Every evening, Wilmington daily commercial., 1921-07-05
LOUIS TOpKIS TELLS OF
BUILDING BUSINESS
Head Of Local Manufacturing
Concern Shows How Trade
10 Expanded.

Under the caption Lower Prices
kassed Our Profits" Louis Topkis.
president of the Tcpkis Brothers
Company. large underwear manufac-
,lurers. writes entcrtainly in the July
aumber cf system. national maSa-
s,ne OF husiness. Following is =
summary OF MIR. Topkis' article:
since the first of the year we have
atore than doubled the volume of busi-
meas over that Of 1899 and have been
iarced to decline orders amounting. at
a conservative estimate, 10 more than
Iteo ooo In the msddle OF last De-
semher We We're operating at a loss.
our sto,krooms were loaded with un-
sold goods. With our factories run
nina at fun time, this Gnsold surplus
was steadily mounting. A month later
January live had turned the
oorncr and we're operating at a profit.
The demand for our product has in
creased AT such a rate since that we
have been unable to keep up with IL
even with doubled capacity. In
view of the prevalent business situa-
tion during this period the condition
~ our company may b. regarded as
unusual. No unusual methods We're
employed Go bring IL about The OBJ
iscts of present day manufacturing as
We see them. and as We have applied
them to attain this result. may be
summed up In two simple statements:
I, To produce an article which the
public can use az a price and OF a
quality that will induce the public to
huv II.
g To adjust production and dis
trieution costs 50 that the receipts
trom the sale Of the article at the
ruhiic's price will compensate us
tairly Tor our laeors and our capital
Investment
The manner in which we have gone
about accomplishing the second OBJ
jective--putting our business on
profitable hasis--has been entirely
dependent upon the answer 10 the
question implied in the first: What
is the public willing 10 pay?"
where Business Has Erred.
We have kept IN mifid that in the
hnal analysis IL is the consumer--and
not the manufacturer, nor the whole
sel'r, nor the retailer--who fixes the
price and who buys our goods. our
whole program of doing business has
boon shaped accordingly and our main
effort has been centered on inducing
the public 60 buy. II our experience
hss brought one lesson more forcefully
TO the front than any other, it is that
the public viii buy, and buy readily,
when quoted price that il thinks is
right, a price which IL is willing TO
pay. Too many business men, especial
~ during the hast few years OF un-
rrecedcnted prosperity. have come
O. regard u as the sole function OF
business 10 buy at low and sell at
nish. lnconsciously. in many quart
rfN, an attitude has been developed of
the 'tako u or leave IL" kind. based
Oh the false philosophy that costs plus
front should always govern price. The
absolute dependence of business upon
ths VIII Of a buyer has been over
l.oked as tho outgrowth OF a tenn
porary situation in which the contrary
seemed % he the case The problem
which confronts business now as a
consequence of this attitude is es-
sentlally one of placating the customer
and 81 trying To- make business profit
able on the new basis Of prices gov
erning costs.
These conclusions are presented
purely for what the reader may deem
they are worth. But / want 10 en-
phasizc that q VAS upon a similar
course ~ reasoning that we built a
pregram which has produced for our
sonoern a greater boom OF business
than ~ ever enjoyed during the palmy
aAys of. and Immediately following.
me war. our success, such as it has
been, - grounded on a recognition OF
the fact that Il is the primary func-
81 al f4snU UH~saaz IL.
eel these days means accepting -
ruhiie's price standards even though
- may look upon those standards
- severe. II not actually unreason-
able.
We bought large quantities OF our
materials at the peak of the market
These we had TO sell. in finished
firm. at the bottom OF the market.
To meet this reduction in price and
cash losses incurred as the result of
n. q was plain that We should have
% increase our volume. following the
tlme-worn rule that unit costs de-
crease exactly as the volume OF out
put increases. Increased volume
meant purchase Of additional raw ma
terlals. SO we bought huge quanti-
ties Of these at the then low price.
. DNfts winch greatly reduced the
average cost Of all raw materials go
ins into our product.
To summarize briefly;
First Ne met the pubiics price, fos
the public is the ultimate buyer OF
our goods; second. We convinced the
public that our quality had not suf-
fsrfd in price reductions; then. after
customers had started 20 buy we
made our third move. which was ad-
rlntnasnt of our costs through in
cfsas.ag sales volume and heavy pur-
ehssos In the raw material market,
which lowered the average cost Of
material stocks. That is our story In
q few words. That, / believe, is the
story which business generally will
he compelled 10 tell before the coun-
trs returns 10 prosperous business
normal
A bigger volume OF sak.s will not
in Itself offset losses growing out Of
purchase OF materials a. peak prices