The Fayette falcon. (Somerville, Tenn.) 190?-current, 1915-07-23
Home Town Building
Dear MIR. Editor:

Dear Mr.. Editor:
In previous issue you put the in
quiry your question no. Z, believe:
Can the merchant in the country town
compete with the big stores of the
city in price and quality when freight
rates, rents. and selling expense, box
ing and shipping together with the
fat dividends paid to stockholders are
taken into consideration?
NY answer to the question is an
emphatic Yes. providing the country
town merchant is satisfied with net
earning of from Is per cent to 20 per-
cent on his investment. The stores of
the city who have an outlay which is
simply appalling for the one item of
catalogues, to say nothing Of high rents,
insurance and taxes, postage, etc;
freely admit that their selling expense
amounts to 20 per cent of their sales.
They claim also to base their list prices
on margin of 80 per cent to so per-
cent, or say an average 3St per cent.
These big dealers are satisfied with a
net profit of say per cent on the sale
price of their goods. On sales of $780,
600, 600 that means profit of So, 500. 900.
The actual money invested in the bus
mess may be only one-tbird of that sum
as the entire stock is, or should be tur-
ned over at least three or four times
each year, so that seven per cent on
the sales make very handsome mar
gin on the actual money investment.
The country town merchant can handle
two or three times more than his present
sales with but little or no increase in
his selling expense, or say one-thir1
less than that of the city concern,
which means perhaps about IL per cent.
Let US figure it out:
Suppose we have a general mer-
chandise store whose sales can be
made to average $4,000 per day:
Sales of 500 per day gives for
One year $500 days. .-,,....,.....$30, 900
Cost of goods-75 per cent of
Gross profit 25 per cent of sales. Z, 500
Selling expense say-12 per cent of
sales SOU
Net profit .......... .............. ...... $500
That means earnings of So, 300 on an
Investment of $22, 500, and if the goods
are turned over only twice each year
the same amount of business can be
handled with one-half the investment,
in which case the annual profit would
be 81 per cent. That's the whole secret
Of the money-making methods Of the big
stores of the city. Its only question
of large volume and quick. turn
over
The secret of the country mer-
chants poor showing is his lack Of
opportunity to make this quick turn
of his stock into money. Enter any
one OF your home town stores and
look around you. There are goods on
every shelf which have been carried
for eighteen months to two years and
perhaps rs per cent Of the stock has
been in the same old place from five to
ten years.
Now, Mr.. Merchant, don't get pos
sessed with the idea that these letters
are giving away any of your trade
secrets. They are not written with
the idea of belittling you in the eyes
of your fellow towns people. Your
editor asked for suggestions as to
ways and means of improving condi-
tons in your town and ! am giving
his readers the facts as see them to-
day and as | have seen them in sell
ing experience of forty years. They
are facts which every man, woman and
child in the country towns of the
United States should know Your
local people have large interest in
the welfare of the town. Their future
is linked with yours. Its a partner
ship for mutual benefit. II your busi-
ness is not prosperous the town will
die of dry rot and the interests of
your fellow citizens will suffer just as
sure as daylight follows the sun.
1t is thesright of every man to buy
where he can get the best value for
his money. If he wants to send his
cash with an order to some distant
city he has perfect right to do so.
1t is the purpose of these letters to
show him that you can and will in
future compete in price and quality
with any dealer on earth and that
when you start to publish your prices
he will be surprised to learn that he
can come to your store and. select
what he wants without hazard of dis
in cost, kind or quality. |
yo, NAV danand urnn IL that he mill 4