12 
THE NATIONAL NURSERYMAN 
Profit in its true sense represents yield on investment and is what the business 
pays the owner for the use of his capital therein invested. 
It is an uncontrovertible fact that the safest selling price is based upon the 
most accurate information on all these sub-divisions of your business expense ; in 
this and no other way can a profit be assured, for in using your competitor’s cata¬ 
logue to fix your selling price, you are using his cost to figure your profits. 
COST OF GROWING NURSERY STOCK 
The following letter is self explanatory. It was sent out 
by the National Nurseryman with a view of opening up 
the subject of cost as applied to the growing of nursery stock. 
The editor wishes to express his appreciation of the 
numerous candid replies which are given below. They show 
the nurserymen are fully alive to the importance of the sub¬ 
ject. Even if no practical method of determining cost is 
discovered, a general understanding of how prices are made 
will at least have a tendency to halt price cutting. If cost is 
known it is possible to undersell the other man and still make 
a profit but when it is not known as in the case of nursery 
stock price cutting is .suicidal. 
Flourtown, Pa., Dec. g, igi2. 
Gentlemen: 
The NA TIONAL Nurseryman would appreciate it if you 
would answer the following questions for publication: 
The same letter has been sent to one hundred' representative 
nurserymen, so that the answers should give much light on the 
subject and be of much benefit to the nursery business: 
(1) Have you any method of determining cost of production? 
(2) If so, will you kindly give an outline of your method? 
(3) Is the cost of production as near as it can be arrived at, 
a factor in your selling price? 
{4) Does the other man s catalogue price influence you, 
rather than what you think the price should be? 
(5) Can you name any items that in your opinion are 
being sold below cost? 
If desired your name will be withheld, merely publishing 
the answers. 
Trusting you will favor us, I remain. 
Yours very truly 
EDITOR. 
No. I 
“(i) We have no particular method in determining the 
cost of production; we found it a very difficult matter to 
ascertain the cost of each tree, shrub or evergreen, etc. 
“(3) Nursery stock of easy propagation generally sells at 
lower price, than such as require more skill, more expense and 
more time. Extra expense does not always increase the 
selling price, for instance, eight and ten years ago the extra 
expense of spraying and extra loss of destroying scaly trees, 
did not increase the price of apple trees, although they were 
selling then at about cost of production or below. Supply 
and demand make the price. 
“(4) One man’s catalogue does not influence us what the 
price should be, but the catalogue of several nurserymen do 
influence us. 
“(5) At the present time we do not remember anything 
which is selling below cost.” 
No. 2 
‘Tn response to your request of the 9th, we are sorry that 
we cannot give you information in this regard, as we have 
not attempted to get at the cost of production.” 
No. 3 
“Nos. I, 2 and 3, that we have no method of determining 
cost of production, and therefore the cost is not much of a 
factor in determining our selling price. 
“We have thought about this cost matter a great many 
times, and have tried to figure out some method by which 
cost could be ascertained, and as a matter of fact did start in 
on the proposition about four years ago and continued it for 
a few months, but found that if we were going to get any 
accurate figures that'it would mean the employment of a time 
keeper who would have to be a fairly good accountant, and a 
man we could not secure except at a fair salary. It was also 
evident that an experiment of that kind must be conducted 
over a considerable term of years to get at fair averages, 
because results vary so greatly on account of climatic condi¬ 
tions, drought, floods, frost and heat, and the variations in 
the soil. 
“If it could be established that one farm could turn off 
Apple trees at a certain cost, it would not be a sure thing that 
another farm could hold at the same figure, and we also felk 
that even if the methods were continued over a series of years 
and figures arrived at that we would still be up against this 
proposition that when our trees came into the market and 
were fit to dig, that they must be dug and disposed of and 
must be sold at the market, regardless of cost, or else put on 
the brush pile, so that we could not figure how we were going 
to be much better off if we knew the actual production costs, 
except that it might lead us to abandon the growing of certain 
things and let somebody else grow them, and buy of him. 
“When we see one block of trees count up 70% of the 
budding in No. i trees, and other blocks count 25% to 30% 
on No. I, it looks to us like a pretty difficult propo.sition to 
get at average costs. This we think will also answer ques¬ 
tion 5. 
“Answering question 4, in making up prices we think we 
are all influenced more or less by the other fellow’s catalog 
prices, although, of course, we try to get as near as we can to 
the price at which we think the goods should be sold.” 
No. 4 
“We are obliged to state that we have not adapted any 
method of determining cost or production. We have based 
