DOING MORE BUSINESS ON SMALLER STOCKS 111
5. Proportionately smaller interest and insurance charges.
6. Fewer employees to each dollar of sales.
7. Lower stock room expense in proportion to sales.
8. Proportionately less handling cost.
As we have seen in the preceding chapters, the Model
Stock Plan functions through permitting us to make larger
total profits by lowering prices or otherwise increasing what
the customer’s dollar buys. Turning stocks faster brings
us a satisfactory total profit on the year’s business, not
through a higher percentage of gross profit per item but
through giving us a much larger number of smaller and safer
profits.
Even if an article does not deteriorate in value as a result
of style changes or similar reasons, its value is nevertheless
certain to become less to us the longer it stays on our shelves.
For instance, it becomes soiled or shopworn or otherwise
deteriorates. It costs us expense to give it room and pay
interest on the money tied up in it. Furthermore, the great-
est losses often come from the fact that slow-moving mer-
chandise keeps us from buying the new, better selling articles.
If we are to have fresher, more complete stocks before com-
petition skims off the cream of the profit, we cannot have our
store unduly burdened with slow-moving merchandise.
In preparation for this book I made a study of many of the
variables which, arousing uncertainty of mind, confuse many
business men so much that they balk at accepting new prin-
ciples. One of the most important of these variables in
stores is style.
This investigation showed that about 25 per cent of all
new styles are inevitable as a result of social and economic
changes. For instance, short skirts and short hair were the
result of votes for women and their other greater freedoms.
Another 25 per cent of all styles are legitimate changes that
are needed as a means of general progress in dress and as
a field for experimentation.
The remaining so per cent are originated primarily as
attempts to avoid competition. These superfluous styles
are started both by distributors and producers; both sides
