Part 13

Buying

The buyer derives much information and much shrewdness by carefully watching the seller's methods.

Some buyers seem to think that bull-dozing tactics, cute lies and irritable manners make the seller humble, weak-kneed and non-combative. This is a great mistake.

The best buyer is first a gentleman. He keeps his word, he is patient and he knows his business thoroughly.

The buyer gains much by being open and above board with the seller. Let the seller know that your success consists in getting as much value as you can for the money, and that your continuous trade will result only through fair treatment.

Let the seller understand that the better he treats you in the matter of price and quality the better you will be able to treat your customers, and the longer you will be able to deal with the seller.

The moment a buyer shows bull-dozing methods, the seller is antagonized, and his object then is to soak the buyer.

The buyer who keeps his temper and goes at the matter philosophically is the one who wins out.

The buyer should explain to the seller that the seller can get the best of him once and may be twice, but not more than that.

The main thing for the buyer to possess is a most thorough knowledge of the goods he buys. Learn who makes the goods and where they are made, and get at the factory cost.

Then learn whose factories have the best reputation, and whose are the best fitted and established to make the goods you buy.

Remember you can afford to investigate. When you find a factory over-sold you will find that factory more independent. When you find a factory short of orders you will find them eager for your trade, and the chances are you can do much better with this factory than with the one that is behind on its orders.

Don't get excited, don't hurry. Speak gently. Know your ground. Cultivate a reputation for fairness rather than smoothness. Laxity and indifference in buying means that you are allowing wastes and leaks to creep in your business, and that you are placing a handicap on your traveling salesman, for goods well bought are half sold.

Expenses

If you get confidential with Mr. Bradstreet or Mr. Dun so that they will give you access to the inside history of the commercial concerns which have failed in business, you will quickly discover that in the majority of cases the cause of the failure was "too much expense."

It has become quite a common saying in speaking of failures that "the expenses ate up the profits."

Our friends Mr. Dun and Mr. Bradstreet tell us that there is about one concern in fifty which succeeds in business. If you will look at the successes you will find out that the proprietors were good buyers as well as good sellers but that the particular point that made them successful was their ability to make careful analysis in the matter of expenses.

The business man should have his expenses divided into as many classifications as possible. His payroll should be separated into various departments, office, salesmen, workmen, accounting, and so on; through all the items of expense the division should be made as finely as possible.

The proprietor should have a statement each week on his desk showing how every cent was expended. These items should be summarized monthly, and constant reference made to the items of expense in comparison with items of expense for the previous month, as well as items of expense for the same month of the previous year.

One of the pit-falls in nearly every business is "general expense" or "sundry expense." This department is a catchall for a lot of items, and it hides a lot of leaks and wastes in business.

You can't divide your expense items too minutely. The finer the divisions, the easier you can detect a waste of money.

The business man who has a statement of both receipts and expenses is in the position of the first engineer of an ocean steamer; he does not seem to be doing much and does not worry unless something goes wrong, then he shows his training and ability to mend breaks and repair weak places.

If the business man analyzes his sources of income into several divisions the same as he does his items of expense, he will find it an easy matter to correct errors that creep in the business. He does not have to worry about those items of expense which show minus, nor about those items of receipts which show plus.

With a finely divided sheet of both expenses and receipts you can quickly determine where the profit is coming from and where the leaks appear.

If an expense item shows plus, you can run down that item and see reasons for it and endeavor to bring down that expense. If a receipt item shows minus, you can run down that item and endeavor to increase the receipts.

The writer has a little printed card on his check book and it reads "Drive the axe into expenses." It is a constant reminder to stop the wastes.

The only real success that comes to the business man is the profits at the end of the year, that is, the amount of money he makes net.

It is easier to increase profits by cutting the expenses in many cases than it is to increase profits by increasing sales. And here let us remark that on this subject, as well as all the other subjects we are writing about in this series of articles, we have in mind the matter of common sense, temperate action. Extremes carry things too far. You must not cut the expenses beyond the point where it seriously interferes with the sales.