SNIPPED THREE SHORT PIECES OF WIRE FROM THE COIL
"SNIPPED THREE SHORT PIECES OF WIRE FROM THE COIL"
"Of course they're not meant for that purpose; but a pocket-knife that can do that must have quality in it."
"Yes, indeed." I looked at the knife curiously to see if the edge was dented at all, but it wasn't.
"That is the kind of pocket-knife we sell," he continued. "Isn't that the kind of pocket-knife that will please your trade? Just a moment," putting up his hand, "there's a bit of copper wire on your counter yonder. May I borrow it a moment?"
I smiled and fetched it to him.
This time he brought out a pair of shears and snipped three short pieces of wire from the coil, passed the scissors over to me and said, smiling in the most friendly manner, "Same story on the scissors, Mr. Black."
My hand instinctively stretched out for those scissors and I examined the cutting edges carefully.
"Look at this, Larsen," I called out without thinking. . . . "Mr. Larsen looks after our cutlery—tell him about it."
I held out the scissors to the stranger, but he didn't take them.
"Try it for yourself," he said to Larsen.
Larsen did try it.
"Any good shears'll do that," said Larsen.
"Exactly," said the salesman, laughing; "which shows these must be good shears. Isn't that so?"
"How much?" asked Larsen.
Well, I need not go any further. We had always bought most of our cutlery from a jobber, feeling that it was best for us under the circumstances. This salesman got us so interested in his cutlery, however, that, really before we knew it, he had our order.
Martin had been unpacking some goods which had just come in and didn't get behind the counter until afternoon. I told him about the selling stunt that we had seen. "That's fine!" he said. "Let us adopt it," and thereupon we decided that on pocket-knives of one dollar and over, and shears of seventy-five cents and over, we should demonstrate their superiority in the same way that the salesman had done.
"Why not on the cheaper ones?" I asked.
"Do you think," replied Martin with a dry smile, "that people would pay extra for the higher priced knives or shears if we demonstrated to them that the lower priced ones would stand the same test of quality? There would be no logical reason for them to pay the extra price, would there?"
A few days after our meeting Jimmie complained that the whole town was using our store as a pencil sharpening emporium. "Everybody is sharpening their pencils all day long, since we put up that notice about the Cincinnati pencil sharpener," he said.
"How many have we sold?" I said, turning to Jones. As a matter of fact I had forgotten our plan.
"There's only one left," he answered.
"Great Scott! Order another dozen right away!" I said excitedly.
"Martin ordered them on Tuesday."
Martin again. He thinks.
When I got down to breakfast one morning the Mater was there with a letter in her hand which had a Florida post-mark on it. Her face was very grave.
"Hullo, Mater," I said; then, noticing the envelope, "Nothing wrong, I hope?"
"Why, no; but I've got a little disappointment for you."
"Betty isn't sick again?" I asked anxiously.
"Now, don't worry, my dear," she said; "but I want you to let me tell you"—here she hesitated and looked at me for a moment, then shook her head sorrowfully and under her breath said, "Poor boy!"
"Good gracious, Mother, tell me quickly what it is!"
"There, there, sit down."
I sat down. My throat felt parched. Mother's remarks made me think all kinds of dreadful things had happened to my Betty. She stood behind my chair and put her arms on my shoulders and said: "Well, my poor boy, your time of ease will soon be over. Betty will be home next Wednesday." I felt as if a ton of bricks had been taken off my chest, and at once forgave Mother for her joke.
I had just bought three electric vacuum cleaners, and Larsen thought I was crazy.
"Retail at thirty-five dollars!" he said.
"Cost me twenty-two," I retaliated.
"H'm!"
"Besides," I continued, "remember that we are going to dominate the electrical supply field."
"And toilet articles—don't forget them," Larsen laughed.
That was his hobby; and it was a hobby that meant dollars and cents to me, for that business was growing steadily all the time.
We had even added toilet soap, because we had been asked for it several times. People came in to leave their safety razors to be sharpened and then bought a stick of shaving soap, and also asked if we had any toilet soap. So, right or wrong, we had gone into it. Martin had the right idea. "If you can make profit out of it it's all right."
Coming back to our vacuum cleaners, I had felt that we ought to have everything electrical, just so that we could dominate the field. I might have been wrong in my reasoning, but that was how it struck me. I had asked Martin if he didn't agree with me.
"I most surely do, Mr. Black," he said. "I think you have the right idea on that, and I think you will sell some vacuum cleaners." He pursed his lips, a habit he had when thinking, then added, "And, even if you don't sell them, you can make a good profit out of them."
Larsen shot him a questioning look.
"In fact," continued Martin, "when you think it over, you might decide not to bother to sell them at all, but just rent them during the spring cleaning time,which is coming on very soon. You ought to be able rent them for a dollar a day, without any trouble. I think that in sixty days you can rent those machines so that they wouldn't cost you anything."
That was on Monday, and in the evening we had quite an interesting discussion at our "directors'" meeting.
Jones suggested that we could send a man to work the vacuum cleaners, and then, while he was in the house he could sell the woman other things.
"That certainly is a very interesting suggestion," said Martin, "and possibly could be worked. But there's one difficulty. All the ads. of the vacuum cleaner show women and children operating the machine. If we suggested that a man ought to work it, they might wonder what is wrong with the machine—or with us. Besides, Mr. Black, don't you think it would take us too much from our regular work, so that, either there or here, we would have to have extra help?"
After I thought the matter was dropped, Martin said, "Do you think that one dollar is sufficient to charge for a day's use of that machine? Don't you think we can get two dollars just as easily? Also remember that, if the machine has been out one day, from our point of view it becomes unsalable as a new machine."
"Do you think they will stand for that much?" asked Jones.
"Oh, yes," I chimed in, "I'm sure they will. It is going to save the women two or three days' work; and, as you know, many people hire a man or woman to come for a day to beat the rugs, and they can't getanybody under two dollars a day, and it usually takes them a day to do the job."
So we decided to charge two dollars a day for the rent of the vacuum cleaners.
Charlie Martin suggested that we ought to get up an ad. for the sweeper service. I thought that Fellows ought to do it, but Charlie was so insistent that I told him to go ahead with it.
Jimmy gave us an idea which I thought was pretty good. "Say, Boss," he said, "couldn't we sell baseball goods?"
"Barlow has always handled those," I said, "and—and—" I trailed off to nothing, because I realized that, because Barlow handled these, it was no reason why I should not, and, if I stopped handling everything he did, I would have very few goods in the store. I had had to give up the idea of farm implements, because of the big hold he had on that business, and the amount of money it required to carry the necessary stock.
"I'm captain of the Little Tigers," broke in Jimmie, "and if yer put in baseball goods, why I can get all our gang to buy from here—and, say, I know a couple o' kids that would like to go and see the captains of the other kids' teams around here—especially if you were to give a little rake off."
We all laughed—except Larsen. "That's one of the best suggestions Jimmie ever give us," he said, "Let his pals sell for a commission. They get business we never get."
Here Martin broke in, "I know a house in Boston that would supply us with all the catalogs we wanted, and we could sell from catalog if necessary, and theywould give us a substantial discount for any orders we sent them."
"Write to them, Charlie," I said, "and see what they'll do."
What a tremendous lot of different lines there are which a retail store can handle—even if only for a brief season each year—and make some profit out of them! But you sure do have to keep on the jump to think of them all. I know my store would never have been handling the number of lines that we had then, if it hadn't been for the Monday meetings. These meetings seemed to tone up all of us, and, once we had gone on record to do something, we seemed to strive hard to live up to it, so that we wouldn't let the other fellows have the laugh on us, which they certainly would if we had fallen down. It was at that meeting that I suggested a motto. It was this:
"Eternal humping is the price of Success."
I asked Charlie Martin what he thought of it. He said, "It's fine, and if you used the wordvigilanceinstead ofhumping—why you would be only about twenty-five hundred years behind the fellow who originated it!"
The day Betty was to return I was at the station at 3:30, although her train wasn't due 'till 3:55—and then the train was fifteen minutes late! How I fumed and fretted at the inefficiency of our railroad service, but I forgot all that when the train finally puffed into the station, and Betty tripped out of the car, right into my arms. I can't express the happiness I experienced—all the hundred and one things we had to talk over—all the foolish little stunts we did, just like a coupleof kids—but both of us supremely happy! I extend my heartfelt commiseration to those poor benighted wights who don't possess a wife.
The next morning, while I was in the middle of breakfast, the telephone rang. I jumped up to answer it and recognized Barlow's voice.
"That you, Black?" he said.
"Yes," I said. "Betty's home: she came yesterday!"
"Glad to hear it," he replied. "I wish you would drop in at the store this morning, if you can; will you?"
"Sure," I answered, but felt somewhat disappointed. He seemed to treat Betty's return as a mere nothing!
When I joined Betty at the table I told her about my automobile arrangement with him. She seemed very pleased at that. Betty thought a lot of Barlow, and I thought more of him than I used to. I had considered him as an old duffer; but I had learned that he was a quiet, thoughtful, progressive business man.
As soon as I got into his store he beckoned me to the rear.
"Say, Black, you've got some vacuum cleaners," he said; "I'm not handling those things, and I wish you'd send one up to the wife. She's always said she wanted one. I'll pay you now—how much?"
I told him the cost price and suggested that he payme ten per cent. over that, which he said was perfectly agreeable.
Then he said, "I couldn't help laughing the other day. Martin seemed to be quite worried."
"Worried? What about? He was all right last night."
"I don't mean Charlie; I mean Bill Martin, who runs the garage. It seems somebody said that the Martin who is with you is contemplating getting into the garage business, and Billy Martin thinks that the confusion of names will take a lot of business away from him."
"Who on earth said a thing like that?" I laughed.
"Oh, you know how these rumors get started. They start from nowhere and they carry on indefinitely. The best thing, of course, is to ignore anything like that."
"Funny that the name should be just the same, isn't it? Especially when we—"
He put a warning finger to his lips and then I remembered my promise not to mention to any one our coming deal in automobile accessories and gasoline.
"I told Betty," I said.
"That's all right; Betty has an excellent forgettery."
Just as I was leaving he said, "I understand that your friend Stigler is contemplating getting out of his five-and-ten-cent business."
I grinned. "Made it too hot for him, have I?"
"I don't know about that," he said; "but I understand that Woolton's five-and-ten-cent store people are buying the place, and adding it to their chain. Well, good-by," and he turned abruptly and left me.
When I walked back to the store I felt mighty uncomfortable—Woolton, the biggest five-and-ten-cent chain in the country, next door to me! I hadn't minded somehow, while it was Stigler, because he hadn't sufficient money to carry a big variety of stock as they did. Neither did he know anything about organization, or marketing methods, as the Woolton people did.
As I neared my store I happened to notice Stigler and a short, thick-set man coming out of his five-and-ten-cent store. As they passed me Stigler said, "Howdy, Black," with an attempt at joviality. Stigler had been looking much older lately. He wore a worried look.
When I passed his store I noticed two dapper young men busily writing. I made the guess that they were stock taking.
I told Martin and Larsen about it. Larsen pooh-poohed the idea of being afraid of the competition. Martin felt differently, however.
I expected the Woolton people would take over the store on the first of the month, and if so they would advertise big bargains the day before. They were sure to have crowds of people visiting them the first two or three days the store was opened, because they always offered as leaders some tremendous values. I mentioned this to Martin.
"The thing we've got to do, Mr. Black, if I may say so," he said, "is to see if we can't get the jump on them in some way, and also trim our windows so as to profit by any one visiting their store."
Jones, who was inclined, like Larsen, to deprecate the idea of fearing them, said, "I guess we needn'tworry about them. We're educating the people to buy something better than five-and-ten-cent goods. Just keep up the educating stunt, Boss."
"You will find," said Martin, "that the Woolton people will make their store as bright as possible, and I am afraid that ours will look a little dull in comparison."
When Stigler had had the store fitted up he had had some very powerful lights put in, but he had never used them much. My store was not any too bright, although, of course, like him, I used electricity.
"I tell you what we'll do," I said. "We'll have an electrical display in both windows and, for the first week, we'll try to get a bigger blaze of light in our windows than they will have. We'll display the best quality goods that we can, so as to avoid any attempt at competition with them, but we'll make our store so bright that every one going to their store for bargains will be impressed with our up-to-dateness."
That is what we decided to do.
Martin had given me his handbill advertising the vacuum cleaners. On the next page is a copy of it.
I had had Roger Burns around for dinner the previous Sunday. He used to go to school with Betty and me, so of course when I told Betty that the New England Hardware Company, for which Roger was working, had made him manager of its chain store in Farmdale, the first thing she said was that we must ask him for dinner.
While Betty and the Mater were clearing away the dinner things, I asked Roger how business was coming along.
LET INVISIBLE HANDS DO YOUR HEAVY CLEANINGInstead of hiring help to clean your carpets, let one of our PEERLESS ELECTRICAL VACUUM SWEEPERS do it for you.PEERLESS ELECTRICAL VACUUM SWEEPERS are quiet, efficient, and thorough. You don't have to find meals for them and they never answer back.If you have electricity in your home hire a PEERLESS ELECTRICAL VACUUM SWEEPER to clean your rugs.$2.00 a day—delivered and collected free.A child can operate them, but they do the work of a giant.A special demonstration all next week atDAWSON BLACK'S HARDWARE STORE32 Hill St."If it's electrical you can get it from us."
LET INVISIBLE HANDS DO YOUR HEAVY CLEANING
Instead of hiring help to clean your carpets, let one of our PEERLESS ELECTRICAL VACUUM SWEEPERS do it for you.
PEERLESS ELECTRICAL VACUUM SWEEPERS are quiet, efficient, and thorough. You don't have to find meals for them and they never answer back.
If you have electricity in your home hire a PEERLESS ELECTRICAL VACUUM SWEEPER to clean your rugs.
$2.00 a day—delivered and collected free.
A child can operate them, but they do the work of a giant.
A special demonstration all next week at
DAWSON BLACK'S HARDWARE STORE32 Hill St.
"If it's electrical you can get it from us."
"Well," he said, "we knew pretty well what we would do before we came."
"How could you tell?" I asked, laughing.
"We knew how much money we were to invest in Farmdale. We knew how often we ought to turn over our stock every year. We also knew what our expenses would be, and what our profits would be."
I couldn't help smiling as I said, "The only thing you didn't know was whether the people would buy the goods."
"That's where you're wrong," said Roger. "We knew what the people would buy, because we analyzedthe market so thoroughly. We knew just what kind of goods each class of people bought; and how often they bought certain kinds of goods. And with our experience in marketing we knew how to get them into our store."
After Roger had left I thought that over a lot, and believed there was some truth in what he had said.
"Of course," I said, "it is much easier for you people to make money than it is for me, because you buy much cheaper than I can, and your expenses are so much less. You could afford to sell cheaper than I do, and still make a handsome profit."
"As a matter of fact," said Roger, "you are wrong; for, while the actual operating expense of this store would be a smaller percentage than your actual operating expense, we have a heavy supervision cost. It is a fallacy to believe that the larger store can operate for less expense. It cannot. The bigger business you have, the more money you have to pay the executives to control that business, and there is such a scramble for really big men that salaries of fifteen thousand dollars and twenty thousand dollars a year are not unusual. Our general manager makes eighteen thousand dollars a year!"
"Think of making eighteen thousand dollars a year! Three hundred and sixty a week! Sixty a day! Working six hours a day! Ten dollars an hour! And here I pike along on twenty-five dollars a week and work my head off ten hours a day. Then you mean to say that it really costs you more to do business than it does me?"
"It surely does," he said, "but, while we get a smaller net profit on each sale, we possibly exercisemore judgment in buying than you do, as we see that everything we buy is a quick seller. That off-sets the increased cost of doing business.
"Another big advantage the chain store has over the single store," continued Roger, "is that we have very little unsalable stock to dispose of. For instance, I have just had a lot of brushes sent me from one of the other stores. They cannot sell them, so, rather than have them sold at a sacrifice, the brushes were sent on to us. I am doing quite a big business in paint brushes—you know we specialize on brushes of all kinds, and I really think that already we are beginning to dominate that field in Farmdale.
"By the way," added Roger, "you ought to meet Pat Burke."
"Pat Burke?"
"Yes, he is the manager of the new Woolton store here—awfully nice fellow."
"When did you know him?" I said.
"Strange to say, he was assistant manager of the Hartford Woolton store when I was there, and I got to know him quite well."
"I hardly like to call on him," I said. "Remember, he's a direct competitor of mine, and next door to me."
"Competitor nothing," said Roger good-naturedly. "You are not competitors at all. You are selling different classes of goods, and you ought to supplement each other."
That was a new thought to me. I wondered if a five-and-ten-cent store was a hindrance or a help to an adjoining hardware store?
A man named Purkes ran a grocery store at the corner opposite Traglio's drug store. He was an undersized man and fussed and interfered with everybody else's business, and made a living chiefly because he hadn't much competition.
About two weeks before, a salesman of cheap enamelware had come into town, gone to Purkes, and sold him two or three cases of "seconds." Purkes thought he was a real fellow when he filled his window full of those seconds. The same week I was having a display of perfect enamelware. He put a price on his goods of ten cents each. He also had a big sign in the window, reading: "Don't pay fancy prices for enamelware. Purkes's cut-rate grocery store will sell you all you want for ten cents each. Pick them out as long as they last."
Now, old Barlow always played the game square. Stigler was certainly a hardware man, and I could stand for his cut prices; but, when a grocery store came butting in, I felt mad, and I told Charlie Martin that I'd like to get Purkes's scalp somehow. Charlie suggested quite a good little stunt.
Three days after Purkes offered his enamelware I had a window full of—what do you think?—tea; in half-pound packets! And it was an advertised line, Milton's, which was a line that Purkes had sold for a long time! That tea usually sold for fifty cents a pound. I put a sign in the window saying: "Why pay fifty cents a pound for Milton's tea, when you can buy it here for thirty-eight cents a pound, nineteen cents the half pound."
That was exactly what it cost us. Martin had got hold of it for us from a friend of his in Providence, who was a wholesale grocer.
You really would have laughed to see Purkes come flying into our store about fifteen minutes after our window trim was complete. He reminded me of a wet hen who had had her tail feathers pulled out. He couldn't speak, he just sputtered and pointed to the window. After a minute I caught the words, "Scoundrel!" and "robber!" and "unjust!" and "report to the Merchants' Association!"
I turned around and caught sight of Charlie grinning his head off. He passed the high sign to me, which I understood to mean "Let him talk." So I beckoned to Charlie to come over.
"This is the man who thought up that idea," I said to Purkes. "It's a good one, don't you think?"
Both Charlie and I saw that Purkes was going to explode again, so Charlie said:
"Now listen, Mr. Purkes. Do you think it is any worse for us to sell tea than for you to sell enamelware?"
"But that's just a job line I bought! Just the little I sell could not hurt you,"—then he added maliciously, "unless, of course, you get fancy prices for your goods."
I felt like throwing him out of the store; but Charlie ignored his last remark and said, "That idea of yours selling enamelware was so excellent that I thought we ought to copy it. You sell hardware—we sell groceries."
"You are—how long are you going to continue selling tea?"
"Only until this lot is sold out."
"I'll tell you what," said Purkes, brightening up,"I'll buy your tea of you and you buy my enamelware."
"We don't sell seconds in enamelware, Mr. Purkes, so your enamelware is useless to us."
"Very well, I will continue to sell enamelware."
"We quite expected you would, Mr. Purkes. We are not going to sell tea after we have cleaned out this one lot, however."
"But by the time you've sold out that one lot you will have established such a ridiculous price that I probably will have to cut my price to satisfy the people. Why, the stuff costs you more than you sell it for."
"Guess we're satisfied with what we are making out of tea, Charlie, aren't we?"
"Yes," he answered, "but I think we are going to do even better on the Cross Tree jams."
These jams were the most advertised in the country, and Purkes was the local agent for them.
The little chap let off a scream. "I'll stop you getting them!" he cried. "I'll sue you!—I'll—!" He stopped abruptly and asked, "Where did you get them?"
"From the plumber's!" said Charlie, "Where did you think?"
"But you can't get them—I've the sole agency."
"In that case," I returned, "you've nothing to worry about, have you?"
The outcome of it was, however, that Purkes promised to take his enamelware off sale at once and get the manufacturers to take it back—even at a loss—-or, failing that, to sell his stock to some store outside of Farmdale. We in return were to sell him our tea atforty cents a pound. The little chap kicked at this, but he agreed.
Having got the matter fixed up, he said, "There now, that's settled, thank goodness. It isn't nice to have disputes among friends, is it? I'll send my man up for that tea this afternoon, so that you won't be bothered to send it down," and he peered over his spectacles and smiled benignly.
"We will let you have the tea as soon as your enamelware has left town. Until then we will keep it here, in case we need it," I replied.
"What, don't you trust me?" he exclaimed.
Here I forgot myself, for I turned round sharply and said: "I donot! I'm almost sorry that you agreed to get rid of that enamelware, for, by heaven, there's a good profit in groceries, and it wouldn't take me more than two minutes to get into that line myself!"
Old Purkes went white to the gills and assured me hastily that he would get the enamelware out of town as quickly as possible.
I felt so stuck on myself when he left the store that I wanted to stand on the counter and crow.
"You threw a good bluff," said Charlie, after Purkes had left.
"What do you mean—bluff?" said I, surprised. "No bluff there. I meant every word of it!"
"Even to starting a grocery business?"
"Aw, that," I said sheepishly. "It was a bit foolish because, while business is booming with us, I find that every little bit of extra profit I make has to go into stock. So, as regards actual cash, I am no better off than I was six months ago. However, bluff or nobluff, I really think we've killed the grocer's competition."
I wonder more retail merchants don't retaliate in this way on merchants in other lines who make this kind of competition. Perhaps they don't because they don't want to offend a fellow townsman. They forget, however, that their fellow townsman doesn't hesitate to offend them.
Pat Burke came into the store that afternoon and introduced himself to me, saying, "Roger Burns sent me, as he wanted me to know you."
He was a short, thick-set man, and spoke on generalities for a little while.
"How's business coming along?" I asked him.
"Very well indeed," he said.
"How did you find the business when you took it over from Stigler?"
Without any expression on his face at all he said, "Just about what we expected."
"What do you think of Stigler?" I asked him.
He didn't say anything for a minute, but let his eyes roam around the store.
"I certainly like the way you have your electrical goods displayed, Mr. Black," he said. "You have a good trimmer, whoever he is."
"I do it myself."
"The dickens you do!" he commented. "Well, that is one of the most attractive displays I have seen in a long while. I want to compliment you. If you were in Boston or New York you would give up running a store of your own, and be head of the decorative department of some big department store. Doyou know that some of those head window trimmers make as much as five thousand dollars a year?"
We got on a general discussion of window trimming.
"Well, I've got to get back to the store," he finally said. "When you have an evening at liberty I should like to have a chat with you. I think we ought to be able to help each other."
It was not until he had gone that I realized that he had never answered my question relative to Stigler. He put it off as neatly as anything I ever saw.
I had pledged myself to a profit-sharing plan with my small staff for the year beginning June 1, since my fiscal year would end with the last day of May.
Think of it! By the end of May I would have finished my first year in business. When I looked back at the year's experiences, I realized that I surely had learned a lot in that short time. I had learned more each month than I had learned in all the time I was a clerk. The reason was, I suppose, because Ihadto learn, whereas, while a clerk, I had had neither the inclination to learn nor the encouragement. I think bosses make a mistake in not encouraging their people to study the business.
Now, I want to tell about my profit-sharing plan. For almost two weeks I had been spending nearly every night with Jock McTavish, the accountant who had helped me out so much in the past. I had told him what I wanted, and we had worked out a plan between us. Jock was Scotch and old-fashioned. I sometimes called him glue fingers, because whenever he got his hand on money it stuck to him.
"Aw, weel, noo," said Jock, "dinna fash yersel', mon! Ye may talk aboot yer pheelantropy an' yer wantin' ta help yer fella creeters, but you maun ken that you canna be doin' it unless ye fir-rst get the baubees. When ye took o'er tha beesiness, ye planned tae sell thirty thousand dollars worth o' goods the fir-rst year, and on that sales quota ye planned expenses to be twenty per cent."
I nodded agreement.
"By tha end o' November," he continued, "or, in other wor-rds, at the end o' the half year, ye were $1,128.00 behind your quota."
"Yes," I said, "but we have caught that up."
"Ye've done gr-rand," said Jock. "Noo frae June o' last year to the end o' February ye hae doone $22,640.00, or $140.00 above your quota. This means that tha third quarter o' your fiscal year showed an excess over its quota o' $1,268.00, which, if ye had keppit oop tha same pace through aw' tha year, would have meant an excess above your quota o' $5,072.00."
"Wait a minute, Jock," I interrupted, "you're making my head go round with all those figures." And I took out my pencil and worked the figures.
"Sither," continued Jock, "ye planned your expenses to be twenty per cent. on a $30,000.00 business, but, as a matter o' fact, it's costing ye twenty-two and one-half per cent. on that basis."
"Let me see," I said, figuring vigorously, "Twenty per cent. of $30,000.00—that's $6,000.00."
"That is so!" said Jock.
"But you figure that, at the present rate, expenses will approximate twenty-two and one-half per cent. of $30,000.00—or $6,750.00."
"Ye spoke tha truth," said Jock. "In other words, ye're losing $750.00 worth of profit which ye would a' had if ye'd conducted your beesiness better."
"I guess I've—"
"Tut, tut, mon," said Jock. "I'm no' saying ye haven't done grand. Ye've done splendidly, but ye should be able tae keppit your expenses doon tae twenty per cent. As a matter o' fact, when ye do more business I think ye'll be able to do so."
"Where has that two and one-half per cent. extra expense gone to?" I asked.
"I'll tell ye," said Jock. "Ye planned bad debts tae be one-half o' one per cent., or $150.00, whereas they are aboot one per cent. or $300.00."
"Yes," I remarked ruefully, "I remember that we made a lot of bad debts when we first took over the business; but, since I have put in that new system of keeping closer track of charge accounts, we have had very little loss that way. We will be down to our one-half of one per cent. next year," I added cheerfully.
"Maybe ye will," said Jock, "and then again, maybe ye won't. Ye will, if ye can keep your feet on the ground, and that seems deeficult for ye to do all the time, does'na it?
"Wi' regar-rd tae advertising," he continued, "we planned it should be aboot one per cent., or $300.00. Noo, as a matter o' fact, ye hae already spent that, and will probably spend $100.00 more afore your fiscal year is oop. Your advertising will be one and one-half per cent. instead of one per cent. There's anither one-half of one per cent. gone."
"Next year my advertising will again be one and one-half per cent.," I said, firmly.
"All richt," said Jock, "but dinna forget that the extra one-half of one per cent. means $150.00 cold cash."
"I'm quite willing to pay it," I said, and here I felton sure ground, for I was convinced that the advertising we had done had been responsible in no small degree for our success in doing as much business as we had.
"General expenses," continued Jock, ignoring my comment. "General expenses we planned should be one and one-half per cent., or $450.00, but they'll be two per cent., or $600.00.
"Your rent should hae been three per cent., or $900.00. As a matter o' fact, it's $1,000.00. Depreciation was planned for one-half of one per cent., but it'll exceed that, or so I surmise from what ye tell me, so that ye might say that depreciation and rent accounts for anither one-half of one per cent. excess o' your expense allowance."
"We will keep depreciation down to one-half of one per cent. nicely next year," I commented. "I will avoid some mistakes in buying that I made this year, and, besides, I will have cleaned out the remnants of the old stock which I bought from Jimmy Simpson."
"On the ither hand," continued Jock, ignoring altogether what I said, "ye expected delivery costs tae be one-half of one per cent., or $150.00, whereas I dinna believe they'll exceed $100.00, so there is a wee bit saving. Salaries should hae been eleven per cent., or $3,300.00, whereas they're rather more than eleven and one-half per cent., or $3,450.00. That is where your two and one-half per cent. has departed. I'll summarize those excess expenses:
Bad debts½ per cent.Advertising½ per cent.General expenses½ per cent.Depreciation and rent½ per cent.Salaries½ per cent.
"Here's the poseetion," continued Jock. "The average mark-oop is thirty-three and one-third per cent. on stock, or twenty-five per cent. profit on sales price. Expenses were planned tae be twenty per cent. of sales, and, had that been so, ye would hae had five per cent. profit after all expenses had been paid, for yourself."
I began to listen attentively. Isn't it strange how one sits up and takes notice when one's own pocketbook is in discussion?
"As it is," said Jock, "expenses being twenty-two and one-half per cent., ye make only two and one-half per cent. profit, if ye do the amount o' business ye expect."
"If," I said scornfully. "It's a cinch we'll do it."
"I hope ye will that, but dinna brag aboot it 'til ye get it. Ye canna build your hoose 'til ye've got the bricks.
"Listen, noo," he continued. Jock had begun to remind me of an inexorable fate, he went along so quietly, impartially, just as if he were passing sentence on me. As a matter of fact, he was making me think of the finances of my business in a way that I had never thought of them before.
"If ye'd made five per cent. net profit on your $30,000.00 worth of business, ye would hae added $1,500.00 a year to your income, whereas, noo that ye may make only two and one-half per cent. on that amount, your income will be reduced to $750.00. It's just those wee bit half per cents. that hae taken $750.00 out o' your pooch."
"If we increase our sales," I said, "of course that is equal to increasing our rate of turn-over, isn't it?"Jock nodded. "Now, see if this is right: If we do make a little less profit on each turn-over, the actual dollars and cents profit at the end of the year may be greater than it would be if we made a larger net profit on each sale but didn't sell so much goods."
"Ye reason that out well, lad," said Jock, and somehow I felt quite chesty to think I had done something which pleased the old heathen.
"If ye keep your expenses as at present, and increase your sales, all the profit on the excess business above your quota is porridge. Ye dinna hae to pay any additional amount for rent, taxes, heat, light, depreciation, advertising, or insurance. In other wor-rds, your operating expenses on all business, over and above your sales quota, are reduced by these items. This saving would reduce your operating expenses eight per cent., meaning that this excess business over your quota would only cost ye twelve per cent. to secure, instead o' twenty per cent. As a matter o' fact, if ye can get more business than your quota calls for, wi'oot increasing your salaries, that would eleeminate all expenses except delivery and general expenses. Noo, if ye feel ye must give awaw your har-rd-earned money here's a proposition for ye:
"Plan tae keep your salary expense at its present figure, which is based on $30,000.00 worth of sales annually.
"Ye can afford to pay eleven cents for salaries oot o' every dollar ye get. Give eleven cents on every dollar ye take, above $30,000.00, to your salespeople, as a bonus and divide it among them according to their salaries. For example, suppose next year ye do $40,000.00 worth of business—and ye ought tae be abletae do this, because ye're selling at a slightly better rate than $35,000.00 a year noo. If ye do, ye secure $10,000.00 above your sales quota. Eleven per cent. of $10,000.00 is $1,110.00, which ye could deestribute among your folk."
I referred to my note book of expenses, and said: "Our salaries at present total $71.00 a week."
"Including yoursel'?"
"Yes," I answered.
"Weel," continued Jock, "that bonus would add $22.00 weekly to that $71.00. That means for every ten dollars o' salary now earned there would be added $3.14 bonus."
"How would it work out in Larsen's case?" I asked. "He gets $20.00 a week."
"His bonus would bring his salary to aboot $26.00 a week. Another way o' putting it is that every dollar o' weekly salary seecures a bonus o' $16.12 a year. I would suggest ye pay a bonus every quarter—if your quarter's quota o' sales is seecured."
"Suppose we need extra help?" I said.
"If ye hae tae have extra help, the expense o' it'll hae to come oot o' the $1,100.00 bonus, or whatsoever the amount might be. Unless ye did this, ye'd be exceeding your original allowance for wages. If your people know that, the less people there are wor-rkin', the more money each o' them makes, they'll all o' them work as har-rd as they can to accomplish the results wi'oot adding extra people tae tha payroll. There is one ither thing I must warn ye of, and that is, tell all your people that this is only a plan tae be tried for a year, and that each year ye'll decide uponthe sales quota according tae the growth o' the beesiness.
"I think I follow you," I said thoughtfully. "The more business we do with less help, and therefore less payroll, the bigger will be the bonus to divide. But where do I come out in all this?" I asked. "Eleven hundred dollars seems a lot to give to those fellows."
"Here's where you benefit," said Jock. "Ye give yourself a salary at present of $25.00 a week, don't you? That's $1,300.00 a year. Now, then, if ye sell $40,000.00 worth of goods next year, ye will make a net profit of five per cent. on $40,000.00, which is $2,000."
"That's so," I commented.
"In addition to that," he continued, "ye make an extra eight per cent. on $10,000.00, the excess sales over quota, on which ye hae no expense ither than salaries; eight per cent. of that $10,000.00 is $800.00. Then, again, remember that ye share in the bonus, for eleven per cent. for salaries includes your ain, so ye receive a bonus of $403.00 oot o' that $1,100.00. In other wor-rds, if ye hae $40,000.00 worth o' beesiness the next fiscal year, and keep your expenses doon tae twenty per cent. on a sales quota o' $30,000.00, your income would be $4,503.00."
"Can you beat it!" I said, under my breath. "Four thousand five hundred and three dollars," I continued slowly, "Ninety dollars a week. Great Scott, that's making money!"
"It's aw' a question o' being able to get your people to speed up your sales to increase the turn-over o' your capital so as tae make extra profit wi-oot extra salespeople," said Jock.
"That's salesmanship," I commented, for I remembered that my friend Robert Sirle—if I could call such a big man my friend—had said that "salesmanship is the creation of additional business without additional cost." "What we must exercise this next year is salesmanship. Why, I can afford to make small increases in salaries and still make a good thing for myself," I added.
"Aye," said Jock, "o' course ye can make increases in salaries, but recollect ye can only give people the money in one way or the ither. If ye increase salaries ye must reduce bonuses in proportion."
I decided to try the plan, and at our next Monday evening meeting I announced it to the fellows. Jock was there, fortunately, to explain it all to them, and finally they all understood it. Larsen, however, said dubiously, "It's complicated to me, Boss."
"All ye've got tae think aboot," said Jock, in answer to him, "is that ye get no bonus until the store has sold $30,000.00 worth o' goods. After that eleven cents on every dollar is divided amongst ye according to your salaries."
"When you start it, Boss?" then asked Larsen.
"We will start this on June 1," I said. I noticed Larsen's face fell, as also did Jones'. "But," I continued, and here they brightened up, "if we do exceed our $30,000.00 this year, I shall give a bonus, though only half of what it will be next year."
"Why only half?" asked Larsen.
"Because," said I, "our expenses have been $750.00 too high as it is. If we do exceed our $30,000.00 for the year ending May 31, we will split up six cents on every dollar over that amount, in proportion to yoursalaries. How does that strike you?" I said, for every one was silent.
Larsen rose to his feet, coughed impressively, and said: "Mr. Black, on behalf of us fellows I say we appreciate it. I don't quite follow this per cent. stuff. You are bigger business man than we,"—I could not help looking at Charlie Martin, when he said this, for Charlie, with his thorough business training in the college of business administration, I knew to be a better business man, on the theory of business, at any rate, than all the rest of us—"and, if you say so, we know it's O. K. It looks good to me. I know the wife will be tickled to pieces."
I smiled at the way Larsen drifted from general congratulations to thoughts of his wife.
Well, the meeting broke up pleasantly, and every one left with a firm determination to do his best to increase sales without the need of increasing our force. Jones and Larsen and the boy Jimmie walked down the road together, and I heard Jones say: "We will work day and night. If we can only do the business without getting any more help—"
I had thought of a great idea to profit by agitation against the high cost of living. The idea had come to me when reading a story in a business paper which had said that it was not high cost of living we were suffering from, but cost of high living, and, instead of buying things in bulk as we used to do, we bought in packages and had to pay a whole lot of money for the package—and the advertising of them. It had said also that the modern housewife was lazy and would notdothings for herself if she could get them done by some one else, and that she thought more of tango teas than toting baby carriages. The article had finished up by saying: "How many housewives doyouknow, Mr. Reader, who will make their own soap, do their own washing, bake their own bread, and such like housewifely accomplishments which our parents and grandparents took pride in performing?"
Now, it hadn't seemed to me that that was quite fair to the housewives. Betty, for one, was no tango-trotter. Well, my brilliant foozle of an idea had been to make a splurge on bread mixers. I had always carried one or two in stock, but never had done much with them. So I ordered three dozen as a starter, that is, two cases, and I got a really good price on them. Then I ran an ad. in the paper, saying that it had beensaid the modern housewife preferred to have things done for her rather than to do them herself, but that I felt it was not so, and that, just to show that the modern woman could do as well as the previous generation, I had started a bread-making contest. I used a slogan: "You can make bread better than mother by using the Plintex Bread mixer."
I then asked every one to buy a bread mixer, bake a loaf of bread with its aid, and leave it at the store. I also stated that I would turn all the bread baked over to the hospital, and I offered an electric chafing dish for the best loaf baked. I concluded by saying that three prominent citizens would be the judges.
I had determined to surprise every one by this stunt, but when it came out no one was quite so surprised as I was at its reception. When I took the ad. to the newspaper office the fellow grinned as I handed it to him.
"Good idea, isn't it?" I said.
"Some idea all right, Mr. Black," said he.
Next morning, when I arrived at the store, Charlie Martin was waiting for me with a paper in his hand. Said he, "Mr. Black, did you put this in?"
"Sure," I answered.
"I thought perhaps Stigler was trying to get at you in some way," said Charlie.
I went hot and cold all over, for I felt right then and there that I had made a big mistake.
"Who's your committee of three prominent citizens?" he then asked.
"I have not picked them yet," I said rather sheepishly.
"But," said Charlie, "a citizen may be prominent without knowing much about bread. Incidentally,after those three prominent citizens have tested every loaf of bread, Heaven help the poor babies in the hospital who have to eat what is left! And, say, if my landlady were to bake a loaf of bread in this contest, there would be death at some one's doorstep. She can no more bake bread than I can fly."
"Well," I remonstrated, "those people who can't bake bread won't send in loaves."
"I am inclined to think," said Charlie, "that they are just the people who will. And, incidentally, you insist on every one buying a bread mixer before sending in a loaf. Why don't you try the same thing with ice cream freezers? Insist on them spending a few dollars to buy an ice cream freezer, and submit a dab of ice cream for a contest?"
"I wish I had talked it over with you, now, Charlie," I blurted out.
"So do I," said Charlie.
Just then the telephone bell rang. Larsen answered and said it was for me. Mr. Barlow was at the telephone.
"Say, Dawson," he began, "who worked up that brilliant ad. you have in the paper this morning?"
"I did," I said, feeling pretty cheap, somehow.
"Did you find the women all lined up on the doorstep this morning, ready to buy bread mixers?" he asked.
"What's the matter with the idea?" I said.
"Nothing, it's a great idea. I'm going to advertise traction engines among the farmers, and offer a prize of two eggs to the farmer who makes it hoe a row of potatoes quickest."
"You are carrying the idea to a point of absurdity,"I said. "What's the matter with my idea, anyhow?"
"Ask Charlie Martin; I guess he can help you," he answered. "And say, Dawson, I don't want to hurt your feelings; but, if I were you, I would not try any more brilliant stunts without talking them over with Charlie or some one else first. The bulk of your ideas are fine, you know, but occasionally you slip a cog."
I hung up the receiver, then turned to Charlie and said: "I thought I had a pretty good idea."
"You had a good idea," he said, "but worked it out incorrectly. It is such a bald attempt to sell bread mixers. You don't give any reason why they should buy bread mixers. The only reason you ask them to buy the mixers is to enter the contest. Now, the better-class women won't do it, and the poorer people have not money to buy mixers."
"I never thought of that," I said.
"Then, again," said Charlie, "you have, or had, quite a good customer for hardware in the Empire Bread Company. I wonder what they will think of you urging people to stop trading with them?"
"Good heavens!" I gasped. "I never thought of that, either."
"Evidently not," said Charlie.
"I am going right down to see them," I said, and I seized my hat and, before he could say another word, I was on my way to see Mr. Burgess of the Empire Bread Company.
When I arrived at Mr. Burgess' office I heard him and Stigler (Stigler above all people) laughing. The boy told Burgess I was there, and I was asked to go right in, which, like a fool, I did.
"How-de, Black?" said Stigler. "Have yer justdropped around to see if Mr. Burgess will enter a loaf of bread in yer bread-mixing contest?"
I ignored him and turned to Burgess and said: "I didn't know you were engaged—I will wait until you are through."
"Don't bother, Black," said Stigler, "I am going now," then, turning to Burgess, he added: "All right, Mr. Burgess, I'll see that yer have them things this afternoon."
My heart sank when I heard those words, for the Empire Bread Company was a good steady customer of mine—one of the best, in fact. Burgess used to trade with Stigler, but they got at cross purposes over something and the business had come to me, and had been with me for over six months.
"Say, Mr. Burgess," I began, as soon as Stigler had left the room, "I'm awfully sorry for that ad."
"Don't you be sorry, Black," he said, "it will probably be good business for you. In fact, I think we will have to enter a loaf of bread in that contest ourselves. It might be good advertising for the Empire Bread Company to win the thirty-cent cheese dish, or whatever it is, that you are giving for making the best loaf of bread."
"I don't know how I ever did such a foolish thing," I said; "but I want you to know that I shall advertise to-night that the contest is abandoned on account of inability to get together the committee of judges."
"Hm!" said Burgess. "I can just imagine the people saying, 'I guess the Empire people got after him. That is why he is squealing.' Still, you know your own business best. And now please excuse me, for I am very busy."
"For heaven's sake tell me what I ought to do, Mr. Burgess! If I hadn't been so bull-headed I never would have got into this mess."
"And," smiled Burgess, "you think it is bad business to risk losing ours?"
"Why—partly—I certainly didn't want to hurt your business," I said.
"Believe me, Black, a thing like that won't hurt our business; but it's good to change at times, so we have switched over to Stigler for a little while. Some day, perhaps, we will give you a chance at some more of our business; and now you really will have to excuse me."
I found myself walking back to the store feeling very disconsolate, indeed. I decided that, at any rate, I would not risk any more advertising on that wretched bread-making contest, until I saw what was going to happen. Charlie met me near the post office. "I guess we have lost the Empire account, haven't we?" he asked.
I groaned.
"Well, cheer up, Mr. Black, we all make mistakes—and it will be forgotten in a day or two. But—" and then he hesitated.
"Go on, Charlie," I said, "I really want to get your advice."
"All right, then. If I were you, Mr. Black, whenever you plan any advertising, see first of all that it is not going to hurt any one else's business; next, whenever you run a prize contest, run one without any strings attached to it; and, when you give a prize—give something other than what you sell."
"Do you believe in prize contests?" I asked Charlie.
"As a general rule, no. I think if you have any money to spend for advertising, you had much better spend it in advertising just what you are selling, giving people reasons why they should buy your goods. That sounds humdrum and everyday, I know. There's nothing apparently brilliant about it, but it gets results. Notice the really big advertisers. They advertise the goods they have to sell, and it is very seldom you find them branching off into prize-contest ideas."
"What about the 'Globrite' flashlight?" I said.
"That prize contest complies with the three rules I mentioned. The prizes werecashprizes and big ones. The public didn't have to buy anything to enter. The prizes were big enough to tempt people to study 'Globrite' goods, and that really advertised the flashlights to every contestant."
Somehow, Charlie's quiet confidence made me feel better. But, candidly, I hated to be seen on the street those days, for everybody asked me how the bread-making contest was getting on.
At the end of three days, we had not sold a single bread mixer!
Our next Monday evening meeting had proved quite interesting. We had sold one bread mixer, but, thank heaven, no one had inflicted a loaf of bread upon us! I was hoping that that foolish stunt of mine would die a natural death—and that's a better one than it deserved.
The matter for discussion at the meeting was introduced by Jones, who had in his hand a copy of that little "Service" booklet which we had issued.
"I was thinking over this little booklet the other day," said he, "but, do you know, Mr. Black, I don't think we are living up to it, somehow."
"In what way do you mean?" I asked him.
"Well, we talk about service and how we want people to feel they are at home, and all that, and— Oh, I don't know how to express it," he floundered.
I certainly didn't know what he was driving at. I looked at Larsen, and his face was a blank; then I looked at Charlie, and, as I did so, he said:
"I'd like to ask Jones a question," and he turned to Jones, saying, "What you mean is that, while we talk of giving service, we have not any definite plan of going about it. Isn't that it?"
"Yep," said Jones, "we have no rules or regulations or anything of that kind."
"I see what you mean," I said. "You mean wetalkabout service, but don'tgive the atmosphereof service."
"That's exactly it," went on Jones, "we ought to be able to give people the feeling that they are being treated differently when they come into the store."
"Store atmosphere, that is," said Charlie, "and the way to get it is by having definite rules of conduct—rules which every one should live up to."
"Do you think it is worth while having a set of written rules of conduct in a little store like this?" I asked.
"Being a Yankee," laughed Martin, "I'll answer you by asking you another question. Do you think it is as important for a small store to have proper accounting methods as a big store?"
For an hour or more we had an animated discussion on what rules of conduct we ought to adopt for our store, and finally we worked up a list of twenty-one, which I give as follows: