MAKING MARK-DOWNS PAY A PROFIT 101
unquestionably sell them. If our first mark-down does not
accomplish it, we must mark them down once again. It is
worth remembering that selling at the first mark-down
leads to the least loss.
Customers will buy almost any goods if the price is fixed
low enough, although once, in the Filene Automatic Bargain
Basement, after we had sold many thousands of dozens of
men’s collars at our first very low price, then taken three
mark-downs to a price only 25 per cent of the first price,
we had to give away the 2,000 dozen surplus of odd sizes to
charity organizations. And when we repeated the experience
on another tremendous lot a few months later, the charities
refused to accept any more odd-size collars and we could not
find anybody to give them to! But this experience is the
rule-proving exception. If we glut our market, naturally
we can’t continue to sell indefinitely more of the same goods
to the same people.
It is, of course, in choosing goods that a buyer discloses
whether he has grasped the fundamental of retailing, which is
buying for the public. A poor buyer makes his best guesses
and lets it go at that. A good buyer, even though he has to
guess on his very first purchases, gets the benefit of his
customers’ judgment before he goes much further with build-
ing up his season’s stock. And the good buyer, consequently,
jis to take fewer mark-downs and a smaller total mark-down
oss,
In stores operated by the commonly accepted methods,
the amount of mark-down taken on most merchandise is
determined arbitrarily, in much the same manner as prices
are ordinarily set. In setting mark-downs the department
head ordinarily decides arbitrarily that an $8 price will move
these $1o sweaters, or that his slow-selling $10 rugs will sell
rapidly at $8.50.
From our study of the Model Stock Plan we know that
this is not the method that will yield us the greatest total
profits. We have seen that we must sell any goods of any
single class (except de luxe and basement merchandise)
at one of the three full-line prices which our customers will
