"We knew how much money we were to invest in Farmdale. We knew how often we ought to turn over our stock every year. We also knew what our expenses would be, and what our profits would be."
I couldn't help smiling as I said, "The only thing you didn't know was whether the people would buy the goods."
"That's where you're wrong," said Roger. "We knew what the people would buy, because we analyzed the market so thoroughly. We knew just what kind of goods each class of people bought; and how often they bought certain kinds of goods. And with our experience in marketing we knew how to get them into our store."
After Roger had left I thought that over a lot, and believed there was some truth in what he had said.
"Of course," I said, "it is much easier for you people to make money than it is for me, because you buy much cheaper than I can, and your expenses are so much less. You could afford to sell cheaper than I do, and still make a handsome profit."
"As a matter of fact," said Roger, "you are wrong; for, while the actual operating expense of this store would be a smaller percentage than your actual operating expense, we have a heavy supervision cost. It is a fallacy to believe that the larger store can operate for less expense. It cannot. The bigger business you have, the more money you have to pay the executives to control that business, and there is such a scramble for really big men that salaries of fifteen thousand dollars and twenty thousand dollars a year are not unusual. Our general manager makes eighteen thousand dollars a year!"
"Think of making eighteen thousand dollars a year! Three hundred and sixty a week! Sixty a day! Working six hours a day! Ten dollars an hour! And here I pike along on twenty-five dollars a week and work my head off ten hours a day. Then you mean to say that it really costs you more to do business than it does me?"
"It surely does," he said, "but, while we get a smaller net profit on each sale, we possibly exercise more judgment in buying than you do, as we see that everything we buy is a quick seller. That off-sets the increased cost of doing business.
"Another big advantage the chain store has over the single store," continued Roger, "is that we have very little unsalable stock to dispose of. For instance, I have just had a lot of brushes sent me from one of the other stores. They cannot sell them, so, rather than have them sold at a sacrifice, the brushes were sent on to us. I am doing quite a big business in paint brushes—you know we specialize on brushes of all kinds, and I really think that already we are beginning to dominate that field in Farmdale.
"By the way," added Roger, "you ought to meet Pat Burke."