continue 
 the department as it stands, because its effect in adding 
 to the necessary volume of business, and in bringing 
 business to the house in the resultant sale of goods of 
 profitable departments, more than compensates for 
 its own lack of profit. But these facts should first be 
 known, so that whatever action is taken shall be with 
 an intelligent knowledge of the situation, and not on 
 mere conjecture and estimates, as is too often the case. 
 
 It is one of the wonders of commercial life how cer- 
 tain theories and beliefs are universally accepted as 
 beyond question until some analytical mind shows 
 them to be in direct opposition to the actual facts of 
 the situation. This peculiarity of unthinking cre- 
 dulity arises largely from the universal human trait 
 which avoids facing basic facts, preferring rather to 
 live in a FooPs Paradise. 
 
 Accounting also may be easily and profitably applied 
 to the examination of the profitableness or unprofitable- 
 
FINANCIAL FACTORS CREDIT, ETC. 109 
 
 ness of certain lines of goods, and the reasons for such 
 conditions. Yet again it may be wisely concluded that 
 it is necessary to carry certain lines because of the great 
 demand for them, and the fact of being able to supply 
 them means usually the consequent sales of other goods 
 of a more profitable nature. Horse shoes in the hard- 
 ware business, and sugar in the grocery business are 
 typical examples of such lines. 
 
 The extent and variety of accounting depends largely 
 upon the size of the organization. Large wholesale 
 houses are apt to have records and statistics on many 
 goods and processes of which no use whatever is made, 
 and consequently such accounting is mere wasted time, 
 labor and expense. On the other hand, small retail 
 dealers often do not "keep books" save in a most prim- 
 itive way, and also in a way that does not betray informa- 
 tion to any one save the man who keeps the books. The 
 best rule is that the nature and extent of accounting 
 shall be in direct relation to the nature and extent of the 
 business. That is why complicated systems of double 
 entry book-keeping are mere foolishness to the small 
 retailer in the small town, who only needs to know some 
 few facts which his books disclose, but which he cannot 
 well discover from his own constant personal contact 
 with practically every phase of his business. 
 
CHAPTER XH 
 
 DISTRIBUTION 
 
 As we have seen in previous chapters, the first process 
 of merchandising is that of buying the needed goods. 
 Then follows ordering these goods, taking care of them 
 when received, and filling orders, which brings us to the 
 question of distribution. 
 
 Trade is generally along certain geographical lines, 
 these lines as a rule being the shortest or most con- 
 venient paths between the points of trading. Certain 
 localities, usually large cities, become centers of distribu- 
 tion because of geographical advantages of situation. 
 In the early days such advantages were largely those of 
 water transit, either on a river, or on the ocean, or on a 
 large body of fresh water, such as the Great Lakes of 
 North America. These various situations gave the 
 beginning of commercial importance to New York on a 
 great harbor, Saint Louis on a great river, and Chicago 
 on a great lake. The rapid growth of railroads profoundly 
 altered this situation for the time being and made pos- 
 sible the existence of distributing centers, such as In- 
 dianapolis, Minneapolis and St. Paul (the Twin Cities), 
 
 no 
 
DISTRIBUTION in 
 
 Denver, Atlanta, and a number of others, all of which 
 are inland cities dependent for transportation facilities 
 entirely upon railroads. To this there has been added 
 in comparatively recent years the Interurban Electric 
 or Trolley lines, which are doing much to increase the 
 distribution advantages and facilities of such cities as 
 Cleveland, Detroit, Toledo, Indianapolis and many 
 others. 
 
 With the growth of the merchandising policy among 
 the retail trade of carrying small stocks and turning these 
 stocks over often, the demand from the retail trade has 
 become largely that of prompt shipment, so that service 
 usually assumes precedence over price as the determining 
 factor in purchases. Formerly the large cities were the 
 principal seats of the distributer of merchandise in the 
 person of the jobber, but of late years many of the 
 smaller cities harbor and support one or more jobbing 
 houses, who cater to the nearby trade with the simple 
 and formidable argument of supplying goods promptly, 
 and thus render it possible for the neighboring retailers 
 in the surrounding country to get along with small 
 stocks, frequently replenished. Several ways of meeting 
 this competition have been put into operation by the 
 more distant and larger jobber in the large city. One 
 is that of a larger and more complete assortment than 
 
H2 MERCHANDISING 
 
 the smaller jobber in the small city can afford to carry. 
 Another is that which is known as direct shipments from 
 the factory. A supposititious case is that of a large job- 
 ber in the Central West, somewhere on the Mississippi 
 River, who arranges with manufacturers in the state of 
 Ohio to ship their products direct to his customers in 
 Ohio. The salesmen of the jobber take such orders in 
 the regular way. When received, they are forwarded 
 by the jobber to the manufacturer, who in turn ships 
 them direct to the customers of the jobber. There is 
 thus avoided the time consumed by the shipment if made 
 from the jobber's place of business, and there is saved to 
 the retailer the difference in freight to his town from the 
 city in which the jobber is situated and the location of 
 the manufacturer. It is obvious that the advantages 
 of this plan to the retailer consists primarily and prin- 
 cipally in the promptness with which the manufacturer 
 makes shipment, as compared with the same service 
 shown by some "local" jobber in the state of Ohio. 
 
 Another plan is that of "collective car loads." Let 
 us assume a case of a large jobbing house in a large city, 
 somewhere in the Central West, which wishes to sell 
 stoves and stove furnishings to a number of the retail 
 trade adjacent to one of the large cities in Texas. Orders 
 are taken by the salesmen of the jobbing house in ques- 
 
DISTRIBUTION 113 
 
 tion from the different retail customers in the section of 
 Texas under consideration. When these orders have 
 accumulated enough tonnage to fill a car, a "collective 
 car" of all the orders is shipped to the large Texas city. 
 When the car reaches its destination, bulk is broken, 
 and the different lots for the different customers are 
 shipped locally in "less than car load lots" to their 
 various destinations. The advantages are that the full 
 collective car goes through much more quickly and with 
 less likelihood of damage to the goods while in transit 
 than if shipped in local or less than car load lots. The 
 theory further is that if the Texas retailer bought from 
 the nearby Texas city under consideration, that the 
 Texas jobber would have to pay the freight from the 
 factory to his place of business in car lots, and that nec- 
 essarily he would add this freight to his price to the 
 Texas retailer, so that in effect when the Texas retailer 
 buys from the jobber in the Central West he purchases 
 the goods F. O. B. (free on board) at the place of business 
 of the jobber of the Central West. But although he 
 pays the freight to the Texas city in the first place on 
 such purchases, he only does what in another form he 
 would do in case he bought the goods from the Texas 
 jobber. 
 Now it would seem that these various methods of 
 
114 MERCHANDISING 
 
 doing business between the jobbers and their customers 
 are very complicated and expensive, and have a tendency 
 to advance the price of goods to the ultimate consumer, 
 because of the constant duplication of effort in selling 
 and buying. These same retailers in Texas may be 
 visited by the salesmen from twenty-five or more jobbing 
 houses situated in all parts of the country. It would 
 seem much simpler to divide the country into geograph- 
 ical divisions, according to the advantages possessed by 
 certain distributing centers. For instance, a certain 
 portion of the state of Colorado might arbitrarily be 
 alloted to Denver as a distributing center, while Salt 
 Lake City might assume charge of much of Utah and 
 some portions of Wyoming. Chicago might take cer- 
 tain sections of the Central West and Northwest, and 
 Saint Louis other parts of the Central West, along with 
 some sections of the Southwest an arrangement in 
 fact after the fashion of the various Federal Reserve 
 Bank divisions. It would appear, therefore, quite logical 
 under such an arrangement that many of the expenses 
 of innumerable competitors, covering the same territory 
 in their efforts to obtain trade, could thus be eliminated, 
 and that the retail dealers and the consumers would get 
 the benefit of these economies in the shape of lower 
 prices of commodities. But there are many things that 
 
DISTRIBUTION 115 
 
 are logical in text-books and in theory that are not so in 
 actual life, and that are quite impossible of realization. 
 The problem goes deeper than logic and economic theory, 
 however unanswerable on paper the latter may appear. 
 The story of American history is the story of progress, be- 
 cause of individuality and the seizure of opportunity by 
 the many. To crib, cabin and confine the energies which 
 sought to find vent in mutual and constant competition 
 with each other is a thing impossible under present con- 
 ditions of American society. 
 
 Only so recently as the early days of this century this 
 plan was definitely and industriously sought to be ap- 
 plied in the shape of great consolidations of manufacturing 
 and mining interests, whose principal claim to existence 
 were more efficient and economical methods of manu- 
 facture and distribution. In many instances they made 
 good as to economies and efficiency of manufacture, 
 but failed utterly as to the same results in distribution. 
 The net results as a whole were an enhancement and 
 not a decrease of prices to distributers and to consumers. 
 Moreover, the success of these consolidations incited 
 other groups to consolidate, thus creating more competi- 
 tion than they destroyed so that the matter of wide- 
 spread competition remains much as before. 
 
 It is perfectly possible and easily thinkable that the 
 
n6 MERCHANDISING 
 
 growth of population in this country, especially in the 
 large cities, may bring about a state of society where 
 in many walks of life collectivism may be the dominant 
 factor instead of individualism. But there is nothing 
 at present in sight to warrant the belief that this is likely 
 to come about in distributing circles in the near future. 
 The conflict of the various systems and units of distri- 
 bution has brought about and spread a spirit of cosmopol- 
 itanism, which could not obtain were the local dealers de- 
 pendent entirely for their supplies upon the local jobbers. 
 Competition, of the keenest nature, spurs the efforts of 
 both the more distant and the local jobber. Both have 
 the incentive of a constant commercial warfare, which 
 makes them more observant of the wants of the customers 
 and of their own methods of business, and there does 
 not seem to be any reasonable doubt but that the retail 
 dealers profit more, both in service and prices, by this 
 ceaseless competition between the jobbers, than if they 
 were dependent solely on one source of supply. It is the 
 story of human nature that when it has a monopoly on 
 anything, it becomes indifferent to the wants of those 
 whom it should serve, and finally looks only to its pre- 
 ferment, regardless alike both of its duties and obli- 
 gations. That both classes of jobbers, local and more 
 distant, have thriven and prospered under this competi- 
 
DISTRIBUTION 117 
 
 tion, is due not to undue and excessive profits, but to 
 improved methods of business, which this commercial 
 warfare made necessary to their very existence. What- 
 ever the faults and sins of competition, there remains 
 no substitute for its incentive and progressive spirit in 
 business, unless mayhap that of cooperation, of whose 
 merits we know but little in an age of Individualism. 
 In the retail trade where the consumer is dealt with 
 directly, the problem of distribution still demands the 
 prime attribute of service. This is shown by the delivery, 
 to the houses of the householders, of the smallest pack- 
 ages, of orders given over the telephone instead of in 
 person, of deliveries to suburban customers by the great 
 department stores, of shopping done by mail, and of 
 every possible form and method of convenience made 
 easy to the consuming public. All this convenience 
 costs and is added to the price of the goods in some form 
 and fashion. This it must be remembered is a general 
 statement, which like all such generalizations is subject 
 to some striking exceptions. The competition between 
 the great department stores is such that as an added 
 incentive to "draw trade," all the ways and means of 
 buying are made easy to the consumer, and often with- 
 out any additional charge, because that would entirely 
 mar the effect of the effort to get additional customers. 
 
n8 MERCHANDISING 
 
 The store in such cases seeks to recompense itself for 
 the added expense by an increase in the volume of busi- 
 ness done, or else absorbs the new cost in its "overhead," 
 as a part of a general expense that inevitably grows year 
 by year. Moreover, the temper of the trading public is 
 such that it constantly demands and gets more in the 
 way of convenience, comfort, and amusement for the 
 same price than it formerly paid for matters of less com- 
 fort and less ease. In discussing this phase of distribu- 
 tion, the mere theorist, safe from the daily contact with 
 the hurly-burly of the workyday world, insists upon a 
 return to a simpler life, as the only solution of this phase 
 of the problem of distribution. The housewife must 
 come and select her purchase for herself, instead of using 
 the telephone, and must take it home with her instead 
 of having it delivered. Undeniably and logically she 
 should, but she will not, and that is all there is to it. 
 This easy, but impossible solution, runs counter first of all 
 to the spirit and psychology of the times. The present 
 method is one of the many advantages of the age in which 
 we live, and makes more leisure and freedom from hard 
 drudgery possible, because of its many mechanical ap- 
 pliances and labor-saving inventions. The woman of 
 the household sees in the telephone and the delivery 
 wagon a release from ceaseless drudgery and also realizes 
 
DISTRIBUTION 119 
 
 the consequent broadening of her mental horizon, because 
 of some spare time to devote to things better than house- 
 hold work, which most women dislike so far as any plea- 
 sure to be derived from it is concerned, and gladly escape 
 when opportunity and their sense of duty permits. With 
 woman much of this labor is after the fashion of Pooh Bah 
 in the Mikado: "I do it, but it revolts me." This, too, 
 despite much sentimentality that mere man has written 
 to the contrary. To ask woman to abandon all these 
 means and methods which enable her to devote at least 
 some of her time to matters of more interest and more 
 pleasure is to run counter to the general spirit of the 
 times, and furthermore to seek to perpetuate ways that 
 are out of date. 
 
 The experiment of marketing by direct contact be- 
 tween the farmer and truck gardener and the house- 
 keeper is now on trial in many great cities. It has in 
 most cases been apparently successful, but the prime 
 difficulty is that its effect is necessarily partial, for the 
 multitudinous many still go on as before. It will be re- 
 membered that just before the coming of the Parcel Post 
 it was heralded as a means whereby the farmer should 
 directly contribute to the breakfast and the dinner table 
 in the city. But little came of this phase of its usefulness, 
 because the ways of purchase, sale, credit and remit- 
 
120 MERCHANDISING 
 
 tance are not easily compassed by so simple an expedient. 
 On the other hand, certain large distributers, in some 
 great cities, some of whom include manufacturing as a 
 part of their equipment, have made a pronounced suc- 
 cess of dealing direct with the consumer, especially on the 
 farm and in the small town. They seek in effect to elim- 
 inate one and sometimes two factors in the chain of distri- 
 bution, namely, the jobber and the retailer. To do this 
 requires an elaborate system of catalogues, much ad- 
 vertising, and much machinery of system and method. 
 It is very doubtful whether after all the increase in price 
 in the usual chain of distribution from manufacturer to 
 jobber to retailer to consumer has in any way been les- 
 sened by this plan. The facts are that both methods 
 diametrically opposite in purpose and method continue 
 to thrive side by side. This is not a new phenomenon, 
 but one occurring so constantly in economic life as to 
 create a well-founded belief that economic ways are 
 largely empirical, and rather the creation of happy op- 
 portunism than of immutable laws. 
 
 The real objection to the system, whose logical effect 
 is to eliminate the retailer, goes deeper than the mere 
 cost of distribution, for it strikes at the life of the coun- 
 try town. The great city has ever been the problem of 
 every civilization from the days of Babylon, Nineveh 
 
DISTRIBUTION 121 
 
 and Rome unto our own times. The decadence and 
 decay of the great capital marked the ruin of the civiliza- 
 tion which it typified. Whether we shall repeat the story 
 of the past depends not so much upon the saving grace 
 which may be manifest in the great center, despite the 
 apparently inherent evils which mark and accompany 
 its progress, as upon the independence and wholesome- 
 ness of the world outside. We are familiar with the 
 growth of urban life and population at the expense of 
 the countryside, and with the resultant evils which still 
 give us grave concern. So an economic tendency, which 
 seeks to destroy the life of the small town, is far more 
 serious than the question whether the rural consumer 
 can or cannot buy more cheaply because of this system 
 than through the medium of the hitherto prevailing 
 methods of distribution. The average small town or 
 city, save where it has some local industry, such as 
 mining, manufacturing or the like, usually subsists 
 principally upon the trade of the nearby farming commu- 
 nity. It buys and markets much of the minor products 
 of the farm, and affords the farmer a shipping point for 
 all his products. Of late years it has become the center 
 of social, educational, religious and economic life to all 
 the surrounding country. It now offers public libraries, 
 places of amusement, high schools, and junior colleges to 
 
122 MERCHANDISING 
 
 all the dwellers on the countryside. These things which 
 make life worth while have now become of easy access 
 to the farming community because of good roads and 
 automobiles. There is no longer that same desire to leave 
 the farm and seek the advantages and opportunities of 
 the great city, which once robbed the farm and the small 
 town of its most enterprising and adventurous spirit. 
 Life on the farm has been freed of that loneliness and 
 monotonous drudgery which caused so many to flee away 
 from it. The newly awakened spirit of local pride in 
 the small town is making it a place of attractiveness to 
 all the dwellers round about it. Means of communica- 
 tion are now so speedy and reliable that it offers much 
 in the way of advancement and enlightenment that its 
 isolation formerly denied it. The people of the town 
 seek the friendship and companionship of their farmer 
 neighbors, thus breaking down that invisible line which 
 formerly separated town and country. If the farmer 
 is to trade with the distributing concern in the distant 
 city, then the small city and town, largely' dependent 
 upon the farmer trade for its support, must decay and 
 become of small import and moment in the country's 
 civilization. The inevitable effect is to retrograde life 
 in the country back to a condition of loneliness and un- 
 attractiveness, such as it has not known for many genera- 
 
DISTRIBUTION 123 
 
 tions. This is an impossible picture, and yet at one time 
 it seemed likely of realization. 
 
 One of the most directly practical factors in dis- 
 tribution is the extent of what is known as the " trade 
 territory " of any distributing center, or that portion 
 of the country in which a distributing center naturally 
 sells goods, because of the advantages of quick and 
 efficient transportation, and the natural bonds of sym- 
 pathy and understanding between the people in the 
 distributing center and those whom it seeks to serve. 
 Freight rates play an important part in this matter, 
 regardless often of the comparative distances from two 
 competing distribution centers to the territory in which 
 they desire to sell goods. The distributing center, 
 which has the lowest freight rates and the quickest 
 means of transportation to the desired points has of 
 course an initial advantage. The majority of dis- 
 tributers in any large city are apt to be content to con- 
 fine their activities and endeavors only to what is gen- 
 erally termed their natural trade territory, by which 
 is meant that section of the country which it reaches 
 most promptly and effectively through its transpor- 
 tation lines, so that it can deliver goods in that par- 
 ticular territory to better advantage than most of its 
 rivals. Chicago, for instance, expects to get the trade 
 
124 MERCHANDISING 
 
 of certain sections in the West and Northwest on this 
 basis, while St. Louis looks to certain portions of the 
 West and Southwest for the trade to be her own pecu- 
 liar province. Yet the enterprising jobbers do not con- 
 fine their operations to any such conventional limits. 
 They demonstrate by means of prompt shipments, by 
 large and well-chosen assortments, by the employment 
 of good salesmen, and by persistent advertising, that they 
 can practically sell a sufficient quantity of goods which 
 they carry to make such trade profitable. There are 
 a few enterprising jobbers in certain distributing centers 
 who sell and distribute the goods all over the United 
 States by the means which have been enumerated. 
 
 The essential problem of distribution is to bring pro- 
 ducers and consumers in as close business contact as 
 possible, and thus diminish the cost to the consumer by 
 removing the expensive operation of having the goods pass 
 through the hands of the middleman. Yet after all is 
 said, such solution makes slow progress because of the 
 stubborn fact that while the generally prevailing sys- 
 tem of distribution is admittedly expensive and in- 
 efficient, it still perseveres because no better way has 
 as yet been found. The analogy of trial by jury is much 
 the same story. It is a very faulty legal procedure of 
 law, but no one has yet suggested a better method* 
 
DISTRIBUTION 125 
 
 The usual mistake is to seek solution of the problem 
 along general lines, when each line of business offers 
 a distinct and different difficulty. The nearest ap- 
 proach to a generalization probably is found in the 
 statement that simple, elemental goods, without too 
 much complexity of assortment, lend themselves most 
 readily to closer contacts between producer and con- 
 sumer. The difficulty increases with the complexity 
 of the line and the variety of assortment. A retailer 
 who handles only one or two simple lines or articles 
 has a much better opportunity of advantageously buy- 
 ing direct from the factory and thus eliminating the 
 jobber, than who handles a great variety, none of them 
 of any great moment. An extreme case will bring out 
 this latter phase more clearly. A retail hardware dealer 
 in far Southwestern Texas has a stock of goods of about 
 $10,000.00 in value, and this stock is made of several 
 thousand articles, very few of which he buys in any 
 quantity. He finds that he needs about one dozen 
 items, each made by a different manufacturer, and 
 none of these items of sufficient quantity to make enough 
 weight for a freight shipment, and it is much too ex- 
 pensive to have them come by express. Moreover, 
 the manufacturers of these needed items are distant all 
 the way from Central West to New England, The 
 
126 MERCHANDISING 
 
 delay in getting the goods is too long to be considered, 
 and moreover none of the manufacturers could afford 
 to sell the retailers such small orders, as their credit 
 and selling forces are necessarily constructed upon 
 the plan of selling large quantities of goods to com- 
 paratively few merchants, and these few buy in large 
 quantities. So the retailer in question finds that the 
 most economical thing he can do is to send an order for 
 the entire lot of goods to the jobber, with whom he 
 trades and who carries all of the items in stock and can 
 ship promptly. 
 
 The jobber in all lines of business still continues to 
 grow and to enlarge his bounds, because he is an economic 
 necessity, and a needed cog in the machinery of distri- 
 bution. We must remember likewise that distribution 
 methods suited to the smaller countries of Europe are 
 not suited to us, not only because of the great extent 
 of our country, but likewise because of the difference 
 in the temperament of our people. Theoretically con- 
 solidation of competing interests, and centralization of 
 manufacturing and distribution, thus eliminating the 
 supposedly useless units and middleman, is best for the 
 race, because it supposedly reduces the price of com- 
 modities to the consumer. In actual practice it often 
 does exactly the reverse. 
 
DISTRIBUTION 127 
 
 But there is another and sinister side to it. No form 
 of civilization has yet been devised which can make a 
 great people out of a nation of employees. The small 
 and numerous employers are better for the country 
 than if they were workers in great central factories. 
 Ownership of some form invariably breeds responsibility 
 and such forethought as is needed to make haste slowly. 
 The hysteria of the people of a great city of many em- 
 ployees is often in strong contrast with the sober sense 
 and sanity of the owner dwellers in the country. The 
 economic problems of the day are largely social, for 
 the real products of democracy are intelligent men 
 and women and not cheaper methods of distribution 
 at the expense of matters far more vital. 
 
CHAPTER XIII 
 
 ADVERTISING 
 
 The nature and function of advertising are too com- 
 prehensive to-be treated in a single chapter, especially 
 as we are concerned only with that phase of advertising 
 which relates to merchandising. We must have some 
 understanding, however, of the real purpose of ad- 
 vertising if we are to comprehend intelligently what 
 bearing it has upon the various policies of merchandising. 
 
 Advertising is in effect a separate business in itself, 
 of extraordinary complexity, and of equally extraordinary 
 possibilities. These possibilities are only now beginning 
 to be perceived, although as a business it was nothing 
 new to many past generations, yet only now are we 
 getting some glimpse of its real nature. 
 
 For a long time success in advertising was supposed 
 to be the result of happy accident or opportunism, as 
 might be illustrated by some catchy phrase, or the in- 
 vention or adoption of some word or slogan, which at once 
 caught the popular eye and fancy. There were enough 
 successes of this nature to encourage the belief that 
 
 such methods were the head and front of advertising, 
 
 128 
 
ADVERTISING 129 
 
 with the natural result of the business being much in- 
 fluenced in the distant past by a set of adventurers 
 who depended upon their effrontery and juggling with 
 the quips and quirks and wanton wiles of the English 
 language in their gambles at getting business and making 
 a success of their ventures. Obviously the ethics of a 
 business, much of which was done after this fashion, 
 was of a kind which incurred the disdain and reprobation 
 of the most potent, grave and reverend seignors in the 
 higher world of commercial life. 
 
 As time went on apace, it began to be seen and re- 
 alized by those enterprising spirits in the advertising 
 business, who had some vision as to the real nature and 
 possibilities of their calling, that advertising was a great 
 and serious affair, worthy of the utmost study, because 
 its chief function was a knowledge of human nature. 
 Its primary purpose is to catch the attention of the party 
 whom it seeks to interest, and to have and hold that at- 
 tention when once secured. Obviously, therefore, it 
 involves a study of the psychology of human nature as 
 to how it shall achieve this result. All printed advertis- 
 ing must not only catch the eye, but likewise the in- 
 terest of the human unit to whom the "ad" is directed. 
 Its principal need, therefore, is a knowledge of the Eng- 
 lish language and how it shall be applied, and this is the 
 
130 MERCHANDISING 
 
 one point on which most of its followers signally fail. 
 So signally, in fact, that it is probably a true estimate 
 that nearly 75% of the money spent in advertising 
 is merely wasted, since it fails to bring adequate results. 
 One has only to read carefully the advertisements 
 which cumber the pages of magazines, periodicals 
 and newspapers to realize how futile, badly constructed 
 and ineffective many of them are. The trouble is 
 that the people who write most of them have neither 
 the needed education nor the needed training to present 
 a story in a few attractive words, which of course is the 
 supreme test of such work. 
 
 The once popular idea that there was a knack, or a 
 trick, or something mysterious about advertising still per- 
 severes to a large extent, when in sober truth it is a busi- 
 ness where success can usually be won only by patient, 
 carefully planned and intelligently carried out methods. 
 The comparatively few successes which go contrary to 
 these methods are only the usual exceptions to every gen- 
 eral statement. Fortunately there is a little human leaven, 
 constantly growing, until it shall leaven the entire mass, 
 which realizes that of all businesses, advertising needs 
 the most perpetual care and unfailing and sustained 
 sober thought. 
 
 The aim of advertising in connection with merchan- 
 
ADVERTISING 131 
 
 dising is to increase the sale of goods, by making them 
 familiar to those who use them. The first consideration 
 is as to whether the concern who does the advertising 
 has what is known as "an advertising proposition," else 
 the money spent for advertising is spent uselessly and to 
 no purpose. 
 
 Let us suppose an example to-day of a large wholesale 
 jobbing house, which has what is known as a "special 
 or private brand" line of goods of their own, as for in- 
 stance a line of edge tools. It is quite essential that the 
 name or title of the brand be appropriate and easily re- 
 membered. It must also be complete as to assortment 
 and represent a line that contains all the tools needed 
 and called for. Most of all it must have the necessary 
 merit, for genuine merit is the only]thing which can be suc- 
 cessfully advertised continuously. There are instances, 
 of course, where the opposite course has succeeded for 
 a time and all seemed well, but the end comes inevitably. 
 Where merit is advertised and is absent, it is usually 
 only a question of time before the scheme becomes ex- 
 posed, and then the end is sure. Some, of course, have 
 gone into this "game," with the intention of "making a 
 quick clean-up" and then retiring. Nowadays, how- 
 ever, such methods come under the ban of the law. 
 
 The line of supposititious edge tools must also have 
 
I 3 2 MERCHANDISING 
 
 sufficient sale and be widespread enough in their use, 
 so that the volume of their business warrants the ex- 
 penditure of the necessary amount of money in adver- 
 tising. For advertising is expensive, and to succeed in 
 a broad way must be done liberally or not at all. Also 
 it is a continuous performance. There is no such thing 
 as quitting when the name of your brand of edge tools 
 is sufficiently well and favorably known to warrant your 
 ceasing your advertising and thereafter enjoying the 
 benefit of the money spent in giving your brand publicity. 
 To cease advertising is painfully to realize Shakespeare's 
 statement, "How soon we are forgot." To obtain the 
 full measure of an "advertising proposition," the owner 
 of the brand of edge tools must also have a large force of 
 salesmen to follow up the advertising campaign with the 
 retail customers of the wholesale house in question. 
 Such advertising as we are contemplating is directed at 
 the consumer, who uses the edge tools, whether farmer, 
 carpenter, mechanic, or householder. Between the con- 
 sumer and the wholesaler there ensues the retailer, the 
 final distributer. The retailer handles such goods usually 
 as are called for by his customers, and consequently are 
 easily sold. Now it takes very effective and long con- 
 tinued advertising backed up by much merit in the 
 thing advertising to induce the majority of consumers to 
 
ADVERTISING 133 
 
 call for the thing advertised, though there is a general 
 impression that advertising alone can create a satisfactory 
 demand for certain articles. This is rarely so, for there 
 must be other factors to make this demand of widespread 
 and enduring nature. Some consumers, probably many, 
 call for goods, with whose desirability they have been im- 
 pressed by advertising. But the principal effect upon 
 other consumers is to make them become familiar with 
 the goods advertised so that they give them favorable 
 consideration when brought to their attention. And this 
 is where the retail dealer comes in. He can do so much 
 to help the sale of an advertised article by presenting it to 
 his customers with his recommendation, or, on the other 
 hand, he can sometimes temporarily hinder the purpose 
 of advertising by throwing cold water on the merits of 
 the advertised article when presented by his customers, 
 or else directing their attention to similar articles, with 
 the assurance that the latter are "equally good," or even 
 better than the advertised articles. The average con- 
 sumer in such cases is apt to accept the recommendation 
 of the retail dealer as coming from one of experience and 
 knowledge rather than trust to his own unaided judg- 
 ment. A few unprogressive retail dealers still object to 
 being forced to handle certain advertised articles on ac- 
 count of the volume and effectiveness of the demand thus 
 
134 MERCHANDISING 
 
 created. Especially is this true where the articles in ques- 
 tion do not pay the dealer a satisfactory profit, as is not 
 infrequently the case. The province, therefore, of the 
 salesmen of the hypothetical jobber and his brand of edge 
 tools is to demonstrate to the retail dealer that it is to his 
 interest to "push the sale" of the articles under consider- 
 ation. For, be it known that unfortunately some deal- 
 ers and their clerks are not salesmen in the modern 
 sense of the word. They are more apt contentedly to sup- 
 ply what the customers call for without endeavoring 
 either to direct and guide such wants, or to increase their 
 volume. In other words, goods are usually bought of 
 such retailers rather than sold by them, though this con- 
 dition is one that is steadily improving as to the sales- 
 manship of the dealer. The salesman, therefore, of the 
 jobber in question must seek to make an active salesman 
 of each retail dealer whom they call upon. 
 
 To do this effectively, there must first be a satisfactory 
 profit in the advertised brand of edge tools to the retailer. 
 The salesmen must then bring this to the attention of the 
 dealer and thus enlist his interest in these goods, because 
 of the profit which there is in them to the dealer. He 
 must counsel him deftly and tactfully to bring them to 
 the attention of each prospective consuming customer. 
 This will be all the easier, he can explain, because the con- 
 
ADVERTISING 135 
 
 suming public who use edge tools are already familiar 
 with the merits and attractive qualities of these tools 
 through the ceaseless advertising campaign which is be- 
 ing conducted in behalf of these tools. He can encourage 
 and direct the dealer to do local advertising himself 
 on behalf of these tools in the local newspapers, by 
 sign boards, electric light signs, window displays and all 
 the manifold methods of advertising. The goods once 
 being established in public favor do much to advertise 
 themselves by the commendation and good report of 
 those using them. When this point is reached it also be- 
 comes very easy to spread the effect and benefit of such 
 good report to any addition to the line. 
 
 If, for instance, in this line of edge tools under con- 
 sideration it is decided to add a new item, say a cutting 
 tool, not yet embodied in the general assortment, then 
 it can be safely assumed that the new tool will at once 
 be accepted by the consuming public as being in every- 
 way as meritorious and effective as those with which 
 they are already acquainted. 
 
 It is absolutely essential that the quality of the ad- 
 vertised articles be not only maintained without dete- 
 rioration, but that it be improved whenever possible. 
 Some owners of advertised articles have been foolish 
 and shortsighted enough to deteriorate the quality of 
 
136 MERCHANDISING 
 
 their goods, in order to decrease cost of production and 
 thus increase their profit, when once these goods were 
 firmly established in popular favor. They trusted to 
 the good reputation of their articles and the effective- 
 ness of their advertising to continue indefinitely the 
 demand for their products. And in so doing they 
 leaned upon a broken reed. For a time the mere 
 momentum of a good reputation carried them along. 
 But in time the truth came out and the reputa- 
 tion of the goods became ruined for all time, and the 
 demand for them fell off accordingly. Nor was it ever 
 possible for them to "come back." 
 
 Advertising must be adequate and proportioned 
 both in its extent and nature. A concern of limited 
 local trade cannot afford to adopt what is known as 
 "national advertising," but must confine itself to local 
 advertising. Nor can a concern with a small product, 
 even though it sell this product all over the country, 
 afford to advertise in any extended way, unless it is 
 quite sure that such advertising will greatly increase 
 the demand for such products. Moreover, often the 
 nature of the product itself limits its demand, and ad- 
 vertising in such instances must be on a moderate scale. 
 For instance, pocket knives and scissors are universally 
 used, and are fit subjects for national advertising, 
 
ADVERTISING 137 
 
 while pencil holders have a limited use, which cannot 
 possibly be sufficiently increased by any amount of ad- 
 vertising. National advertising is usually done in 
 magazines and periodicals having a nation wide cir- 
 culation, and the great expense of such advertising is 
 supposed to be compensated by the number of readers 
 who see the advertisements. It is obvious, however, 
 that there must be made evident, commensurate re- 
 turns to warrant the great expense thus continuously 
 incurred, since fugitive advertisements appearing now 
 and then cannot produce the full effect desired. For 
 the effect of advertisements can never be predicated 
 in advance, since it is an interesting fact of human 
 nature and experience that the average man only sees 
 the advertisements of things which interest him. 
 
 The purpose of advertising has been stated as that 
 of throwing bricks at a man until you finally hit him. 
 For persistence is the soul of advertising, or as one 
 advertising concern has phrased it, "Keeping ever- 
 lastingly at it." 
 
 In local matters sometimes very good results are 
 obtained by an intensive campaign of all manner and 
 methods of advertising until supposedly every man, 
 woman and child in the territory in question knows 
 of the advertised articles. Not only must advertising 
 
138 MERCHANDISING 
 
 be adequate and proportioned in extent, but likewise 
 in nature. It is recognized nowadays that most every- 
 thing offered to the public is a fitting subject for ad- 
 vertising. But obviously the manner of advertising a 
 Symphony Orchestra Concert, and a Vaudeville show 
 must differ widely. It is in the recognition of this 
 fact and how to treat it that the art of advertising lies, 
 especially as to the extent it calls upon the skill, in- 
 telligence and experience of the advertising man. 
 
 There must be an adequate recognition and per- 
 ception of the different classes and people to whom 
 advertisements are directed and the psychology and 
 environment of different callings and professions. The 
 woman shopper may be attracted by a bargain sale, 
 while the carpenter and mechanic look for enduring 
 quality in the tools upon whose use they depend for 
 their living. A homely but piquant phrase, an apt 
 illustration, a pertinent quotation, or a striking and 
 original statement, are apt, however, to catch the 
 attention of most users. For instance, in that line of 
 edge tools, which we have selected as a typical example, 
 it might not be amiss occasionally to vary the story of 
 their merit and the details of their efficient workman- 
 ship by such quips as, "a red haired, cross-eyed girl 
 has nothing on these chisels for temper"; "These 
 
ADVERTISING 139 
 
 Pocket Knives are sharper than a Serpent 's tooth"; 
 "These are the identical Razors with which the Scribes 
 and Pharisees split hairs in ancient times." 
 
 As stated previously the purpose of advertising is 
 to increase the demand for the articles advertised, and 
 in such increase must the main advantage and profit 
 of advertising be found. It is not a good game arbitrarily 
 to raise the prices of advertised articles when once they 
 have become established in popular favor. Doing so, 
 under the impression that the public must have such 
 goods, because of the publicity created for them by 
 advertising, and will be forced to pay the advanced 
 prices, is usually a fatal delusion. The public in such 
 cases are quick to take offense and to resent the action 
 as an endeavor to despoil them. The profit from an 
 advertised article must usually be found in an increase 
 in volume, which thus makes up for the expense of 
 advertising. 
 
CHAPTER XIV 
 
 THE HUMAN EQUATION 
 
 Success in business in the earlier stages of our coun- 
 try's history usually fell to the lot of those dominant 
 personalities, who not only had vision as to the future, 
 but that much rarer quality of seizing opportunities 
 when they presented themselves, and of taking fortune 
 at the flood. As the pioneer days passed away, and 
 opportunity had to be created rather than seized, there 
 naturally and inevitably ensued the period of organiza- 
 tion when coordinated bodies of men essayed to supplant 
 the work of individual genius. Naturally there came 
 to be placed upon system, method and the machinery 
 of commercial life an undue emphasis, which has per- 
 severed unto our own day. In fact so-called scientific 
 methods, often the products of purely theoretic students, 
 have been exploited to a degree that is often at the 
 expense of common sense and of a due regard for the 
 overwhehning importance of the human equation in 
 every phase of business life. 
 
 Systems are necessary in all large and extended 
 
 businesses if the work is to be done promptly and effi- 
 
 140 
 
THE HUMAN EQUATION 141 
 
 ciently, but they are of small, and often of doubtful 
 value unless controlled and administered by trained 
 and intelligent human beings. The danger to be guarded 
 against in all systems is their tendency to perpetuate 
 themselves in their original form as something sacred 
 and infallible, and consequently there is lost the re- 
 alization of the necessity of their being always kept 
 up to date if they are to preserve their efficiency. The 
 "red tape" of official life is a living example of how 
 expensively, slowly, laboriously and unintelligently 
 systems work when they thus become largely matters 
 of inheritance and tradition. The inevitable tendency 
 of every system is to perpetuate itself for the benefit 
 of the system itself, and not for the definite and speedy 
 accomplishment of certain results. So in effect every 
 system, unless watched, regulated, and revivified, be- 
 comes in many ways a handicap and not a help to the 
 transacting of business. 
 
 It must be remembered that systems and mechanical 
 labor-saving inventions are separate and distinct things, 
 and not to be confounded. Such inventions as adding 
 machines, multigraphing machines, machines that open, 
 seal and stamp letters, and all similar appliances have 
 nothing in common with system, but are merely the re- 
 sults of the efforts of inventive genius to do away with 
 
142 MERCHANDISING 
 
 the expense of unnecessary human labor, to remove 
 the chances of human mistakes, and to accelerate the 
 transaction of business. Such machines are the in- 
 evitable accompaniment and part of every well-ordered 
 system, but are not the thing itself. 
 
 System is in effect the intelligent coordination of all the 
 various phases of any business, so as to produce the most 
 economical and efficient results. As an example, the care 
 of stock in connection with selling, buying, and order- 
 ing must be always to the end that orders when received 
 shall be filled as completely, promptly and economically 
 as possible. To this end not only must all mechanical 
 labor-saving devices be employed, where the volume of 
 business warrants such expense, but there must likewise be 
 trained and instructed employers and employees direct- 
 ing and carrying out all the operations. It is this latter 
 phase, which is the great problem of all business to-day. 
 The problem is an individual one, since the training and 
 discipline of human beings finally resolves itself into the 
 separate instruction of each unit. To this end there 
 must first be the spirit of cooperation, which filters down 
 from the top, since as Goethe said, "Every institution is 
 the lengthened shadow of one man. " 
 
 Discipline is essential in every organization, and there 
 must be obedience to commands from those in charge. 
 
THE HUMAN EQUATION 143 
 
 But it matters materially whether or not that obedience 
 is enforced by mere autocratic fiat or by the cooperative 
 spirit of team work. The discipline and team work of a 
 football team in a modern University is a case much in 
 point. There, obedience is prompt and unquestioned, but 
 it proceeds from voluntary submission of will to one whose 
 intentions and ability are trusted to bring about the vic- 
 tory for the honor of the college, which is the purpose for 
 which the team is organized. The relations of employer 
 and employee are far different from those of the past gen- 
 eration. Respect for leadership is won by display of abil- 
 ity and by democratic bearing, and not by the mere ipse 
 dixit of place and authority. The essential thing in the 
 success of any organization is the creation of an esprit 
 du corps where each employee feels a personal interest 
 in the success of the concern. Such a spirit can be cre- 
 ated only by the genuine interest of those who give orders 
 in those who execute them. As far as possible, the suc- 
 cess of the concern must in such measure as is feasible, 
 signify some participating success by its workers. Only 
 here it often encounters that phase of human nature, 
 which is willing to share the benefits of prosperity, but 
 not so willing to bear the burdens of the days of business 
 depression. The problem is a large and complicated one, 
 and not easy of solution. Often the best intentions of the 
 
144 MERCHANDISING 
 
 employer fail of their purpose, because they seem to smack 
 of charity or condescension, which is something few em- 
 ployees are willing to accept. All that the average worker 
 asks is a square deal and such opportunity of advance- 
 ment as may fall to his lot, though this latter statement 
 is always subject to the amendment that almost every 
 man places an undue value upon his services that busi- 
 ness conditions make it impossible to recognize in any- 
 thing like his reckoning. 
 
 The surest way to bring about real efficiency in any 
 organization and to create an interest by its members in 
 their work is a definite plan of educating each employee 
 in the nature and function of his work, for only in this 
 way will the average employee interest himself in his job. 
 It is also an "immortal cinch" that he will make but 
 small progress in his work unless he likes it. Otherwise 
 he is interested merely in holding his job. All teaching 
 which is worth while means infinite patience and infinite 
 detail. But the burden of this infinite detail upon the 
 learner must be lightened by an explanation as to the 
 meaning and purpose of this drudgery of minuteness, so 
 that it may be seen and realized as a means to an end, 
 that end being the accomplishment of definite and efficient 
 processes. Only in this manner can there be opened up 
 to the learner the full meaning and possibilities of his 
 
THE HUMAN EQUATION 145 
 
 labors, and the education thus involved in his intelligent 
 prosecution of his work. For almost every occupation in 
 business life has such possibilities in full measure, if only 
 the worker has the vision to discern them. In the chapter 
 on "Ordering" it was shown how the simple and appar- 
 ently uninteresting and monotonous work of ordering 
 goods has almost infinite possibilities of an education 
 which is world wide in its scope. Moreover, as enlight- 
 ened self-interest is a most potent incentive in human 
 nature to action, it must be demonstrated to the learner 
 in humble station that by this process of learning the 
 possibilities of his job, he is fitting himself in the best 
 possible way for higher and more lucrative positions. 
 
 There are to-day a great many successful men in busi- 
 ness in high positions who commenced their careers as 
 office boys, and it was solely because they were efficient 
 and capable office boys that they went on to better things. 
 In most cases, however, their success was due to an in- 
 born ambition and initiative which made them study 
 their duties in the lack of definite teaching by those 
 higher up. For the ideas of training employees systemati- 
 cally in their duties is largely a modern conception, and 
 an outgrowth of the recognition of the truth that educa- 
 tion and intelligence are business assets of the utmost 
 value. It is much easier to make an efficient employee 
 
146 MERCHANDISING 
 
 out of a well-educated boy than of one who is only partly 
 educated, provided the matter of individual ability be 
 about equal. Only by persistent training and education 
 in their daily duties, illustrating the lessons by constant 
 examples, can the average boy or man be made to think 
 about his duties, and see the reason for the various acts 
 that he daily performs. "Using your head," as is the 
 common phrase, is not a general attribute of humanity, 
 simply because it has never been made so by ceaseless ed- 
 ucation. Such consecutive and logical thinking can be 
 made an instinctive impulse in most workers, by teach- 
 ing them, line upon line, precept upon precept, to ask the 
 why and wherefore of every new proposition presented 
 to them, to endeavor to analyze its possibilities and its 
 limitations, so that they may intelligently proceed in its 
 execution. The bane of business, and the cause of in- 
 numerable and costly mistakes, is blindly doing things 
 because they were always done that way, when the rea- 
 sons for such action may have been materially changed 
 or else entirely disappeared. 
 
 Always there should be encouraged in employees the 
 habit of making suggestions for the benefit of the concern, 
 although no one should ever of his own volition alter the 
 manner of doing anything without first consulting some 
 one in authority. It is also the part of wisdom for those 
 
THE HUMAN EQUATION 147 
 
 in authority to give careful consideration to all such sug- 
 gestions, even though most of them, as is usually the case, 
 are of no special value. There will be however usually 
 enough wheat in the chaff to make it worth while. 
 
 The methods of teaching, that they may be effective, 
 are too diverse to be treated in this chapter, especially 
 as they vary much in different occupations. But the 
 teachers must always be men of experience, who them- 
 selves know the business and have patience and also 
 human interest enough to realize the fruits of their labor. 
 We hear much of the needs of efficiency in our industrial 
 life in the future, which awaits us after the war. Some- 
 what mistakenly it has been supposed that we must 
 imitate autocratic methods, which have been so strik- 
 ingly exemplified by one of the gteat powers of Europe. 
 No methods can be further from our purpose, or the hope 
 of its accomplishment. Between the ways of autocracy 
 and the ways of democracy there is a great gulf fixed, 
 and the present war has shown that although democracy 
 be unprepared in the beginning it soon learns to beat 
 autocracy at its own game. System and efficiency in our 
 future industrial life can come only after our own fashion 
 and our own native instincts, and by the spirit of intel- 
 ligent and trained cooperation between all sorts and con- 
 ditions of men in commercial life. 
 
INDEX 
 
 Accounting, 101, 107, 108, 109 
 Accounts, 1 06 
 Activities, commercial, 108 
 Advertisement, fugitive, 137 
 Advertising, 5, 128, 129, 130, 132, 
 
 136, 137, 138, 139 
 Agriculture, 3 
 Articles, 90, 91, 92, 94 
 Articles, advertising, 135 
 Assortment, in 
 Astronomy, 67 
 Autocracy, 147 
 Automobiles, 74, 75 
 
 Banking, 3 
 Boll weevil, 61 
 
 Business, 85; ethics of, 129; ma- 
 chinery, 28, 140; successful man, 
 
 i4S 
 
 Buyer, 7, 85, 87 
 Buying, 4, 6, no; aim of, 9; 
 
 goods, 57, 83; policy, 6 
 Buy outs, 97 
 
 Cans, tin fruit, 86 
 
 Capital, 20 
 
 Charges, carrying, 13, 60; express, 
 
 95 
 
 City, 119, 120, 121 
 Classes of people, 138 
 Climate, 103 
 Cloth, screen wire, 71 
 Collective car loads, 113 
 
 Collectors, 103, 105, 106 
 Competition, ro, in, 116 
 Competitors, 85 
 
 Concerns, 136; mercantile, u * 
 Consumers, 86, 132, 133 
 Contract, 58 
 Coordination, 142 
 Cost, percentage, 16 
 Cotton, 61, 62, 63 
 Credit, 102 
 Credit man, 102, 105 
 Customers, 85, 92, 96, 97, 98, 102, 
 103, 104, 105 
 
 Dealer, 86, 104, 134 
 
 Demand, 37, 49, 63, 93 
 
 Democracy, 147 
 
 Depreciation, 12 
 
 Deterioration in quality, 37 
 
 Discipline, 142 
 
 Distribution, i, 3, 5, no, 117, 118, 
 
 120, 123, 124; center of, no, 
 
 in, 116 
 
 Economics, 31 
 Education, 145 
 Efficiency, 144, 147 
 Electric light signs, 135 
 Employee, 127, 142 
 Employer, 127, 142 
 English language, 129 
 Experiences, 85, 90 
 
 149 
 
INDEX 
 
 Factors, financial, 3, 5, 93, 101 
 Fishing, 3 
 Freight, 95 
 Futures, 77 
 
 Geology, 67 
 
 Goods, 76, 80, 88, 94, 95, 96; 
 
 buying, 57, 83; carrying over, 
 
 80; close out, 64; handling, 80; 
 
 holiday, 76, 79, 82; lines, 15; 
 
 Plow, 57, 59; regular, 31, 47, 57; 
 
 seasonable, 32, 57, 59, 61, 64, 
 
 65, 72, 76; staple, 32, 47; steel, 
 
 57, 72, 73 
 
 Hammocks, 74, 75 
 Hay, 70 
 
 Hoes, cotton, 58, 61 
 Housewife, 86 
 Human equation, 5 
 Human nature, 143 
 
 Instincts, sanitary, 71 
 Insurance, 12 
 Intelligence, 145 
 Investigation, 107 
 Item, loo 
 
 Jobber, 8, 13, 22, 58, 59, 64, 77, 
 
 78, 87, 116, 126 
 Jobbing house, 24 
 
 Knives, carving, 84; corn, 69; 
 pocket, 84, 136 
 
 Leadership, 143 
 Luxuries, 77 
 
 Magazines, 130, 137 
 Manufacture, 3, 8, 9, 57, 59, 77, 79 
 93 
 
 Marketing by direct contract, 119 
 
 Maximum and minimum quan- 
 tity, 28 
 
 Mechanical labor saving inven- 
 tions, 141 
 
 Memorandum, 96 
 
 Merchandising, i, 3, 6, 22, 34, 37, 
 54, 80, 91, 93, 101, 119, 128, 130 
 
 Methods, 140 
 
 Methods, scientific, 140 
 
 Mining, 3 
 
 Money, 10, 101 
 
 Monopoly, 116 
 
 Mosquitoes, 72 
 
 Nails, brass, 91 
 Necessities, 77 
 Newspapers, local, 135 
 
 Obedience, 142 
 
 Orderer, 84, 85, 87, 89, 90 
 
 Ordering, 4, 6, 8, 31, 34, 35, 50, 
 Si, 55, 57, 64, 65, 70, 72, 79, 83, 
 94, 101, 145; department, 94 
 
 Orders, back, 98; filling, 5, 70, 93; 
 work, 29 
 
 Padlocks, 87, 88 
 
 Parcel post, 119 
 
 Pencil holders, 137 
 
 Periodicals, 137 
 
 Perpetual inventory, 25 
 
 Photographs, 88 
 
 Population, 116 
 
 Price, 85, 86, 90; advancing, 6, 7; 
 
 comparative, 41; low, 48 
 Production, 4 
 
 Profits, 19, 20, 139; gross, 20 
 Promptness, 99 
 
INDEX 
 
 Psychology, 38, 76, 86, 106, 129, 
 
 138 
 
 Public, 138 
 Purchasing power, 81 
 
 Records, 33, 59; sales, 36; system 
 
 of, 93 
 
 Red tape, 141 
 Reduction, 86 
 Reports, low, 26 
 Retailer, 3? 61, 77, 86, 87, 109, in, 
 
 "7, 133, 134 
 
 Sales, 48, 77, 86, 89, 90 
 
 Salesmanship, 77, 83 
 
 Salesmen, 78, 83, 84, 85, 89, 90, 
 
 105, 132, 134 
 Samples, 84, 85 
 Saw, 85 
 Schedule, 32 
 Scissors, 136 
 Scythe, grain, 65 
 Self-interest, 145 
 Selling, 5, 7, 57, 83, 89, 91 
 Service, 93 
 Shipments, 52, 60, 95, 96; direct, 
 
 112 
 
 Shortages, 26, 28, 93, 95 
 Sign boards, 135 
 Simplicity, 31 
 
 Stock, 31, 100, 101, 142; accu- 
 mulating over-stocks, 8; care of, 
 4, 22; clerk, 29; entries of, 31; 
 over-stock, 101; taking, 23; 
 turn over of, 4, 10 
 
 Stoves, 53, 54 
 
 Substitutes, 96, 97 
 
 Suggestions, 146 
 
 System, 140, 141, 142, 147; dual, 26 
 
 Teaching, 147 
 Terms and dating, 60 
 Territory, trade, 123 
 Tools, edge, 131, 132, 134 
 Town, 120, 121, 122 
 Transportation, 3 
 
 Users, 86 
 
 Using your head, 146 
 Variety, 99 
 Vaudeville, 138 
 
 Weather, 81 
 
 Ware, aluminum, 50, 51; enamel, 
 
 37, 39, 55 J nickel plated, 48; 
 
 white, 51 
 Wholesaler, 3, 9, 20, 29, 34, 59, 87, 
 
 88, 107, 109, 131, 132 
 Wild animals, 72, 73 
 Window display, 135 
 Women, 41 
 
 Printed in the United State* of America 
 
nPHE following pages contain advertisements of a 
 few of the Macmillan books on kindred subjects. 
 
SOCIAL SCIENCE TEXT-BOOKS 
 
 EDITED BY RICHARD T. ELY 
 
 History of Economic Thought 
 
 A Critical Account of the Origin and Devel- 
 opment of the Economic Theories of the 
 Leading Thinkers and the Leading Nations j 
 
 BY LEWIS H. HANEY 
 
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 " Dr. Haney's work is both complete and exhaustive without being discursive. 
 We shall look far before finding anything of its kind so satisfying." 
 
 The Argonaut. 
 
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 unlike French and German economic writers, who have produced several histories 
 of economic thought, only one has been written previously in English, and that is 
 now out of date. Dr. Haney has made a distinct contribution to economic litera- 
 ture and one reflecting credit on American scholarship." 734* Boston Transcript. 
 
 Business Organization and Combination 
 
 An Analysis of the Evolution and Makers of Business 
 Organization in the United States, and a Tenta- 
 tive Solution of the Corporation and Trust Problems 
 
 BY LEWIS H. HANEY, PH.D. 
 
 Professor of Economics in the University of Texas 
 
 Cloth, 8vo, 483 pages, $2.00 
 
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 This book deals with the organization of business enterprises, chiefly in the 
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 describing and analyzing the various forms of business organization in such a way 
 as to bring out the centuries-long evolution which has molded them. Then, the 
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 in a series of chapters which describe in some detail the main event ; promotion, 
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 corporate organization, the question of public policy is raised, and an attempt at a 
 comprehensive and scientific solution of that question is made. 
 
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SOCIAL SCIENCE TEXT-BOOKS 
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 Part III. Socialization and Social Control; Part IV. Social 
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 been the endeavor of the authors to bring together in this book 
 the results of the most recent discussions in the various fields of 
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 specting the origin, nature, structure, functions and abnormal 
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 AND 
 
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 fact the pioneer in securing world recognition for free government, and it is 
 the originator of the Presidential type. The first part of " Comparative Free 
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 devoted chiefly to a study of the cabinet type. England is given first place 
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 the growth and perfection of free government in all states rather than to make 
 a general comparison of governmental institutions. It is particularly adapted 
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 Although this book is designed especially for use as a text in college courses 
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 known by its output. 
 
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ELY AND WICKER'S 
 
 Elementary Principles of Economics 
 
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 In the introductory chapters the student is given an idea 
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Outlines of Economics 
 
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 Third Revised Edition, Cloth, 8vo, $2.25 
 
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 date, and the book in general is more useful to the teacher, and more 
 attractive to the reader. The authors are both open-minded and con- 
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 and that chapter has been simplified and made more easily compre- 
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 maintains the same high standard it held at the time it was first pub- 
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 "Anyone who got his foundations in political economy out of the text- 
 books of the last generation cannot fail to be struck with the enormous 
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 then included; and there is always some danger that in the mind of the stu- 
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