Time Telling through the Ages

by Harry Chase Brearley

Twentieth Century Watches

Here is represented the final stage in the development of modern timepieces. Though of graceful lines, they are designed for accuracy and utility, and are ranged in price to fit every purse.

Some effort was made with outside trades, but these generally considered watches to be out of their line. Nevertheless, in the course of time, persistent effort began to bring results. Occasionally jobbers made purchases, and here and there a jeweler or hardware dealer offered the watches for sale. When the firm felt justified in spending some money for advertising, the public began to learn at first hand of the Ingersoll watch, and the sales gradually increased. Many people, however, expressed doubt as to the quality of a timepiece that could be sold for a dollar, and the Ingersolls replied with a guarantee that has since become famous.

Then, in the natural course of business, competition developed from the marketing of inferior goods, and the firm found it necessary to place its name on the dial for purposes of identification. In spite of all difficulties, there grew up in course of time a very considerable public demand. Whereupon certain dealers undertook privately to raise the price in order to increase their profits. This situation was met by emphasizing the price more prominently on the boxes and in the advertising, a policy which soon put an end to price-raising but led, in some instances, to the even greater difficulty of price-cutting. The better known became the price, the greater became the temptation to dealers of a certain class to advertise its reduction in order to bolster up "bargains" upon other goods. This naturally demoralized the sales of neighboring dealers and caused them to lose interest in the line. Thus, instead of increasing the sales, the reduced price proved a serious selling obstacle.

The same difficulty has been encountered by other manufacturers of widely advertised goods, and some of them have sought through the courts to compel adherence to their prices, the argument being, as in the case of the Ingersoll watch, that price-cutting does not serve the interests of the public but tends to interfere with sales since it obstructs the channels of distribution. At this writing, the question in its legal phase has not yet reached a final decision in the courts, but the Ingersolls have solved it in a practical way, since their trade-policies have brought about the voluntary cooperation of the retailers.

Such cooperation, however, was not to be attained at once. It came about through much study and after much experience. It involved the assembling of a large amount of data upon commercial economics and a deep inquiry into the fundamental principles of retail distribution. It proved necessary to weigh and compare recent and important factors in the retail situation. For example, because of the fact that so many manufacturers were giving indiscriminate discounts for quantity purchases, it had become profitable to establish huge department stores, chain-stores, and mail-order houses whose scale of operation made it possible to handle goods in large amounts.

For a time, the Ingersolls, in common with other manufacturers, gave discounts for purchases in quantity; later, as the business grew and its distribution problems were more scientifically studied, they saw more clearly the way in which the principles of equal opportunity and equal treatment could be applied.

It was in this spirit that the firm began to ask itself whether the large distributors were really more efficient than the small retailers; whether they actually earned the extra amount which they were paid for selling each watch, and whether it would be a healthful thing for the country if all retail business were transacted through such organizations—in short, whether restrictions to such a system were really consistent with the theory of commercial democracy.

Approached from this standpoint, the answer was found to be in the negative. A careful research among stores in all sections of the country showed unmistakably that the cost of selling in a small store was actually less than in the department store, the chain-store, or the mail-order house. Viewing the sale of each watch as an individual transaction, it was seen that a small store in some far-off country village gave quite as valuable service as did a large store in a metropolis, and therefore should be paid as much. Consequently, the Ingersolls introduced a selling-plan which, under the conditions, was as revolutionary in the field of retail distribution as the discovery of Galileo had been in that of clock mechanism. Yet it was merely that of a flat-price schedule; in other words, it was a provision that the dealer buying one dozen watches, or even one single watch, should pay exactly the same price as the dealer who bought ten thousand. Quantity discounts were definitely abandoned.

Naturally, this plan met with cordial response from the countless small retailers scattered throughout the length and breadth of the country, and the close relationship thus established led to other logical developments in the way of cooperation, such as that of display devices suited to the needs of these dealers, a simplified accounting system to increase their efficiency, and various measures of a similar nature.