The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1915-11-05
By David Powell

IN d preceding dFllcle VI InlS ser
les the conclusions of factory cos
expert were given as to the compare
tive buying power of different classes
of merchants which very clearly dem
onstrated that the larger concerns
have very little, if any, advantage in
the buying of merchandise. In this
article the selling methods employed
by catalogue 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 bust
ness. In freight charges the local
dealer has almost an even break.
Much of his line he nowadays buys
direct from the factory and by club
bling with other merchants gets part
of it shipped in car lots which gives
him the lowest rate.
Against this, fost of the mail order
merchandise must stand the initial
freight charge from the factory to
either the central or branch house
and a second transportation charge
from the distributing house to the
consumer. This second charge aver
ages very high, as a large part of II
is either express or postage. That
the catalogue house has no great ad-
vantage here is quite apparent.
Comparative Cost of Doing Business
Upon merchants ability to prop
erly regulate his cost of doing bust
ness depends his ultimate success or
failure. To the consumer not versed
in commercial terms the true mean
ing of this expression is often not
clear. 1t is determined by totaling
all items of expense connected with
the running of business for GER
tain period, say year, and the per-
centage 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 sep
Earate from the percentage Of profit a
merchant adds to the cost of an art
icle to determine his selling price.
By better methods and stricter econ
omy one merchant may do business
at less expense than his competitor,
which would enable him to sell the
same article at a lower price and still
make exactly the same percentage of
profit on 1t.
It is plainly evident that If the
large city stores and catalogue houses
have no advantage over the small
dealer in buying an article, it is man
ifestly impossible for them to sell 1t
for less than the small dealer, un-
less their cost of doing business is
les than the local merchant. From
many sources it is learned what
different merchants figure their cost
of doing bushes and it very rarely
exceeds 20 per cent. 1t would sim
plify matters very much if few
of the big catalogue houses would
publish the same information. AS
of course, they won't in order to
make comparison it win be neces-
sary to estimate it. For example,
take one of the large mail order
houses situated in Chicago.
Fat Salaries Paid by Mail Order
House
Such a concern has an immense
overhead expense entailed in main
tanning large office force as we'll
as a corps of high-salaried advertise
ment writer's. 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
$4,000 to $4,000 per year. Did it
ever occur to you what 1t costs to
put in your hands one of these beau
tifully Illustrated catalogues? In their
you are informed that they
are generously giving away some
thing free, postage prepaid, that rep
an outlay on their part of
some rs 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 /
Of their books each year, 1t costs |
them far more than 25 cents.
Taking catalogue issued for this
season 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, careful estimate shows that