I had spoken to Jock McTavish about this, and had suggested that perhaps I ought to cut all goods down to cost for a little while, for apparently Stigler could sell at a 15 per cent. reduction and still make a profit.
"No," said Jock. "Dinna ye ken that he loses money when he cuts his goods that much?"
"Why, how can that be?" I asked. "Suppose he buys something for $1.00, and the regular price is $1.50. He cuts that 15 per cent.—he would be selling it at—at $1.27. He would make 27¢ profit!"
"Ye're wrong," replied Jock. "The cost o' the goods is no the bare invoice price, but the cost plus the cost o' selling. Noo, as ye ken, it will cost ye round aboot 30 per cent. on cost to sell your goods, so that those goods would cost $1.00 plus 30¢, the cost o' selling; and when he sells them for $1.27 he'll be losing 3¢ on every sale."
"But he could care for his overhead on his regular stock," I replied.
"Verra foolish reasoning," snapped Jock, "for a mon to mak' a part of his sales carry the freight for aw o' 'em!"
I had thought about this afterward, and finally had been able to see how, if he cut his goods 15 per cent., he couldn't make anything on the deal.
However, several people had been saying that Stigler had got me "on the run," so I decided it was up to me to have a whack at him. Therefore, I planned what I called an "Automatic Sale." I picked out a whole lot of stock, goods a little bit damaged, lines that I had no sale for at all—I found a lot of things which the two previous owners of the store bought and stored away and apparently never did anything with. I found about a gross of painted rubber balls; I found a lot of juvenile printing outfits; and padlocks—I dug up about three gross of padlocks, of the strangest patterns you could think of! I found eleven different makes of safety razors, and there were only two of them I had ever sold any quantity of. I planned to reduce the number of lines as much as I could and just push the real sellers—put my money into goods that would sell quickly and so increase my turn-over.
All the five-cent articles that I wanted to dispose of in this sale I tied in pairs—two for ten cents.
I intended to run four narrow tables down the center of the store. The first one was to contain ten-cent goods, the next twenty-five cent, the next fifty-cent, and the last one all the odds and ends at various prices.