The Leavenworth echo. [volume] (Leavenworth, Wash.) 1904-current, 1914-10-23
LARGE SHARE OF MERCHANTS
SO-CALLED PROFIT IS SPENT
IN PAYING FREIGHT CHARGES
Often Not Taken Into Consideration by
Consumer when Comparing Prices
A Fair Comparison of Selling Methods
Proves that the Regular Dealers
Have Great Advantage
BY David Powell.

given as to the comparative buying
power OF different classes OF merchants
which very clearly demonstrated that
the larger concerns have very little, if
any, advantage in the buying of mer-
chandise. In this article the selling
methods employed by catalog houses
will be compared with those employed
by the regular dealers.
The first item of expense the local
merchant has to consider in fixing his
selling price is freight charges, and the
next is his cost of doing business. In
freight charges the local dealer has
little, if anything, the best of it. All
of his goods are shipped direct from the
factory by freight and much of it in
carload lots that gives him still lower
rate. Against this the mail-order mer-
chandise must stand the initial freight
charge from the factory to either the
central or branch house, and second
transportation charge from the dis
tributing house to the consumer. This
second charge averages very high, as
large part of it is either express or post
age. That the catalog house has no
advantage here is quite apparent.
Upon a merchants ability to prop
erly regulate his cost Of doing business
depends his ultimate success or failure.
To the consumer not versed in COM
mercial terms, the true meaning of this
expression is often not quite clear. 1t
is determined by totalling all items of
expense connected with the running Of
a business for a certain period, say a
year, and the percentage this amount is
of the total sales for the same period is
known as the cost of doing business"
This, however, is entirely apart and
separate from the percentage of profit
a merchant adds to the cost of an arti-
Gle to determine his selling price. By
better methods and stricter economy
one merchant may do business at a less
expense than his competitor, which
would enable him to sell the same
article at lower price and still make
exactly the same percentage of profit
on it.
1t is plainly evident that if the large
city stores and catalog houses have no
advantage over the small dealer in buy
ing an article, it is manifestly impos-
sible for them to sell it for less than the
small dealer, unless their cost of doing
business is less than the local merch-
ants. From many sources it has been
learned what different merchants figure
their cost of doing business and it very
rarely exceeds ,20%. 1t would sim
plify matters very much if few of the
big catalog houses would publish the
same information. AS Of course they
won't, in order to make comparison
it will be necessary to estimate it. For
example, take one of the large mail
order houses situated in Chicago.
Such a concern has an immense over
head expense entailed in maintaining
large Office force as we'll as corps Of
high salaried advertisement writers.
These are the men who paint in such
attractive word pictures the virtues Of
the goods sold by the house, For this
work they secure the best men they
can get, paying them salaries ranging
from S., 900 to $40, 900 per year. Did
it ever occur to you what it costs to put
in your hands one of these beautifully
illustrated catalogs? In their literature
you are informed that they are gen
erously giving away something free,
postage prepaid, that represents an out
lay on their part of Is cents, and they
hope you will appreciate their efforts to
aid the oppressed and down-trodden
in reducing the high cost Of living, etc.
Now, as a matter of fact, although they
put out several millions OF copies oil
their books each year, it costs them
far more than twenty-five cents.
Taking catalog issued for this seas
on by one of the two largest mail-order
houses OF the country as a sample, and
the same number Of copies the same
house sent out last year, a careful esti-
mate shows that just for printing and
mailing the cost would exceed sixty