in order to make money, you have to sell them." Such is emphatically the case. Many years ago a man acquired a small varnish factory in part payment of a bad debt. Among the assets he found a barrel of tropical gum that had been sent North by an exporting house to find out whether it could be used in the manufacture of varnish. It was quickly determined that it was of no use for this purpose. The new owner thereupon commenced a series of experiments to see whether or not it could be manufactured into chewing gum. Eventually he discovered that it not only could be used for this purpose, but was extremely well adapted for it. He and his associates found out how to flavor it, invented machines to roll it and pack it, and finally put it on the market. They made a little money, but not much. There was a good deal of competition; and, although their article was good, the sales didn't increase; and after the new business had been carried on in a modest way for some time, he sold it with all of his machines and patents to a Chicago man named Wrigley, who thereupon proceeded to tell the whole world how the "flavor lasts," and rapidly built up a great fortune. The man with the producing ability and the knowledge and technique of manufacture, in this case failed to reap the rewards. The man who got them was the one who could sell. Selling ability is a sine qua non in this business. Producers of high-grade articles who have gone bankrupt on account of inability to market their products can be cited by the hundreds. RECOMMENDED READING CHURCH, A. H., Making of an Executive (D. Appleton and Co., New York, 1911). COOPER, C. S., Foreign Trade Markets and Methods (D. Appleton and Co., New York, 1922). DUNCAN, JOHN C., Principles of Industrial Manage- Organizing for Work (Harcourt, Brace and Co., HOUGH, B. OLNEY, Practical Exporting (American Exporter, New York, 1920). HOXIE, R. F., Trade Unionism in the United States (D. Appleton and Co., New York, 1917). HURLEY, E. N., Awakening of Business (Doubleday, Page and Co., New York, 1916). REDFIELD, W. C., The New Industrial Day (Century Co., New York, 1913). THOMPSON, C. BERTRAND, How to Find Factory Costs (A. W. Shaw Co., New York, 1911). CHAPTER V THE MERCHANT HE manufacturer is the man who changes TH the wheat into flour. The merchant is the man who sees that the flour gets into the housewife's kitchen. His function is essentially that of a salesman, and his whole business consists of buying goods and then selling them at a profit. The corner grocery store is a good example of merchandising on a small scale. It is not necessary to explain his business. Everybody understands what goes on in his store. His business looks easy, but as a matter of fact it is not particularly easy. Good judgment has to be used in making purchases, and in making sales, besides a natural ability to sell. A young man may start out as a clerk in a store and, after a few years in one department, come to the conclusion that he can run the store as well as his employer. The business seems to consist simply of buying and putting a lot of goods on the shelves, selling them to the people who come in, and then pocketing the profits. The young man, therefore, borrows some money from a relative, friend, or even from a bank; buys a stock of goods and starts in business. For a while all goes well and he is seemingly making a success of it; but, after a year or two, he finds that he has a good many bad accounts, that his goods have become shop-worn, that he has used up his profits to live on, and has not the wherewithal to replenish his stock. His books do not balance, he is not sure whether certain lines of goods have shown him a profit or a loss, he has not taken an inventory, and hasn't an accurate account of his stock. The customers who came in at first begin to disappear because competitors are underbuying and underselling him, or because they are getting better service. He finds that he cannot compete successfully with his old employer, and the result is bankruptcy. He goes through the courts and next appears as a clerk in another store with a grudge against the world in general, and a conviction that he was "never given a fair show." This is just the way that a good many failures arise. Statistics from Bradstreet and Dun show that a considerable proportion of the men who enter business fail at some time. Lack of capital is given as the chief reason, incompetence and mismanagement come next, and failures caused by dishonesty are comparatively few. This seems to indicate that failures are usually caused by men entering business without proper knowledge or preparation. Incidentally, it may be remarked right here that statistics are often very misleading. Unassailable figures which point to one conclusion may not take into account the entire situation, and thereby give an entirely false impression. To give an example, a certain new hotel was built in a small Kentucky town in about 1910, with a private bathroom for every room and an up-todate restaurant. This town was just like another near-by town in which was a similar hotel which was showing good profits. Nearly all the traveling salesmen who visited this town stayed there, instead of at the competing establishment, which didn't have private bathrooms. It therefore looked like a perfectly safe bet that the new hotel would get most of the business of its only competitor. The figures and facts were perfectly correct, but there was one thing which had not been taken into consideration; namely, that the drummers, who furnish any small-town hotel with most of its revenue, do not take a bath every night. They reserve this pleasure for week-ends and always try to pick out a "live town" in which to spend the week-end, bathe, shave, reverse the ends of their cuffs, and go down to the square on Main Street, where the band stand is located. During the week they are saving money on their |