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The Lumbermen s Round Table 



THE PRICE AND THE SALE 



Just at this time, nheu trade is seasonably quiet, aud businets uoii- 

 ditions are likewise affected by such important faetors as the proposed 

 currency revision, it may be well to quote the wise saying of a leader 

 in the hardwood field on the subject of cutting prices: 



"The dealer who resorts to a reduced quotation in order to close 

 a sale," he said, "seldom does himself any good, but only disturbs 

 the market. Under ordinary conditions reducing prices does not 

 stimulate the demand, but simply means taking the available business 

 with a reduced margin of profit. It is the exceptional buyer who 

 will order a car that he doesn't need simply to get a bargain; and in 

 most cases when a sale is made at a cut price, it could have been 

 made at the standard quotation just as well. It takes a little more 

 salesmanship to handle a buyer without yielding to the temptation 

 of reducing prices; but who wants to be a mere order-taker?" 

 SHALL IT BE QUANTITY OR QUALITY? 



The uld debate between sawmill iiiou on the subject of cutting the 

 lumber for quality or quantity still comes up occasionally, and some 

 pretty good points can be scored on both sides. It is true enough 

 that conditions have changed radically in recent years, with the 

 growing scarcity of hardwood timber and the constant advance in 

 price. This advance has proceeded more rapidly than that on labor, 

 so that if there were ever anything in the argument that it is worth 

 whUe to sacrifice a little in output in order to improve the grade, it is 

 all the more cogent now. 



The happy medium is the only solution of the problem. Nobody 

 wants his sawyer to waste an unreasonable amount of time turning 

 over the log and figuring out 'how he can cut it so as to make the 

 most lumber ; nor does the average millman like to see a slambang 

 run that turns out stock in unusual quantity but kills the grade. The 

 sawyer who can keep the production up and not overlook any bets in 

 the way of increasing the percentage of firsts and seconds is a real 

 jewel, and is generally appreciated, and he realizes that both features 

 of his work are important. 



At the same time, it is porobably true that in the small mill the 

 quality end of the argument ought to be given first place, while in 

 the large one, with big overhead expenses facing the operator, the 

 only way out is to keep the production up to a high mark. 

 EXCHANGE OF CREDIT INFORMATION 



A number of local lumber clubs have endeavored to make use of 

 the information which their members possess regarding credits by 

 exchanging data on this subject. The plan usually decided upon 

 is similar to that used by the general organization, that is, the secre- 

 tary or other executive of the association keeps in his office a list of 

 firms upon which reports have been made, and at the same time main- 

 tains a file of letters and other written information upon which the 

 reports are based. The latter feature is of particular importance, 

 because it has been pointed out that the only danger to which a club 

 exposes itself in transmitting information regarding the credit or 

 general desirability of a customer would result from the distribution 

 of reports which axe not backed up by evidence in the form of letters 

 from its members. Legal advice on this point is to the effect that 

 when a list of names is sent out, with the specific purpose for which 

 it is to be used — credit information — noted upon it, and with sufficient 

 data in the office of the organization supporting the report, no trouble 

 with the authorities need be anticipated. 



DON'T TAKE AN UNEARNED DISCOUNT 



In connection with the point noted above, the growing tendenc}- 

 on the part of members of the trade to exchange credit information, 

 lumbermen and others should remember that deducting a discount from 

 a bill after the discount period has passed makes them legitimate 

 material for inclusion in a list of undesirables. This is as bad as 

 being slow or uncertain in paying, unfair in grading and measuring, 

 having a poor rating or possessing any of the other disqualifications 

 for dealing with other business concerns. Houses which are irre- 

 proachable otherwise, from a credit standpoint, frequently acquire a 

 —26— 



\cry undesirable reijutatiuji aiiiijuy tin- liude just by virtue of trying 

 to get something to which they are not entitled in the form of un- 

 earned discounts; and tlie concern w'hich is as jealous of its reputation 

 in this regard as it ought to be will not run the risk incident to taking 

 the alluring two per cent when it isn't entitled to it. The victim 

 of such a deal may accept the check and say nothing, but sooner or 

 later the act, if repeated, will be a business indictment the terms of 

 which are generally familiar. 



ARE YOU A SPECULATOR? 



\\'licu a cotton sjiiuuer takes a contract to deliver 100,000 pounds 

 of cotton yarn between now ami next May, tor example, he im- 

 mediately covers his requirements by purchasing 100,000 pounds of 

 cotton, plus a fixed percentage for waste. He declines to speculate 

 in what the market is going to do in the intervening months, but 

 assures a profit on his manufacturing operations by getting the cotton 

 at the price basis he used when he quoted the buyer of yarns for May 

 delivery. 



A lot of lumbermen are in the habit of making contracts with con- 

 sumers to supply lumber during the ensuing twelve months at a given 

 price without having bouglit the logs which are to be used in manu- 

 facturing the lumber to be delivered on that contract, or otherwise 

 anticipating the situation and avoiding a loss in the event the price 

 of lumber — aud logs — should go up. The lumberman may object that 

 it is impracticable to buy logs that far in advance of manufacture, 

 and it would be bad business to carry more than three or four months' 

 supply ahead. If so, why make contracts? 



Isn 't it true that the chief reason why contracts are broken by sellers 

 as well as buyers — the latter side of the situation has been discussed 

 pretty often, so there is no need of going into it here — is in order to 

 avoid a loss brought about by an unfavorable change in the market 

 situation? That being the case, the contractor ought either to make 

 sure that his costs will not be excessive, by buying or contracting for 

 timber ahead of time, or quit making agreements which he may not 

 be able to fulfill. 



"I won't sell anybody lumber for delivery more than three months 

 ahead," said a leading member of the trade not long ago. "To get 

 a contract involving large blocks of lumber it is necessary to sell 

 at current prices, or lower; hence when you make a contract of that 

 kind, you are simply wagering on the market remaining stationary 

 or declining. In view of the general tendency of hardwood values for 

 years past, the odds are against the seller. Besides, if the price goes 

 down, you run the risk of the buyer wriggling out of his contract. 

 For these reasons I have passed up the annual contract as a poor 

 form of salesmanship." 



TELEPHONE AND TELEGRAPH 



' ' One of the best ways to get an order, ' ' said a lumber salesman 

 who is wise to most of the wrinkles of the selling game, "is to use 

 the long-distance telephone. Frequently I have missed getting busi- 

 ness, and then called up from my next stop to offer the buyer a 

 special proposition of some kind. He is naturally impressed with the 

 fact that I regard the proposition as important, or I wouldn't be 

 using the 'phone, and not infrequently I land him, That involves 

 getting the confirmation by mail, but ordinarily isn't diflicult. " 



In the same connection the head of the collections department of 

 a well-known concern said recently that the use of a wire to a de- 

 linquent customer will have more effect than anything else. It shows 

 the debtor that the lumber house is in earnest, and that the account 

 must be given attention. 



"Don't use the telephone on cases of this kind, howevef, " advised 

 the collection expert. "The man who owes you can tell his tale of 

 woe so easily over the 'phone that it 's hard to insist on action, while 

 the cold, crisp message of the telegraph makes a response necessary." 



If that car shortage could be made to curtail lumber production 

 instead of delaying shipments it would have a good influence on 

 the market and profit the manufacturers. 



