1. business and industrial

HOW
TO
A
RUN
AT
A
PROFIT
FIGURING
EXPENSES
MARK-UP"
AND
COUNTER
DISPLAYS"
WINDOW
AND
HOW
CREASED
RETAILER
A
BUSINESS
FOURTEEN
IN
STORE
NET
SHORT
TRADE"
PROFITS"
YOUR
BY
RETAILERS
GOODS
A.
W.
AT
SHAW
SELL
WHICH
SOLD
LESS
62
MORE
EXPENSE
COMPANY
SHAW
NEW
CHICAGO
W.
LARGER
TO
COMPANY.
1913
-10 ^^b
YORK
Ltd..
IN
CUTS
TRAINING
MEN
METHODS
A.
400%
MONTHS"
HANDLING
IN
LONDON
THE
MACAUNE
SYSTEM
OF
"HOW-BOOKS"
How
TO
Increase
Your
How
TO
Increase
a
How
TO
Systematize
TO
Increase
How
DUSINESS
Sales
Bank's
Deposits
Day's
the
Sales
tub
Work
of
How
TO
Sell
Real
Estate
How
TO
Sell
More
Life
Inscrancb
How
TO
Sell
More
Fire
Inscrancb
How
TO
Write
How
TO
Talk
How
TO
How
Write
Sell
to
to
Collect
How
TO
Finance
How
TO
Run
Win
that
Win
to
Monet
Mail
bv
Store
at
in
FACTORY
Get
and
Profit
a
Preparation
"HOW-BOOKS"
How
to
How
Scientific
How
to
Get
Help
to
Cut
Your
Out
More
Your
of
Management
How
TO
Handle
How
TO
Systematize
Coal
STAND-\RD
is
Workmen
Your
in
Factory
Preparation
VOLUMES
KNACK
AND
OF
(In Six
SELLING
BUSINESS
Volumes)
ADMINISTRATION
MAN'S
BUSINESS
LIBRARY
LIBRARY
MAN'S
(Ten
ENCYCLOPEDIA
Volumes)
(Two
BUSINESS
LIBRARY
LAW
(Five Volumes)
THE
(Ten
SYSTEM
Units
In
OF
Preparation
1H" MACAZIME
Copyright,
A.
W.
SHAW
BUSINESS
Thirty Volumes)
"
SETS
Books)
CORRESPONDENCE
(Three
Volumei)
BUSINESS
Factory
Applied
Bill
Your
Others
THE
Supplies
Bcsiness
a
a
Sell
that
Appliances
Others
BUSINESS
Profit
a
Advertisements
Office
How
How
at
Letters
Bcsiness
Stork
the
(/MANACtHIKT
191S,
COMPANY
bt
v\ ^3
CONTENTS
PART
FIGURING
YOUR
I
EXPENSES
AND
PROFITS
the Facts
Face
Chapter
I
II
Page
Fixing
Prices
What
m
Where
IV
How
Cost
It Should
Reduce
to
Reckon
to
Cover
to
Expenses
You
VI
VII
VIII
Making
Floor
TO
Plans
Giving
Profits
YOUR
Store
That
Serves
Trade
45
Lay-out
Store
53
Service
Prompt
61
Cuts
Short
72
PART
REPLACING
37
TRADE
Draw
Displays
Customers
17
II
HANDLE
and
Storekeeping
....
29
Watch
and
Window
Store
Expenses
The
V
Keep
to
PART
HOW
7
III
WITH
GUESSWORK
FACTS
Darrell Maxims
IX
X
XI
XII
What
a
Branch
Bringing
a
Store
Store
Fitting
Sales
Buying
to
Suit
Taught
System
Methods
the
up
to
Trade
a
to
the
Grocer
83
Date
Customer
89
....
95
105
CONTENTS
4
PART
IV
STOCKS
MANAGING
AND
Advertise
EMPLOYES
Your
to
Men
Page
Chapter
XIII
Storekeepinq
XIV
Winning
Blunders
to
Your
over
Sales
LIST
OF
Avoid
117
Force
124
CHARTS
Chart
i
ii
expense
how
items
typical
four
iii
m.^ximum
IV
TAGS
THAT
HOW
TO
HOW
SHOP,
V
VI
CASH
VIII
A
MONTHLY
XI
KNOW
STORE
AND
27
expenses
31
AND
OFFICE
OF
STORE
BACKS
DRAW
WINDOWS
ARRANGEMENT
WRONG
XIV
HOW
TO
MAKE
FIXTURES
XV
HOW
TO
MAKE
CURVES
STOREKEEPING
FOR
BLUNDERS
41
44
SALES
MORE
47
51
TRADE
65
FIXTURES
67
FIXTURES
OF
ERRORS
40
SUMMARY
ADVERTISING
ARRANGEMENT
TESTING
...
PURCHASES
OF
XIII
35
COMPARE
EXPENSES
FOR
YOUR
UP
32
DAILY
SALES
CHARGED
YOUR
WHAT
PROFITS
SUMMARY
PLANNING
HOW
TOtJR
RIGHT
XVII
18
....
STOCK
KEEP
XII
XVI
....
expense
figured
store
6
cover
,
A
X
should
stores
minimum
and
VII
IX
mark-up
your
68
SELL
CHECK
IN
STORE
THAT
SALES
116
MANAGEMENT
HURT
82
SLUMPS
....
PROFITS
119
.
.
.
.
Sf
Part
FIGURING
I
YOUR
EXPENSES
PROFITS
AND
Face
the Facts
it takes to make
a business
of a great store;
man", says the manager
"five to know
what goods and clerk hire total*
five to know
the cost to keep store; five to recognize
it."
stand
a
nd
profit
up for
rpiFTEEN
years
-'"
these years
^you can
While your competitors
stop guessingat success.
still
their
cost
to sell,
are
estimating
you
make
sheet show
itemized expense
can
your
gain on every line you handle.
your
But
bridge
can
you
"
"guess in" the dii^^^ence between
buying and sale price,you "gae^s In" your
gamble on Exvense, you
profit. When
you
are
gambling with your business dfo.
When
you
chant
Paper profitsare no insurance for tho merwho
in the dark or
keeps his expenses
fears to face them.
Turn
facts !
the
Itemize
lighton
your
Expense,
and
business!
make
your
Face
the
price to
cover.
Think
out
tui
nothing
of it must
of the
come
Know
your
success
only by
cost
net
for
large gross profit,
all your running expenses.
to
run
and
measure
your
profit.
=.al
111
hi:
EXPENSE
YOUR
ITEMS
SHOULD
MARK-UP
COVER
Traiacd
i Number
Education
New
SeUiiig
of
Salc"p*-oplc
Chaiyc
r{
uniil Efficieat
Expense
M
Figure Number
of New
New
OrJcra
Charge
H
Fxpensc Cost
a^
Figure Number
Returned
Goods
Find
of Each
t
Pnc
Delivery
the Extras
Figure at
Opention-"
Often
SeUing
Advertising
aa
Cost
Rehandling
_
Charge
Own.A
of
Coat
in Your
Charge
Delivery
I
Securing
of Returns
Expense
aa
Include
Extra
of
"
Charge
Expense Items
Orders
_
as
Market
Expense
Rates
Uhor
Charge
as
Elxpense
Overlooked
and
How
Figure Yearly Loss
to
Bad
Charge Them
Accouots
~
and
rl
*"
UOMC*
Rent
-|
of Building
if Owned
Estimate
by
Charge
to
Figure at
-J
Charge
Figure at
I
Market
as
:
Expense
Current
I
Value
Rates
oo
Investment
Charge
-j
DeprecifltioQ
to
Capital Account
and
I
Stock
Figure on
Equipment
Charge
DepreciationAccount
"
Take
Discount
]
CoAt of Merchandise
f-
tbe Retailer
Interest
and Thefts
Losses
-
-J
-j
Charge zs Experue
Improve Credit System
to
Maximum
j
Discounta
oo
Purchases
Credit
CHART
cut that
price
"II
to
to Discount
Account
item shown
here and your net profitis
Overlook
an
I:
expense
make
difference.
You
mxist
selling
the
your
much
pay
you
running expenses before you can get sound profits
all your
cover
and figure a safe mark-up
"
:iii
CHAPTER
Prices
Fixing
I
Cover
to
and
APPLICATION aptitude
successful
so
a
shop of his
for
the
man
from
whom
he
found
"Got
of you
ahead
"Won't
marked
"How
did you
The
the
answer
who
men
mine
marked
There
out
To
sales.
when
more
you
and
I took
my
the
at
guess
have
business
it
"
the
than
the
field manager
his
goods
of
running
a
cheerful
the
young
My
you.
I ought
any
buyers
open,
a
mood.
dealer
plained.
ex-
goods
are
costs.
prices on
to
"A
of
friend
each
the
other
article
"
get plenty of trade."
poor-house
other
of
great percentage
priced everything in
' '
should
sellingprices'?"
the lowest
goods.
started
he
sellinglike cakes."
and
characteristic
was
Then
bother
to
"
in
time,"
fi,gureyour
around
went
stores.
and
last item
every
"
have
that
store
new
owner
this
man
young
couple of days, the field
a
the
plentifuland the youthful
a
clerk
bought
Delayed
and
made
aiTanged that
He
arrived
hardware
a
own.
for him.
price them
manager
as
Expenses
' '
price that
form
divide last year's ex/pense
fix selling-prices,
by
this per cent to your
Add
iiet profitand
get
and
the original goods cost.
selling,this sum
of
cleans
ment.
mismanage-
EXPENSES
8
AND
PROFITS
lotteryis going on in nine out of ten retail
businesses every day
business after business is operating
blindly;sapping not the public pocketbook but its
cash drawer; and
it
own
cutting net profitsbecause
The
same
"
at expense.
guesses
Some
don't
men
fail to record
"Wherever
in with
it out
an.
them; still others
prices asked, the merchant
his owTi
pocket. Cost to run
the lumber
in a chair;
as
collar;the
There
of the clerk who
wage
is small
and
labor
costs
business
a
Here
vague.
the
which
an
in
starch
a
shoe.
getting away;
terial
ma-
recognized;
the
income
invitation to lose items.
open
these
business
Some
the
re-sold to make
are
appliedto
names
character.
men
items show
call it
fined
its unde-
"burden";
' '
' '
general expense
; still others style
"non-productivecosts"; and the majority colloquially
designateit
others
it
have
men
Usually
one
(1)
or
not
thought
unreliable
more
The
title is vague
The
it "overhead."
name
to
is
as
paying for
legitimate
But
the cost
prime cost.
of living,disregarding material
on
its cost
"
direct labor
and
Even
based
is
apparent and
are
charged
not
is
fits your
of basic cost
chance
selling price is
"is
lost and
or
others
of them,
some
the
of
run
at
guess
item is overlooked
an
expense
to
all the items of expense;
know
the idea out
expense
of five
clearly.
percentages can
be
traced
causes:
accounting system
judgment that determines how
be charged is unsound.
(2) Often a store manager,
Figure usual
investment
ness
busi-
because
such
interest
at the
be
may
expense
on
the net amount
your
fault
items
facing high
beginningof
of real estate.
at
"
the
should
expenses.
of
your
business year,
total
clusive
ex-
"decides to
to catch
drop
with
up
and
accounts
9
PRICE
THE
SETTING
business
increase
"
hoping
expense.
costs,
Sometimes, not botheringto figurehis own
storekeeperadopts a competitor'sexpense as his own.
ing
(4) Many men, thinking they know, are reallyfigur-
(3)
a
false
a
on
costs; they don't want
first class
The
whose
men
is
prices are
A
an
a
banker
the
probably
some
took
a
At
the
end
of the
most
their
face
to
numerous
because
low
too
they
do
wrongly, or drop
laundry for
acquaintance in charge, familiar
side.
afraid
to know.
item,charge
showing.
Western
method.
seem
even
every
make
"
rule-of-thumb
merchants
Some
(5)
"
first
not
the
clude
in-
others to
He
put
the mechanical
with
month,
debt.
"
his books
showed
dollars. But a bank and a
profitof three hundred
laundry are strikinglydifferent from the standpoint of
The
bank
needs
no
heavy depreciation on
expense.
equipment the laundry grinds off a layer of assets
with every
of the power-drive.
turn
This laundry ran
for six monthsThen
the wreck
of a
and the necessityof buying a new
chine
madelivery wagon
exhausted
the cash in the bank, and
the owner
began to investigate. The system of accounting had
been
showing as profit what was
actually expense,
bad
chargeable as maintenance, depreciation,
accounts,
and
all legitimate items of expense
which
the
so
on
had been paying out of his employer'spocket
manager
instead of charging in the prices.
a
net
"
"
It is common
for
Figureall fixedexpense,
a
merchant
to say,
* '
I
can
.inch as interest,
taxes, insurance,
water, lightsor fuel,and prorate it over the business year
in properly
itemized weekly instalments.
get around
EXPENSES
10
high operatingcosts somehow,"
those
percentages which
to evade
and
deeper
Your
his
Is
Mark-up
Is
high,
were
harder
to
his
for
men
customers,
is
the
secure
bigger
a
push
and
If your
You
be hired.
if
If there
increase
orders
more
are
in proportion. You
have
or
business
as
to
take
a
shottingwear
ever-
to many
a
of
profitbecause
a
sales will not
act
as
business without
can
do
a
creasin
in-
just
so
must
men
secured,more
packages to deliver,delivery
on
Figure depreciation
may
The
are
more
department heads, but
sales
the extra
clerical force
Your
cost.
your
work;
increase your
cannot
increase.
delivery bills,
common
making
the
merely increasing
expense,
sales
lose.
fallacies
is not
store
him
made
expense,
getting
the gross
regular business.
the
in
the
paralleled
had
of the serious
one
secured
he
salesmen, made
new
on
than
more
even
remedy.
while
expense
hasty sales, additional
spent
money
business.
costs
best way
to
the expense
present shadow,
much
little more
a
from
Come-backs
high
crowd
business,and
desired,he found
This
the
that sellingcosts
knew
figure the additional
not
the extra
cost
needed
He
$2,200.
for business.
did
He
appliance company
an
to be
he
that
to
was
offer
to
of
Although
decided
he
profit expected
volume,
to sink
DeceptiveRainhoiv Unless
and Profitable
Sound
half year
a
high,
are
get the required$5,000 yearlyprofitand
to
his bonus.
secure
knows
a
manager
profitfor
$2,800 more
he
in the effort
and,
imaginary profits.
Volume"
sellingagency
found
and
into
deeper
"Increased
A
PROFITS
AND
all
need
more
increases,one
man
goo^s carried
reduced priceand
and
not
may
tear.
on
over
for which you
ing
anythingdeteriorat-
THE
SETTING
adds
another
assistant,
an
One
found
man
his net
that
profitat
a
needed
this ten per
cent
customers.
My
business
gross
ten
an
largestsales
he
to
of
cent, in
per
and
competitionwas strong
sought by all. "Now,"
trade
Somehow,
have
you
work.
for the extra
to pay
clerk.
a
11
PRICE
net tc the basic cost
ditiona
get the ad-
can
the
at
me
talkingpoint
a
thought, "I
put
lished
$180,000 estabindustry where
top by adding
from
orders
on
handle
present organizationcan
new
the additiona
business."
He
failed to make
the
dwindled
old
the cost of getting
distinction between
a
business
and
the
and
new,
his
profits
wiped
point where the originalnet was
But
out.
a
good accounting system saved him; as his
that his net
cut pricecampaign progressed,he discovered
A
little study
falling below ten per cent.
profitwas
him
that expenses
had
showed
He
quickly
gone
up.
ofi'the non-paying business,sought a different point
cui
of appeal that allowed
him to charge the higher prices,
business.
and covered the additional cost of getting new
to the
"Ride-of Thumb''
Dangerous
Methods
and
type of merchant
Another
A
young
to
figureon
paper
box
lots for
maker
and
adoptscompetitors'figures.
started in business and began
large users.
after contract
Contract
to his
competitors.Finally he
by
friend
of his ; he
was
Give
Deceptive Mark-ups
W*^nt
a
Guesses
lost
able to ask
an
order
placed
why.
"The
pricewas lower," he learned.
Further
inquiry showed that the successful
figure as labor,your services or those of any
employed in the business, at their worth to
'"our
expense
account
with these services.
of your fiimily
Charge
others.
concern
EXPENSES
12
AND
PROFITS
the
paying substantially
was
"'It
be, then,'' the
must
"that
I
it must
know
figuringmy
am
be less than
He
cut
guessed
long
A
his
worker
trade
city.
these other
Material
a
in ;
to ask
man
that the
his
cent
per
running
years,
he
in
Western
thought
and
his
make
to
ten
this blanket
knew
Power
"overhead,"
penses
ex-
sure,
cent.
per
overhead
diversified ;
centage
per-
capital
more
line of credit established at
the
company's
casualtysuit
a
accounting,the
close to that for many
half
but
day
searching for
hypotheticalten
one-half
average,
as
cupied
factory oc-
rent.
He
But
only
credit.
a
His
wastes.
become
one
low.
in
be;
balance
and
the
was
ager
man-
additional loan.
an
an
lasted
business
a
trade
judgment
a
Demanding
and
the
should
patents and
nominal
a
considerable
a
Then
by
out
had
cost
below
Products
local bank.
wiped
I
expensive selling
capitaland
; wages
by his
plant expanded.
taken
cluded,
con-
I haven't
"
expense
several
started
the customary
stood.
was
owned
cheap
building at
be
must
The
his meager
on
who
furnished
charged
the
or
"
was
old
were
terial.
ma-
wrong.
follows'
competitors' and
thoroughly,
an
heat
fit his
he could live
good
overhead
his running
what
at
price to
as
and
use."
they
his
labor
manufacturer
young
their big organization,high rent
metliods
for
same
"
real
per
almost
out
was
in
double
This
and
had
own
wasted
"
was
good
a
found
realityeighteen
"
man
of his
his business
started
figures. It
cent
years.
expenses
and
the
banker
had
been
been
paying
pocket.
victims
of
teen
Fifthe
associations and like
given to charities,
assessments.
or
Chargethem
subscriptions
causes,
to advertising
or a special
giftaccount.
Figure sums
and
THE
SETTING
ten
annually go into retail business fail
the same
basis.
on
running expenses
Overhead
Fixed
Are
Charges
often
and
"
this
uses
in
when
prices
business
a
realityhe
has
they figure
unless
Expenses
fixed overhead
a
basis
the
as
which
on
pense
ex-
on
his
to gauge
investigatedto
not
for his business
it is correct
whether
sets
man
because
who
men
Dangerous
with
Frequently Checked
Too
13
fetish. Seventy-five
per cent of the
cent
per
PRICE
under
see
the conditions
to be met.
The
' '
expense
It does
a
''chargingten
tradition of
has ruined
to cloud
more
business
the
basis than
overhead
to
lack of
than
understanding of
insecure
an
on
businesses
more
cent
per
any
capital.
costs and
other
put
single
factor.
In
a
built up
the
growing city,a
by a clever man.
local bank
for
continued
The
went
the bank
investigated-
but
of
that the addition
business
and
was
made
live.
Profits
then
ceased.
big deficit. Together,
a
insisted that
manager
to
away
smaller
while, grew
notified her of
store
money,
a
and
grocery
he died his widow
When
bank
Finallythe
she and
trustee
successful
new
making
they were
sponsible
reequipment was
for the cessation of
profits.It was found that
he had figuredhis direct costs
^such as purchases,labor,
advertising correctly,and then by adding twelve per
business by cutting prices.
cent, had planned to get more
"
"
This
looked
but
an
safe
on
expert accountant
merchandise
Figureas losses,
lost,allowances made
cashier's
errors
the basis of twelve
and
sent out and
showed
not
per
cent
that he had
charged, goods
believed worthless,
customers, accounts
unusual
collection expenses.
head^
over-
not
EXPENSES
14
AND
on
charged depreciation
interest
items
to
up
equipment, office expenseit,
the investment
on
and
plies,
sup-
miscellaneous
many
which, all together,brought the running expenses
between
twenty-six and twenty-seven, instead of
twelve, per
Here
of
PROFITS
was
cent.
a
pricesfor goods
his employer with
Little Items
that
took
to be
money
Overlooked
Which
ing
competent, chargof the
out
pockets
sale.
every
Often
to Sums
Often
supposed
manager,
Amount
Endanger
Your
Frequently
Profits
the little items of
seeming "outside"
expense,
which are in reality
to an
regular running costs,amount
when
important sum
figured on a long time basis.
The
of the boot and shoe department of a
manager
"unit" store in a small Eastern city,put his yearlyprofit
at $1,500 in a talk with a salesman
friend. "And
this
is net," he added, "every expense
figuredin."
A smartly gowned lady interrupted him to ask for a
out
charity subscription. Without hesitancy,h^ handed
a
five-dollar bill.
The
own
salesman, accustomed
road
"
"Oh,
inquired,"to
expenses,
to
advertising?
I don't
of 'em
down, of
give. It comes
to exact
have
do you
in his
charge
nations
do-
' '
any
course,
what
accounting
but
of my
I turn
regular account.
in this case
lots
it's good business
* '
pocket anyhow.
The
to the salesman's
next
answer
question showed
that these donations
would
as
high as $150 a
average
He rapidly figured,
in
show me
the basis of
on
year.
to
out
own
' '
Deduct
' '
completeexpense percentage and what the goods
you, from the priceof any articleyou have sold,and the
result shows your net profit
the sale.
on
cost
your
THE
SETTING
his
accounts, that "in
own
profitof $1,500" one
item in
not putting one
"
This
must
merchant
prices of
the
the
years
you
out
pay
full year's profitwiped out
a
by
the overhead.
is
basis
no
which
on
If
somewhere.
items
These
goods.
everything
that
"
included,there
it is not
ten
15
stopped to think
of doing business
never
into the cost
go
PRICE
to add
always
not
are
it to
small.
"My
isn't ten per
expense
good money," said
strenuously to the
for
dealer
who
his association
found
carefully and
owned
the store, charged
his investment
on
dealer
the
'
and
actuallyhave
building, out-of-date
twenty-two
charge
the items
over
of
dealer, since he
the
he
profitsin
charge myself
I
should
the
in stock?"
money
in his business
making
objected
proper
"leaving
wasi
asked, Why
own
a
am
terest
figured no indepreciationon his stock-
no
he
to
as
rent ; that
' '
and
of my
use
that
no
explained that
the business ; '
for
I
association's secretary checked
expense
The
I know
of seventeen
average
suggested by
running expense.
The
implement
an
cent
per
cent.
All
will be
in five years
machinery
and
will
he
down
run-
a
some
lectible
uncol-
accounts.
In
another
in
againsthis
"All
have
vehicle
labor
that
to pay
These
a
village,a
and
out
dealers
any
were
for their customers.
Go
agency,
farmer
failed to
with
vested
$5,000 in-
charge salaries
that of his two
in
comes
retired
profit,"he
strappingsons.
explained. "I
salaries.' '
not
They
working for themselves,but
were
making
less than
the selling
carefully
priceof the various articlesyou
ing
where you stand as to profits,
and correct sellsee
figuresif necessary.
over
handle
and
don't
a
fair
EXPENSES
16
their
surpluses.
their
gootLs to
is
There
who
*
'
have
"We
This
that
his
makes
another
is
in the
other
line of
department
of
profit,
who, therefore,says,
A
and
definite
He
he
change
is
know
where
going.
Some
one
profits.
affect the
may
pieces with
is
he
which
"
abnormal
by
knowledge
expense
his total
losing money
to
go
do
of his fellow
know
conditions
the business
proof
any
may
up
of
as
doesn't
be
may
make
must
further
cent.
right?"
the expense
goods
a
fifteen years
For
plunger
classes.
where
show
"What
a
profitor
or
up
handing
were
books
figures are
much
as
ate
six to sixteen per
ever.
profits,but
profitableline
the
than
expense
isn't safe.
Lack
they
money.
from
his total
department
This
our
merchant
and
making
way
assets
retailers
costs
whose
man
are
all the
more
need
we
? We
made
have
if
as
charges
cost.
at
of
overhead
drawing dividends, and
Vfl\y bother
we
just
was
type
been
has
It
customers
a
PROFITS
last only until
could
profitand
AND
crash.
a
"blinder"
a
to
retailer.
Ask
the manufacturer
bills
expense
in odd
pennies.
article
on
cent.
But
ask
penses,
for
were
that
cost
what
the month
Ask
a
his pay
before
retailers what
shelf; they
these
to
difference
is divided
above
amount;
portion of their
gross
will
answer.
wait
of
for
an
profit
is
They
of
of
do
for
"
or
of
costs
a
ex"
and
doing business
net
them
"
know
the
this
running
all, ask
not
tell you
can
fraction
the
actually
progressiveretail management)
business.
he
between
the cost
their
department
or
pay
total
sellingprice,items into which
and
;
they
know
retailers the
of sales expense,
roll
cost
and
the
of
what
you
tial
essen-
doing
AND
EXPENSES
18
PROFITS
EXPENSE
HOW
WHERE
THE
ANNUAL
BUSINESS
$11,000
WAS
3.9";; J840.J.4.69
|..$420
Rent
_
Saliry
Salary
_
1 --'24.
Self
to
^
_
Advertising
|
Heat
1..IJO.
165. .1.5%
.1.2%
...IfiO. .1.5%
Light
and
Fixtures
Miscellaneous
270
Total
.4%
\
1J%
.
...200. ...87ft.
-.100. ...47o.l
i.2';t
250
..
1.0%
-
,3,105
Percentage of Expense
,
Net
80..
220
Expenses
Gross
[8.7%
.1.5^, .352
.175
.
900
1,288
.
.7%
75..
..
..
.688
.
Depreciation on
SI.200.
832
.
J...378.
Help
to
IS DISTRIBUTED
.
Profit
Profit
$1,320.
18%
.30^4
U%
17%
.28%
I$1,980 11%
-17%.
.26%.
.$2,250
four typical classes of retail shops distribute
II: How
CHART
stores representing
is here shown.
Whether
their expenses
you are keeping store in country or city,your
with normal
business fitsinto one of these classes. You can thus compare
your
expenses
As
stood,two-thirds of their stock
matters
at eleven
above
cent
per
four per cent
delivered to
they
could
a
was
invoice cost,plus freight,or
tually
ac-
less than the cost of the goods when
While
customer.
last
marked
was
a
matter
inventories and
bank
questionof how long
of simple arithmetic,apparently
balances showed that they
the
actuallymaking money.
Then
they discovered,what
were
was
overlooked
that it cost less to sell at wholesale than
merchandise
sold wholesale
at
and
retail,
at eleven
per cent
first,
fore
thereabove
yielded a fair profitwhich was being eaten up
by the growth of retail departments and lines that were
hard
The
to move.
non-profitableretail business had
first cost
faster than the wholesale.
grown
Like
hundreds
of other
stores
that
have
been
saved
careful analysisof costs
of failure,
a
* '
what
conditions and a definite knowledge of
and selling
when
on
the verge
it costs to do business"
had
to
come.
Three
thingswere
STOREKEEPING
IN
A METROPOLITAN
19
STORES
RETAIL
IN SUCCESSFUL
COSTS
DEPARTMENT
STORE
6.00%
Rent
.5.00%
..3.1"%
.3-00%
Salaries
Advertising
Heat
Light and Power
and Displays (thisincludes depredation).
Alteration
Miscellaneous
-
Deliver; and Equipment.
Supplies
.6.00%
...25%
.^.10%
_
Uwurance and Taxes
Expense
Shrinkage on Stocks
Loss on Bad Accooats
.2.00%
9.35%
._.so%
General
.xoo%
.
.
....so%
.
9.35%
Total
Expenses
Gross
Expense.
Gross
Profit
.28.45%
.
.28.45%
33.33
...
Net
.4.88
Profit
1/3%
1/3%
and detect
figures
If the figuresdiffer widely,your net profits
your storekeepingerrors.
probably being robbed by a deceptive mark-up and you should go over your methods
Check over
of keeping shop and figuringcosts.
frequently and make safe
your
expense,
are
done
at
once
:
(1) Groceries,hardware
supplies and implements
were
reco^ized as different commodities
needing varying
outlay of effort and expense to sell.
(2) Retail and wholesale departments were separated
"
and
new
percentages of
department, each line.
(3) Classifications
lines which
for necessary
could
carry
minimums
cost
worked
worked
were
maximum
out
out
to
in
advances
each
cover
the
various
to make
up
elsewhere.
Rent, light,
heat,taxes,insurance,clerk hire,delivery,
penses,
shrinkage of stock, depreciationof fixtures,office exmake
and all the other items that
partners'salaries,
for the firsttime included to
sellingexpense, were
get the revised percentages
the cost
of
running the
business.
like any other fixed charge.
Profit was
added
It was
hard work at the start to figurehow particular
items affected individual departmentsand lines,
and how
on
"
20
EXPENSES
add
to
this
"
out
report made
a
the old crude
With
way
of
this infonnation
a
sales
new
PROFITS
percentage in each
definite basis
"
AND
up
But
case.
each month
guessingseemed
at hand
once
it was
like
on
a
in the office
nightmare.
a
difficult
to work
not
polic}' to push hardest
lines
the
on
"
and
departments that were
evidentlybringing the best
that "fixed price" articles,
to see
carried as an
profits,
accommodation, ought to take care of themselves.
How
to
successful retailer has
Every
to show
Figure Riinmng Expenses Tlmt
^Yay for a Sound Profit
out
for his profit.But,
"blanket"
percentage
excepting only
those
fixed manufacturers'
is often used.
"
as
in the
case
the
plan
some
his running expenses, so that he can add
and
percentage to invoice cost and freight,
the way
"
worked
Clear
an
pense
ex-
clear
of this firm,a
which
that
applies to all purchases,
provide bargains, maintain
prices,or
This
is
one
meet
unusual
tition
compe-
of the greatest sources
of failure,
because
operatingexpenses do not follow an
accepted line of uniformity.
In the big citystores,where customer
service has been
the average
developed to a high degree of perfection,
operatingexpense often reaches twenty-eightper cent of
these only by the
gross sales. In stores separatedfrom
width of the street or the length of a block,with lower
less aisle space, a smaller
rents and less customer
service,
livery,
number
and cheaper character of clerks,no specialdestore policyfor "returns," and lackinga dozen
no
other "luxuries," this percentage of cost may
drop five
or
ten per
cent.
department store in a small city,with an annual
business of $750,000,spent $112,500 in one year, making
its running expenses fifteenper cent. Across the street,
A
STOREKEEPING
a
shoe store with annual
to reduce
per
cent, while
It is easy
sellingcost
in
see
and
unable
one-half
and
twenty-two
of three thousand, a
town
is
a
equally
on
easy
running
to
a
big variation
of different
expense
percentage
It is
of
that there
running
"blanket"
character
$20,000 was
$30,000 annual sales,secured
of only eight per cent.
to
dangerous.
Canadian
a
21
with
expense
a
sales of
gross
this percentage below
general store
that
COSTS
costs
in the
and
lines,
is always
understand
that
store, the clientele desired,the
the
ning
run-
the
quent
conse-
service and
maintained, all enter vitally
policies
into the cost of running expenses.
It is the small store that suffers by clingingto accounting
methods
which
not exact for its particular
are
condition.
It is the small dealer,more
than any
other,
who
have an accountingsystem which shows
how
must
it costs to handle clothingthan millinery,
much
more
or
groceriesthan drugs, and why.
What
Retailers in Country and
Their
Rental
column
is
Cost
retail store.
Found
Them
of the first big items
one
of any
Rent
City Have
While
in the
this is
a
expense
problem
to
the
extent, and
specific
percentage that should be
devoted to it is variable,
it is a constant
charge and other
be regulated accordingly. It is usually
must
expenses
safe to figure,however, that a good situation and high
rental are more
economical than a cheaper and inferior
place,because of the increased volume of sales which the
valuable location will bring.
A dry goods firm in a small southern
town
paid $100 a
for a three-storyframe
feet.
month
building, 35x100
Their sales averaged $150 a day
which
brought their
some
"
rental
down
to
a
low
percentage- Their
distance from
22
EXPENSES
the
shopping:center
made
for trade.
This
for
low
the
should
And
i-ental
For
unusual
to advertise
tensively
ex-
expenditure made
item
the
up
of
advertising
made
the saving on rental.
to balance
the necessaiy balance,a desirable location
of
because
PROFITS
it necessary
excess
"
often be
on
often be the better investment.
may
is
AND
the average
cit}^retail store,four per cent
safe figure. In a small country
small
usuallyconsidered
a
store, it has been known
to sink with
safetyas
low
two
as
per cent.
The
retailer who
runs
city usually figureshis
In
cent.
the
city,rental often
demands
cent, but the volume
is of
department
between
of sales
large.
Careful investigation
lias
uniform
small
seven
in
store
four
and
againstwhich this
a
per
large
five per
is figured
of the
operatingexpenses
department store.
Why
It Is
Important
Sales
Perhaps
running
a
the
store
that the item of rent
shown
factor in expense,
the
for
or
a
course
is the most
from
in
store
close to six
rental
of the
case
department
a
to Get
and
second
Your
villageshop
a
Pay
roll.
pay
help,but
often misses this mark
city
Gross
Roll
in
Clerk
the
of
cost
hire fluctuates
to season, is usuallygoverned
season
the
or
Ratio Between.
important factor
is the
it be in
whether
and
by
the demand
results in
siderable
con-
waste.
There
should
salaries.
Few
often pays
or
on
and
a
be
a
relation between
constant
merchants
clerk in the
realize this.
sales and
A
storekeeper
dress-goodsdepartment fifteen
because he makes
a big book
eighteendollars a week
Saturdays, though does
"
hesitates at six dollars
little business
a
week
for
a
other days
"
bright young
STOREKEEPING
girlin
COSTS
23
the notion
notions carry
of
department, who does a fair amount
this is logical,
for
extent
day. To some
slightprofits.Almost invariablythe rule
should
base
business
every
be
to
salaries
the
on
of individual
value
sales.
Well
cost
not
conducted
no
than
more
to
or
Plan
to
keener
Your
Limits
Local
here.
saleswomen
cent, of their sales. One
clerks to this standard.
found
Individual
more
needs
also enter
did
merchant
put
an
activelya
must
on
barely made
his
the
into the problem.
annual
same
tailer
re-
be considered
business
spent $300 in advertising.Another
$1,200 and
will
Advertising Outlay within
and Still Meet Competition
conditions
England
$40,000 and
third
four per
the competition,the
advertise.
must
New
six per* cent, and
larger stores, salespeople
are
given bonuses.
Reasonable
A
salesmen
in the
commission
How
or
or
figurethat their
this is to hold
assure
Sometimes
The
five
than three
more
way
stores
of
priated
appro-
turnover.
A
advertisingcost him $1,000, while his
sales only reached $11,000. It is apparent that here is
a question for study.
A singleline or the entire business can
profitby a
of publicity.To go beyond that point is
certain amount
clearly wasteful.
Observation
and analysiswill show
the point where
This is a
to be a good investment.
advertisingceases
law of diminishing returns
as
yet little appreciated.
A dealer in the Northwest,with a healthy business
and
for a small city,
had sales of $13,500 in November
with profitsrespectively
of $1,368
$14,750 in October
and $1,445,or about ten per cent of the sales.
"
"
24
EXPENSES
The
dealer
October
and
distributed
November
;
then
to base the division of his
Cloaks
PROFITS
charges for
dilTereut departments for
the
among
AND
and
struck
an
each
advertising
daj'-during
average
on
vrhich
appropriation:
suits
18%
Notions
18%
Men's
Dress
this
clothing
goods,
silks,
16%
13%
etc
Shoes
12%
Millinery
7%
Groceries
6%
Other
departments
10%
100%
for
figures,he took similar averages
in previous years
months
normal
then planned each
month's
advertisingin advance on a basis of profitand
made
it a point never
to go beyond these tested publicity
figures.
sive
Many stores do a satisfactorybusiness without extenadvertising. The appropriationof ten small stores
ness
scattered
throughout the West, doing an annual busiof from
twelve to fiftythousand
dollars,averages
Five other retail houses, each doing in the
"two per cent.
neighborhood of $40,000,keep their appropriationaround
A report, covering a period of fifteen
three per cent.
firm
showed
advertisingappropriationsfor one
years,
running as low as one and a half per cent, while tile
One
three and a half per cent.
high water mark was
this organizationdid a business of $119,675 on an
year
advertisingexpenditureof $4,188.
in the country or in the city,the newspaper
Whether
advertisingappropriationfor the average store has been
about three per cent.
found to most profitably
run
To
test
these
"
26
EXPENSES
AND
PROFITS
although in a citystore with
$85,000 annually, where
gross sales averaging about
careful accounting systems and
daily sales and cost
records are maintained,this item fluctuated around
two
and eight-tentlis
per cent.
Delivery is still another item that depends largely
close to two
run
the
upon
a
policyof
the store.
As
rule,the
a
average
will approach five-tenths per
city store
country
cent,
per
store
deliverywill,because
of
amount
merchandise
cent, while
of the
handled
for
creased
greatly de-
and
the
less
often
about
two
perfect facilities,
average
per cent.
However, deliverycharges range anywhere between five
and ten cents per package this item being susceptible
reduction through the use
of motors, motorto material
cycles
and other modem
equipment. Salaries and wages
of the delivery force are
in this
usually included
"
amount.
There
are
a
of other
number
items often overlooked,
' '
' '
These
miscellaneous.
merely covered by a blanket
of equipment; interest on
usually include depreciation
the capital
invested ; the salary of the owner
or
partners,
carried as separate ledger accounts; and provisions
to
or
theft.
cover
of
Each
these
items
alone will average
is
important
"
as
one-half and
between
depreciation
two
per
cent,
according to whether the store is in the country or in
the city,the higher percentage, of course, applying to
the first-cla.sscity store with modem
equipment. The
interest
store
on
investment
in the country
ran
for
the average
close to
well
conducted
eight-tenths
per cent,
nearly two per cent for the small
city store. By methods of testingand comparison,it
has been found that the more
successful owners
charge
while
their
it ranged up
salary at
from
to
one
and
two-tenths
to
one
and
one-
STOREKEEPING
half per
cent, though under
liberal in department stores
HOWMAIN
GROSS
one
with
a
ITEMS
EXPENSE
cent
per
is considered
large annual
tum-
RUN
GROSS
SALES
SALES
a57,-
Stmttaple
tuet
.Ki~.
"
Ail""tidi"E
t%~.
_.
"."%
Oelivefica
LlKhtlad
HMt
27
COSTS
Power
"
".7%^
SuppBe*
DeprecUcioQ
.
_
_.
CntereitooCepiti]
.
Office Espeiue uuS.." 2
_"%
1
Ll%
I
latvraiica uuj Texce
SeluT
of Owner
between
the extremes
and minimum
III: These
maximum
are
percentages
The two largesquares represent
the wise retailer holds his cost to do business.
tion
oblong represents ten per cent of this sales total, and the black porgross sales. Each
items
shows the percentage of gross sales usuallytaken by the main expense
CHART
which
The
over.
"incidentals"
various
to
run
item of "miscellaneous
have
been
expenses,"after these
segregated,will still
important figure.
an
Safe and Healthy Percentage of
Expense for Your Business
to FiTid
How
a
general store in a small city,with a business of
ends
of expense
and
its odds
about
$30,000, found
partmen
averaged about one and six-tenths per cent, while a defive
store in the same
city,with a turnover
A
times
a-s
large,placed its
close to five-tenths per
miscellaneous
expense
average
cent.
did a
town
department store in a small Western
business of $143,072. The cost priceof the merchandise
sold during this period amounted
to $106,058,leaving
a healthy gross
profitof $37,014,or a shade over twentyA
six per
cent.
footed up
to
operatingexpenses
$29,627.
The
of the
business
28
EXPENSES
The
profitfor
net
five per
AND
of
cent
the year
the
While
the investment,
on
be safely cut
A
careful
more
items
shown
of
percentage
should
be
In
Any
decided
standard,
when
allowance
basis
of
individual
figuring is
chain
count,
ac-
unfavorable.
made
been
percentages
kind
for interest
in
Protect
that
connnereial
the
a
that
out-of-date,or
as
a
leader.
to
use
the
link
in
the
pense
ex-
and
wobbly
pense
ex-
priceon goods
the
cost,
sales expense
and the proper
age
percentof running expense,
is to dispose
of dead
stock because
it is store-worn
or
this
ing
chang-
danger signals.
include
not
for
Mark-up
for
excuse
some
figuring
Your
THEthatonly
does
made
of
side
business,means
Wrong
the
business, which
either
on
been
every
wrong,
are
the
have
selling price, is fairly
the
has
probably
of retail business
variation
to
is weak.
would
sheet
running
of
care
definite.
factors
be
to
seem
every
for
cost
taken
liberal drawing
a
to have
expense
waste.
some
not
the
as
advertisingand clerk liire could probably
this omission.
to cover
sufficiently
inspection and analysisof the various
this store's
on
$7,387. Inasmuch
liimself with
showing does
provision seems
no
therefore,a little over
was,
sales,or
proprietor provided
the
TROPITS
the low
price
CHAPTER
Where
OVER
small
arrangement
retail sales
be handled
for
does
store
the
meet
to
day
a
square
stock
up
of the average
business
tific
scien-
a
keep it
to
A
of
stock
hand
on
in
minimum
suppliespromptly
to have
Always
stock
of
though
on
tap
shop several
for
for right stock
iety
var-
quantitiesand
goods
clean
a
supplies,whether
necessary
as
and
the
plenished
re-
small
its size by simply maintaining the maximum
times
a
of
volume
a
"
demands.
the
in
made
are
profitablyonly by
cheeking
just enough
shoe
Expenses
shop, only forty feet
that could
business
Reduce
to
thousand
a
III
plenishing
re-
the store.
leave
orderly arranged
office
the
or
keeping, is
a
store,
matter
of
less
importance than having enough and no more.
Disregard of this fact is one of the biggestsources
waste
in
more
in
a
retail store.
than
a
Interest
reasonable
on
every
supply of
any
penny
one
of
invested
item
just
"
tising
making too big an adverappropriation or allowing too high salaries is a
direct drain on net profits.
The
sideration
right quantity must, of course, take into conany ultimate advantage of price fluctuations,
"quantity" purchases and the increased eost of handling
as
paying
too
high
a
rental
or
"
29
"30
EXPENSES
well
small
as
orclei*s,
shipments.
of
Each
than
more
PROFITS
AND
as
interest and
storage
hundred
retail shoe
a
large
on
stores
maximum
net
by one
profits
company
pays
chietlybecause a stoekkeepingsystem is used that solves
the "right quantity" problem. These stores are
first
with one
stocked as nearly as possible
month's supply.
Then
frequent small shipmentskeep up the stocks.
A very
simple system takes care of shipments. A
ticket,giving the style,leather,width, length, stock
and
number
price,placed inside each box of shoes, is
owned
from
taken
cashier.
as
a
at the
the box
time
tickets then
These
of sale and
to the manager
go
to the
sent
and
day's order from the factory.
information
given by the ticket is indicated
guide to
The
the
In
numbers, figuresand trade names.
(Chart IV), ''bump"
Russia," the
;
and
act
last and
' '
731,
and
pair number
rightsand lefts.
' '
gives the
material;"3
Foxed
the stock number.
enables
the
the
salesman
produced
example restyle;"50
Blue,"
' '
in
9277
' '
match
to
a
scripti
de-
is the
up
seldom fail to get their fit in
result,customers
style,notwithstandingthe fact that the quantityof
any
investment
stock is always down
to the smallest possible
invested in
saving not only the interest on money
but also the rental on expensivestore space.
over-stocks,
]\Ianysmall stores may use a similar system to keep
a
trustworthy account of sales an accurate description
of the item on the duplicatesales check or on the price
ticket,these tickets to be assorted and recorded as a
slipsalso offer a
guide to future purchases. The same
cheek for the record of stock on hand, if such a record is
kept, thus forming the basis of a permanent stockAs
a
"
"
keepingsystem
that cuts down
excessive cost
on
the items
and
of stock
rental.
the sales
which
How
should
They
31
the lines from
show
made.
are
ProgressiveHaberdasher
a
Keeps Store
Day's Supply
One
Only
has
shirt company
well known
A
COSTS
CUT
TO
:WHERE
it
found
possibleto
running the
similar plan.
operate in the best city locations without
item of rental to
Only
the last of each
time. When
a
day's quantity of
placed on sale at a
one
item is
each
excessive fig^ure,
by
an
ivith
item
-'9277
,
is
specialorder
fills out
clerk
reached, the
for
blank
a
Bump
another
SftRiiSsia
in
day 's supply, which is brought
from
a
surplus!stock stored
3 Foxed
at
in another
inexpensivestockroom
building. The same
system
is followed in the surplus stockwhere
the supply of stock
room,
"-
Blue
an
for
carried
is
ahead
orders
"
manufacturers
This
but
two
going
only as
in
scheme
same
weeks
chart
This littletag is
iv:
the basis of a money-making
shoe stock system
the amounts
only
cute
get low.
down
the
rent, but also of clerk hire. A small sales
fewer clerks than
a
comparativelygreater for each
Saving money
by keeping just enough
time, is
a
kinds
of
goods
are
A
and
that
retail stores
of
amount
clerk.
stock to meet
a
comes
within
where
any
the
number
periodof
provinceof all
of lines of
carried.
Western
both
of
for the shortest convenient
demand
scheme
item
requires
room
large one, while the total
sales is
reasonable
$3:85
the
to
not
-"
'
retailer has found
costs
and
loss" schedule.
sales
by
that it is possible
to
means
of
a
trol
con-
weekly "profit
EXPENSES
32
itemized department statements,
This embraces
give
statistics for
that
offer immediate
sales
or
These
marked
,
increases
at different
Then
clearlynoticeable
in expenses.
a
periodsof
any
and
which
comparison and tabulated
reports
warning of appreciabledrops in
statistics first offer
conditions.
PROFITS
AND
standard
the year
variation
action
can
from
which
and
can
under
lowed
be fol-
special
this standard
be taken
before any
is
portant
im-
loss is sustained.
retailer,
using this weekly analysisof the
able to reduce his problem of buystore's business,was
ing
and sellingto a mathematical
basis.
A
Southern
lie allowed
sales to govern
the
purchases,though
the
regularlyswelled by forced price-reductions,
in profits.
which spelled,of course, a diminution
For
instance, in January land February, the two
in which
months
spring buying is done, purchases ran
high, while in July, one of the quiet months, they were,
of these months
the other hand, low. Each
showed a
on
well defined percentage of the year'stotal sales as a guide,
while during the months
of March, April and May the
volume
was
V:
Up-to-the-minute figurescheck on hidden expenses, give you the pulse of
A progressiveretailer gets daily
business and put your credit on a firm foundation.
It is only necessary
his expenses as here shown.
to prorate your
by classifying
figures
CHART
your
34
EXPENSES
AND
By borrowing from
orders, a. small retail
reduce
interest
the
six
usually
from
borrow
cent
per
worth
amounts
and
two
half and
a
showed
the
discount
two
covered
three
and
two
the
cent
per
three per
that
to
is
a
of
rate
often
of
a
running
as
of his sales.
cent
usually
may
the suburbs
were
portant
im-
an
purchases
month, or
on
which
item
to
laneous
miscel-
at the annual
twenty-fourper cent a year.
The deliveryexpense
is another
fluctuate decidedly. A grocer in
cityfound that his deliverycosts
as
able
was
of the small
one
the bank
about
to
country
considering. It
less,while
or
discountingall
investments
necessary
items,it is well
and
in the
store
Wliile this is
extent.
possibleto
bank
the
on
PROFITS
large
high
vestiga
in-
An
territorywas
being
a
day by an inefficient
and through the store's
same
times
of
routing the wagons
policyof deliveringdirect on rush orders.
By carefullyrouting his w^agons, making two regular
deliveries a day and using a motorcycleto handle special
this grocer
able to cut this percentage
w-as
deliveries,
method
below
and
one
a
retailer
Another
themselves
into
within
must
be
half per
delivered
deliveries
whose
classes
two
a
cent.
radius
a
those
"
of two
distance
naturally divided
which
miles
of
went
and
four
and
to
those
tomers
cus-
which
six miles
"
his
delivery costs were
running unusually
high because of the time required in making the long
distance deliveries by wagon.
the
He
truck and started it on
purchased a motor
desired
especially
long distance work, where speed was
and stops infrequent,
and left the nearby deliverywork
found
that
to
the
by
half in the
The
and
horses
item
wagons.
percentage of
The
result
was
a
decrease
cost.
of advertisingis another
expense
that de-
TO
WHERE
COSTS
CUT
35
watching. A furniture store discovered
who had been especially
that by hiring"
trained in
a man
window
trimming and who could devote half of his time
mands
CHART
close
VI:
The
actual
expenses
of
a
shop,
a
retail store and
an
office are
classified
here. Whether you are selling
decide whether your cost to do
goods or service,
you can
business is excessive by comparing it with these norma
1 figures
to the windows
and
in the store, it
advertisements
was
able to decrease
advertisingappropriationby
While
the added
in addition
salary of
ing
to clerk-
the newspaper
two-thirds.
the clerk
was
a
small extra
EXPENSES
36
the
sufiieiont
to
reduce
of
sales
cent
window
The
well
handled
made
to
A
care
for
the
all
similar
took
store
postage,
waste
and
Each
member
a
watching
of
abnormal
number
expense
to
efficiently
decrease
ciation
depre-
in
laneous
miscel-
report
slip
within
could
note
life
of
any
the
chinery
ma-
decrease
cent.
per
the
be
can
covered
the
of
office
a
supplies, and
of
goods
dry
is
of
an
down
required
was
supplies
careful
for
to
meeting
normal.
in
turn
"
the
expense
item, it
analysis
and
are
known
the
to
needed
statements
expense
Once
items.
cent.
an
Frequent
running
he
per
in
excess
through
expenses.
of ways
the
prevented
miscellaneous
these
three-tenths
business.
item
able
as
advertising.
they
one
office force
saving
the
is
sufficientlyto
typewriting
discovered
every
the
and
there
is usually
in
town
supplies of printed forms, stationery,
of
slip reporting
Wherever
a
used
of the
was
locate
nearly
over-stocking
weekly
result
to
item
pencils
the
lengthened
scheme
care
of
which
small
desirable, it
blank
a
nine-tenths
it
if
often
delivery equipment
depreciation
the
often
item
on
This
repairs.
in
was
and
was
"
cent.
unusually
placing
advertising
"
three
per
very
an
"
by
"
two
city
employes,
and
a
small
a
from
biggest part
equipment
of
A
and
location
in
item
is vahiabk^
the
expense
the
about
to
PROFITS
big
cost
and
on
needed
this
city,
the
laundry
reach
the
dispLay
in
as
in
saving
expoiiso,
per
AND
that
by
clude
in-
the
safe
way
there
are
ally
usu-
difficultyand
ting
get-
CHAPTER
to Reckon
How
IV
Watch
and
wholesale
Profits
and
jobbing houses
that they realize
a
rule, retail merchants
profitson their experience
MANUFACTURING,
usually
profits
know
on
sales from
largely
base
day
their
during past
when
taken
the
the
exact
As
day.
to
of
estimates
years
the
"
only
annual
or
expected profitsin
to
find that
semi-annual
some
in many
stances
in-
inventory
mysterious
way
is
have
dwindled.
factors to determine
Two
that
may
be marked
on
the
article
any
competitionis not too
be gradually raised until the
may
the percentage of selling expense.
Where
petition
comis keen, the safest remedy lies in an
increased
volume
of business at a lower profit.
An
important step is to keep a record of the amount
of the sellingprice that is lost by "mark-downs."
For
this purpose
form
is often
is
a
provided on which
recorded
the quantity, description,sellingprice before
reduced, the reduced price,and the extended difi^erence.
By subtracting this difference from the originalselling
value,the net gain on the transaction and the percentage
expense.
If
of gross
profit
are
competitionand
great, sellingprices
ceeds
mark-up safely ex-
amount
37
'38
of
EXPENSES
profitmay
be determined.
the ofiSce each
The
PROFITS
This
is reported to
record
week.
of these reductions
amount
sales of
actual
AND
is then
added
to the
the
department for the corresponding
period and the result is the originalsellingvalue of the
sold.
If the sellingprice mark-up on
merchandise
the
merchandise
thirty-threeand one-third
averages
per
than
the
of
cent more
cost, then,
course, by deducting
thirty-threeand one-third per cent from the original
If, in turn, this
sellingvalue, the cost value is obtained.
is deducted
amount
from
the
actual
sales,the
exact
profitis secured.
is obtained
The percentage of gross profit for the week
by dividing this amount
by the sales. The loss
or
gain is measured
by the margin by which this profit
falls short of the cost of doing business.
exceeds or
is a specific
Here
by
example that shows the method
cost and value of the goods
which the difference between
is determined:
and the gross profit,
of gross
amount
Sales
for
the
51,525
period
224
Reductions
Less
Cost
331/3
per
583
cent
$1,166
value
Difference
or
1,749
selling value
Original
gross
Percentage
between
cost
value
and
actual
sales,
359
profit
of gross
profit
23%%
Then, if it costs, say twenty-fourper cent, to operate
be one-half
this department, the loss of the week would
per cent, or $7.12. On the other hand, if no reductions
had
been
made
the
same,
the
and
gross
the cost per cent
profitwould
to
have
operate remained
been
thirty-three
one-third
and
will thus
be
and
cent
per
that
seen
the
net
reductions
39
UP
MARKING
FOR
RULES
profit$163.24.
It
all times
be
must
at
carefullyrecorded.
Stock
Check
Which
Records
the
Watch
Clerk
and
Merchandise
for
You
of profits,not
to keep track
Progressiveretailers,
record of cash received and
only provide an accurate
cash disbursed,but also a stockkeepingsystem that accounts
for
check
for
merchandise
employes
the
on
might
who
sell
shelf in
goods
to
manner
a
worth
one
dollar
fiftycents.
"No
merchant
can
to realize
hope
for his
more
chandise
mer-
placed in
is to be expected,for freOf course, the reverse
quent
stock.
price reductions are necessary in order to keep
odds and
ends cleaned
it is just as necessary
up, and
record of all selling
to keep an accurate
pricechanges,"
than
says
has
marked
it when
it
was
retailer.
one
This
he
keep his
stock records straight,
he uses
as
a
system that keeps
close tab on all his activities. He
also places opposite
each item on an invoice,
after it is checked in,the selling
keeper
priceof that article. By extendingthese items,his bookof revenue
easily ascertains the exact amount
realizable on each bill of goods. The gross profitand
then readilydetermined.
rate per cent are
One invoice,
of course, is not enough to judge the
this merchant
has a plan
so
percentage of gross profit,
that makes
Double
columns
a
are
perpetual record.
providedfor each department and each invoice is entered
In this way
at cost and at sellingvalue.
the merchant
retailer does
is able at all times
are
made
by
a
not
find
to determine
it difficult to
the average
department; if they
are
not
that
profits
up
to the
40
EXPENSES
standard, he
PROFITS
take steps to change
may
hardware
Ohio
An
AND
dealer,in
the condition.
city of
a
ten
thousand,
the weekly
perfecteda system of keeping'track of
of his business and
the
uses
department tnm-ovei*s
record as a guide in buying, charging and stock-keeping.
So simple is the plan that it is practicallyself-operating.
merchant
for his
"While devised by a hardware
with
but
it can
slight changes be
special purpose,
adapted to any store.
has
Hoiv
the Sales Records
for
In
is
general term
and
To
scheme
Week
term
selected
is used
as
a
in referring to stock.
mark
VII:
shown
a
Kept
into
the initial letter of the
record
CHART
Dollar's
St"t-e Are
ventory
a
complete inoperation,
partment
classification of the stock according to demade.
Each
class of goods is defined by a
such as "house
furnishings" or "tools,"
puttingthe
and
Four
of a Retail
well be carried every day to the "Sales Book Summary"
cash sales may
You can secure
the
the charged sales at the end of the week.
sales slips
department figuresby dissecting
your
Your
here, and
make
easy
the work
of clerks in
enteringrecords,
key-letter of each class is written or rubberstamped on the shelves or on the packages in which the
goods are wrapped. The classificationsused by the origthe
42
EXPENSES
sales
ordinary
AND
book
PROFITS
suffices for
system
keeping
these
records.
At
the
slipsand
carried
deducts
the
to
entered
Entries
day
the
bookkeeper totals the
department by the sales
in each
charged
The
sales.
"Sales
in
the
in the
Purcliase
and
Book
"Sales
cash
Book."
Summary
Day Book
in the
Prices
costs.
each
for cash
sold
amounts
are
of
end
amounts
Charged
dealt
weekly.
on
delivery
Book"
Summary
sales
with
based
are
are
are
the
prices at which goods are sold.
The plan yields prompt
keeper
returns
by putting the storein possessionof full-figure
facts about his business.
annual
semi-annual
or
Relying upon
inventory
taking is a dangerous practice,since small daily losses
to
amount
for
the
a
annual
a
months
business
to
to twelve
before
is saddled
Often
overcome.
allowed
when
sum
period of from six
inventory system,
the
takes
formidable
to
months.
the
with
recovery
a
leaks
late
accumu-
Under
are
covered,
dis-
deficit which
is
impassible.
operationcost of four dollars a week, this method
of keeping track of sales,deliveries,
purchases and stock
times multiplied
hand
back to the owner
on
comes
many
in the shape of loss prevented and profitsmade
possible
by running the store on a basis of exact knowledge inAt
an
steaxi of
approximation.
Net
only way
YOUR
operating
Profit
or
costs
are
get around
high
is to cut out the
that the high running
to see
covered by the price.
costs
waste
to
in
urn
II
Part
HOW
TO
YOUR
HANDLE
TRADE
The
Store That
your
"1\/^HEN
^
ties up
competitor
his funds
Serves
the
across
corner
ment,
mahogany equipkeep yourselffrom the oppositeextreme.
with negative.
Don't match
positivewaste
Cripple your store with neither too much nor
too little. Keep your balance.
'
in
dows,
winbuilding,
your
counters, your sales people,only
your
in serving
for their effectiveness
your trade.
Pay
your
Whole
location,
your
dollar displaywinof thousand
dows
blind to the wishes of those who pass.
rows
are
Entire
advertising
campaigns fail to tell the
how
customer
he is to be served for his money.
hires an orchestra to attract
Many a merchant
loungers,and forgets that little silent
salesman
the pricetag.
"
Store
ride your
customer
The
serves
that devour
that
pay roll. Mistakes
the corner.
drive him across
arrangements
store
"
that
that
saves
succeeds is the
time and steps
want, and makes
what
customers
easy,
pleasant,to buy
"
and
get
your
time
delay your
that
that offers
store
it simple,
away.
0
iirt
g
-"""
Ill;
ill
PLANNING
YOUR
STORE
FOR
SALES
MORE
''^
I
Boya
I
[ Juolors
Millinery
Tables
2
II
o
o
e
2
"c
|"|"Tablea
-5
a
Furnisbiags Case
Display Space
Display Space
CHART
DC:
how a retailer made
This chart shows
a floor plan increase
his sales forty per cent.
He
placed articles of everyday use in the rear
and led his customers
to them
through many
attractive displays intended
to
III:
suggest
additional purchases
III
V
CHAPTER
Displays Draw
Making Window
Trade
retailingin country or city,
the show window
is a form of salesmanshipwhich
can
keep within arm's reach of the passer-byevery
you
hour of the business day. Windows
are
exceptionally
pensive
good types of flexible salesmanshipand unusually inex-
WHETHER
you
are
ones.
It is true
form
that
this
competitorshave
all your
same
of
the
salesmanshipin their service. To overcome
dows
apparent disadvantage,you are forced to use your winbe taken into comwith individuality.They must
radeship
with your salespeople.They must
demonstrate
with the pride of a clerk enthusiastic for the store that
back of them stand the stock,the shop,the merchant
out
of the ordinary.
To accomplish this and make
windows
pull for
your
with their full power, it is necessary
net profits
to consider
them
silent salesmen.
They are dumb salespeople.
The
windows
of
manner
must
a
dumb
for this
person
reawn
"
signs.
Place something moving in
in
be made
to talk in the
motions, or
tions,
demonstra-
or
4"
the
windows
and
they are
46
HANDLING
longer
no
goods
your
with your
Then
a
dumb.
TRADE
still,have
Better
in the
maJving or in some
the sellingappeal you
stock
will
crowds
window
THE
to
stop, A
city
thera
demonstrate
other
way
connect
give them.
music
store
dressed
represent a small,instrument-cluttered
lin
vio-
shop. In it an old violin maker
puttered about,
repairing,rebuilding and varnishing, exactly as if in
his attic shop at home.
Hundreds
of people stopped at
that Avindow
of an
business day. A member
chestra
orevery
which
plaj^edin the city during a coast-to-coast
tour, inquiredat his hotel where he could get a valuable
violin repaired. "Why,"
repliedthe information clerk,
of Spring and Essex
"I passed a window
at the corner
lins.
Streets yesterdaywith an old fellow in it repairingvioThose
It was
certainlya dandy window.
people
should
be live enough to help you
out
right." The
musician found the shop and received good service.
Concentrate
on
Fill
There
SuggestingDesires Your Stock
to the Customer's Satisfaction
is another
working with
one
thing at
fundamental
windows.
your
rule to remember
The
good
salesman
Can
when
talks
usuallyfeature
but one
attraction or line. You may
use
some
secondarj^
sign or a moving object to attract to the display,but
make
the displayitself concentrate
on
one
subject. Give
time.
a
the customer's
Your
mind
windows
A
a
good
window
singleidea
should
stand
on
reasonablyask
cheerfully,
to
step in
It is then
with
at your
which
upon
the
every
Think
doors.
will
street
person
of them
to center.
and
antly,
pleas-
who
passes
in this
light.
all,be dressed
doing you justiceif
evident that they should, above
extreme
care.
They
they displaya generous
topped by bunches and
are
not
stock of brass and
heaps of stock
"
nickel fixtures
that
is,unless
WINDOW
DISPLAYS
47
fixtures. Hide
sellingbrass and nickel window
use
the fixtures;if that is impossible,
something that
goes naturally with the stock displayed. Hang the hat
instead of a brass rack ; hang the summer
cane
on
a
dress over
a
June-day parasol,and discard the nickel
you
are
poles.
from
the trade territoryof
sellingforces that attract customers
Each
medium
reaches its small or large circle of prosis the enter.
pects;
and store
tliccounter
the salespeopleusing their persuasionwith actual inquirers,
and
urging store visitors to buy, the window disphiydrav. 'ng in passers-by,
arrangement
carrying the magnetism of values throughout your town a^d its rural routes
publicity
CHART
which
X:
your
The
store
springs largely from suggestion,if you stop
suits. A remark
to analyze it. April suggests new
overheard
a
on
busy street suggests that vou need new
shirts. Windows
are
suggestionexperts when properly
Trade
48
IDVNDLING
THE
TRADE
equipped. Let them always suggest first of all,then
give them stock to show and prices to quote which will
fan suggestioninto desire.
A
reasonably strong desire will persuade a passer by
inside. This suggestivepulling power
to come
is shown,
for instance,in the simple displayof an Eastern
ture
furnistore
of reversible vacuum
make
selling a new
cleaner.
In
the
blue
ball goes
goes
with
spinning about
steady
a
perpetual motion.
of
reversible
a
right point on
a
which
ease
Of course,
the
light red and
silver plate. Around
it
apparently accomplishes
a
quickly see the nozzle
cleaner is resting at just the
vacuum
of the nozzle
Back
of the window
center
edge of
you
the
discover Blake's
you
drive the ball.
plate to
vacuum
cleaner
pumping air through the nozzle; and in the center
the plate,constantlycircled by the ball,this card :
This
is
the
Way
Dusty
Not
The
but a sure-fire
perpetual motion
of securing dustless cleaning
in and let us show you the cleaner picking
things
up littlethreads and bigger
when
three fundamental
wath
this store
this
ordered
he
purposes
clerks,and
to visit the store.
a
in mind
:
following a
display. He had
was
publicity,
ation
co-oper-
tactful invitation to customers
Displaysof
a
similar nature
can
be
adaptable to windows
made
You
may
and
you
for
advertisingman
definite idea
Cleaning
"
way
Come
Around
Get
to
of
dress
your
offer in them
do not enliven them
of any size.
windows
with technical correctness,
good
with
but if
prices,
originality,
you lose half
stock at fair
HANDLING
50
something" with
"do
and
to watch
then
be drawn
may
of
town
merits
hundred
two
some
this meat
boiled ham.
the
Dressing a
shoppers,and
patrons daily had
women
with
a
dow
put in the win-
was
for feminine
large percentage of
a
"
Sales
inhabitants
of
slices of the ham
to cut
Do
They
acquaint the public in
to
certain brand
a
What
chef,he
represent a t^^pical
to
man
into the store.
seventy-fivethousand
of
passer-bystops
in Increased
firm decided
grocery
the
Showing
by
Usually Results
A
TRADE
that objectand
Goods
Featuring
THE
them
a
taste
decidingit
of
was
of
purchasing. It was the combination
this scheme
of display with the idea for touching the
's purse through her palatethat made it an effective
woman
"puller."
"delicious"
A
and
hardware
dealer
display" to disposeof
This dealer placed a
that he would
a
pay
ten
be shaved, were
the hours
This
card
in his window
cents
for the
to
men
shaved
were
ing
dur-
a
displayat the side
cleaners
selling vacuum
razors
concern
method
ten
big attraction,and morning,
pavement was crowded, a good percentage
steppinginside to examine the big
proved
of the lookers
A
stated
of demonstration.
eveningthe
variety of
and
which
of shaving
privilege
to
fiftyapplicants,
eager
Some
engaged
scheme
and
noon
in the
large stock of safetyrazors.
a
in his window.
man
this idea of "action
used
get
of the window.
on
customers
in the store
used
and
the
same
sell them.
A
general store disposed of a quantity of kitchen utensils
by an almost parallelplan. There are few lines of goods
where
some
scheme
of this kind
cannot
be
appliedas
an
effective "silent salesman."
There
is still another
kind
of
window
display that
to
effectively
can
be used
the
passingpublicwith
a
dealer
shoe
and
This is to
impress
goods through
trade.
draw
qualityof the
how
that shows
they are made.
secured several employes from
demonstration
A
51
DISPLAYS
WINDOW
the
for his purpose,
enough machines
started making shoes in his display window.
at their
shoe-makers
"
attracted
work
the scheme
turned
out
to be
facturer
manu-
a
and
The
then
busy
a
good deal of
a
big factor
tention
at-
in advertisin
his
goods and in pullingtrade to the store.
Many a buyer does not know he needs a certain article
him
until its merits have been forciblyimpressed upon
through
such
some
SASHES**-
SLIOINS
CHART
XI:
The
show
window
demonstration
as
this.
rixeD-^'*
idea back
of this window
lay-out taites advantage of the fact that
play
both the goods and the customer.
These disnear
built into the doorway, and enclose a path to the counters
display is of the greatest value when
windows
are
pricing of all goods in the window,
where
these prices are
as
sufficiently
unusual, serves
of the most
of drawing customers
effective means
one
retailers object to
into the store.
It is true that many
of the price ticket on the ground that it places
the use
priceabove qualityand only brings buyers into the store
Often
to
the
get that
This
mere
one
particulararticle.
is ail any
kind
of
an
advertisement
depends upon the clerk or the displaywithin the
multiply a customer's needs when once he enters.
docs
"
it
store to
52
HANDLING
TVhen
the
close to
often
do
to
There
before
extent
some
strikes
hits the
appeal that is
few lines of goods which
are
a
prospective buyer look over
that the
demand
not
stock
pocketbook, it
vital.
most
TRADE
story told by the display window
man's
a
THE
purchasing,and
displayedstock within the
for other goods that have not
"
store
creates
been
cut
ively
attract-
an
the desire
vertisi
for ad-
down
purposes.
But
all
marked
goods on
the
colored
cards
in addition
to
cards
the
its share
maximum
is neat
that do not
whatever
do
drawing trade
include
display must
goods that
the goods, and
And
for
schemes
and
method
such
attractive,
detract
with
a
through price-
from
catchy
of marking
as
varied
the appearance
words
of
of
sellingtalk
price.
the scheme
of the
effectiveness
for making
the
show
dow
win-
sellingwork, it can only reach
when
coupled up carefullywith
the displays inside the store.
For
it is seldom
that the
the ones
are
goods displayed for advertising purposes
that offer the big profits.Let the displaywindow
draw
in the store, it is the work of the
the buyers then, once
sales force and the store displays to create a desire for
other and more
goods.
profitable
"
that a
know
attaches to him
real personalinterest that is not
a
measured
wholly by his orders and his
dollars and you will win in return that
close personal association and active
support that builds up business.
GeorgeH. Barbour
your
LETpersonal
interest
customer
"
"
"
CHAPTER
Plans
Floor
VI
Store
and
Lay-out
problems purchasing
and selling. Successful purchasing depends entirely
his abilityto
of the market
and
his knowledge
upon
pends
demand.
Successful sellingdeforecast the immediate
the attractiveness of the
almost
entirely upon
it affords,effective advertising,
store, the conveniences
honest
goods and
intelligentclerks,prompt deliveries,
THE
retailer
other
innumerable
Under
factors
the
"
from
faces
two
"
factors.
heading "sellingforces"
personal
elements
two
daily
and
deals with
the
be
placed two
impersonal. The first of
shop service fostered by the
these
to the
The
highest paid
impersonal forces
may
include
clerk
window
cash
ager
man-
girl.
dise
decorations,merchan-
of the
displays,and the convenient arrangement
various
departments.
"Stock
"are the
displays,"says a successful retailer,
merchandising. They
greatest silent force in modem
the
are
Avoman.
traced
The
gown
pace
makers
for
Fully forty per
the salesman
cent
of
our
and
the
sales-
total sales may
be
directlyto shop arrangement,"
who visits the store planning to purchase a
woman
does not realize how cunningly the department she
53
HANDLING
54
visit is located
must
pass both
she must
THE
TRADE
so
that to reach
the
millineryand
the suit
department
shoe sections. After
purchasing a suit, the season's latest hats entice her
All along her
with their beautiful plumes and flowers.
bargains are lying in wait,making it easier
way, in fact,
harder
to leave the store without
to buy and
making
more
purchases than she at first intended.
How
Customer
a
Goods
to
Is Induced
by
the
Purchases
Umntended
Make
hit upon
Illinois merchant
Arrwngement of
plan of arranging
and
the street
furnishings near
shirts,ties,underwear
most
entrance
frequented by men, realizingthat the
takes no
pleasure in elbowing his
busy business man
Accordingly the men's
through crowds of women.
way
An
is made
wear
is centered
most
on
the
accessible and
making
the
every
art of the retailer
displaysso attractive
hurries in for
that the
half dozen
pair of socks
will end up by buying a shirt and tie;so conveniently
arranged, in fact,that they reallysell themselves,the
clerk merely taking the order.
who appreciatesthe possibilities
of selling
The merchant
goods the visitor has not thought of buying, plans
customer
who
the store in detail with
outsider
spool of
and
show
who
does not
thread
cases,
accessories that
a
a
system which
realize that she cannot
the
amaze
buy
even
a
without
walking past counters, tables
alluringlyfilled with novelties and dress
catch the eye and stimulate the interest,
could be turned
possible,
reach
department, she must
any
alluringlydisplayednecessities.
and,
would
if
'Some retailers have
hit upon
into
run
purchase. To
the gauntlet of
a
successful
justwhy their arrangements
appreciating
but the observing merchant
up salas,
plans without
acted in speeding
daily asks his
STORE
department heads
of
number
LAY-OUT
55
until
"Why"
he
established
has
a
science
to extending the
principles
applicable
of the store.
their merchandise.
The largerstores group
floor may
be
devoted
house
to
shopper is looking at rugs, it
curtains,if they are just across
It is not from
and
has
chance
shown
that
purpose
of
number
of
entire
the
furnishings. When
is easy
in
to interest her
the aisle.
that carpets, draperies,
furniture
located
clothingare
One
on
customers
floors.
upper
go
to
with
store
a
Experience
the
fixed
lookingat these articles. The firstfloor must
be reserved for silks,
and small articles
lingerie,
novelties,
of merchandise
that the customer
had no thought of purchasing
before sightof them awakened
the desire to buy.
The
of an
Indiana
furniture
department manager
with a large
store, approached the end of the season
cedar
chests
on
hand.
People either overlooked them or
not
right to stimulate buying.
in
three
the rug
a
on
row
and
each
the
H^
Oriental
rug,
the many
uses
had
just in front
each chest he threw
Across
them
placed
aisle leadingto
side of the main
carpet department and
elevator entrance.
They did not sell.
surroundings were
a
of the
handsome
The
leaving the lid of the chest open.
displayimmediately caught the eye of the womengoing
and coming from
the carpet department and suggested
entire
lot
proper
was
there
are
in
sold
soon
"
a
home
for cedar
sales that
were
chests.
induced
The
by
arrangement.
The
of
an
The
questionof color effects is followed with the skill
artist by many
efficientin the arrangement of goods.
largestores aim to dress their decorations in bright
colors for half tone
daylight.
whenever
On
dark
light and in subdued
days brighter colors
colors for broad
are
thrown
possible.The questionof lightsis no
out
less im-
56
HANDLING
portant and
department heads
that the proper
see
provided for
while
china
rooms
emphasize general lines
Schemes
That
Add
and
it their firstduty to
lightsare
secured.
the
furniture
the
TRADE
make
of
number
strong color contrast
are
THE
The
turned
most
out and
a
brilliant lights
and
cut-glassdepartments,
call for subdued
lightsthat
rather than details.
effects,
to the Convenience
of Customers
Sales but Swell the Overhead
Increase
degree of privacy must be provided for in certain
is often flattered by having
departments for the customer
goods brought out and spread before her alone.
for trying on corsets,coats and other
rooms
Then, fitting
apparel are provided,and a "costume room" is found in
be seen
the largercity stores where evening gowns
may
A
"
in
artificial light. The
either,for
may
room
A
no
little
how
matter
ones
play
amusement
room
babies
can
not
overlooked
for
great the pressure
be, the shop-keeper finds
where
are
a
place
for
an
infants'
for while mothers
be cared
space
shop.
is fitted up with swings, sand pilesand
facilitiesthat serve
entertainof ing
the purpose
the children and
ing
enlistingtheir services in advertisthe departments by teasing their mothers
to shop
there and coaxing their fathers to buy swings and devices
they won't be happy until they get.
Some
departments are as much fixtures as the store
while others are moved
itself,
daily a
weekly or even
"
veritable
game
that the
to lead them
here
familiarizingthem
establishment.
If
storekeeperplays with his
today and there tomorrow,
with
a
stores,and
and
comer
line of goods does not
place,it is moved along to
The "bargain basement"
in many
nook
every
even
a
thus
of the
sell in
one
favorable location.
more
is
tomers
cus-
a
permanent
department
in the smaller shops the most
HANDLING
58
THE
TRADE
baskets,fancy goods, cooking utensils and
housewife
that the
have
of
thought
sales outside
up
things
uses
daily,but otlierwise might not
bought. This plan materiallybuilt
department.
grocery
or
the
many
Opening the eyes of retail clerks to what the store is
selling establishinga connectinglink between window
displaysand stock is necessary if the full value of the
"
"
window
Windoiv
is to be realized.
merchant
to the
DisplaysMust
Sales Force
Be Supported
Attractive
and
It has been said the human
In business terms
soul.
of the store.
effort and
windows
done
a
the
expended
art
is wasted.
What
from
be drawn
Store
of the
displayis
the
location of the stock,all
to
attractive show
secure
efficient clerk could
an
eye
is made
connection
permanent
and
Efficient
an
is the window
eye
the window
a
the windows
between
the
Unless
by
have
the
example given here.
During a recent "silk sale" in Boston,a woman
passed
prominent department store one morning. She had
may
buy,
not
set out
to
the
window, and
there
cloth became
the
back
She
mother
to the
went
the rich
"
to
beautiful black
displayed. Instantly the shimmery
focus of her vague
ideas about a gift
suitable little souvenir
some
to the
silk counter
clerk scratched
several
out
woman
insisted that she had
patternsshown in
batch, with
less courteous, and
she
and
not
take
to
the
same
he hinted
wished
same
His
that the
woman
piece
at random
and
price.
the
clerk got down
result.
without
the
yet handled
The
the window.
described
his head
patterns of the
picked
what
a
her
villagehome.
of goods. The
over
displaybrought
her eye fastened upon
silk remnant
for her
but
manner
had
recognizingit.
The
same
other
an-
grew
passed
Twenty
STORE
minutes
silks to be put away
The
however.
She
clerk
a
rarely does
with
temper and
the
what
she
"window
her
did
opinion,
early in
and
want,
not
the sale.
made
him
do
look at the window
"
display of
customers
judge
the counter.
on
woman
handle
to
panion
com-
strewn
was
store, the criterion by which
own
Moreover, the
right; she
was
that
had
particular leader.
not
been
She
mitted
per-
carried
five yards of it.
away
Whole
blind
on
as
of
rows
one
about
In
her
to take
robbing
the goods he puts
well
both
declined
avoid
to
counter
invited the clerk to the sidewalk
what
his
She
shopper, a
later.
shopper kept
merely
The
the salesman.
59
for the
frittered away
were
and
LAY-OUT
thousand-dollar
display windows
the proprietordoesn't know
side,and
the blemish.
customers
know
But
the
earlymorning
keen-edged squads of clerks
"
"school
and
there
thing
any-
clerks
as
the displays.
getting dividends from
in Chicago uses
company
but effective. During
means
here
are
its show
a
windows,
method
that
slack hours
when
are
"
sent
up
ing
cloth-
is roundabout,
and
the men's
a
this
minds
to the
ally
usuare
store's
of
receives
salesmanship." An "instructor"
them
and gives each sciuad a straight-from-the-shoulder
talk on
and
selling on helping yourself,the customer
employer.
your
He teaches the salesman
how
to find anything in the
store and how
to direct a customer
to any
point; how to
do this courteously,
without an air of superiority.And
how
to match
incidentally,
a. window
display or climb
"
into the window
and
get what
a
customer
wants.
More
followed
novelty attaches to the method
by a
vertisem
large department store in the same
city. Blanket adin the newspapers
aim
to feature
something
HANDLING
60
on
THE
displaysfollow
floor. Window
every
closely. And
They know,
the
The
into
all the ten floors
on
tions,
sec-
spread
stop even there,however. Routine
sections go to
thing through. The advertising
attendant
in
concerts
next, to the
givesgraphophone announcements
the lunch rooms,
one
day to the men
Two
horns are used, under
women.
Sousa
between
by means
oxfords, tennis
follows
is behind
and
Caruso, let
of the second
the attention
curtain.
a
the
say,
are
the
clerk
And
nounces
an-
horn, that to-day,ladies'
novels
and
rackets
us
;
"featured."
are
display in the windows, under
passingthousands, and are being asked
they
of the
and
who
of the operator, who
every
is cut
does not
matter
puts the
eyes
publicity
of the day's features.
news
an
this
is advertised.
"blanket"
Avhieh the lioor-walkers
as
what
the clerks know
because
TRADE
on
It
the
for
minute.
speech tells only what the clerks addressed need
to know; and coming like a song announcement, it "soaks
in" and actuallyoils the wheels of salesmanship.
into four or three
Your
sellingforce may not number
vertise
adannual bill for newspaper
two figures.Your
or even
This
window
and
in the
columns
graphophone
displaysmay
not
ledger. It follows that
schemes
may
be too
span
lectures
pretentiousfor
five
and
your
business.
do is to get your clerks
Possiblywhat you will finally
morning and say: "Notice
together for a minute some
dress goods this week.
that we're featuring the summer
People will be asking you for those choice pink and
trade is slack,or at
colors. Just stroll out when
straw
lunch
time, get
over.
Then
But
do
come
a
breath
in and
something!
of
fresh
locate them
air and
on
"
look
them
the shelves."
CHAPTER
VII
Giving Customers
ONE
of the greatest
of
their
of
maximum
to
stores, perhaps
most
The
of
Under
rush
per
cent
be
periods
with
more
counter
one
to
serve
in
who
of the
to
overhead
The
store
day.
for most
in
the
what
impossible during
sixty
a
seventy
or
prepared
store
to
remaining thirtyor forty per cent, after
or
or
not
ratio,but
manager
the
eliminated.
be
another,
go
reduce
only
will
their money
patienceto spend
less
away,
perhaps
purchases elsewhere, or maybe
It follows,therefore,that speeding
operations will
stores
congestion
their
all.
many-
large
matter
no
than
go
the
a
scant
in
is blamed
is often
more
The
periods of
some
unavoidable
with
apparent
population
of the customers
The
is
of it,however, could
Much
buy goods.
hours.
in crowded
existingmethods, it
the
trying
rush
doubt
no
less
stores, regard-
customers
serve
subject
of urban
would
stores
methods.
at
or
this trouble, and
the
in most
conspicuously
seasons
congestion
to
during
this
analysis given
during busy
problems
size,is
speed
Service
Prompt
add
in the shoe
increased his volume
to
the
not
up
clerk
the volume
department of
a
of sales about
to
the
hire
to
plete
com-
buy
at
selling
and
the
of sales.
metropolitan
twenty
per
62
HANDLING
cent, because
he found
TRADE
THE
a
of
means
gauging the
waste
tion
mo-
eliminatingmost of it. He found
advertisingcampaign brought people to the store
that
of clerks and
the
sellingmechanism
that the store
This
them.
waste
fault
due
was
could
almost
take
not
wholly to
but
care
of
nating
predomi-
a
tomers
merchandising:the slow pace of cusin going through the store.
In the shoe department
during specialsales,one-third of the prospective
in vogue
left without buying. A custom
customers
was
of keeping the cheaper grades of shoes upon
counters
that immediately abutted one
another,without adequate
departments to separate the sizes and styles. Double
the necessary sellingtime was
ing
lost by the clerks in huntfor goods, and twice as many
wise
otherclerks as were
needed
increased expenses.
While measuring this
loss the following time-studywas
made :
Number
of
Total
Total
had
record
36
minutes
minutes
$9.25
was
poor,
showing
because they could
loss of time.
made,
Number
of
Total
not
be waited
.showed
per
from
away
without
upon
time-study,after improvements
A
followingresults:
the
served
customers
time
by
one
clerk
sale
11
182
minutes
16.5
minutes
$18.25
sales
increase
selling
ing
Speed-
average
their cash
took
time
Average
Total
low
a
expensiveover-head continued.
since
the department needed, especially
an
what
was
been
An
5
sales
the store
undue
clerk
one
sale
per
dissatisfied customers
many
by
181
time
price,while
up
served
customers
time
Average
This
of
of 120
served,
and
per
almost
cent
in the
100
per
of
number
cent
in
tomers
cus-
money
PROMPT
volume
of
The
old
are
shown
of
the
in
arrangements
new
charts
by
long
63
the increase in
sales,shows
and
SERVICE
(Charts
counters
on
XII
and
which
sellingefficiency.
this department
XIII). Instead
collections of
shoes
detached
circular
counters
dumped, small
the shoe
across
were
section,each
arranged in rows
bearing a singlesize. During the rush of the special
picked out the shoes they wished
sales,the customers
the aid of the clerks.
to try on, often without
Then,
stepping to the seats, they are served in less than
tated
half the time formerly required. The
change necessiin equipment, although
small investment
a
very
the entire shoe section had to be re-arranged. Due
to
the arrangement of equipment,waste motion was
largely
eliminated,so that the continual sortingof stock by the
with.
the sizes was
clerks was
done away
]\Iixing
tically
pracprevented by separating the circular counters
enough to enable the crowds to pass between them. The
voted
greater part of the clerks' sellingtime could thus be deand not to sortinggoods or hunting
to actual selling,
were
for them.
Customers
Cut
When
buy
"
Turned
Away
Profitsand
Weaken
to
take their money
it without
be
importantfactor.
counters
without
they wish
to
of time
such
a
The
being
not
served
energy,
is not
the
loss of
the
most
of persons
would
line
leaving the
ence,
forget the experi-
they don't. When
again,they remember
be great. But
buy goods in this
and
immediate
condition
If the number
the loss would
to the store to
"
ascertained.
resultingfrom
come
Reputation
advertisingcampaigns and must
again because they cannot spend
waste
prohibitive
should
reasons
trade
a
away
the Store's
of customers
large numbers
in response
ivithout Proper Attention
HANDLING
64
THE
the lack of attention and
Eighty
was
TRADE
trade somcAvliere else.
in a ribbon department
per cent of the shelf room
found to be wasted,owing to the scant facilities
Here the waste
gettingdirectlyat the stock wanted.
of time was very heavy, because clerks frequentlyhad to
for
remove
in the
goods
been
bolts from
many
the shelves
of the spaces.
rear
customary in
To
in order
reach
obviate this,it had
instances to leave the
some
to
of the shelves
entirelyempty, heaping
instead.
This, however, did
rear
tion
por-
the
goods on
the counters
not remedy
conditions ; often it resulted in a mixture and tanglethat
reduced
the former
below
efficiency
plane.
these results:
A study of one
clerk showed
Number
of
Total
customers
10
served
time
Number
of
stock
foreign
Number
of
served
to
sale
thus
in
question.
proper
equipment
devised
in
for
wasteful
the
some
.
.32
minutes
54%
wasted
that
A
minutes
in handling
customers
with
plan was
the place of
supplemented
the
time
of
Percentage
consumed
minutes
59
cases
might
15
revolving
shelves.
been
have
racks
These
to
racks
take
were
by specialdrawer-cabinets.
perfectionin equipment cannot often
be obtained,although the maximum
readily be approached
may
The value of the majority of such plans is
usually greatly lessened by the lack of comprehensive
system based on motion study.
The
In
full degree of
Manufacturing, Tools Are Carefully Selected;
in Selling,
Scarcely Considered
retail
a
great many
viewpointof efficiency,
stores are
wretchedly equipped for doing business. In
in fixtures.
"feefirstplaoe,
there is a lack of specialization
From
the
66
of
HANDLING
THE
buying:,
althoughthere
TRADE
nothing to attract buyers.
The casual visitor saw
great staclvs of goods with only a
Many customers,
rug exposed to view here and there.
whose eyes might easilyhave been caught by some
sirable
detook their trade elsewhere.
rug,
radical betterment
A
of
was
has resulted from
hanger system which
a
motion.
from
iiigs
eliminates most
of the waste
like clothes bars, these
Swinging
two
the installation
each
electric lightsthrow
back
arm,
hangers
back.
to
strong radiance
a
pend
sus-
cealed
Conthe
upon
goods.
motion that lay in the old
selling
found
method
was
by time-studies. This observation
embraced
the operationsof one
clerk and his assistant
during the sale of a 9x12 medium
pricedrug under the
old system of pilingthe goods on the floor:
The
of
great waste
Number
of rugs
turned
for
back
inspection by
the
52
customer
Number
of
duplicated
was
Number
duplicated
Number
duplicated
time
Average
Total
By
away
the turning
in which
the
of rugs
106
in which
four
required
the
turning
of rugs
60
times
to
uncover
rugs
3 minutes
104
time
with
turning
times
inspection
the
of rugs
408
three
of operations
was
in which
twice
of operations
was
for
operations
minutes
hanger system, turning operationswere
and
the
services of the
assistant
done
discarded.
vnth
of rugs could be made
a
saving
Re-inspections
Several
of
customers
time.
cent
of
ninety per
time
able to inspectrugs on a hanger at the same
were
and
conduct their re-inspection
independently of each
oth"r. By this method
one
salesman, without a helper,
PROMPT
could effect
a
requiredwith
the floor
How
sale in
a
fiftyper
helper. The
also increased
was
67
SERVICE
cent
number
twelve
of the time
of persons
per
Congested Drug Department
a
and
Its Customer
formerly
visiting
cent.
Was
ized
Reorgan-
Capacity TreMcd
commonly
drug department, the congestionwas
timeA
of the clerks.
great in the sellingefficiency
not doing within sixty
study determined that they were
due in a great measThis was
ure
per cent of capacitywork.
in gettingthe goods from the
to the time consumed
In
a
SHELVES
CHART
XIII:
long tables (A)
shelves.
are
Retail shoe store fixtures used the wrong
way
covered
with stock displayed regardlessof size.
and lost sales result
are
Owing
shown
here.
The
Confusion, delays
elongated dimensions,the clerks
forty or fiftysteps in securing goods.
to the
frequentlytook
Experiments indicated that this waste could be cut
down
at least sixtyper cent by re-arrangingthe counters.
THE
HANDLING
68
Under
the
arrangrement,a clerk could stand in each
new
of the sections and
be sold.
be within
width
The
of most
reach
basket-carrier
overhead
An
bundles.
TRADE
of
the
AISLC
FOR
AISLt
FOR
of the
goods
his
system handled
aisles for
customers
was
CLCnKS
CUSTOMCRS
XIV:
These
CHART
counters
arranged to increase sellingefficiencyby placing
are
salesmen always within reach of the stock they usually handle.
Portions of the counter
are
hinged so that clerks can get to their posts
the crowds
reduced, but
Goods
better
turned
selected
three times
out
and
the
as
fast.
of
purchasing
cards
sometimes called transfer blanks or travel slips
encouraged a customer
wishing to make
purchases in
of the drug sections. Wrapping and money
two or more
creased
changing was
speeded up to correspond with the insellingfacilities.
Here is one
tail.
of the time-studies relieved of complex dewere
use
"
"
selected for this observation
clerk
The
good
the department
a
the presence
observation
saleswoman
of the observer.
was
of
a
Average
Total
A
a
most
notion
with
customers
time
sales
The
busy afternoon
employed
been
She
was
of
unaware
time selected for the
when
the counter
was
14
served
120
per
in
customers.
time
Total
had
for several years.
continuallycrowded
Number
and
sidered
con-
was
customer
minutes
8.5 minutes
?5.76
covered
time-study investigation
significant
department where fortunatelythere was a strik-
PROMPT
SERVICE
69
ing opportunityfor comparing the inefficient methods
with relatively
efficientoperationsin another store.
In a similarlybusy periodan observation was
made
at
of
Number
Total
Total
served
customers
26
120
time
4.6 minutes
customer
per
minutes
$8.84
sales
in the
the two
efficientstore the total sales during
more
hours
were
greater by
was
fifty-three
per
about
in the rival store,while
upon
:
time
Average
Thus
results follow
The
the other store.
than
more
of customers
the number
than
more
cent
waited
eighty-fiveper
cent.
Working at the same
rate, these two clerks would have
shown during a day of nine hours, results as follows :
Number
of customers
Total
of
waited
First
Second
Clerk
Clerk
117
63
on
sales
$39.78
$25.92
this disparityin sellingefficiency,
there
For
was
a
in the equipment,
It lay,first,
clearlydefined reason.
ever,
howand, secondly,in the instruction. The instruction,
would
have been
largely unavailing without the
equipment
in the
even
had
as
basis.
a
more
The
observations
analytical
based
on
more
Time-studies
motion.
reveal stillfurther
it must
efficient store
been made.
ever
Yet
be remembered
actual time-studies
no
betterments
had
of motion, but
or
not
from
less accurate
in the
more
that
clusions
generalconknowledge of
efficient store
for
opportunities
from
come
would
betterment.
Retailers Will Take Advantage of These
Progressive
Motion Studies
ImprovementiiResultingFrom
The
of
stores
today
in
of the future
many
will be
different from
radical respects. Some
of the
those
im-
70
THE
HANDLING
TRADE
might install in planning a
new
merchandising building are siiraraarized here:
and
(1) A closer relation between
selling counters
stock room.
"Waste motion
remedied
by stock
the sellingfloors and extension of selling
rooms
on
thus
to portionsof the higher floors,
space
stock.
decreasingwaste of time in replenishing
carriers between
the stock room
and
(2) Mechanical
provements which
store
(3)
A
managers
sections.
heavy decrease
shelves and
in
counters
in the stock
the
and
quantity of
an
stock
on
increase in the quantity
rooms.
carriers between
the store sections and
(4)
Mechanical
(5)
and
collecting
shipping departments,eliminating
trucking of merchandise.
different
Re-arrangement of departments and
grouping of counters.
that compartso
ments
(6) Adjustable shelves and partitions
be changed at will.
and conditions can
(7) Greater utilization of vertical store spaces with
deck platforms in some
departments and
upper
speeding up sales by clerk assistants.
aisles to facilitate the pass(8) The bridging of some
age
of customers
during congested periods.
all selling
floors to
on
(9) The construction of galleries
increase the selling
space.
time
The majority of these improvements result from
studies.
These studies are
and motion
just as valuable
in the large department
in the small shops as they are
made
in villageor city,are
whether
All sales,
stores.
along a railroad we might call Sales-Effort. This road
is Sales-Completion.
starts at Sales-Purpose
; its terminus
Time-studies show
the quickestand the safest running
the two points.
schedule between
"
PROMPT
It is best to make
sales
at
the
or
hide
motion
This
has
themselves
greatest efforts.
two
under
of
by
use.
a
studies
during special
salespeopleare working
advantages.
Fii-st,faults
daily routine
become
Second,
figures secured
motion
maximum
Otherwise,
the
under
before
time
be
normal
they
are
to
studies
difficult to
conditions.
be
reduced
put into actual
salespeoplewill feel they
are
being
unduly pushed.
Throw
on
the
Light
goods always before the
Get in the glareof favorable
publicity.Make known the merits
your
KEEP
public.
stock.
of your
ging
Success comes
by focusingthe diverof public opinion centering
rays
choice on
what
the customer's
you
"
have
offer.
to
Make
your
ability,
your
commodity,
service known.
Every cent saved in shortened
your
is lost in shortened
the sales keep up
trade.
To
value,
keep up
the quality!
and the
Aim
first to sell satisfaction;
goods that giveit will re-sellthemselves.
"
the
mum
give maxi-
pressure
study figures must
allowance
reasonable
of
it would
which
ing
glar-
pushed
are
results
the
employes working under
from
estimate
71
equipment
efficiencystatistics
These
the
salespeopleand
when
made
the
holidays, when
capacity.
which
SERVICE
CHAPTER
VIII
Storekeeping Short Cuts
dollar
EVERY
maintenance
one
year
that
a
its cost of
on
production,represents interest for
cent on
a
capitalof $16.66. Figured
or
at six per
that any
this basis,it is obvious
on
saves
company
expenditure has
needless
nates
that elimi-
economy
direct and
important
bearing upon the value of a business. A saving of even
detail may
some
a dollar a day upon
apparently trifling
effect the theoretical value of the stock of a corporation
that is not to be lightlyregarded by
over
$6,000 b, sum
a
a
"
even
a
And
large concern.
stores
possiblein offices,
proportions indeed.
and
is
The
be
may
devised
by
are
in
the necessary
located
those
detail work
who
by which
methods
where
a
who
the
saving of
factories of very
these elusive
and
are
by
as
shorter
or
are
to be
ways
for
saved one suburban
dollars in eleven months.
72
penses
ex-
rule, be
with
the
effected,and
accomplishing
effective routes.
more
Re-arrangement of lightingand
cuts which
day
moderate
a
intimately familiar
the economies
a
"unnecessary"
stopped must,
positionto suggest
work
dollar
a
counter
space
six
retailer over
are
short
hundred
HANDLING
74
I had
total record.
had
I decided
sold.
of finding out
way
no
goods
sold the most
TRADE
THE
how
or
much
of
one
any
get this information
to
which
at
clerk
to
once
had
us
if
see
opinion formed from observation.
of the boys to file his dupli"So I requiredeach one
cates
separatelyand record the total each day, and I
in
I kept this up for a month
did the same
witli mine.
it would
back
order
get
to
up
a
my
fair average
hunch, Jim
to my
the
sellingexcept
had
Rob
"So
were
that
bested
to
far
in the
he seemed
rapidly and
how
You
You
When
explicitlythe
do
of his
the time to convince
to take
I make
is served
busy with
and
I
and
time.
satisfied and
just
pet subject,
to
another
one,
that your
me
quick sales.
smiled
use
and
an
said
that
are
he takes
assistant.
of the
do not.
already
out
'em withtomer
cus-
my
of the store, and
before
you
brand
is
:
vinced.
already con-
have
I
got your
'
just as good.
worth from $15 to $60
are
Regular customers
to you
find out if any are being driven away
to stock or service
store by failure
as
"
tell
' '
Consequently
out
very
to know
are
push goods
consumer
loss of
prospect convinced
I found
of national advertising; you
to the
or
that
customer
a
Mine
sell her.
is to it.
is all there
argument
you
use
favorablyknown
am
secret
this Jim
his sales
able
was
in
that
his
upon
and
me
glad
questionto him, he
alone. I
all your s'elling
merits of the brand
That
be
I put the
fellows
have
for
help
to
of customers
care
that I would
told him
all loaded
was
plainlyand
*
to be able to take
and
Rob
at
even
said
merely
lead, but
than
tell him
did it. I evidently struck
he
for he
* '
I didn't
Jim.
I went
so
days, but
fiftyper cent.
over
that, true
pretend
rush
on
by
goods
I didn't
course
found
and
sellingmore
was
I put together. Of
record
each
a
year
from
your
SHORT
"I
CUTS
the
tried out
right.
more
I had
idea and
found
that
I
now
where
saw
cent
extra
an
obliged
content
to
on
I don't
brands
more,
because
sale when
I had
make
a
against
Every
trade-mark
doing
do
work
a
it took
the
bottle
of
none
I believed
But
To
much
so
make
of
bears
is
a
time
more
any
advertiser
goods.
the
shelves
my
waste
us
longer to
times
(some-
customers
merits
on
the national
that
me
convince
to
and
and
now
I
so
the money.
serious mistake.
a
will) of
their
package
can,
little
a
a
less sales.
any
I made
was
package I had actually been
myself with making fifty per cent
stock anything but well advertised
two
or
he
brands, and
the trade, as
made
I had
that
the advertised
on
always tried to push them with
just as good values for
they were
had
75
RETAILER
articles in stock
than
on
THE
clerk's
some
money
FOR
willingto
for us."
Almost
always
line that
some
furniture
$14,000
has
a
year
loss
then
better
for
In
despair,the
$10,000 a year, on
month
that the
went
to
waste.
stock
on
hand
River
Wages
factory ran
hired
owners
condition
example,
a
believing
owners,
cut
were
along
lost $8,000 to
had
installed
in power,
expense
For
The
years.
or
minimum
less.
at
boilers and
new
and
every
outgo
behind.
successful manager
a
that he make
at
-purchases
cost
The
new
$2.50. He
Don't let gross sales enter into your
divide your
cut
at
the
plant pay.
he concluded
spent in analyzing the situation,
of which
big expense
lay in labor,much
Many piece-workers had been earning
a
only .$1.2.5
day,
reasonable
to
way
machinery.
Still the
a
a
the Ohio
seven
lay partly
trimmed.
is
escaped attention.
factory near
that
After
there
stock-turn
manager
cost.
the
did this to increase
figures
"
ply
sim-
for the periodby the average
duringthe periodat
fixed
76
HANDLING
THE
TRADE
of labor at least 100
the efficiency
establish
in order
cent
per
to
equilibriumbetween machine
capacityand
overhead
one
on
side,and labor on the other.
expense
To accomplish this he established a bonus system, and dis'
charged all workers who did not prove capable of responding
an
to
increased
the
half of the workers
blood
new
had
too old
were
be
to
the
there
alternative
and
no
throw
the
than
a
time
new
there
out
the
of work, and
was
But
manager.
except to close down
employes
one-
and
antagonistic,
too
or
toward
town
all the
More
instilled. For
bitterness in
was
demands.
plant
the
men
held their peace.
Anotlier
that he corrected
waste
petent
to incom-
traced
was
terial.
macutting,which caused a heavy loss in raw
Added
to this, and
closelyallied to the labor
stock of goods spoiledin machining.
a big waste
was
loss,
found
A whole building was
to be filled with this accumulated
stock.
of it
Most
charged
was
off and
used
for fuel.
discovered by tests that
paintshop,the manager
of the men
some
dripped a quart of varnish a day
apiece. No comparative records had been kept to reveal
In the
this loss.
Failure
to
made
by-productsalso
year
after the
$14,000 net;
Minimum
in too many
for
material
utilize waste
in
the fifth year
showed
labor
businesses.
This
Remember
your
a
is the
sort
show
on
expenses
and
not
the
managers,
results from
it does
item.
considerable
a
change
by turning
priceand not out of
selling
is 100%; cost equals100%
The
it into
second
plant earned
profitof $75,000.
tragedy that occurs
of loss is the most
the
net
records
come
profits
the cost
less your
unless
out
sidious
ina
of your
selling
price
price.
mark-up.
The
SHORT
CUTS
reduce
based
a
without
expenses
retail mercantile
but had
should
to sales in each
bear
would
of expense
while
another
percentage expense
Thus
it should
what
below
cut
was
costs,
of economy,
spasms
department.
double
be
had
the proper
determined
never
of
tests,is illustrated by
and
that
house
table
standardized
observations
actual
on
a
77
of attempting to
futility
The
is devised.
specialgauge
RETAILER
THE
FOR
normal,
of
seriouslyaffectingthe efficiency
been,
have
the
to
class
one
point
of
the entire house.
Department Costs are Necessary to Locate Wastes
and Properly Place Responsibility
For
instance,the
the sales
record
department and in
available to show
was
be, per horse,per
to
cut, ten per
same
There
was
in the
spent hours
his
no
wagon
in
made
comparative
what the bam
ought
expense
age.
or
per pound-mile of cartthe stable.
check
to
way
cent, was
saloon,or
friend,the cab-driver,with
bam
boss
hundred
a
who
teamsters
on
up
the
on
No
who
liged
ob-
pounds
of free oats.
Tlie foreman
many
of the
economies,such
instead of boxes,and
one
his
checker
an
did the
department
than
packing-room had
was
the
as
tuted
already insti-
of paper
use
cartons
by
originalcheckingsystem, wherework
formerly done by two. But
ordered
to cut
off
a
greater percentage
shipping department, where a re-arrangement
and different routing would have saved much
pense
exhad the head possessedthe necessary initiative.
though
of the cut, alThe sales department got the brunt
the travelingmen
had been kept down
to reasonWalch
the
and
Jor ovenreighls
cuts
a
"
a
quarterounce
Within
a year.
retailerseventy dollars.
profits
many
in lard cost
ovcrmeasures
dollars
a
year,
weight
overweights
over-
s
THE
HANDLING
78
able figures.The
ran
There
abroad.
went
A
of buying expense.
it was
so
good profits,
its high expense
was
showing
small
a
afterward
was
those
accounts, especially
was
established percentage
no
certain
department
all
by the head office that
right. Another
department,
assessed
that
low, while that of the
notwitlistandingthe profits.
business
had
former
of the various
was
many
It
cent.
per
was
ready
al-
excessive,
years,
and
legitimateratios
the
that
departments, so
no
of
department
ously
punished for the faults of another. It is obviif not impossible,
of
to limit the expenses
difficult,
penses.
department \vithout a knowledge of its legitimateex-
need
a
established
determined
might easilyhave
costs
been
twenty
the ratio of the latter
far too
This
showing
was
assumed
profit,was
shown
molested,though they
not
were
extraordinary expense
up
who
buyers
TRADE
be
Checking Wasted
Adds
Minutes
SalespeopleOften
Pro-jits
among
Dollars
to Your
of the
big items of expense, commonly unrecognized,
is waste
time.
By changing the location of a
men's
stairway,a wholesale house saved four hours of salesin a decade
would
time a day, which
equal the
One
time
of
one
man
this establishment
for five years.
did not
work
But
since
the
by
the
men
in
mate
hour, this esti-
saving might have
been much
In the rush seasons, even
the saving of
more.
few minutes on each customer
is important.
a
The
house
saved
one
re-routingof delivery wagons
is
approximate. The
Duplicatesales slipsenable you to push the stock which
and check bad buying the cause
of poor stockand
net
turns
dwindling
profits.
moves
^
actual
"
SHORT
CUTS
FOR
RETADLiER
THE
The manager
the expense of a wagon.
placed a curtained mirror where it was
his
to
of
79
retail store
a
accessible
most
clerks,saving customers
annoying waits
turer
the girlsarranged their hair. A candy manufactook advantage of the market
and bought one
dred
hunbarrels of sugar
for cash, but stipulated
liverie
that dein ten-barrel lots to save
be made
re-handling.
while
women
All of these
littlecuts in expenses.
were
A
hundred
such
items loom big in the aggregate.
A
arranged
competitionnext door, rehis stock so that goods called for most
often
might be most accessible. Formerly he had kept his
canned
quent
goods on inconvenient shelves,
requiringthe freof a stepladder.Now
he put a supply of this
use
rush requirements on
stock sufficient to meet
display
tables; during slack hours his clerks replenishedthe
tables. This plan, followed wherever possible,
often saved
several minutes on a customer, and preventedhim from
walking out and buying at the next store. In a busy
establishment,the quick dispatch of customers
means
grocer,
aroused
by
new
money.
A
lumber
big
t'lonsanda of dollars
"When
ends.
away
discovered
odds
and ends
with
months
a
Take maximum
a
were
big
from
discounts
were
this waste
and
of short
alone.
your
and
The
and
was
either
tendent
superin-
directed that all the
in
specialcompartments
them.
"Within
some
sizes,
two per
bills;
hwndred and jour -per
on
one
on
losing
of lumber
discarded
to be stored away
assortment
dixoants
specialsizes
been
of odds
waste
by the employes.
the sizes marked
weeklystock-turn is
year
for
that it had
through
year
off ends
carted
or
a
order
an
filled,the sawed
burned
found
concern
cent
cent
on
a
a
few
running
as
low
feet in length,
two
tos
surprise
could
Some
year.
for
hunt
in
broken
the
showed
that
broke
toy
a
book, and
the
one
Broken
did
toys
were
of them.
use
be
Within
a
to
invariable
handle
loss
the
to
through
breaking
of
each
packer
of it in
record
the
to
for
month
in
the book.
employes,
that
could
made
was
the
gation
investi-
Every
a
society
rule
permitted
were
year
charitable
to
were
entered
name
longer given
a
allowed
make
offered
was
his
have
no
An
clerks
only
bonus
not
others
An
adopted.
to
systematic
were
suspected
was
even
deliberatelycareless
were
rule
or
a
articles
them.
were
article had
or
away
some
new
small
a
who
sent
were
A
handled
employes
instances, and
toys purposely.
who
who
customers
of the
losses
dollars
a
displaying, and
and
many,
its
again
to make
many
a.
pieces.
that
half
increased
good
impacking
by
in many
A
short
was
how
thousand
two
determined
cause.
It
to find
estimated
to
was
manager
the
crushed
this
years
The
doubled.
in stock.
these
house
amounted
breakage
through
held
Avcre
filled from
be
large toy novelty
A
TRADE
superintendent himself
to the
ordera
small
a
THE
HANDLING
80
that
mechanical
but
make
no
tomer
cus-
toys, and
demonstrations.
make
articles
broken
was
duced
re-
one-third.
The
of
waste
facilities
stores, insufficient
light
of overworked
expense,
money
had
but
been
practically all
and
for
and
loyalty
heat, icy sidewalks, dis-
underpaid
just as positivein
throAvn
other
looming by itself.
away.
avoidable
displays, dingy
poor
clerks,is
results
Some
expense
as
merchants
and
if
all negative
so
much
cut
leave
out
this,
:iii
Ill:
TO
HOW
CURVES
MAKE
A
SALES
CHECK
SLUMP
Sales by Months
Jan.
Feb.
CHART
he
must
attract
"ui:
-
Mar.
Apr.
May
June
,JuIy AugT
Sept. Ocu
Nov.
Dec.
XV:
These graphs showed Darrell,a New England grocer, that
make
and
special efforts to
expect sales slumps in the summer
The
trade.
small
vertical squares
represent the sales in dollars
month
and ten of the small horizontal squares
one
:iiv
IX
CHAPTER
What
Branch
a
Grocer
a
HAVE
I
been
sellingmethods
my
what
at
of
cost
were
doing business
I
About
should
each
of my
neither
of
kind
business
why
what
I
guessed
"
be
guessed
"
where
the
had
made
at
gone.
most
things,I knew albelieve,as the average
I
class. But
exact
information
my
specific the only
nor
knowledge
"
on
which
a
sound
store
my
I
up.
needed
produce results.
I
England,
tells
began
change
adopted
keeping
I had
and
read
every
every
a
here
he
how
increased
his
sales
annual
from $37,000 to
and
$ 1 27,000
cut
his average
mark-up
from
about
live
Hve
with
thirtyto
twenty-
per
cent,
nearly
doubled
to ask
a
net
self
my-
in
a
order
"why"
to
He
went
detail
detail of my
store-
article in my
stock.
analyzed
meth-
carefully.
lot about
"modem
83
over
titude
atevery
towards
New
in
grocer
standing still and
was
to
Darrell,a retail
profit.
be built.
can
I woke
Then
My
of these
much,
as
grocer
have
a
guessed at
guessed
"
was
guess.
I
should
prices
profits and
money
by
was
keeper.
store-
I
years
guesses.
my
my
was
eleven
buying
My
guesser.
of
kinds
two
For
Taught
Store
his
store
of
and
it
M
FACTS"
NOT
ods"
He
had
dered
blun-
along for
broke
him
upon
that
if he knew
curately
ac-
zi'hat
was
going
his
own
in
on
store,
he
could
smile
at
the
"cash
market"
next
the
on
corner.
in
but had failed to apretailing,
ply
this reading to my
business. Until,
the smoking compartment
of a train,
in
I
talked
about
He
but
know
himself,
"This
is
stock system
rightmerely
I
use
chase
puris
method
not
"
good
cause
be-
I
it;
this
equipment
is not
because
it."
do
the best
I
of his
at each
more
and
costs
sale ;
what
sacrificing
quality and
not
I
am
makes
to the lowest
to cut them
fifth,
point
service.
mally
principlesforonly tellingwhat I got out
these
state
talk,then
and
later.
Coming back to my store, I tried to
apply these ideas. My first effort was
outsider
would
to size things up
as
an
with a fresh pointof view. I began with
my
customers.
The
store
served
an
clusive
ex-
of Boston's
neighborhood one
gent
intellibetter suburbs.
My people were
and discriminating. They wanted
"
groceriesin the
market.
They also wanted prices.
so-called
offer them
To
bargains
would be to oft'end them ; they demanded
the
own
no
your
did
;
to
I got five ideas:
third,to turn your stock as often
possible; fourth,to givefull and exact
without
this
buyerdepartment store
;
them, and
said
the
to
first,
"t rid of traditions and
"
personallikings
or
prejudices in making decisions or
purchases; second, to buy nothing you
can't sell at a profit,
either in money
or
advertising,and to judge every article
bought from the customer's viewpoint of
to
it;
with
western
a
him
measure
because
hour
an
merchandising.
From
as
not
for
of
manager
values
He
WORK
fore
be-
eleven years
it
GUESS
best
meats
and
A
values,and
made
had
STORE
BRANCH
the
them
increasingcost
of
living
critical than
more
ever
of them
were
Many
buying
staples,
package goods,and other branded
at the city department stores
specialties
and were
giving me only the tag ends of
before.
their orders.
trade,it
To
this part of my
recover
85
EXPERIMENT
Hoiv
to
test, to
find
correct
his
and
faults
"without waiting
store
for his
plain that I would have to
department store inducements,
the
and
besides
better
serious
local
petition.
com-
ers
custom-
him
at
p
s e
en
it for
do
to
was
meet
began
he
the
to do this
the
residents
of most
high class
and
they
chose
to
called each
ask.
On
morning
Special deliveries
the rule
to take
of the customer
as
the
in
which
their orders.
accounts
were
ence
at the conveni-
and
occasional
an
Baskets,
containers of all kinds
boxes
than
was
the
no
in
worse
Don't
be
dic
d.
e
ran
consumers
costs
up
to
a
restive and
an
got
wh
new
ic h
But
level
en-
him
after
failure.
success
a
In
spects
re-
in
grocery
preju-
this gro-
brought
average
Get
ideas.
new
ideas
these
of
out
rut.
c e r
all this service
made
the
hour
given away.
were
keenly competitive neighborhood.
which
and
on.
store
Climb
To
system.
measuring goods.
My
chant.
mer-
the
please their
"regulars", salesmen
frequently erred
the side of generosityin weighing or
on
so
retail
the result of this loose credit and
collection
And
by-day key to
the problems of
of triflingpurchases
with payments
"
day-
request, a clerk
Charge
common.
were
a
prospec-
receiving everything
were
ban
subur-
of service and accommodation
way
loss
problem. Like
customers
towns, my
tives
the
was
his
of
is
profits,
How
ex-
NOT
FACTS"
86
WORK
GUESS
couragcd department
the
Study
tomers.
cus-
your
if
See
they
get
can
they
what
at
both
without
question whether
a
of service could
immediate
an
be effected
loss of
determined
to
find out.
been
to
the
trade.
I
Expenses had
n'ant
pared
prices savings looked
in
point where
impossible in
further
other
any
direction.
goods.
and
reduction
any
store,
your
time, it was
same
At
buying.
store
Price, service
then,
were
and
began
I
the
and
volume
factors
in
of
problem
my
study their effect
to
sales,
on
one
service
was
another.
In
often
gain
re-
trade
which
hold
to
and
features
dispense
what
with
in
they
for
eliminate
stimulate
and
tomers,
cus-
my
would
exchange
I
prices? Could
partment
de-
big
place, what
absolutely necessajy
Enterprise
will
first
the
lower
tras"
"ex-
these
buying by paying
stores
take
from
away
smaller
the
tailer.
re-
get along without
to
consumers
perform
for themselves?
them
from
city stores, cash
peddlers, they showed
this
Could
and
margin
main
my
all
a
vice,
possibleser-
the
cost
not
developed,
savings, into
cash
profitand
between
store
experiments.
at
of
right selling
prices.
and
was
too
loss in
to
narrow
risk
through radical
I decided, therefore, to
disturbing conditions
customer
but
ing
buy-
tendency.
a
be
or
fixed habit?
The
Give
In
markets
such
tendency
through education
a
them
up
open
a
localityand
small
try
in
store
out
a
a
neighboring
number
of
new
ideas.
This
of
new
store
was
started
on
the basis
offering the highest class of goods
at
A
the
BRANCH
lowest
There
to be
stock
while
equipment
the
features
and
of
cash
trade
and
cash
to
and
will
liveries
de-
no
the
the branch
first,
Certain
for the
big
during
this
same
careful
check
on
out
of
made
charging
This
sold.
check, of
helped
to
tried out
was
item
course
"
a
tem
sys-
and
home
out
to
and
infallible
later
my
"
two
but
unll
Learn
down
and
the
because
but
the
los.ses
were
tomers'
cus-
your
reasons
for going
c
am
p
they
can
V
t
an
t
e
to
it
iter's
a
geously
turned
to
win
trade
with
you.
Find
the
weak
points in your
nating
"policy."Elimiexcess
you
was
will
able
en-
to
duce
re-
selling
costs.
creased
efficiencyof the clerks in-
of their watchfulness.
if
be ad-
and
kept
a
See
store.
service
to occur,
do
lower
for
prices.
men
sales-
in weighing
responsibility
mea.suring. A monthly discrepancy
their
bound
trons
pa-
your
the
check
ods
dependable meth-
more
be worked
bring
no
to
wiped
received
to
much
a
explained
I started
gave
process
to
were
every
how
Learn
I had
against stock received
hand
on
I
ice.
serv-
success.
One
period.
inventories
weekly
stock
a
were
stock.
affect
From
which
store
profits.Then
honest
was
''good measure"
how
clerk
my
store
which
my
bargains.
economies
other
in mind
backed
and
with concrete
arguments
herent
in-
the customer
buying
making
possible. changes
as
your
carefully
before
leverage in reducing the prevailing high
the most
of the unprices. I made
doubted
advantages
tion.
reduc-
Study
tained,
ascer-
giving a great
as
to
of trade
usually follows
service
week.
easily
sales
advertised
were
and
store
low
as
Loss
branch
outlay for fixtures
kept
was
all sales
in detail every
small
were
main
87
profit.
This
only.
the
checked
was
Expenses
The
cash
from
stocked
was
of
delivery and
no
for
be
to
EXPERIMENT
possible margin
was
were
STORE
88
FACTS"
NOT
GUESS
It would
problems
Ovcriveights
profits
sap
as
jtirelyas
uudcr-
weights
do
trade.
in
clerks
their
sibili
two
my
vital facts.
certain
to Imow
lines were
what
what
that profitwas
for
sell
each
ty
and
had
branded
many
prices
judiciouslyyou
know
for
me
on
these
than
of goods
and the cost of
selling the m.
cost
to know
My
was
Think
yourself
bigger than
problem.
The
complex
most
problem
to
any
taken
pieces and
tail
analysed in de-
is then
longer form
dable.
it
whether
On
cent.
lowed
margin alimportant
was
sellingexpenses
greater
For
the
less
or
same
information
son,
rea-
about
basic lesson, of course,
my
Next
in
that
was
importance
the division of stock into lines
requires
fair mark-up.
mark-up
average
articles the
of sellingfor cash.
a
it cost to
each man
clerks;how much
sold; what
kind of goods he sold; and how
much
for the store.
made
profiteach man
The
Profit
what
thirty-five
per
discount.
needed
I
and
was
specialties
the
the
;
I wanted
paying a profit;
less and
was
me
fix
line.
been about
measures.
must
I tried to solve in that branch
respon-
weights
To
be useless to analyze all the
The
during the next six months.
examples just quoted will indicate
general direction. I was
grouping
towards
Train
your
store
WORK
and
the
computing
of
or
partmen
de-
selling
profiton each line. Of
in clerks,
of securing efficiency
methods
of turning stock rapidly,of buying,
the like,my
periments
exstore arrangement and
little directly
had taught me
cost
and
net
applicableto the main store.
sensed the importance of each
But
I
of these
no
i-
matters;
learned
I had
complex problem
simply took
details
one
it to
by
one.
could
that
the
most
be solved if you
piecesand
settled the
90
FACTS"
NOT
ing
in
each
a
definite
in viexifre-
plan
din
gar
fifth of
g
be
to
was
and
counts
however, that
paid on or before
be
each
be not
a c-
WORK
month.
paid
Should
at that
discontinued
I announced
weeks
before
were
time,the
without
who
would
for
cash
warned
Custom
and
precedent
keep
in the old
in
settlement
the
keeping
so
on
high
would
to
of
cost
side and
my
offered
back
your
store
of
prices and
talks
policies.
to
it?
doing
in
Mistakes
YOU!
fashioned
number
sumer.
con-
of the
one
the
at
of
methods,
of
business
trading
doing
The
THE
ARE
PAYS
WHO
of
cost
the
out
put
CONSUMER,
cost
the
I
the
early advertisingcard:
an
ONE
you.
was
women
for
sales made
THE
The
I
cash-economy view.
advertising insisted on
little economy
sons
rea-
surd.
ab-
as
even
Here, for example, is
tising
adver-
meet
livingwas
the prices
that
bring
to
the
my
YOU,
ready
But
length.
at
on,
savings cash
customers
of
strike them
working
of
their
bills would
satisfied that the
head
of
constantly
rut.
All
paying
friends
purchase, my
accustomed
to
They were
And
around
bothered
in the house
grocery
I
effect,there
every
checks
money
the
further
plan, two
new
into
be
monthly bills and
your
credit
prophesied disaster.
not
me.
write
this
it went
many
Women
in
count
ac-
any
notice.
When
Tell
the
force
en-
it.
many
the
case,
should
amount
Have
GUESS
are
Who
who
keeps
expensive
borne
by
charged
biisiness.
merchant
who
is
up
pays
old-
uses
an
sary
unneces-
delivery
teams
the
at
loafing
back
credit
his
allows
goods
some
shop
in
worn
to
means
But
is
out
without
goods
spoil
the
stock
give
you
service?
it
room
ON
methods
ISN'T
"
this
eliminate
NEW
FRESH
house
IT
the
save
to
700
and
each
you
buyers
and
for
are
something
they
quick to
and
out.
your
and
cost,
reasons
puts
in
the
on,
cash
our
you
and
best
the
month
knew
lower
in
savings
from
paying.
us.
up
with
intelligent
every
lower
were
duces,
pro-
much
buy
you
butter,
market
so
us
lutely
abso-
are
dollars
many
let
meats,
our
prices
figure
can
and
groceries
our
price quotations which
been
It
selling talk I backed
woman
Show
new
modern
methods
West
qualities,
so
week
That
consumer.
help
possible
that
you
and
that
expense.
Newton
standard
eggs,
useless
the
to
up
difference.
Telephone
prove
HE
Our
sense
it
NECESSARYsensible
UN-
JUST
common
lowest
chant
mer-
Put
truthful
MERCHANDISE
the
at
that
"
BILL?
our
no,
get
or
WHICH
YOUR
"
being
service.
EXPENSE
PUTS
from
slip-shod system
go
other
while
charged,
to
91
DATE
who
time,
losses
petty
whose
accounts,
TO
UP
the
half
door
standing
continually
is
STORE
A
BRINGING
than
she
had
As
explained before, it
of lower wholesale
a
was
season
prices
This
on
retailer's
meats, fish and provisions,and my
phasizes
experience emthe full
daily "leaders"
gave consumers
the
benefit of the market.
From
the first day, the cash
plan was
knowledge
Sales increased tremendously.
dete
successful.
the
branch
the
system
store
Six
exact
in
rminin
Likewise
five weeks
of
payment
cessity
ne-
was
more
our
troubles.
which
In
cash
sufficed at
moralized.
completely declerks
were
en-
prices.
g
NOT
FACTS"
92
GUESS
and
gaged
had
we
orders
handling
But
Correct
retail
prices depend
on
actual
to
the
cash
of
checking
againststock,on
for
lowered
I
which
costs
even
than
more
selling,broke
cash
on
down
c on-
fix
them, figureson
each
delivering purchases.
and
the methods
depending
was
in
great difficulty
no
costs
To
sumer.
sales' and
WORK
line
are
needed.
completely.
cashier
A
there
handled
all the
money;
dishonestyor willful error ;
but I couldn't get trustworthy information
what
on
we
were
doing each day.
And
cash prices,
whole scheme
my
my
of business,were
built on the command
of facts and the checking of mistakes.
My margin of profitwas in danger. And
day I kept on guessing and sales
every
continued
to mount, the danger of final
no
was
failure increased.
action
Quick
couldn't
wait
imperative.
was
I
figureout my own
tem
sysfor handling, checking and recording
and for keeping track of stock,
sales,
to
deliveries and
C. O. D.
efficiencyon
The
dete
system
of
minin
g
r
business
facts
buy
by
in
a
specialist
retail
a
was
up
to
me
to
system
told
him
what
gave
him
a
and
It
Delay might
ready-made. So I
in retail accounting,
specialist
store
a
called in
is best laid out
clerks.
my
the business.
wreck
the individual
I
needed
free hand.
in less than
to
He
a
and
know
was
month
tent,
compeI
was
counting.
ac-
getting daily reports which kept me
touch with the important details of
in
my
business.
Here
was
safety,all right. But
I had
BRINGING
begun
to
A
the
see
STORE
UP
of
possibilities
built and
managed on
knowledge. I wanted
exact
Instead
broad
of
Human
formation.
in-
profitwas
of the chief items
smoked
milk
and
eggs,
dried
and
to know
what
n
and
them
made
loss.
a
I conceived
I
was
that
aware
type scales
ness
b usi-
tools.
it possible
these
Four
Know
wka
each
line is adding
to
t
your
profits. Then
human
the
investments.
modern
of
standing between me and
equation was
certain profitswhich were
going astray,
cash
I soon
to see automatic scales,
came
as
an
registers and
adding machine
money-saving
the
paid
one
any
by
was
unprofitablelines to others,which, for
the time, were
makers.
money
Next, I departmentized the store, and
because
were
adopting
idea
divert sellingeffect from
to
s s e s
eliminated
of these
whether
e
find
to
My
cream.
profiteach
week;
every
and
and weak-
ket,
mar-
being made on each
beef,lamb, poultry,
meats, fish,butter,
"
takes
mis-
three
or
divisions of sales in the meat
what
93
ness
busi-
a
more
two
DATE
basis of
a
for example, I determined
out
TO
try
to
divert
the
selling to
the more
itable
ProfHne^.
late-
installed,
therefore,to
takes
regulate overweights and prevent misin
us
gave
were
charging.
iron-clad
an
with
Two
cash
check
on
registers
all transactions
customers.
a
was
price I
adding machine
paid cheerfullyfor the division of my
daily sales by departments an hour after
The
the
last customer
also gave
by
each
me
a
cash
had
check
on
been
served.
It
the totals shown
register.
Not
to
remove
te m
p
t a t io ns
from
is
employes
to
guiltyas
be
as
they.
94
FACTSr"
NOT
GUESS
WORK
This
A
daily detailed
report
giz'es a
check
on
tems
sys-
and
plans
enablingtheir
continuation
that
or
with
cessation
the
daily detailed report, in fact,was
the pulse of the business,and was
fully
carestudied.
increase or
Any unusual
fallingoff in a department was
shown
knowledge
are
you
right.
the
up
day
it
change could
If
cause.
happened.
be
traced
to
favorable, this
finnation of
be moved
sales
for
organized
bills. I had
for
than
more
To
customers.
credit
tions
for
-new
problems form
the spotlightof
business.
They
show
your
up
ability
judgment.
and
for
that
of
from
of
daily
cash rule
our
regular
adding
to this
be
devised
worry
about
to
daily
for the grocer.
money
For
who
those
found
cash
therefore,I adopted
difficult,
plan.
send
for
our
plan had
list,some
removing
waived
keep
basis
cash
was
holds
house-
a
on
hundred
a
It
whose
women
monthly bills,to keep
grocery
of my
their drawbacks.
inconvenient
were
once.
prosperity. But
new
my
sales had
cash
at
the foundation
were
and
plan
new
lu-
con-
some
should
Cash
s o
the
meant
vertisin
buying, sellingor adpolicy or device,the discovery
of a new
slant in public taste or a new
of interestingbuyers. When
means
a
decrease
occurred, the information was
quite as valuable, since it showed
up
some
marked
stotk
inefficiencyand
which
Correct
Usually the
some
specific
me
check
a
deposit with
exhausted
renewed
we
it.
each
and
notified
credit deposit
against this
draw
order.
a
they would
intervals
At
purchases
Before
them
and
it
was
they
CHAPTER
XI
Fitting Sales Methods
the
to
Customer
modify
To
and
the
my
hold
of
classes
two
first group
made
was
sales
customers,
of
up
the
Customers
be
charge
The
accounts.
several
you
month
a
or
groceries against
made
the
each
order
store
this
policies
in effect
business
a
policieshave
facts,he
plan
and
That
at
had
I
method
least
much
pitched
This
check
a
Question
every
detail until you
bank;
have
which
knowledge.
was
learns,by
man
one
been
is apt to
disregarded
and
paying?
exact
in foodstuffs.
experience,that
main
posit,
de-
order
deposit.
of grocery
sort
a
was
honored
When
a
oftener,and
sure
ond
sec-
are
once
was
make
to
out
of step with
detail,
question every
he
has
been
the
way
with
eleven
crete
con-
of his
two
or
using.
I
me.
years' experience
disinterested
credit
advice
selling overboard.
when
and
Finding
c
0
r
r
e
c
and
zvaste
motion
may
many
Yet
you
my
customers
into
classes.
your
allowed
was
group
can
divided
Are
of my
cream
of cash
program
were
paying
and, instead
of
cash
for purchases
losing volume,
95
not
know
tin
g
lost
veal
re-
takes
misdid
isted.
ex-
NOT
FACTS"
96
sales
GUESS
WORK
increasingday by day.
were
To the introduction
and
cash
registers,
ray
lems
Delivery probhostile and
here
however,
seemed
offer
solution,and
were
adopted.
a
been
indifferent.
round
swiing
against mistakes.
trucks
to
had
scales
clerks had
of the savings made
precedence.
Motor
trade
my
were
largelya matter
0 f
following
of automatic
Both,
tion
apprecia-
to
ance
the insur-
and
My
tising
adver-
new
plan had proved both cheap and
for
efficient. Every change had
been
the better ; it was
natural,perhaps, that
of my
in some
subsequent experiments,
I should
too fast.
move
Service
the
was
profitshad
not
bug-bear. Net
store
kept
pace
with
volume
:
chieflybecause cut prices (the key of
the whole
program) had eaten up the
tained
had mainsavings made, and expenses
To
a certain proportionto sales.
of the new
take care
business,six clerks
had been added and our
deliverywagons
hard
were
pushed to handle orders on
time.
I
tremendous
and
extent
I decided
to
to
After
causes.
which
amount
find
months
many
ers
custom-
would
deny
themselves
finding and
here is
now
became
the
question in
ducing
re-
correctingthem.
methods, arrangement
not
(some of them were
in
delivery than
costs.
were
My
a
narrative of how
correct
I
was
What
the
still
lows
fol-
of the changes
summary
a
and
business,
of the
and
a
was
of lost motion
effort in this end
waste
The
certain that there
was
equipment
final),rather
and
the betterments
made.
first big
might
operatingchange, for
have
been
avoided
and
stance,
inan
98
FACTS"
NOT
Our
GUESS
motors
WORK
saved
from
money
the
first.
Motor
cut
trucks
deliz'ery
costs and
tised
adver-
the
yet
store,
pensed
dis-
were
with
on
ter
la-
account
of expense.
They displacedfour drivers,who
made
from $13 to $15 a week, and their
maintenance cost never
equalled that of
the
nine
horses and
five w^agons
I had
had distinct advertising
been
using. They
value and helped, I think,to establish
the standing of the store with many
of the new
customers
we
gained during
the autumn
and winter.
Yet they, too,
discarded
were
way
to the
been
used.
which
wagons
Simply
Wty?
step forward
of
in their turn, and
because
struck
formerly
I took
another
in the
that
me
the
absurdly high
covered.
records
distances
for the
of
Five-sixths
lived within
made
had
of deliverie
standardizing
After noting the dailymileage
for a couple of months, it
motors
our
were
gave
a
showed
our
much
small
area
customers
mile of the store, yet the
that
the
cars
miles
fiftyto fifty-five
How
traveled
of this
was
frequently
each day.
service that
dispensedAvith? At the branch
store, I had added a deliveryon three
for orders of $2.00
half days per week
Innovations can
Customers
w^ere
gettingalong
only gradually or over.
could be
he
introduced, with
this restricted service without
and
diplomacy
apparent
must
be used.
this idea of scheduled
more
I
difficulty.Could
we
any
adapt
deliveries to the
exactingpatrons of the main store ?
determined
to try. And
as
"usual,I
employed
our
card
weekly advertising
to
EEACHING
"sell"
the
of these
cards
without
some
sort
had
the
sometimes
routes
for each
A
acting
reading
them.
and
and
page
to
on
of
Four
ule
time sched-
a
change, with the
card, each customer
the
prospect received
card
hang
to
It bore
Customers'^
names
"Route
a
card
strong
personal
appeal
a
"
aided
"
getting
the
plan thoroughly
understood.
ule"
Schedphone.
tele-
her
near
up
each
on
route
in
sales
regularweekly
and
the
given.
before
week
one
accustomed
described
were
during
"selling talk"
of
99
Few
out
gone
head
grown
TRADE
to customers.
little
a
at
people had
and
plan
new
year
YOUR
telephone number,
our
of course, but the importantfeature was
the list of our
closing hours for each
The
personal application was
in
brought home
by writing her name
the blank space oppositeher route, which
further distinguishedby a heavy
was
route.
cross.
induce
To
customers
cutting down
We
had
couldn
service is not
't afford
to
in"
offend
of
make
specialdeliveries
things
a
standardized
the work
habit of
From
we
the
had
to
such
whenever
I
was
after the
service and
speed of
phase of
savings of
we
kept
of
our
patrons
up
to the
educating customers
ordering on time.
we
Once
fixed,the
change
was
readilyadopted.
new
continued
we
of
many
we
emergency
of this
took care
cars
but
delivery,
whom
to
The
necessary.
the motor
and
task.
easy
these
:
gradually
order
were
an
"regulars"
many
"break
to
co-operate in
to
had
Aiding those
habitually late
to
time
order
eliminated
feelings
hard
and
on
insured the
orders.
FACTS"
100
NOT
GUESS
WORK
been
taking telephone orders for some
time,callingthem at a fixed hour and so
saving
Still enabled
deal
with
to
her
them
natural
telephone tolls. It
step
list the
to add
now
who
women
favorite clerk
by
to
upon
telephone,
to this
could
their
get
calling
be
not
a
was
pended
de-
lists
in
promptly.
To expeditethe taking of orders,I put
the new
idea and really in the simplestform of privatetelephone
ice.
got better servthat the cashier could
exchange, one
the
women
cepted
ac-
interference
operate without
regular duties,and" persuaded
former
''route"
service"
The
the
over
advantages
would
continue
could
clerk; she
to
men
sell
with
her
three
my
"personal
their clients.
'phorc to
real: the customer
were
to deal with
him
trust
her favorite
as
much
one
other, while by taking and
her order early in the morning
filling
before fruits,
and so on were
vegetables,
"picked over" by cross-counter buyers,
he
the
as
way
could
than
give
much
her
available later.
were
better
values
These
ments
argu-
weight. We lost only a
duction
few patrons by the change while the recarried
By holding
tain
nothingtoo certo
admit
of doubt, this
retailer found
motor
too
delivery
expensive.
in expense
By
the
time
was
my
radical.
scheduled
delivery
I had
working satisfactorily,
that
another
made
discovery. It was
to keep my
too little work
there was
motor
cars
busy. The cost of up-keep
had been reduced, but
and maintenance
plan
I had
method
was
progressedto
was
too sacred
the stage where
to be
no
investigated.
REACHING
of
One
our
motor
new
While
for
shop
his
could
do
went
into
that
all that
efficient.
inthe
Under
wagon.
Fifty miles
the
horse
a
101
ies
deliver-
making
fixed schedules, I found
wagon
was
car
by
TRADE
drivers
tried
repairs,I
his routes
on
YOUR
sixths
demanded.
was
and
day
and
five-
cost
was
much
that
each
motor
in
with-
mile of the
a
than
horse and
a
Before
a
motor
on
But
motor.
one
relativelyshort
and
of stops the horses
did
looked
on
as
was
me
I had
make
and
horses
where
nine horses had
work
visers
ad-
some
turned
re-
ing
consol-
a
perimenting,
ex-
my
to
way
wagons
Three
and
of his business.
department
also
rule to
with
measure
which
provides
up
a
Each
sort
of
terment
bet-
foot-
the deficient methods
it is surrounded.
scales,for instance,our
Our
cash
wagons
supplanted
nine
man
a
two
the
as
motors, where-
necessary.
lays hold of the fact that
be losing
yesterday'sright way
may
of to-day'sprofits,
he is likelyto
some
carry his weighing and testinginto every
Once
horses
and
five wagons
before
been
of
step, I
discovered
off.
sive:
conclu-
that,through
deliveries with two
my
three
backward
taken
dreds
hun-
the
deliveries. The
to wagon
fact to
a
were
all deliveries
the
cheaply. The figureswere
though it involved what
more
motors
a
because
hauls
"why
t's
on
wagon
I also tried to make
other.
with
the
month's
T ha
store.
I
back, however,
test, running
pair of routes, a
one
maintain
to
wagon.
changing
full
made
the
expensive
more
the
of
customers
showed
sheet
My
a
matic
auto-
regis-
and
horses
five wagons
used
were
at
shows
first.
the
This
sult
re-
of actual
investigation.
102
FACTS"
NOT
GUESS
WORK
ters and
adding machines,by
error-proof operations made
round-about
The
one
solution
of
{Problem iin-
coz'crcd
handling
' '
like
a
Our
in the
sales had
defect
the
ninth
store
stand
at
the end
out
' '
zvhile
only the visible
is known.
clerks
we
every
turn.
more
we
room
but
with
hinderingone
were
Either
But
better
the two
six
of
extra
another
had
we
make
or
had.
doubled
month,
covers
several,
one
ward,
awk-
routine of fillinij
and
thumb,
sore
the
er.
anoth-
One
often
orders
their swift,
to
use
at
secure
of what
could
storerooms
be
enlarged without costlystructural
changes. Therefore,the second expedient
not
was
our
choice.
Re-arrangement of departments and
careful selection of display stocks was
the first step taken.
store
we
sold
the
stock
the
day's sellingwas
room;
after
in the most
venient
con-
place
liveries
for filling deand
allowed
attractive
plays.
dis-
on
shelves and
in
done.
cases
This
displaystock attractively,
wdthout
stant
crowding, and insured a condisplay of fresh goods. I do not
showed
that we
mean
only two or three
of
bottles of this,half a dozen
cans
ance
that, but simply that we struck a balbetween
space, stock accessibility
allowed
Carryingstocks
w^as
the groPractically
cery
turned
into a big sample
the samples and
ished
replen-
us
to
displayand restored this
balance
daily.
for example,was
Our stock of staples,
carried almost entirelyin the shipping
We
displayed a sample lot of
room.
the
sold where
stock of everything we
effective
REACHING
could
customer
we
handle
we
quantityin
the
of leaders.
But
when
ipounds of sugar
worth of beans, either
telephone,the stuff was
the spot only when she
be
with
her.
all the
her
the
sale.
paid
In
'
If it
at the
fillingthe
space
third
as
much.
in
mailing up
to
see
how
on
finds work
for
hands
in
it
to
order,
plan
less than
Steps saved
orders
on
the
cut
creased
in-
expense
and
able
valu-
swelled
the
work
profits.
one-
clerk,for instance,
order ran
through it
The
an
many
items
could
be
filled
ready-wrapped packages in
stock in the shipping room.
in the mam,
Orders for staples,
to
ran
standard
quantities five or ten pounds
of rice,one
of sugar, a quarter'sworth
two
or
pounds of coffee or a quarterpound of tea. Weighing and wrapping
these quantities
ing
during the early mornbefore,they can be
or the afternoon
piled up on shelves in the shipping
for instant use
during the rush
room
from
slack hours.
the
out.
this
idle
and
ing
show-
she
transaction,
she went
time
down
of
character
time worth
saves
totals
efSciencyof the most
and time by unloading
and
space
was
pricesand
registercheek
as
goods
by
to take
simply put
cash
a
desk
wanted
out
the order
and
was
weighed
or
the
cash
amount
the
on
a
package
f
o
and
wrapped
quarter's ready for use
a
in the store
clerk
items,with
gave
or
various
display quantifies
ordered
woman
a
When
delivered,the
and
it. When
for
placereserved
five
away
103
anything as a "leader" for the
usually piled up an impressive Having
ran
day,
and
see
TRADE
YOUR
the
"
You
ozv
much
to
clerks
your
c
as
your
as
to
customers.
Without
cious
judiment
arrange-
of goods
and
modern
equipment, they
can't he efficient.
104
FACTS"
hours
NOT
GUESS
when
every
WORK
minute
serving:customers.
is needed
Knowing
what
this package stock,the clerk who
Ten
cent
per
off
chopped
prices for the
benefit
of
tomers.
cus-
Yet the
made
store
greater
profits
gained
and
stability
known
u
a
n-
for
is in
fillsan
order
the arsimply selects or measures
ticles
the shipping room
not on
shelves,
assembles
them, checks these items on
the order,puts the carbon duplicatewith
the goods and sends the first copy to the
to be completed from the
shipping room
package stock kept there for just this
purpose.
before.
Twenty steps, on
saved
their
on,
on
were
average,
Allowing for the
previously lost by clerks waiting
turn
at scales,
barrels,and
sugar
on
time
so
each
the
least two
at
sale.
every
saved
allowed
order.
us
made
The
minutes
steps and
for space
a doubled,and
difficulty,
in the originalstore
the
utes
min-
and
efficiency
handle, without
to
saved
were
a
great
any
ness
trebled busi-
space.
The
The
chandise,
right mer-
the
at
right
in
time
the
and
right
quantity, is
good
rule
a
for
the retailer.
the
cost
largest saving on
creased
sheet, however, came
through the inefficiencyof clerks. Before
the store
was
re-organization,
selling
about
ployees.
$37,000 annually with nine emAt the height of our
tion
congesin all departments, with
sales
about
roll carried
double, the pay
tw^enty-four. For the greater part of
last year,
$127,000
men
and
when
the
total sales amounted
work
in the store and
two
girls.
was
on
done
by
to
eleven
deliverywagons
106
FACTS"NOT
Did
you
have
on
zvhich you
couldn't get rid
hand
Here's
off
a
retailer's pract ic a I
tions
sugges-
ing
for sell-
slow
stock.
Unless you look
ahead
of your
competitors,you
will
a
always
WORK
tiou in his
ever
stock
GUESS
be
laggard.
purchasing. He need not be
wizard to install a stockkeeping sysa
tem
that brings to his attention any
item which is wearing out its welcome
his shelves,will warn
him againstreon
ordering
it and will suggest a cut price
other means
of sellingit. With
some
or
little patience and industry,he can
a
keep weekly records of sales in the principal
lines he handles,and so have trustworthy
figures on which to base his
quantityestimates for the next week and
for corresponding weeks
in succeeding
If he is civil to the jobber's
years.
who
call on
him
salesmen
and
fairly
sound
in judgment, he can
stock his
goods at the average market prices,and
thus be prepared to do business on the
margin and take an
average
average
profit.
All this,however, is only the defensive
side of buying. If he is going to sell
half
week
every
tains
(and
as
it is
much
his store
as
bound
contain
to
great bulk of staplefoodstuffs which
Be
the
your
ing
purchas-
agent
for
c 0 mm
u-
nity. Catching
the
"snaps" of
the
wholesale
houses
Don't
the
buy
must
secure
a
trail his
He
When
is easy.
guess
on
market,
or
you'lllose.
customers
market
from
For
time, if
most
he
in order to
large quantities
than
price) he must do more
likes
and
dislikes.
anticipateboth and frame
accordingly.
size up
he buys, he must
the
a
in
must
orders
eon-
of his
the
customer's
he is
going
he
business,
must
his
the
viewpoint.
to make
the
forgetthat
WATCHING
he is
a
grocer
and
become
for
agent
Hardly
YOUR
MARKET
sort of purchasing
a
his
community.
day passes that the grocer in
touch with a big wholesale market
is not
offered a real buying opportunity,if he
has the wit and knowledge to recognize
a
it.
It
107
Create
your
"snaps" if
own
none
fered
of-
are
market.
may
standard
be
a
canned
"snap"
"
goods, or
a
of
carload
potatoes, apples,
which
some
flour,on
jobber is
willingto sacrifice his profit. Or it may
be a distinct loweringof pricesin certain
classes of foods
as
compared
staplelines. Decision
is easy
with
in the
other
the
by
is
it
But
unsafe
to
guess.
You
should
study
wholesale
the
market
for
sags.
case
to
"snap." But when it comes
on
a
sizing up a sagging market
staple
and deciding how many
extra bushels or
will absorb
hundred-weight your customers
who
at the lower
price,the man
often
will
merely guesses
wrong
go
enough to cancel the profitnetted when
his guesses prove up right.
In other words, the business men
hardware
dealer
grocer, dry goods man,
or
druggist must be able to create his
"oMTi"
snaps, instead of depending on
the emergenciesof the wholesale or commission
for him.
house to provide them
Flour, for example, is not the sort of
housewives
buy
staple that suburban
often in the wood.
They order bakery
goods, bread, cakes, rolls and the like,
in the main,
and their purchasesof flour,
of special
of small quantitiesand
are
of the
Here's
how
retailer
a
placed
"
"
-five
thirty
tra
ex-
of
barrels
flour among
trade
dull
during
a
period. Try
it out.
The
entails the
of
his
clerks
a
riod.
plan
use
ing
dur-
slack pe-
108
FACTS"
NOT
kinds
GUESS
cake
"
flour for instance.
twenty-four
quick "turn,"
substantial
a
profitand
a
price that
V
e r
t
is
store
e s
in
last
in
branch
It
stores.
was
a
standard
nesota
Min-
low
brand, the kind
adthe
the
are
hours
Yet
spring,I placed
less than thirty-five
barrels of flour
the district covered by my
main and
no
A
WORK
entire profitsof
and
was
qualityI sell
advertise to my
regular trade. It
very cheap, however, by comparison
with
the deal.
and
what
for
had
customers
my
their
been
ing
pay-
in twenty-fiveand
flour
fifty-poundsacks.
We were
math
having a dull week, the afterof a holiday rush, and I could release
three
four of my
or
clerks for
without
store
sacrificing
couldn't
see
why any
My men
regular
would
customers
want
liciting
so-
service.
of
our
large
so
quantityas a barrel of flour. It was
the price
to tell them
task,therefore,
my
advantages of such a large purchase
before they started out. I did it by comparing
the package price with that they
a
be able to offer
would
flour in the wood.
customer's
consuming
pacity
ca-
for three,
six
or
showed
sales record,
them
of
four
or
From
that
families in town
twelve
months, by the
made
our
for
customers
his
Knowing
the low
buying
of flour every
I
six months.
of
number
any
were
barrel
a
records,I
my
the
alent
equiv-
three
explainedto
them
in the store's sales and
ebb
put
this" turn''
ness
busion
possible
principles.
it up
bring in the orders.
bought only twenty barrels
to them
I had
flour. In
a
to
little less than
day, between
and
or
three
four
the
one
o'clock
of
full working
one
noon
after-
next, they disposed
WATCHING
YOUR
of
barrels.
The
thirty-five
might say, "pure
you
flour
delivered
was
it
which
a
entered
never
low
direct
wholesale
from
The
out.
came
109
business was,
velvet."
The
stock
our
IMARKET
but
room,
the
in
ear
combination
price,minimum
The
allowed
to
me
overhead
no
quote
price and yet make
profiton the turn,
This special sale
mean
by buying on
knowledge of
capacity. I
' '
a
whatever,
substantial
very
I
curate
strejigthof acconsuming
territory's
my
could figureout the
sales in quantitiesfor
flour
total of my
three,six or twelve
housewives
the
I aimed
their natural
bargain
in
at, their fixed
the cost of
to
eagerness
staple like
that I could
quote
nearly twice
as
a
wholesale
charges and
overhead
no
ever.
what-
termination
de-
living
a
secure
flour.
Simple
did the rest. I played safe
mathematics
by buying only twenty barrels. The price
a
is
customer
low
and
of the ceding
prethe temper of the
to reduce
and
dealer
months
I knew
year.
-
price,minimum
handling
' '
illustrates what
u
tuallyattractive
ling
hand-
attractive low
an
bination
comm
of
to
charges and
stock
was
many
attractive that
so
women
saw
my
fer
of-
Do
you
price
fix your
on
entirely
cost?
stock
from
Then
it myself. you're losing
saw
lightas
This retailer
sale
money.
Keeping in dailytouch with the wholefound it
markets
helps me to keep my retail
consistent
to
prices right as well as to buy when
the
follow
wholesale
pricesare low. On beef, for
zvholesalc market.
in the
I
same
instance, there
high
the
range
old
of
days
was
exceptionally
an
prices for 'a
it
was
I expect it is the method
year.
method
my
of
a
good
"
In
and
many
FACTS"
11"
NOT
grocers
GUESS
and
market
WORK
men
to raise retail
"
priceswheu the cheaper stock in the ice
box
and
the
began to be exhausted
Accept ab I e
higher-priced
brought out
quarters were
the
and
qualities
the cutting blocks.
Those
intervals
on
best values vAn
might be a week or even
longer. The
trade.
Buying
of course, profited
by the delay
consumer,
them.
governs
notice of his savings.
By purchasing but usually took no
as
When, however, beef sought a
if especially
for individuals
lower
customers
were
price level,my
of his trade, never
clear my
highwilling to let me
this
merchant
priced meat out of the "cooler" before
won
patronage.
Like many
a reduction.
they demanded
other dealers,I was
trailingthe market
cause
beand
losing on every price advance
lower prices
I didn't raise and
with
the wholesale
market.
By keeping in touch with the market,
however, any rise or reduction in price
comes
I have
where
for which
Unless
able
are
you
to
downward
sale
shiftsin wholeels
price levmay
and
force
to
at
catch
unawares
you
move
a
or
loss.
you
stock
also compare
a
cept
ex-
"special"
bought, the
er
propI
reduction
is made.
the value
level of all the
follow
closely,
them
advertised
the stock is
advance
and
attention at once,
to my
can
competing foods on the market, and so
shape my buying and sellingprogram
vantage
for the next
day in order to take adsale
of every
change in the wholeprices and buy with the purpose of
supplying just those meats or eggs or
fish which
customers, if they knew
my
selves.
the wholesale market, would buy themThis, of course, is merely good
business ; the retailer who offers accept-
WATCHING
able
YOUR
qualitiesand
bound
the
get the bulk
to
,The daily report
the sales of my
of a visit to a
best
MARKET
111
is
values
of the business.
which
on
business
I
rely for
A
pital
doctor,a hosand
the result
was
hospital. "While
this retailer
gave
I
was
valuable
a
waiting in
the
ante-room, I noticed
an
chart
a
one
of
idea.
doctors
studying every detail of a
chart handed
to liim by a nurse.
A few
questions brought out the fact that its
him
enabled
use
since he had
conditions
gently,
prescribe intellitual
picture of the ac-
to
a
and
tendencies
before
Treat
him
chart
days.Why
bothered
adopt the
not
treatingmy business
prescribingfrom day
for
me
idea myself,
patient
and
to day on
a
basis of real information and detail figures
the daily report
? The outcome
was
sheet,which certainlygivesme the vital
statistics and symptoms of each department.
Comparison
enables
to make
me
of what
a
each
department, of
and
the
likelyto
delivered
began
order
the
a
to check
received and
this
was
not
to
chart
a
-
of
your
zv
h ic h
sales,
should
give
complete"symptoms"
and
tistics.
sta-
priceI
be in
can
pay,
are
these
the branch
store
weekly inventory in
stock on hand
against
sold.
c
the
to
I
nv
e
nt
check
o
ries
careless
measuring
the
that
cording
a
mate
pretty close esti-
costs.
to take
business,
previousyears
customers
quantitiesmy
absorb at pricesbased on
after I started
Soon
I
with
as
purchases should
my
is
ivhich
Thereafter,that
several
tient,
pa-
your
the chart.
on
For
but
difficult,
apply the same
the branch
when
I
method
suit-
clerks.
A
ab
interval
Ie
betzveen
tories
inven-
is usual-
h
tempted
atto
b y
a
month.
FACTS"
112
GUESS
NOT
the main
did not
convincing
"A
ventory
monthly inearnest
exact
gave
an
check
on
and
no
the extra
clerks
my
demand
that the
sult
re-
effort.
By
that
I
in
was
for accurate
ure
meas-
however, this weekly
more,
stock
on
found
soon
repay
in my
check
I
store
WORK
had
been
successful
so
crepancies
The dis-
stock.
that
I disliked to
give it
were
was
because
small
every
clerk had
been
trained in
was
Compared
giving full,but
not extra, measure.
a
compromise ;
begun.
with
like
But
I had
work.
business
the
sult
re-
monthly
a
of
end
the
year,
big doubling up
a
set out
ventory
in-
of taking
the old method
inventory at
this seemed
The
up.
to know
of
what
doing, and to know it
accuratelyand intimately. So while the
of taking the inventory was
an
expense
addition to my
running costs, yet I felt
my
was
that the information
worth
was
Experience
effort
and
showed
that the variations
business
the
outlay.
were
average
stock
bought
the month's
discrepanciesin
the
sold
and
on
soon
little greater than
very
of
the extra
at
the
branch
Special sales
by the weekly inventory
store, as shown
but
cut
profits,
it was
now
there. By this time, too
if investigated
nearly three years since I stopped guessing
givevaluable inabout
trained to
become
clerks had
formatioti
my
"
"
slow
moving
stock.
They
against
check
blunders
in the
the tale of full weight but
Accuracy
nature.
The
has
no
become
habits
with
almost
ure.
measond
sec-
surance
inventory is simply in-
againstlapsingback
future.
extra
their attendant
into the old
losses and
leaks.
When
I find from
the inventory that
FACTS"
114
check
NOT
GUESS
mark
indicates the number
handled
clerk who
being
afraid to
your
that
aside my
know
failures,
you
may
remedy them, is
"
old
of the
the sale.
three
practically
It took
Not
WORK
to cast
years
"
rule-of-thumb
methods
begin doing business on a basis
of accurate
knowledge. My
general
policy and many of my experiencesand
and
good retailing. experimentshave
been
outlined
here
serve.
they de-
greater length,perhaps, than
The
have
big
been
for cash
and
service
allow.
development
business
The
process
the
to
the
of these
Both
of my
have
of better and
tomers
cus-
meant
more
tematic
sys-
methods.
of evolution
still continues.
new
ences
experi-
ing
importance of selladvantage of providing
a
yet intelligent
the demands
as
would
the
the
economical
as
store
lessons
at
from
I
absolutelysatisfied
myself
be
method
until I have assured
the old
never
with
let
any
myself that
by careful tests. There is too
danger of fallingback into the old
of guessing, for me
not to beware
it is sound
much
rut
Constantivatch-
of the easy
But
way.
the fact that time
of my
original
proved the wisdom
old
to
changes, adds a feelingof confidence in
ruts, the most
efforts at analysisand the decisions
my
dangerous thing
them.
based upon
Having met similar
the security
to
problems in the past, I can go at the
of successful
ing prevents
business.
turning
re-
has
new
a
ones
with
assurance
more
better idea of how
I need
when
I do
and
secure
how
and
with
to
tion
get the informa-
to
analyze the facts
them.
IV
Part
STOCKS
MANAGING
AND
EMPLOYES
Advertise
T
than
ESS
three per
skilled at
*-^
men
to
are
Your
Men
of all retail sales-
cent
The
this trade.
other
ninety-seven per cent are working along in
the dark
faithfullyperhaps, but ignorantly,
their
see
thoughtlessly,blindly. They may
and your
clock; but their work, their
wage
chance, your need, are beyond their view.
"
salespeople
supervise your
with tact,
are
as
supervising your stocks
you
will you have
with judgment
with
resource,
eflScient sellingforce, working open-eyed
an
Only
when
you
"
"
towards
the
of your
success
business.
Efficiencycan be made; skill can be instilled;
You
can
loyaltyand interest can be aroused.
fit your
train and
to their places but
men
with them
share
must
enthusiasm,
your
you
knowledge, your loyalty.
your
"
Responsibilitysobers
Get your
business
their
to
men
to
them.
chances.
Build
for
Demand
ambition.
your
men
thinking.
Tell
Make
men
Opportunity stirs
shapes supply.
men.
them
them
and
Advertise
your
needs
your
and
look ahead.
they
will build
your
business.
1^
a
" II
;ii
TESTING
FOR
ERRORS
IN
STORE
MANAGEMENT
Vital Points
Good
In
of
Storekeeping
Rjgfat Quantities
At Right Prices
retailer depends on carefullyanalyzing
as
Your
a
XVI:
success
CHART
Analysis is foresight,
these factors that determine good retail management.
business against
and foresightgets ahead of difficulties. Check
up your
of right merchandisingpolicies
this analysis
:iii
CHAPTER
XIII
StorekeepingBlunders
TAKE
this
$200
a
mark-dawn
$20."
bracelet
that
on
In
half
darkness
winter
days,
the
the
of
of the
largest specialtystores
by the
counters
one
walked
directed
assistant
him
by
merchandise
few
a
"This
ordered
a
The
made.
small
crudest
Only
Smith
would
"On
the
at
is small
low
with
jewelry,we
the
capital tied
which
can
is
more
mark
for
up
up
one
of
which
dollars
at
the
has
been
last
managed.
mis-
store-keepingblunders
have
be
under
it
happens
Around
with
jewelry.
here
through
comer
find
that
Jeweler
per
the
the initial
is
stock-turn
of the interest
some
usual.
117
the
Since
cover
hundred
to
it.
must
liberal than
very
of the house.
continued
things closely,I
mark-up
of
knot
the
is thousands
fact that
miserably fail
looking
consternation
retail store
of
A
cost.
and
buyers, following
the head
by
roof keeps it solvent.
our
we
with
merchant
the
is
"It
counter.
been
and
managers
jewelry department
over-bought,"
the head
in this country
fell below
that
steps, noted
radical reductions
which
of his jewelry department
pricelevels
new
short
on
reduce
gold bag;
follows
closing hour
Avoid
to
an
initial mark-up
novelty lines
Some
cent
on
or
more.
The
STORE
118
should
MANAGEMENT
fall below
fiftyper cent.
"The
sales force is taking nearly twenty per cent of
which is far too high. We must locate the best
the sales,
are
salespeopleand speed them up until their wages
general nm
under
seven
the slower
not
of
cent
per
sellers should
their individual
be weeded
sales.
Then
until the direct
out
or
department monthly pay roll for salespeopleis seven
eightper cent of the jewelrysales for an average month.
' *
The
what
deal of
have.
must
we
staplestock
in the
here
will not
turnover
store
be
over
Jewelry
turns
should
stock to give 'tone,'and
* '
I shall also
up
far below
"
slowly,and
a
good
round.
But
only enough staple
feature instead popular
carry
must
priced,quick turning, specials.In
drive the turnover
two
or
be carried the year
must
we
one
to five
stop all orders
six times
or
"
this way,
no
a
year.
stock is to
more
can
we
come
department until it is in a normal condition.
Above all,in the future estimates of jewelry sales are to
be carefullyanalyzed. By this analysisyou will find
that a fairlyconstant
percentage of the year'sjewelry
For
sales fall in each month.
instance,June with its
weddings will carry a high percentage of the annual
Once you have
sales. So will December, the giftmonth.
into the
fix
these averages,
ahead
face
you.
stock
* *
the
and
on
take
a
Subtract
hand.
conservative
volume
for
a
the percentages of the months
out
Then
estimated
these
sales
buy according to
from
year
that
your
the result.
' '
fellows
quitea lecture, laughed
ments
I have said are merely the elemerchant.
"What
of good retailing.
This store is just a collection of
Now
I 've read
small stores under
all the
have
on
to manage
you
one
roof and
pointswhich
you
must
the small-town
for himself.
take
into
count
ac-
jewelerwould
' '
This retailer has four thousand
peopleon
his pay
roll.
BLUNDERS
He
has
gathered over
corporation. Still
he
those of the smaller
are
that
CHART
if you
his
hundred
says
his
119
AVOID
littlestores into his big
problems
retailer.
and
blunders
Furthermore, he adds
experiencein sellingnot
far
from
a
million
be Riven a definite value.
here can
The storekeepingblunders
shown
XVTT:
will analyze your
practice under these headings. A properly classifiedexpense
of these errors
sheet will warn
you of many
dollars of his stock
can
a
TO
be
The
a
month
shows
that
these
avoided,and tells you how.
buyer for this jewelry department, it
blunders
later de-
STORE
120
in
vcloped, was
been
who
could
work
busy
too
be
situation
a
country merchant
had
MANAGEMENT
woke
finally
to make
money
and
up
"
of
that
found
the
that he
three-fourths of his
by a five-doUar-a-week boy. The
days working out priceciphersand
done
his
buyer had spent
exactly like
lines for
branded
to create
persuading manufacturers
his department. Instead,he should have estimated with
his probablesales,
made
that his expenses
were
care
sure
stock-turn.
reasonable and planned for a profit-making
Both
the city buyer and the country retailer had been
lashed to detail and had never
themselves
reallydisentangled
enough to lead their business.
Stock
Quick and Profit-Bringing
Impossibleloithout Modern
stores.
A
wished
to
A
Southerner
or
year
though
so
later
the store had
wanted
purchasers
had
been
there
also
difficulty
a
had
few
a
keep busy. He started
charge to "keep shop."
in
man
is
stock
Dead
a
ten
some
not
Records
peculiarto city
dollars
thousand
retail store and
sell out
been
''keepingshop"
was
to
Stock
for the Southerner
thousand
dollars' worth
he
put
a
even
came,
making a great
The
inventory taken.
not
an
chance
a
Usually
Tur*ns Are
The
deal.
who
man
"guessed
of stock
on
hand."
The
inventory,the
actual
store,showed
a
stock
dollars. Seven
the shelves
well.
"
on
hand
thousand
first in the
worth
over
dollars had
just as thoroughly as if
Modem
stock methods
would
history of
seventeen
been
have made
sand
thou-
buried
at the bottom
the
on
of
a
the neglect
than a few months.
impossiblefor more
know
to retailers who
Quick turnovers are only possible
of
accurately the amount
by stockkeeping methods
by their trade.
goods normally demanded
of these goods
STORE
122
MANAGEMENT
He
remodeled
his store on a
quick stock turns.
basis of small departments and specialized
these low
on
pricedlines with rapid profits.Working out the profits
individual lines enabled him to shift the departments
on
which were
to more
favorable locations in
losingmoney
gave
the
discontinue
store, or
them
if necessary.
He
could
also advertise
the
departments with direct consideration of
possibleprofitin mind. At last he knew his business.
Today he reckons a month 's gross profitin figureswhich
formerlywould have seemed a satisfactory
yearlyrecord.
Yo^lr Net
the
An
Profitand
Expenses
SellingPrice
with
investigator
that seventy-five
per
and
Are
Not
of
a
likingfor
cent
of the
Percentages of
the Cost
statisticshas stated
retailers in America
figuretheir profits
inaccurately.Many
of them
mark
up
by takinga percentage of their cost equal to the desired
instead of working back from a selling
price.
gross profit,
A young
into this snag.
accountant
He bought a
ran
half interest in a Pennsylvania retail store which showed,
But
when
he went
over
satisfactory
profitson paper.
costs and
mark-ups with his partner, he discovered that
most of the profits
were
imaginary.
His trainingenabled him to trace down
the difficulty.
He found that the dangerous trouble lay in his partner's
tain
sj'stem of estimatingthe cost of doing business as a cerpercentage of the gross and then adding this per'jentageto the cost pricewhen figuringfor the selling
basis
on
individual lines. The
minute
the
new
member
figuresas a starting
selling
pointin marking, the business showed healthy profits.
The young
accountant
man
correctlysecured his gross
twenty per cent and the net ten
profit (expenseswere
cent) on an item costing ten dollars,including
per
of the firm used the desired
BLUNDERS
freight and
price, always
Cost
to
Net
profit
do
Cost
follows
as
10%
70
percentage
in
have
10%
of
$10
for
incorrectly marked
$1.28 below
$13.00, or
|10 for
its percentage,
the
gross
cost
to
do
$ 2.00
business
1.00
net
$ 3.00
10.00
$13.00
price
figured his thirtyper
of
price, instead
always
cent
But
per
his
on
only seventy
was
which
be
of seventy
is therefore
desired
per
taken
as
per
the
cent
one
cent
profit on
selling price.
hundred
the
cost
But
the
sellingprice,which
per
Thirty
cent.
gives twenty-one
per
cent,
profithe actually secured.
he thought he was
getting thirty per cent.
Seventy
cent, his cost, plus twenty-one per cent, his actual
of the
therefore
sold.
gross
of the
cent
gross
profit,is ninety-one per
gross
same
this calculation:
profit
Selling
per
the
sired,
profit he de-
Cost
must
.70,
selling price : $14.28.
would
of
$10, by
money,
correct
20%
cost
307o
70%
after making
He
:
100%
as
desired
partner
Gross
taken
it out
20%
cost
the
article at
working
business
in
Dividing
The
123
$10
Cost,
him
and
cent
per
Selling
gave
AVOID
cartage, Dy assuming the sellingprice to be
hundred
one
TO
desired
lost nine
selling he
per
cent
cent, which
is the percentage
marked
goods by.
on
every
his
dollar's
worth
lie
he
CHAPTER
Winning
XIV
Over
Your
Sales Force
winter
morning, eight hundred
telegrams were
store managers
dispatched to as many
throughout
ONE
the
who
man
every
signed by
with
bought
which
these
of the retail world
value.
that
It is
a
building
value
Courtesy
does
of
long chain
the
of
they
were
cigar stores
a
"
importance
one
two
king
attaches to courtesy in business.
have
the
element
rare
courtesy
"
it is
because
the
mean
with
right to speak
spring in
main
not
and
connected
were
to
thank-you
say
cigar today?"
a
managers
who
men
estimate
you
illustration of the
dollar
Business
"Did
presidentof
the
hundred
read:
They
country.
business
so
"
at
a
ity
author-
very
life;of
high
business
rarely found, perhaps.
and
ingratiatingbow
scrape
origin,but the little every-day attentions
only thoughtfulness,yet go far in securing
untutored
that
cost
good will.
His
supply
broker
of
stepped
A
collars
into
smile
cheerful
for the
a
and
store
usually has
having
are
to
a
run
haberdasher's
low,
a
New
shop
York
on
the
astic
hearty"thank you" from a clerk enthusisiasm
worth many
mahogany fixtures.Enthubegin with the proprietor.
124
Broadway
had
his
nearest
comer
paid
This
residence.
dasher
haber-
for his location.
big premium
a
125
FORCE
SALES
YOUR
of his money
Here
back
by
regular customer.
An
over-dressed clerk,jerking a box of collars of
from
desired size and brand
a
shelf,slapped the
the
his best
was
chance
converting this
down
dozen, did
say ?
you
get
some
into
broker
a
under
the counter
on
The
to
"
the customer's
box
"Half
nose.
the already irritated purchaser.
he asked
nodded.
broker
He
only got five left," said the salesman.
grinned. To be caught out of stock was evidentlya joke
"We've
the
on
customer.
|The broker,
to
eager
took
instincts,
easily. He
ao
Half
clerk.
that
had
yet
slipgiven him
See here,
cents.
haven't you?
' '
But
he
to deal with
to the
way
sales
' '
the lot.
clerk with
a
escape
called
not
was
the
to escape
that the
of
payment
' '
protested, you have
You
are
charging me
he
hired
who
man
cashier,he noticed
for the
guided
mis-
such
sixty-five
made
a
take,
mis-
fifteen cents
for that fifth collar."
collars sell for fifteen
"Single
He
it
said
him
' '
from
as
one
boy
conscious
you
time 's worth
My
He
customer.
huff.
A
bundle
rip scum
This
store
courtesies and
attention.
pay
behind
two
cents
extra
just
"
"
two
the charge and
made
Interested
me
than
more
paid
a
re-vorapped;
up.
one
of stock," expostulatedthe broker.
out
are
"I'll speak to the manager
' '
of having every
clerk.
the
to boss.
So you 're going to make
because
cents," said
bit
an
enemy
' '
cents,
retorted the
left the
instead
of
store
a
given;a
of information cheerfully
customers
by suck
salespeoplewin
in
a
regular
STORE
126
and
it
because
customer
raised
allow
ever
lot of small
clerks.
was
if she
"Even
made
or
him
on
some
realize you
him just as
sales
more
How
know
we
some
he is there and
the
and
Secured
and
That
Vahcahle
customers
To
to
overcome
''At Home*'
their order,or
the
who
of his clerks
One
these cards
and
the fact
His clerks
he
knew
that
all because
a
with
salesman's
of the
that
was
a
waited
had
it
made
of the salesman
name
neat
business
hit upon
clerks
adopted by
up
a
this to every
of orders.
salesman.
of
ner.
cor-
presenting
the entire sales force.
good customer, wrongly
Explain
provided
bearing the
left-hand
plan
taken
He
cards
lower
the
had
who
them.
upon
in
name
Success isn't made
And
somehow
to
quiteimpossiblefor
know
the different clerks personally.
of acquainting
this,he devised a means
patrons with
individual
the
Customers
home"
at
have,
we
' '
His
necessarilylarge sales force
each
little attentions
these
proprietorawoke
the personalelement.
"feel
will wait
you
friends
more
efficient but
failed to
customers
let
*
that
possible.All
lacked
courteous
were
don't
how
matter
metropolitangrocery
that his business
his
And
"
Feeling among
A
order.
going ,to make.
are
Grocer
a
one
busy you
^bya pleasant good morning,
littleword or action
letting
"
as
soon
friends
make
where,
purchases elsebundle, or to deliver
store, no
way
at least
smile,or
a
the
in
to his
merchant
of her
of her
rest
wise
a
ing
carry-
'
in
without
to leave the store
most
them
the
enter
customer
are,
system of blind clerks
a
bundles," said
along with
any
on
customer
a
offer to wrap
them
run
letter rules.
"Dont't
a
MANAGEMENT
It is made
is
treated,
soon
of re-orders.
offyour books.
YOUR
SALES
sellinghis
After
card
presentedhis
attention
customer
mention
would
she
his
goods, the
clerk
if she desired
that
orders
any
127
bill of
a
told her
and
given
in, and
FORCE
might
phone
to tele-
care
to the
name
sonal
per-
telephone
be glad to see that her orders
clerk,he himself would
were
promptly and carefully filled. Thus, this proprietor's
solved
and
personal attention problem was
his telephone orders were
increased.
A telephone customer
dropped into a store in the rice
"
She
belt.
had
flavor of the
her
food
extra
value
unpolished grain and decided
and
better
try it. The
to
failed to recognizeher and
at the counter
man
smiled
at
request.
"You
it
of the
read
on
can't buy it,and
failed
understand
to
from
to
that
Another
appearance.
point
secure
a
could,you
"It's
her.
rated
she
of
sack
On
the
put
dark."
too
He
mere
it
request, made
unpolished grain
investment
an
wouldn't
utilityabove
her
dealer,at
rice grower.
a
told
table," he
your
if you
of
only
a
direct
lars,
five dol-
able to satisfy
plus the trouble of writing,he was
her curiosity,
make
her a steady patron and incidentally
for the unpolished grain.
stimulate a regular demand
Training in Personal
Salespeople and
Every
first-rank
every
are
and
a
and
your
work
slwidder
big
view
employes that
vnth them.
the
one
fact that
of the
you
Make
arc
them
man
the
"
and
people
sales-
patience,tact
customers'
wants
tinguish
dis-
just as surely
helpout
altray-i
ready
to
feelyou
shoulder
are
school
where
"
growing business
and
vrith them.
training
maintains
impressed with
common-sense
a
Show
store
Your
Both
Profits
Your
its formal
needs
store
Helps
Service
to
MANAGEMENT
STORE
128
his pay
envelope. Personal
adaptabilitymust,
therefore,be considered an essential of store efficiency.
final word
in retailing,
The
however, is real customer
service
putting all ot your storekeepingabilityat the
does
as
"
call of the
people in
had
asked
at
beef
and
wished
market
a
found
He
buy.
to
"Yes,
that
have
we
the
trade
your
for
territory. A
certain
brand
reply, "but we don't urge it on
Deducting the weight of the package, you
ten
and
ounces,
hardly
value.
bargains
went
are
we
his customer's
One
be
you
would
get only about
yourself,is
for
see
featuring today,"
reason
scarcity.But
suggest
and
he conceived
for the
high
whatever
If You
An
can
customers.
our
one
of the
the market
man
to be best fitted to
wishes.
strong
its
as
place of it,I
displaywhat
to
on
that,
In
of
chipped
in larger quantities
it came
than he
inquired for a smaller package.
other brand
at thirty
-seven
cents,"
a
the
was
customer
value
the
of courtesy may
reason,
it does
pay.
Were
Employee"
What
would
A
could the firm do for you that
for them?
make
you do more
Customer"
methods
of your
first criticise.'*
Which
The
other
you
looking
occasionally
the viewpointof
people is extremely profitable.
habit of
yourselffrom
mental
at
would
SOUT
UNiVERS
.,ALirORNIA
7
mlmmm^^
.
UC
SOUTHERN
AA
REGIONAL
001
147
LIBRARY
970
FACILITY
6