14 



X. H. Agri. Experiment Station 



[Bulletin 251 



132,805. Sales per man varied from less tlian $20,000 up to $60,000 

 ■ — an indication tliat the labor problem is handled more efficiently in 

 some stores than others. 



On a dollar of sales basis, the range was from $.03 to $.10 with an 

 average labor cost for all stores of $.0598 per dollar of sales. There 

 were four stores with a labor cost of $.035 per dollar of sales, twelve 

 with $.045, eleven with $.055, eight with $.065, four with $.075, one 

 with $.085 and one with $.105 labor cost per dollar of sales. 



The effect on the labor cost of securing large sales per man is shown 

 in Table 10. Labor costs are reduced approximately $.02 as sales per 

 man are increased from $20,000 to $60,000; or for each $1000 increase 

 in yearly sales per man, labor costs are reduced $.0005 per dollar of 

 sales. Since labor represents over half the total cost of operating a 

 grain store, it is possible to show the relationships for sales per man 

 with total costs and gross margins per dollar of sales. As sales per 

 man increase from $20,000 to $60,000, total costs decrease approxi- 

 mately $.06 and gross margins approximately $.05 per dollar of sales. 



Fifteen of the stores included in this analysis were operated at a 

 loss and 26 at a profit. Many more of the stores could have made 

 a profit if they liad dropped one or two men from the pay roll. 



Table 10 — Relation of Sales per Man to Labor Costs, Total Costs and Gross Mai-gins 



The efficiency of those stores with an average sale per man of 

 $32,000 or above is reflected not only in greater net profit, but in de- 

 creased gross margins. This means a decreased price of grain to the 

 trade. 



Because of the small sales in the afternoon, one manager found it 

 possible to save the expense of one man by closing the store half a 

 day so that the same person could handle sales in the morning and 

 make deliveries in the afternoon. This change was effected in an or- 

 derly manner by mailing notices to the trade several weeks in advance, 

 stating the mutual advantages to be gained and when the new system 

 would commence. Through this greater efficiency, labor costs were 

 reduced approximately $1 a ton. The yearly sales of this store av- 

 eraged $40,000 which is above the average of the group studied. 



Doubtless many border-line cases do exist where added or decreased 

 help is in question. Many claim they can afford to hire a man to 

 stay at the store while they visit the customers, obtain more trade, 

 collect bills, etc. 



Through the cooperation of five store managers, the daily distribu- 



