Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-12-17
"PRICE GOODS ON A
REPLACEMENT BASIS"
COAST SPEAKER SAYS
(Continued from Page one.l

I paid that for it?" the speaker.
mimicked. Then he declared that
it was not so.
Sell it for 25 cents and what do
you get? A profit of 1-3 cents
on the article because the replace
ment price of the article is only
16 2-S cents at the new price of 50
a dozen. Are you losing money on
this kind of business"
The maligned lemon and the
delicious orange, products Of the
a association which Mr.. Lindlay rep
resents, came in for just enough
during his talk which
lasted nearly three hours and
which he illustrated with a black
board demonstration However, he
applied the theories of the merch-
andising of lemons and oranges to
other goods as well and made 1t
interesting even to an undertaken
who was present.
PITY the Poor Grocer.
Having been a grocer for many
wears, Mr. Findlay was able to
quote interesting figures about this
business, which he characterized
as one of the most precarious of
any He asserted that only per
cent of the grocers are making a
profit. Twenty per cent, he said
are in the twilight zone" and no.
bodv knows whether they are maxi
ing money or not The remaining
10 ner cent are potential failures,
he declared.
mot that they fail in business
Int there is never time when
they are actually solvent. They
are lust a lap ahead of the sheriff
all the time and after forty years
in the business they go and live
with the married daughter. And
if they were to close out today they
couldn't get their money out of the
business"
Better business methods in all
business are needed to guard
against failure, Mr.. Findlay told
the albuquerque merchants. He
asked how many present took
salary for their time devoted to the
business. Five of the fifty or more
present raised their hands to show
that each Saturday night they paid
themselves Oft.
"Bad Business He Says.
"You wouldn't expect your
clerks or delivery boy or cashier to
work without pay and yet you do
il vourself,f he said. That is not
good business. You wouldn't work
for anyone else on that basis or
waiting till the end of the year to
see whether or not there Is any
thing left for you and you shouldn't
do it for yourself"
A distinction between profit and
margin was made by the speaker.
margin" he dQeined as the per
cent the merchant makes on the
selling price of his wares" Profit"
is what is left after all operating
expenses are deducted from the
margin, according to his explana-
ton.
Don't figure your margin on
the cost of the article. Figure it on
the selling price" he advised" II
you do not you will get in trou-
ble."
Here's the Rule.
Thus, he said, if an article costs
you 81 and you wish to make
rs per cent margin. the article
should be priced at $1,S3 and not
at $1.25.
AS rule for computing this
price he gave the following:
subtract the percentage margin
you wish to make from 100 per
cent and divide the cost by the re-
suit"
In this case you would subtract
25 from 100 and divide 1t into 81,
the result being $1,33.
He asserted that by following
this rule a merchant will never
go wrong and then gave the fol-
lowing startling illustration.
IF you buy an article for dol
lar your margin will be selling it
Tor 81 is so per cent and not 100
per cent and you can never make
100 per cent because you are al
ways out the dollar you paid for
it."
He gave list as follows; the
first figure being the selling price
of an article bought for 81 and the
second figure the percentage mar
gin the merchant makes at that
price:
$50 per cent.
$3-66 2-3 per cent.
$7-S5.72 per cent.
$15-9333 per cent.
5000 per cent.
"A Mythical Figure
"And if you sell it for million
dollars you can't bring the profit
up to 100 per cent" he SAL.
The importance of including OPP
Grating expenses of the business
We're emphasized by a list of fig
ures which Mr.. Findlay said is the
average cost of operation for vari-
Gus businesses:
Mail order house, IS per cent.
Grocer. 16 2-3 per cent,
Hardware, 1914 per cent.
Clothing, 20.5 per cent.
Dry goods. % per cent.
Shoes 23.5 per cent.
Furniture, "a per cent.
Drugs, 24.5 per cent.
Jewelry, 26 per cent.
Department stores. 26.5 per cent.
And despite the fact the cost of
business is greater than in any
other line. department stores are
the greatest money makers, Mr..
Findlay said. And in answer to his
"Why?" he said that they sold
goods"
They work both ways from the
collar" he declared. They use
this" he explained, touching his
skull.
Grocers, Mr.. Findlay said. have
many articles. between 40 and so
per cent of the gross sales. that do
not bring in a margin as large as
the cost of operation. These IN
clude staples such as sugar, flour
and others. On the other SIS per
cent of articles handled it is neces-
sary to make the margin corre-
spondingly high in order to come
out on the right side of the ledger
Mt the end of the wear he said. The