Department Sales. Next in importance to a knowledge of profits on a single commodity is a knowledge of the results produced by a department. This necessitates a record of departmental sales. Sales and profits measure the efficiency of a department, just as they do of a salesman.
Fig. 6. Record of Total Sales of One Commodity
RAILWAY EXCHANGE BUILDING, CHICAGO, ILL.
An Excellent Example of the Modern Type of Office Buildings
The necessity for departmental records depends on the business. A manufacturer who produces but two or three articles needs only records of sales of commodities; a wholesaler requires records of sales of classes of goods. In a wholesale business, departmental divisions are distinct; each department is in charge of a head, and the record of the department is his record.
In a comparison of departmental profits, the percentage of net profits should not be followed blindly. Certain departments are not money makers. To a certain extent it is possible to discontinue unprofitable lines, or even departments, but in some businesses it is necessary to maintain departments which are not profitable. In the dry goods business—either wholesale or retail—the margin of gross profit in notions is so small that it is doubtful if, when all legitimate expense is deducted, a net profit is realized. The salesman for a wholesale house whose sales of notions is largest, has made the poorest record; the manager who has kept the sales of the notion department at the lowest price—at the same time keeping his stock down—may be the most efficient.