CHOOSING PRICE LEVELS TO INCREASE SALES 21x
of these prices, leaving only the $15 price. We now need to
buy 1,200 dresses to sell at our $15 price. We are now able to
deal with large manufacturers who make their dresses by
mass production; or else we can purchase from smaller
manufacturers in the same large quantities and help them
attain mass-production economies.
If we have any doubt whether we can do this, we can
remove it by studying the assortments in one-price women’s
or men’s shoe stores, or the one-price women’s dress shops,
even at as low a price as $10.75. Nobody who lacks actual
experience in this field can easily appreciate how radically
prices can be reduced if distributors and producers cooperate
sincerely to conquer wastes in production and distribution.
If $10.75 dress shops or men’s and women’s one-price shoe
stores fail to convince us, then let us have a look at Wool-
worth’s, Grant’s, and Kresge’s stores, even if we sell fine
goods. From the display counters of these fixed-price chain
stores we can get an idea of how prices can be reduced. In
every department of these stores—but if we are hurried we
can concentrate on the toilet goods section at Woolworth’s—
we shall have our eyes opened. We shall see what high-
quality goods can, under compulsion, be got down into the
cheapest full-line price. If the producer can find no other
way to get his high-cost goods into a Woolworth store, he
finds a way by diminishing the quantity in the package
without tampering with its generally recognized quality.
Here is the way it works out in everyday experience with
the Model Stock Plan. Let us suppose that our best-selling
full-line price for an article is $1. The wholesale price on
this $1 article is, let us say, $8 a dozen.
Competition will be strong among manufacturers to supply
the demand for this article. If supply is larger than demand,
the manufacturer’s profit will gradually be squeezed down or
out. He will either, in order to get the trade, make a better
or more costly article for $8 or else cut his price for the article
to, say, $7.50.
Assume that, to get a better average profit, a manufacturer
makes something to sell against the $8 a dozen article. and
