222 THE MODEL STOCK PLAN
problem its facilities for group buying. This procedure
promptly transformed these departments into money-makers.
In department stores which are being forced into chains,
standardized prices and the other methods which are the
basis of the Model Stock Plan will be the conquering prin-
ciples. They will make possible the most effective combina-
tion of their powers. At present almost all of the department
store groups are simply aggregations of stores largely lacking
the advantages of group mass buying, principally because
standardized prices have not been agreed upon.
There are still many dangers threatening retail distribu-
tion as at present practiced because the wastes are so enor-
mous. As we have already seen, prices increase anywhere
from 100 to 300 per cent between factory and consumer on
the average article sold in stores, and this despite the fact
that the average retail net profit is less than 5 per cent, which
is certainly not profiteering. N evertheless, the spread is
too great to be allowed to continue, because the consumer's
dollar is not big enough to stand this waste.
The fact is, serious new dangers are threatening retailers
on account of these great wastes in distribution which the
Model Stock Plan so successfully combats. For example,
there is something that within a very few years is going to
make serious inroads into the total profits of one whole class
of retail merchants who today are utterly unsuspecting.
If they were using the Model Stock Plan, this danger would
not now be threatening them.
The head of one manufacturing company which dominates
this field in volume and in quality has told me confidentially
that he is only awaiting the building of a greater surplus in
his business to take his product away from jobbers and retail
stores. His product is in an industry where grades are
definitely recognizable, with no possible question of quality
arising. Itisnow distributed through a class of stores which,
because a large part of their stocks turn extremely slowly and
for other reasons, have a very high total store overhead.
The product is regarded by the public as de luxe goods but
is desired by all consumers. Actually, on a basis of produc-
