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.”