DOING MORE BUSINESS ON SMALLER STOCKS 117
Merchandising by opinions is becoming more and more
difficult. It used to be so simple that any normally intelli-
cent man could find for himself the most profitable way to
operate. No longer is this true.
Waste-saving methods, which today are distinctly on the
increase, are the source of the really sharp competition. The
wasteful business cannot stand up against truly economical
methods. This applies particularly to the wasteful
independent retail store, for the chain stores are bringing
more economical methods into retailing.
Moreover, manufacturers who have eliminated most of the
wastes of production will not, cannot, tolerate enormous
wastes of distribution. A waste in distribution affects the
mass producer just as if it were in his own factory, for it
increases the price to the consumer and thus decreases his
total sales.
So the products of these better value manufacturers will
inevitably flow through the most economical retail channels.
The backward retailer cannot meet this deadly competition
with its low prices based on its double saving. Or if retail
channels do not voluntarily open for economical distribution
of their goods, these waste-saving mass producers will open
still more direct channels of their own.
Keen minds applied to these problems of distribution are
cutting out wastes, making competition harder for those who
operate by opinion and guess. Opinion cannot stand the
profit test against facts.
Many an individual or corporation becoming acquainted
and familiar with the Model Stock Plan in these early years
of the Second Industrial Revolution will be sent willy-nilly
into mass distribution in fields as yet unexplored. And these
users will find themselves in very much the position of men
who have found and staked out new oil or gold fields.
The small business man who thinks himself excused
because his business is so small or because it is a neighborhood
business must take warning. In the improvement of dis-
tribution and the necessity to fight waste, it is certain that
the masses of population will more and more increase their
