CHAPTEK V. 



• THE FARMER AND THE TRADESMAN. 



TRADESMEN — meaning especially retail tradesmen — 

 seldom make as much money as farmers suppose. In 

 the first i)lace, the actual cost of transacting a retail busi- 

 ness will vary from fifteen to twenty per cent upon the value of 

 the goods sold, depending upon the amount of business done. 

 A very large retail establishment may reduce cost of carrying- 

 on business below fifteen per cent, and a retailer in a town or 

 city is in danger if his cost runs above that. But upon many 

 articles, like sugar and flour, wliose wholesale cost is known to 

 the public, the profit is usually less than fifteen per cent. It 

 is essential, therefore, that at least equal quantities shall be 

 sold at a profit greater than is required upon the average, to 

 cover the cost of business, or it is only a question of time 

 when failure must follow. There are also other losses, notabh^ 

 bad debts and dead stock. The dealer will try to purchase 

 only what he can sell, but he is as liable to error as other 

 people, and accumulates unsalable stock, which becomes shelf- 

 worn and must be sold for whatever it will bring. While 

 an estimate of fifteen per cent upon the "turn over" may be 

 assumed to cover depreciation and bad debts, whether or not 

 it actually does so depends mainly on the good judgment of 

 the tradesmen. A little calculation will make this plainer. 

 If a small dealer puts $3,000 into stock, and "turns" his capital 

 three times a year, his annual sales will be |9,000, upon which 

 fifteen per cent will be only ^450.^ It is evident that in a busi- 

 ness conducted on so small a scale, fifteen per cent will not 

 pay cost of transacting it, but with an average profit of twenty- 

 five per cent, yielding $750, the dealer can live, if he has help 

 in his own family, and does not make too many bad debts. 

 For retail stores, such as the farmer most commonly deals 

 with, an average profit of twenty-five per cent is necessary if 



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