Stepping into a hardware store early the next morning, after introducing myself I was handed a letter sent to me in the care of the firm. I was very glad to receive it, and accepted the pleasantly given invitation to sit down and read it.
No man should greet a letter with more welcome than a traveling salesman. It is a tie that connects him with home, he who is so wholly disconnected. He is always wondering what his house may think of this sale, or that price, or this failure to sell, and be he never so sure that he has done well, still the assurance from home that they recognize his success makes him happier.
Houses differ much in their manner of writing to their traveling men. A friend of mine who lately made a change told me his principal reason for leaving the old house was the letters they wrote him. “I never cut a price in the world, unless I had to do it to meet a competitor; but if I did it, no matter for what cause, I was sure to be reminded that I had not been sent out to 'cut,' but to make money. Yet when I came home and explained why I did it, I was told I had done the right thing. But they nagged me the next trip just the same, and I grew tired of it.”
I did not find any such letter as that. It was a hearty commendation of my work and braced me up for the future. “We miss you in the stock,” the letter read; “but we can put up with all that while you do so well on the road.”
I spoke of this to a traveling man. “Well,” said he, “I scarcely ever hear from my house from one end of the trip to the other. Our goods don't vary in price very much, and I'm not much of a hand at writing letters. I send in my orders when I've any to send, and when I've none I save postage. But I know men who have a printed form, and they have to fill one out and send home every night, orders or no orders. That's too much like being a sleeping-car conductor for me.”
After reading my letter I turned to Mr. Shively with determination to sell him a good bill. But I saw he had a customer, and kept out of the way, but not too far to hear the conversation.
“That,” said Shively, “is a better gun than the ordinary Lafoucheaux—a good deal better. I know you can buy of Reachum and Shiverhim & Gaily for $7.65, but there is all of $2 difference in the goods, and the man who should appreciate this the quickest is the retailer.”
“But I can't get a cent more for this gun than for the others; buyers will not discriminate.”
“You give them no opportunity. You take it for granted that they will go to the lowest-priced places, so you insist upon buying the lowest-priced goods, but I tell you, Mr. Thompson, you are making a mistake. A certain proportion of every community runs after the lowest prices; a large majority seek good value for their money, and a small percentage, who are fools, buy only high-priced goods. Then again, a share only of the trade will come to you or me. Our competitors, no matter how mean they may be, will have their own friends, and, try as we may, we can only draw a certain share of the trade.”
“That's so.”
“Of course it is so. And the dealer who looks these things squarely in the face and acts accordingly is the one who succeeds. I remember when I was younger I expected to do all the business in my line here. There was a run on Parker's gun. The list price was $50; they cost us $37.50. Every one was asking the list, but making a small cut if necessary. I had a fair trade in them, but I concluded I would do more, so I advertised the price $45. This did not accomplish what I expected, so I came down to $42.50, and finally to $40. I sold a few more guns than I otherwise would have done, but I did not make one dollar more of gross profit. In order to attract a few extra buyers I had been cutting down prices to men who would have bought of me, whether or no, and I stopped it.”
“I remember my first Parker gun,” said Thompson; “I called a man into my store to look at it, one who talked as if he knew all that was worth knowing about guns. He opened it, looked through it, sighted it, etc., then asked the price. I quoted $50. 'That settles it,' says he, 'I wouldn't have it; a good gun can't be bought for any such money,' and he dropped it as if it was a hot brick. The next time I showed it I asked $75, and I sold it at $65.”
“Yes,” said Shively, “the fools still live; I'm one of 'em. I suppose I do things just as bad as that every day, but I don't do it knowingly. Here's this craze over Smith & Wesson's revolvers. A man, for some good reason of his own, wants a revolver in the house. He hopes he shall never have to shoot with it, but for fear he may need one he buys it. The chances are ninety-nine in one hundred that he has never been a marksman, or if he was he is so much out of practice that he could not hit a door off hand, and with his nerves steady. I show him a good revolver at $2.50, or a double action bull-dog at $3. But he asks, 'Have you Smith & Wesson's?' Of course I have; single action $9.35; double-action, $10.35. I explain that the cheap one is as safe to the shooter as this is; that the chances are not one in a hundred that a man can jump out of bed excitedly and hit a burglar off-hand; that no burglar, hearing a shot, waits to be informed whose make of revolver is used, and that practically the cheaper pistol is the most sensible for him to buy. But he has a foolish idea that he is going to be a much more formidable fellow with a Smith & Wesson under his head, and he takes that. And because of just such idiotic men Smith & Wesson can ask a big price for their goods.”
I was much interested in that talk, and sorry when the two men separated. But I was there to sell Shively some goods, and I went at it right heartily.
“I am rather tired of the gun business,” said he, “and would drop that branch quite willingly. It is being managed on the basis of brag rather than that of brains. Any fool can sell a revolver at 92 cents that cost him 90, or a gun for $7.50 that cost him $7. No brains are required to do that. The poorest salesman I have on the road sells the most goods and makes me the least money. The gun business has got into the hands of men who have just brains enough to run a ten-cent counter store.”
“Is it not about as bad in other lines?” I asked.
“No, not quite. There is much more detail to other lines. The gun business is compact and the line small. Consumers pick up names of makers quicker, and post themselves easier. A man buys a pistol or gun but once or twice in his life, and he gives the matter considerable study and shops around a good deal. Fifteen years ago Kittridge of Cincinnati used to be the champion cutter, but either he is out of business or has changed his tactics; now St. Louis and Chicago have gone into the postal card business and struck the 'Me Big Injun!' attitude. Here is a card one of my men sent in from a little town to-day. Shot quoted 80 bags $1.16! The man can't buy 80 bags in 80 months, and the house sending the card to him knows it, but it gives him a basis to work on us, and hurts us without helping anyone.”
“Yet you buy of these card men?”
“No, I don't, d—n them; I'd shut up shop sooner. There is no reason in the world for wholesale gun stores; the business ought to be handled by the wholesale hardware trade, and ought to be done in a legitimate way on a legitimate profit. But some idiotic manufacturer, either being hard up for money, or envious of a competitor, goes to one of these gun houses and offers a special cut price, and within twenty-four hours every little cross-roads dealer is advised of the cut.”
“I heard a man swearing just about the same way about screws,” I said.
“Screws? Oh, yes; that's so. Screws have been about as mean. One factory used the hardware trade of the country to club a competitor, and thousands of dollars of values were wiped out in the operation. I had, say $1,000 worth of screws, bought at 75 percent off. Russell & Erwin wanted to hurt the American, so down went screws to 80. That didn't settle the business, and next they went to 90 off. What was worth $1,000 at 75 off was worth but $400 now. And this cut was advertised everywhere, so that retailers insisted on getting it. The orders as sent in were not filled, and retailers' orders on us were much larger than before. By and by we had no stock, and then, without any reason other than their own sweet will, prices went up again. It was a most outrageous piece of business from beginning to end.”
“I am glad all the bad work is not done in guns,” said I, “but how is your stock? I think bull-dogs are going to advance.”
“I suppose they are; look at this letter.”
He handed me a letter from a New York house which read:
New York,——, 188—.
Messrs. Rhodes & Shively—Gentlemen: I have entered your order for 100 “Blank” Bull-Dogs at $2.85, prices guaranteed. Please send on specifications. A combination is about to be formed among the manufacturers, and prices will advance to $3.25. Yours respectfully,
F.B. Combaway.
This was news to me, so I opened the letter I had just received from home and read to him:
“We have just got in a large lot of 'Blank' bull-dogs and you may cut prices to $2.65.”
“Well,” said he, “what the devil does this man mean by sending me such a letter?”
“He undoubtedly believed there was going to be an advance and booked you for 100 revolvers.”
“What is your price on cartridges?”
“Fifty-nine per cent.”
“There is another smart combination. The cartridge association puts my competitor in the A class and gives him 50 and 10 off, but we, who have to sell in the same town and to the same men, can only get 50. It's the most childish and sickly combination that I ever saw. Manufacturers seem to sit up nights to see what infernal fools they can make of themselves. Now I tell you there are only two classes of dealers—wholesalers and retailers. If a man is a wholesaler he should have wholesaler's prices, and if he isn't he shouldn't. But your smart Aleck manufacturers want to rate them, as Bradstreet does, and give 12 1/2 off to the A class, 10 off to B, 7 1/2 to C, 5 to D, and list to E.”
“But a man who buys 1,000 dozen axes ought to buy for less than he who buys but 100 dozen?”
“Not a bit of it. If both men sell at wholesale they ought to be on one level, otherwise the smaller buyer can not hope to succeed. And I tell you it is much more to the interest of manufacturers that there should be six small houses in a town than one extra large house. Your large buyer is autocratic; he can break the market, and often does it to his own hurt, as well as to the damage of every one else. The average buyer is content to buy as low as his competitor, or if he gets a little inside price, keeps it to himself, lest his competitor shall know it.”
“You seem to have figured it out pretty thoroughly.”
“I have, and I know what I'm talking about. But of all the silly things manufacturers do, they never get quite so absurd as when they undertake to advertise.”
“Please explain.”
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