AN ENTIRE STOCK OF BARGAINS 149
modern, production equipment. If a factory does not install
new, low-production-cost machinery, this does not mean
that the new machinery will not be installed. It simply
means that some newcomer in the field will start up a new
factory, buy only the best machines to turn out goods by
mass production at lower costs, and put the old, obsolete
factory out of business. The new machinery, you see, will
be bought and installed whether or not the old timer adopts
it. The only difference is that it is installed and operated
at a good profit under a new roof instead of the roof of the
established firm.
An identical condition prevails in distribution. If we
do not adopt the more-profit, waste-eliminating methods of the
Model Stock Plan, this does not mean that it will not be adopted.
It simply means that our competitors, and new competitors
who see in our conservatism an opportunity to go ahead,
will install these better methods in their businesses, and
eventually they will force us out of business.
Just because we have always heretofore made money by
our old methods is no more reason for sticking to them than
an automobile manufacturer would have for keeping obsolete
machines because they made money for him in the past.
Competition sets standards to which we are forced if we are
to earn the greatest total profits and remain in business.
Plainly, the greatest opportunity for profits is offered the
merchant who first adopts a coming, basic improvement;
but eventually he will have to adopt it, anyhow, or else go
under.
We have already seen how the Model Stock Plan increases
our profits by literally forcing us to buy better values in
order to get them into our fixed price lines. When we have
determined the three prices and the three full lines according
to the procedures already explained, we know the merchan-
dise we want and the limit that we can pay, and the simple
fact of knowing this is one of the greatest aids to getting
what we want.
Recently, the head of one of the large, successful fixed-
price chains was negotiating a merger with a group of stores
