Strange as it may sound when first stated, advertising is primarily the base of this result. We know that the first principle of lowered cost is buying in quantities; that if we buy for 100, the cost for each is lower than the cost for one; if for 1,000 it is lower than the cost for each of 100, and so on.
So, when Ford buys the materials for 533,921 cars, which was the number he sold in 1916, he gets the price of the cost of each of these more than a half million cars down to a less price than if he bought material for 1,708 cars, the number he made in 1904, or even 168,220, the number he made in 1913.
This is patent to any one who ever heard of wholesale and retail prices.
But how did Ford find a sale for 533,921 cars in 1916?
By advertising.
The first thing a manufacturer must do to lower the cost of production of the single unit is to make in quantities.
How to insure the disposal of that quantity has been the big problem that American automobile manufacturers have had to solve. The solution was at hand. It was advertising. The commercializing of automobiles with the speed and to the extent to which it was done between 1900 and 1917 could not have been successfully accomplished before this period, because the recognition of the value of advertising had not become widespread up to that time.
Advertising had gone through a process of development that was as slow as that of the automobile business. Both arts emerged from darkness into light at about the same time. Here is evidence that a very bright and smart set of men engaged in automobile production at the very outset.
They were mechanical, they were versed in business methods, and they were conscious of the value of advertising.
This combination of knowledge by the men engaged in it has made the automobile industry a record breaker in point of the time consumed in its development. It has made it stand out as unparalleled by any other industry in this country in the speed with which it progressed from final experimentation to an established recognized enterprise, involving mammoth investment of capital and huge profits.