To the man who has made no attempt to secure them, the compilation of these statistics may seem an endless task, not justified by their value. Actually, the magnitude of the task is, to a great extent, governed by desire; a man is quite likely to obtain what he really wants, and as his desires increase the difficulties decrease.
When it comes to the actual work of preparing these statistics, the difficulties are found to be really minor ones. The main thing is to do the work every day; to record the transactions of a single day does not involve an undue amount of labor, but if allowed to get behind, the task assumes appalling proportions.
Modern billing systems make it possible to tabulate certain of these statistics when the bills are made. The adding machine is also of inestimable value in statistical work; computations which would involve a whole day of hand-and-brain work are made in an hour on a modern adding or calculating machine.
In deciding what statistics should be compiled, the nature and needs of the business must be considered. It is usually unnecessary to use as the unit a single brand of a given commodity. A wholesale grocer, for instance, would not find it necessary to make separate records of each brand, or even each article, in canned goods. They would be divided into classes—as vegetables, fruits, and meats, and each class would be treated in the records as a single commodity. When taking on an entirely new line, he might wish to compile separate statistics for a time, but when the fact that the line is a profitable one has been established, the special statistics would be unnecessary.
Again, one house will find it advisable to go into certain details not considered necessary in another establishment. For example, one house has, as a result of the facts revealed by their statistical department, established a system of bonuses to their salesmen based on the profit percentages of their business. This necessitates a record different from any of those that have been shown. This concern has grouped the goods in each department according to percentages of gross profits—as 5%, 10%, 20%, 25%, etc. Each salesman is given a monthly quota—based on salary, territory, and previous sales—which he is expected to reach. This quota specifies not only the amount of sales but the percentage of profit; each $100.00 of sales is expected to include not more than a certain amount of 5% goods, nor less than a given amount of 25% goods, the exact ratio of each being given. If a salesman exactly equals his quota, maintaining the percentage prescribed, he is given a small bonus; if he exceeds his quota and maintains the prescribed percentages, or increases the percentage of sales of the more profitable goods, his bonus is increased in proportion to the increased profits—the greater the percentage of profits, the more rapid the increase in the bonus. On the other hand, if his sales of goods sold at a small profit increase, he is penalized by being denied a bonus, no matter what the volume of his sales.
Fig. 11. Salesman's Comparative Sales Statement
This bonus system, which is an adaptation of the bonus wage system used in factories, has the effect of increasing the sale of the most profitable goods. When a customer places an order for goods in which there is little profit, the salesman—who cannot refuse the order—is given an incentive to push the sale of more profitable goods; he must do so as a matter of self-protection.
To determine the bonuses, statistical statements differing from those already shown are necessary. These statements must divide sales according to percentage groups, rather than by commodities, as shown in Fig. 11. The data for this statement is taken from the commodity sales statement, Fig. 4, and with an adding machine can be tabulated very quickly.
Another house, which does an exclusive mail-order business, keeps accurate records of the sales resulting from circular letters, charging the cost of the letters, including postage, to those sales. Records are also kept of the sales of each correspondent. When an order is received, the correspondence record is examined and, if the order is in response to a dictated letter, the correspondent receives credit. Each correspondent is required to keep a record of the number of dictated and form letters that he uses, the cost of which is charged against his sales. At the end of the month results are tabulated showing the percentage of orders secured from circular letters and from dictated letters; the amount of business from each letter of each correspondent; and the percentage of cost to the cost of goods sold.