The model stock plan

Bibliographic data

Monograph

Identifikator:: 1820833348

URN:: urn:nbn:de:zbw-retromon-210730

Document type:: Monograph

Author:: Filene, Edward A. http://d-nb.info/gnd/123562244

Title:: The model stock plan

Place of publication:: New York

Publisher:: McGraw-Hill Book Company

Year of publication:: 1930

Scope:: xiv, 253 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VI. Basement stores for thrifty customers

Collection:: Economics Books

58 THE MODEL STOCK PLAN Of course, if a buyer gets too large a proportion of merchan- dise that has to be marked down, he is unprofitable to the store—which supplies an incentive to good buying. The automatic reduction plan makes him continually conscious that he has to sell the merchandise as well as buy it. A buyer might, to avoid losses, be tempted to mark some of his merchandise higher than he should, but he defeats him- self if he tries it. The greatest losses he can have are those that result from the automatic mark-downs. People will not buy anything but bargains in the basement. An article priced too high is not a bargain. It may not become a bargain until 25 or even 50 per cent is taken off the original price. So the buyer who overprices at the start fools nobody but himself. The first price simply must be extraordinary enough to sell the bulk of the merchandise in the first 12 days. Otherwise the lot does not prove profitable. Even if a policy of overpricing is temporarily successful it is harmful in the long run because it hurts the goodwill, the drawing power which is the chief asset of the store. A fast rate of turnover, speedy selling—that is the big thing. It is a definite outcome of the automatic plan. The basement has sold as many as 30,000 pairs of shoes in 8 hours, which was a whole lot faster than the factory could turn them out. Small merchants have bought thousands of dollars’ worth of merchandise in the basement at the retail prices. The basement can often buy, take a fair profit, and yet sell for less than the jobber’s price on small lots. One of the original problems arose in connection with giving away merchandise unsold after 30 days. It was found that giving goods to customers resulted in some mis- understandings, charges of discrimination, and loss of good- will. So it was decided to give the merchandise entirely to organized charities. Of course the amounts are small, averaging perhaps $600 to $700 a month; that is, on a monthly business of more than $800,000. The figures on the percentages of goods that have to take either the first, second, or third mark-down vary so greatly on different lots as to make averages untrustworthy. For

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