Fixed Charges
Fixed charges are sums you have to pay out regularly, week after week, or year after year. When you buy materials and supplies, when you lease property or hire employes, or pay interest on borrowed money all such things are fixed charges, and it calls for the best there is in a man to keep these fixed charges down as low as possible. When you buy a single item, such as a desk or a chair or a waste basket, do not lose a lot of valuable time trying to save too much on those articles.
When you go to New York once a year, do not stay at a second class hotel for the several days you are in New York, when by the expenditure of fifty cents a day more you could stop at a good hotel.
It is false economy to spend five dollars' worth of time to save fifty cents.
When you are buying single articles that are not fixed charges you have a little more leeway in the matter of price than when you are buying things that come under the head of fixed charges.
In the matter of fixed charges the penny you save on the unit assumes vast proportions in the many multiples.
Some men will deny themselves a respectable desk because they can buy a cheaper one for ten dollars less, and this same person will lose a thousand dollars through laxity in buying things that come under the head of fixed charges.
If you buy one lead pencil never mind whether the price is five or ten cents, but if you buy great gross lots every few weeks you can afford to be very circumspect and painstaking in the matter of price.
If you are buying a shirt, fifty cents one way or the other does not make much difference, but if you are in the furnishing goods business and buying thousands of shirts at a time, twenty-five cents a dozen means quite a lot.