MANUFACTURING AND SELLING. 135 
mail-order house in the other and then add the items as they occur on the way to the 
consumer. To the 22 per cent representing the average cost of doing business in the 
mail-order houses we would have to add the transportation charge to the consumer. 
The average order handled by a mail-order house in Chicago, according to one of its 
executives, is somewhere around $10. Now, I understand that transportation charges 
on Rickages of that value average about 50 cents. We may probably take 50 cents 
as the average cost per package Jor transportation, and 50 cents is 5 per cent of $10 
which is the assumed average value of the average order. Therefore you must add 
5 per cent to your 22 per cent of expense and that will give you a total of 27 per cent. 
hat 27 per cent represents the cost of distribution by the mail-order method. 
From 27 to 30 per cent of the sales prices takes care of the expenses of distributing a 
very large part of the goods that go through wholesalers and retailers. The differences, 
therefore, in the expenses of distribution by these two methods, considering nothing 
else but expenses, are very small, and I can hardly say that there is an advantage on 
either side. 
So far as my figures have gone they do not show that the mail-order house hasany 
distinct advantage in the way of a lower expense of doing business over distribution 
through the regular channels of trade. It has several disadvantages, so far as the 
consumer is concerned, in not being able to give the personal service that retailers 
should give, and not allowing a free inspection of actual goods before purchase. What- 
ever advantage the mail-order house has over the small store lies not in its methods 
of merchandising, but it lies in the fact that the mail-order house is able to buy large 
quantities of goods at special or quantity prices—at inside prices.