30 



HARDWOOD RECORD 



c sting talk on "Sales Cost from a Jobber's 

 Viewpoint." Mr. Brown expressed a senti- 

 ment favorable to an elastic price list. His 

 talk is herew'ith reprodiifod: 



Sales Cost from the Jobber's Viewpoint 



'I'liis cont'croncc lalli'il liore today ]jrcsages 

 iniicli of vital iutcrost to every lumberman. As 

 eompetition constantly becomes more keen the 

 margins of protit tliminisb and the need for co- 

 operative and concerted action with a view to 

 minimizing sales cost becomes more manifest. 

 The various topics offered to this body for dis- 

 cussion has claimed the attention of the mosi 

 enlightened and constructive thinkers in the 

 lumber ti-ade at various times in the past, both 

 in convention and through the trade press. Con- 

 certed action after a general discussion of sug- 

 gestions advanced by representative men from 

 so wide a range of territory, men actuated by 

 similar motives, is always profitable, and when 

 such consideration is indulged in by sales man- 

 agers, it touches the most vital part of the lum- 

 ber industry. 



A certain volume of business must be done by 

 every individual or Arm to defray the fixed ex- 

 penses contingent upon the carrying on of any 

 business. These sales add nothing to the visible 

 income, but when the point of overflow is passed, 

 it is a surplus sold above this amount that makes 

 profits, adds to the bank account and cancels 

 the outstanding bills when such sales have been 

 made at a minimum cost for the maximum price. 



J. GIBSON McILVAlN', ,JK., PHILADELPHIA, 

 PA., DIRECTOR 



The question which I have been asked to dis- 

 cuss is not a new one. The cost of sales as 

 viewed by a jobber includes many features hear- 

 ing upon the following six factors ; 



1. The manufacture of lumber. 



2. The product itself. 



3. The demand for this particular product. 



4. Methods of advertising. 

 ;■). Salesmen. 



6. (Most important) The sales manager. 



Careful and intelligent consideration of these 

 factors in connection with the cost of sales of 

 lumber is of more importance in similar com- 

 mercial pursuits than actual production. 



Let us consider each of these factors briefly 

 in this connection. We have all learned by ex"- 

 perience that when we have an article of good 

 quality, well manufactured and of high grade, 

 when properly introduced it will sell itself at a 

 premium, with small sales cost to the jobber. 

 Considering this question purely from a lumber 

 point of view, the selling cost contingent upon 

 the marketing of a certain quantity of lumber 

 increases and the margin of profit shrinks direct- 

 ly in proportion to a decreasing qualitv of manu- 

 facture and grade. Of considerable "importance 

 in itself and closely allied with the manufacture 

 of lumber, is the manner in which it is handled 

 and transported. 



Now as to the product Itself and the demand 

 for it. Primarily it must be introduced to the 

 direct consumers and musi be suited as nearly as 

 possible for their own particular requirements. 

 Further, this introduction must be made when 

 there is a present or an anticipated need. We 

 are constantly seeking to place our products 

 with the consumers where we find least resist- 

 ance and at the same time with those whose 



credit is commensurate with their requirements. 



Now wo come to the salesmen who represent 

 the sales manager, and we might sa.v. is a pro- 

 jection in a sense of a sales manager. Every 

 tiber of the salesman's makeup enters into the 

 cost of sales. His habits, his industries, his 

 ambition and his integrity are perhaps the most 

 salient points to consider. When he is on duty 

 his time belongs to his employer and not to the 

 liratification of any of his personal tendencies. 

 It he is ambitiousfor the future success of his 

 department he will not overlook the fact that 

 liis statements concerning the product which 

 lie offers must coincide with the quality of the 

 stock when delivered. Every time a salesman 

 secures an order that is filled to the satLsfaction 

 of the customer he helps to reduce the sales cost 

 of that product iu so far as the customer will 

 not require the same amount of argument when 

 be finds that he can place confidence in the 

 salesman whom he naturally considers as a per- 

 sonal representative of the sales manager and 

 hence of the concern itself. If the salesman is 

 a man who thinks and takes advantage of every 

 opening and circumstance which presents itself, 

 or which he can discover for the furthering of 

 his employer's interests, and takes special pains 

 to see that his employer receives the full benefit 

 of his discovery, he will not only be strengthen- 

 ing himself personally and his future prospects 

 and usefulness, but will at the same time leave 

 behind him a trail of confidence, which is the 

 underlying principle upon which commerce is 

 founded in connection with the goods he is mar- 

 keting. 



The last and most important factor which 

 enters into the cost of sales as I have analyzed 

 the question is the sales manager. As already 

 stated, be is the man who must, by his tact, in- 

 genuity, integrity and knowledge o"f the business 

 and of the articles which he is marketing, find 

 a man who wants these products and create 

 within the mind of that man a desire for this 

 particular Hue. Insofar as he succeeds in 

 Iiringing this about, he succeeds as a sales man- 

 ager. His temperament, his tact and his intelli 

 gence are of vast importance, for it is an ex- 

 Ijcnsive thing to allow the mail to carry a hasty 

 word or an impassioned statement which often 

 costs not only the immediate sale in question 

 imt jeopardizes all future business. 



The cost of sale, therefore, in its final analy- 

 sis as viewed by a jobber, includes the human 

 element of character. That industry which is 

 successful in maintaining a force of men w'ith 

 high ideals and a strict sense of right and wrong, 

 is the concern \vbo.se cost sales will be lowest 

 and margins highest. 



The president then introduced Ilamiitou 

 T^ove, of Nashville, who spoke as follows 

 relative to the hardwood code book which 

 lie recently compiled in the interest of the 

 l;ardwood lumber trade. 



Mr. Love's Talk 



For fifteen years I have been sales manager 

 of one hardwood bouse, and during all of this 

 time I have wrestled with the telegraph codes 

 in vogue. I have all along keenly felt the need 

 of a code that was in universal use and one 

 that was simple to a maximum degree — one that 

 could be understood by the most ignorant saw 

 mill men, convenient for the busiest sales man- 

 ager and one that could be carried in the pockets 

 ot traveling salesmen and buyers. About a year 

 ago I worked out .such a code, confining same 

 exclusively to the hardwood branch of the lumber 

 industry and published an edition of 2,0t>0 copies 

 at quite a little expense. Realizing that it would 

 be of little value unless it was universally used, 

 I selected after much red tape a list oi' 1.200 

 prominent manufacturers, dealers and users of 

 hardwoods in this country and Europe and wrote 

 each one a letter, giving them a prospectus of 

 the hardwood code and told them that, unless 

 they objected in the meantime, I would publish 

 their names in the book as users. When the 

 book was published I would send thera a copy 

 and if it looked good to them they could send 

 me the price, which was really nominal — $:-!.50 — 

 but if for any reason they did not care to pay 

 the price there would be no charge, but they 

 were to agree to accept the book free ot charg"e 

 and use same when the opportunity presented 

 itself. This was necessary in order to keep mv 

 records complete and make the list of users i"n 

 the book bona fide, so as to avoid any possible 

 confusion. 



Well, for reasons of their own, 7.10 accepted 

 iny free offer and they were presented with their 

 copies gratis aud no questions asked. Not one 

 of the 750 made any adverse comment on the 

 work, but practically all of them endorsed it 

 The rest of them paid for the books, but on the 

 whole "I came out in the hole" financially, but 

 1 obtained the object sought, viz. : getting into 

 universal circulation a code that was practical 

 concise and one that would be of much use to 

 the busy hardwood lumberman. 



Since the issue a great many of those 750 have 

 not only paid for the books, but have written 

 very complimentary letters regarding the work 



I am just about even on the ' proposition now^ 

 but in order to keep up the cause 1 will have 

 to have a new edition printed soon, which will 

 be an additional expen,se, and it will take some- 

 time to get back even again. I am not complain- 

 ing about this and only give these facts to show 

 that the whole proposition is not one designed' 

 for profit, but really for tlie benefit tif the hard- 

 wood trade. 



I still stand ready to give any new- firm, not 

 on the list of users, a copy ot the code free of 

 charge if they are not willing to pay for it. 



I do not want to be placed in the attitude 

 of running down the other codes or coming in 

 competition to them. They are all right if you 

 - have the time and patience necessary to "use 

 them. My (aily adverse comment is that they 

 are too complete aud therefore cumbersome and 

 unhandy. Every one of ynu as practical sales 

 managers and business men, know the disad- 

 vantages of the larger codes. The Western Union 

 code, for example, has 10(i,tHiO words or one hun- 

 dred times as many as the Hardwood code. The 

 Telecode has over til, 000 and the Universal prob- 

 ably 75,000. Besides these codes contain many 

 intricate tables and complicated keys aud other 

 enigmas to worry your brain while you are trying 

 to formulate or translate a message. It is also 

 impractical for a traveling man to carr.v one of 

 these large books around with him. All of you 

 are familiar with these details, so I do not be- 

 lieve that further comment is necessary on these- 

 points. 



The Hardwood Code is a pocket edition and 

 contains exactly !>S7 words, and every one ot 



CHESTER F. KORN, CINCINNATI. O., 

 DIRECTOR 



them are familiar, English dictionary words, rec- 

 ognizable by even the most unsophisticated tele- 

 graph operator, and the chances of error in trans- 

 mitting messages is minimized ; quite in con- 

 trast to the other codes, whose compilers, it 

 seems, tried to select the most outlandish code 

 words in the dictionary, and an operator has to 

 be a pretty good disciple of .Noah Webster to 

 transmit or receive them correctly. 



Every one of you knows the advantages of 

 using a code. Aside from the great saving in 

 telegraph tolls, there is the advantage of secrecy 

 and privacy in transmitting your business by 

 wire. This is not such an important factor iij 

 the larger cities, but it is sometimes a great 

 advantage where the message is sent from or 

 received in a small town, where it may be tc^ 

 your interest to keep the information contained 

 in the message away from the telegraph operator^ 

 who might possibly be a friend of your com- 

 petitor. 



The Night Letter service has cut down to some 

 extent the use of telegraph codes, but when you 

 consider that in this service ,vou have to wait 

 from twenty-four to forty-eight hours for tele- 

 grams to pass, it is not of much use to one 

 wanting quick action. 



Until the end of time telegraph codes will be 

 used by lumbermen, and in this enlightening age, 

 where we live a week in a day, lumbermen are 

 using the wires twenty times" more than they 

 did twenty years ago. Stocks of all kinds, in the 

 hands of shippers, are uncertain ; wholesalers do 

 not want to sell something they are not sure of 

 furnishing at a profit, and consequentl.y they are 

 using the wires to locate the stock and s"ecure 

 Iirices before definitely accepting an order from 



