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Note.— Dealers in commercial stationery and office equipment will read Mr. Sheaffer’s views with interest. His observations and suggestions are based upon an experience of many years as a successful retail merchant. His comment on the influence of national advertising on the selection of goods for resale is authoritative and impartial by reason of the fact that he is the founder and chief of a company which is an extensive user of publications of national circulation for the promotion of its own business.
The editors of Office Appliances interpret Mr. Sheaffer’s article, not as a protest against national advertising, but as a protest against permitting it to weaken the old and honored position of the retail merchant as an authority and guide in the matter of merchandise values. Unconsciously, perhaps, Mr. Sheaffer brings out the importance of first getting new lines before the dealers to establish demand and provide for distribution. This is successfully accomplished through the pages of the trade press, whose influence Is certainly very great in the distribution of merchandise. Live dealers everywhere are seeking the very information which their trade periodicals give them.
The writer hereof, having spent the greater portion of his life in a retail store, and being ae therefore acquainted with the many ups and he downs with which retailers are confronted, recalls vividly many plans suggested from time to time to bring about a betterment of conditions in the retail trade.
Not so many years ago very few articles were nationally known. The successful merchant was the one who made a careful study of the merits of the merchandise of consequence that passed over his counters. This process was educational, tending to make salesmen of the merchant and his clerks. The merchant occupied an important position in the community because stores were few and people were limited in their opportunities of securing goods. The merchant, having a thorough knowledge of the quality of the goods he offered for sale and knowing that he had provided the best value possible for the money his customers paid, earned and deserved the confidence of the community in which he lived, building the reputation of his establishment on service, just as the doctor built and held his practice by his ability to relieve suffering and keep his patients well.
Of late years, however, retail merchants in growing numbers seem to be getting away from the early business methods which obliged the retail dealer to build a reputation for his accurate knowledge of merchandise. So great have been the changes in merchandising methods that many modern dealers no longer make an effort to know the quality of their lines throughout but determine the goods which are most frequently called for and hand them out on demand. This policy among retailers seems to have grown with the growth of national advertising which has implanted certain brands or trade designations ineradicably in the minds of the people. I believe that dealers do not consider the consequences of this policy on their trade, nor its probable effects upon themselves and their salespeople.
When many of the principal dealers, particularly in the larger cities, are approached with a new line of merchandise, their first answer frequently is: “Create a demand for your goods and we will handle them.
We have time to hand out only the merchandise that is called for.”
Let us follow this policy to its logical conclusion and see where it leads. If all dealers refused to buy goods for which demand had not been created, then no manufacturer would be able to obtain distribution through retail outlets on any new lines which he might produce. To create demand, he would have to advertise, requiring the expenditure of a large sum of money. By and by his salesmen would begin to note the results of the advertising by a more tolerant attitude on the part of the retailers and orders would begin to come. This would be slow work. Furthermore, it would be expensive— far beyond the pocket of any manufacturer of limited resources. Such a manufacturer, confronted with refusal on the one hand and prohibitive publicity cost on the other, might work on for years before he could build up little by little a modest demand for a meritorious product.
Take again the manufacturer whose resources are large: By means of national advertising he can create a demand in advance of distribution but creating a demand for an article before the distribution is ready to meet it represents a waste of thousands of dollars, for the manufacturer must now get his distribution, all his advertising having brought nothing but probable returns—making the public familiar with a name and bringing a request here and there.
If the dealers had cooperated with the manufacturer, assuming that his product had merit and sale ability, much of this initial expense might have been avoided, since distribution would have been established to go hand in hand with such national advertising as the manufacturer thought it advisable to do.
Having created his demand, the manufacturer is in a position of advantage. Knowing that the retailers will want to hand out his readily saleable product, he can, if he will, recoup his losses by reducing discounts, arguing that, since the goods are now in demand, the turn-over is more frequent and the dealer can make more money by selling four articles at a less discount that he can make by selling three at a greater.
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Assuming, therefore, that the dealer handles only those goods which are demanded by the public and that he permits no substitution, then he must handle such goods irrespective of whether the margins are satisfactory or not. He has no choice, for, so long as he adheres to his policy of moving along the line of the least resistance, he must buy the goods in demand and sell them again at the customary rates. His other alternative is to close out his business.
The manufacturers of the country are not to blame for the extent to which these conditions exist among the dealers. The manufacturers are obliged to look out for themselves, nor should they be expected to forego an advantage which the retailers force upon them.
Effect Upon Dealers and Clerks.
Character is not made by traveling the easy road, though uncounted millions ere this have gone that way and countless more will follow. Sound achievement demands work, both mental and physical. He who would be a salesman must know what he is selling and how to sell it. Every sale is a fresh conquest—every sale adds its mite to the sum of experience and helps ever so little to fix those habits of knowledge, confidence, tact and courtesy which differentiate the salesman from the order-taker. But if the ambitious man or woman is forbidden to exercise initiative and salesmanship because of a rule that goods called for and those only must be handed out, then existent abilities atrophy from lack of use and potential abilities never come into being. This applies to the proprietor as well as the clerks. The more a retail establishment tends to lose individuality and become automatic in its contact with the public, the less firmly will it hold to that elusive but important asset of good will, without which the business must disintegrate. Little hope of advancement is offered to the salesman and saleswoman who may hand out only what is called for. The errand boy, if he can wrap as many packages and do it smilingly, is quite as valuable.
The writer hereof desires to present the matter in a way which will be of advantage to retailers—to bring before them again some of the fundamentals of sound business policy. By no means do all retailers err in the matters to which I have called attention, but there is an increasing and unfortunate tendency for the trade to go the way I have indicated. I believe in advertising and in all the national advertising that can be done without impairing one’s resources. I believe in making the best article of merchandise that can be made at a given price; in giving everyone employed in making and selling it a fair, living wage; in giving the retailer a fair margin of profit, and in giving the consumer who pays for it all the best article that can be had for the money paid.
The dealer who receives an article having merit and helps the manufacturer to introduce it, places the manufacturer in a position to allow him a satisfactory margin of profit, for the manufacturer has not been obliged to spend money unnecessarily and can afford—if he follows a sane advertising policy—to make a first-rate article and allow the dealer a fair return.
One of the greatest business houses in the world will tell you that they will stock your article if it has merit, dependability and is good value for the money, for they have trained salesmen and saleswomen, and the reputation of their house for selecting high grade merchandise is so well known that their customers act upon their advice. The reputation of this house has been built upon the policy of skill and knowledge applied to the purchase of goods, and to my mind this is the cornerstone of a solid business structure.
The house referred to would, no doubt. if given the choice of two articles of equal merit, lean towards the one most widely known and the most easily sold, because they believe in the power of national advertising, but the consideration which in every case determines their choice is quality and sale ability.
That dealer who adheres to a policy of handing across his counter only those nationally known lines which are most in demand is likely to find competition very keen. He may find that more articles are advertised and called for than his turn-over warrants him in putting into stock but having adopted the policy he is obliged to carry it out. The conditions under which business is done in our time make the carrying out of this policy difficult for the following reasons:
The American public today is differently situated on account of communication and transportation advantages than it was many years ago. In earlier times, when an article came upon the market in the East, it did not reach the Central West until the following year and by the third year it appeared on the Pacific Coast. The merchant was thus able to dispose of his stock. He had time to turn himself and to give consideration to new goods which were offered. Conditions to a certain extent protected him from taking on too much stock. Today when the people take to a new article, the demand flares up all over the country at the same time. The dealer is urged to buy and take advantage of opportunity at its flood. The goods are produced and distributed rapidly and sometimes the market is saturated before the dealers dispose of their stocks. In the meantime, another new idea has taken hold of the public fancy and the dealers are called upon to make new engagements of capital before they have fully realized on the old.
How much better it would be if dealers, without disregarding the power of national advertising, were to stock conservatively, studying closely the lines best adapted to the trade of their respective localities, and stick to those lines, permitting themselves only a careful excursion into occasional promising fields. The dealers who have clean, saleable stocks, with salespeople trained to sell the goods because they know how to present their merits, are fortunately situated, for their credit is A-1 and they can sell the lines they have in competition with other stores because the lines selected are reliable and appropriate and their salespeople know how to present them. Such dealers, having a sound business structure, are little tempted to overload their shelves or spread their capital out into too many different lines.
Most of the big industries were started on limited capital which would not permit of national advertising at the time of their inception. They built their business gradually to a point where they could afford to spend larger and larger sums for advertising. Had they been obliged to create a demand for their goods before any dealer would attempt to sell them, many of our established and successful concerns would have had much greater difficulty in getting started. Concerns of more recent origin have derived much benefit from the work of the pioneers who popularized certain ideas, with the result that improvements and modifications thereof have met with a more sympathetic reception from the trade and the public. They in turn have aided others unwittingly, perhaps, but nevertheless certainly, for every performance that bears the stamp of honest effort intelligently put forth helps others as well as its own sponsors.
It is by no means my intention to suggest that an effort should be made to sell every customer of a retail establishment a substitute for the goods for which he asks. If, however, in the opinion of the salesperson the store has a better piece of merchandise for the same purpose and at or near same price
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—provided price is a factor— then it should be the duty of the salesperson to call attention to the merits of the superior article. If the matter involves service, and price is not an especial consideration, then the duty of the seller is all the more evident. If the clerk merely hands out s called for, knowing that he has something better in reserve, he falls short of his opportunity to serve his employer, whose business depends upon the customer who, pleased with the service, returns again and again. li the customer, after having an opportunity to compare two articles, deliberately selects the inferior one, he has only himself to blame, for whatever shortcomings it may develop must be laid at the door of the manufacturer, not at that of the dealer. Having placed the facts before the customer, the dealer has fulfilled his duty as a merchant. Advertising is one of the greatest assets of the business world. It creates demand for practically everything which is subject to sale. It stimulates trade, and brings customers into stores, giving to sales le chances they could not otherwise have had thrust before them. Advertising, however, is like strychnine—a fine stimulant when administered by the competent person, but injurious and sometimes fatal if taken in an overdose.
Like strychnine, too, advertising is cumulative, but beneficently, not harmfully so. The importance of advertising increases from year to year as its principles are studied and its practice approaches more and more nearly to that of the more exact sciences. I believe that the part the retail merchant has played in the business world of today has been underestimated. Unquestionably the majority of national concerns of great wealth owe their early successes to the cooperation of retail merchants, who took the time to explain to their customers the merits of merchandise not then known to them, thus building up sales and enabling manufacturers to strengthen their financial position and increase their distribution to a point where they found themselves able to advertise in a large way. You, distributors of America, do not cast away the advantage that has been yours, but keep your salespeople thoroughly posted on articles which are, in your judgment, the best at a given price, and always be willing to give your customers the benefit of your knowledge. Thus, you will greatly benefit yourself, your customers and the industry generally, and lay a lasting foundation for your business.