After reading my letter I turned to Mr. Shively with determination to sell him a good bill. But I saw he had a customer, and kept out of the way, but not too far to hear the conversation.
“That,” said Shively, “is a better gun than the ordinary Lafoucheaux—a good deal better. I know you can buy of Reachum and Shiverhim & Gaily for $7.65, but there is all of $2 difference in the goods, and the man who should appreciate this the quickest is the retailer.”
“But I can't get a cent more for this gun than for the others; buyers will not discriminate.”
“You give them no opportunity. You take it for granted that they will go to the lowest-priced places, so you insist upon buying the lowest-priced goods, but I tell you, Mr. Thompson, you are making a mistake. A certain proportion of every community runs after the lowest prices; a large majority seek good value for their money, and a small percentage, who are fools, buy only high-priced goods. Then again, a share only of the trade will come to you or me. Our competitors, no matter how mean they may be, will have their own friends, and, try as we may, we can only draw a certain share of the trade.”
“That's so.”
“Of course it is so. And the dealer who looks these things squarely in the face and acts accordingly is the one who succeeds. I remember when I was younger I expected to do all the business in my line here. There was a run on Parker's gun. The list price was $50; they cost us $37.50. Every one was asking the list, but making a small cut if necessary. I had a fair trade in them, but I concluded I would do more, so I advertised the price $45. This did not accomplish what I expected, so I came down to $42.50, and finally to $40. I sold a few more guns than I otherwise would have done, but I did not make one dollar more of gross profit. In order to attract a few extra buyers I had been cutting down prices to men who would have bought of me, whether or no, and I stopped it.”
“I remember my first Parker gun,” said Thompson; “I called a man into my store to look at it, one who talked as if he knew all that was worth knowing about guns. He opened it, looked through it, sighted it, etc., then asked the price. I quoted $50. 'That settles it,' says he, 'I wouldn't have it; a good gun can't be bought for any such money,' and he dropped it as if it was a hot brick. The next time I showed it I asked $75, and I sold it at $65.”
“Yes,” said Shively, “the fools still live; I'm one of 'em. I suppose I do things just as bad as that every day, but I don't do it knowingly. Here's this craze over Smith & Wesson's revolvers. A man, for some good reason of his own, wants a revolver in the house. He hopes he shall never have to shoot with it, but for fear he may need one he buys it. The chances are ninety-nine in one hundred that he has never been a marksman, or if he was he is so much out of practice that he could not hit a door off hand, and with his nerves steady. I show him a good revolver at $2.50, or a double action bull-dog at $3. But he asks, 'Have you Smith & Wesson's?' Of course I have; single action $9.35; double-action, $10.35. I explain that the cheap one is as safe to the shooter as this is; that the chances are not one in a hundred that a man can jump out of bed excitedly and hit a burglar off-hand; that no burglar, hearing a shot, waits to be informed whose make of revolver is used, and that practically the cheaper pistol is the most sensible for him to buy. But he has a foolish idea that he is going to be a much more formidable fellow with a Smith & Wesson under his head, and he takes that. And because of just such idiotic men Smith & Wesson can ask a big price for their goods.”
I was much interested in that talk, and sorry when the two men
separated. But I was there to sell Shively some goods, and I went at
it right heartily.
“I am rather tired of the gun business,” said he, “and would drop that branch quite willingly. It is being managed on the basis of brag rather than that of brains. Any fool can sell a revolver at 92 cents that cost him 90, or a gun for $7.50 that cost him $7. No brains are required to do that. The poorest salesman I have on the road sells the most goods and makes me the least money. The gun business has got into the hands of men who have just brains enough to run a ten-cent counter store.”