CHAPTER VIII

DOING MORE BUSINESS ON SMALLER STOCKS

Eight advantages of fast rate of turnover. How new styles originate.
The Model Stock Plan eliminates needless items. Keeping open to buy.
Making more money in dull times. Do we need smaller stocks for
present sales volume or larger stocks and far larger sales volume? Precisely
 how large a stock should be. Backing up the buyers. How the
Model Stock Plan meets the conditions of the Second Industrial Revolution,
 Mass producers canno tolerate wasteful distribution; every
distributive business must meet new standards. Mass distribution
lowers prices and increases markets through eliminating wastes. Eight
major advantages of the Model Stock Plan, Combining the strength of
the chain store and of the independent store.

ONE of the most troublesome problems in retailing may be
stated thus: How can we have stocks so complete that customers
 can find anything they may reasonably ask for in
our line, yet so small that they will sell out rapidly and completely?
 If we could do this without fail, we should be the
best merchandisers, other things being equal. Unfortunately,
 perfection in this respect is hardly possible, even
with the most staple merchandise. In some lines the problem
 is complicated to a high degree by style and other
uncertain elements.
Of course we know, offhand, most of the major advantages
of a fast rate of turnover. But for the sake of having them
fresh in mind, suppose we list the direct economies:
1. Smaller capital investment in proportion to the amount
of business done,
2. Greater total sales through ability to satisfy more customers
 through fresher and more complete stocks.
3. Fewer mark-downs and a smaller total of mark-downs
through less risk of the goods deteriorating or going out of
style.

4. Greater mobility to take advantage of sudden market
changes (specially important where style is a factor) and
changes in general business conditions.

Ti

~~