The Complete English Tradesman (1839 ed.)

by Daniel Defoe

For a young tradesman to over-trade himself, is like a young swimmer going out of his depth, when, if help does not come immediately, it is a thousand to one but he sinks, and is drowned. All rash adventures are condemned by the prudent part of mankind; but it is as hard to restrain youth in trade, as it is in any other thing, where the advantage stands in view, and the danger out of sight; the profits of trade are baits to the avaricious shopkeeper, and he is forward to reckon them up to himself, but does not perhaps cast up the difficulty which there may be to compass it, or the unhappy consequences of a miscarriage.

For want of this consideration, the tradesman oftentimes drowns, as I may call it, even within his depth—that is, he sinks when he has really the substance at bottom to keep him up—and this is all owing to an adventurous bold spirit in trade, joined with too great a gust of gain. Avarice is the ruin of many people besides tradesmen; and I might give the late South Sea calamity for an example in which the longest heads were most overreached, not so much by the wit or cunning of those they had to deal with as by the secret promptings of their own avarice; wherein they abundantly verified an old proverbial speech or saying, namely, 'All covet, all lose;' so it was there indeed, and the cunningest, wisest, sharpest, men lost the most money.

There are two things which may be properly called over-trading, in a young beginner; and by both which tradesmen are often overthrown.

1. Trading beyond their stock.

2. Giving too large credit.

A tradesman ought to consider and measure well the extent of his own strengh; his stock of money, and credit, is properly his beginning; for credit is a stock as well as money. He that takes too much credit is really in as much danger as he that gives too much credit; and the danger lies particularly in this, if the tradesman over-buys himself, that is, buys faster than he can sell, buying upon credit, the payments perhaps become due too soon for him; the goods not being sold, he must answer the bills upon the strength of his proper stock—that is, pay for them out of his own cash; if that should not hold out, he is obliged to put off his bills after they are due, or suffer the impertinence of being dunned by the creditor, and perhaps by servants and apprentices, and that with the usual indecencies of such kind of people.

This impairs his credit, and if he comes to deal with the same merchant, or clothier, or other tradesman again, he is treated like one that is but an indifferent paymaster; and though they may give him credit as before, yet depending that if he bargains for six months, he will take eight or nine in the payment, they consider it in the price, and use him accordingly; and this impairs his gain, so that loss of credit is indeed loss of money, and this weakens him both ways.

A tradesman, therefore, especially at his beginning, ought to be very wary of taking too much credit; he had much better slip the occasion of buying now and then a bargain to his advantage, for that is usually the temptation, than buying a greater quantity of goods than he can pay for, run into debt, and be insulted, and at last ruined. Merchants, and wholesale dealers, to put off their goods, are very apt to prompt young shopkeepers and young tradesmen to buy great quantities of goods, and take large credit at first; but it is a snare that many a young beginner has fallen into, and been ruined in the very bud; for if the young beginner does not find a vent for the quantity, he is undone; for at the time of payment the merchant expects his money, whether the goods are sold or not; and if he cannot pay, he is gone at once.

The tradesman that buys warily, always pays surely, and every young beginner ought to buy cautiously; if he has money to pay, he need never fear goods to be had; the merchants' warehouses are always open, and he may supply himself upon all occasions, as he wants, and as his customers call.

It may pass for a kind of an objection here, that there are some goods which a tradesman may deal in, which are to be bought at such and such markets only, and at such and such fairs only, that is to say, are chiefly bought there; as the cheesemongers buy their stocks of cheese and of butter, the cheese at several fairs in Warwickshire, as at Atherston fair in particular, or at fair in Gloucestershire, and at Sturbridge fair, near Cambridge; and their butter at Ipswich fair, in Suffolk; and so of many other things; but the answer is plain: those things which are generally bought thus, are ready money goods, and the tradesman has a sure rule for buying, namely, his cash. But as I am speaking of taking credit, so I must be necessarily supposed to speak of such goods as are bought upon credit, as the linen-draper buys of the Hamburgh and Dutch merchants, the woollen-draper of the Blackwell-hall men, the haberdasher of the thread merchants, the mercer of the weavers and Italian merchants, the silk-man of the Turkey merchants, and the like; here they are under no necessity of running deep into debt, but may buy sparingly, and recruit again as they sell off.