Chapter 79
20c. 20% 23% 26% 28% 31% 33% 35% 37% 39% 20-1/2c. 18% 21% 24% 26% 29% 31% 33% 35% 37% 21c. 16% 19% 22% 25% 27% 30% 32% 34% 36% 21-1/2c. 14% 17% 20% 23% 25% 28% 30% 32% 34% 22c. 12% 15% 18% 21% 24% 26% 29% 31% 33% 22-1/2c. 10% 13% 16% 19% 22% 25% 27% 29% 31% 23c. 8% 11% 14% 17% 20% 23% 25% 28% 30% 23-1/2c. 6% 9% 13% 16% 19% 21% 24% 26% 28% 24c. 4% 7% 11% 14% 17% 20% 22% 25% 27% 24-1/2c. 2% 5% 9% 12% 15% 18% 21% 23% 25% 25c. 0% 3% 7% 10% 13% 16% 19% 21% 24% 25-1/2c. 2% 5% 8% 12% 15% 17% 20% 22% 26c. 0% 3% 7% 10% 13% 16% 18% 21% 26-1/2c. 1% 5% 8% 11% 14% 17% 19% 27c. 0% 3% 6% 10% 12% 15% 18% 27-1/2c. 1% 5% 8% 11% 14% 16% 28c. 0% 3% 6% 9% 12% 15%
_Figuring Costs and Profits_
While the cost of conducting a retail grocery business naturally varies according to local conditions and the size of the enterprise, an investigation among some 250 stores in small and large cities made in 1919 by the Bureau of Business Research, Harvard University, showed that the average cost was fourteen percent; that the net profit averaged two and three-tenths percent; and that stock was turned about seven times a year. Gross profits ran from ten and one-half percent to twenty-six and four-one-hundredths percent of the net sales, the most typical figure being sixteen and nine-tenths percent. Sales cost formed the largest single item of expense, varying from three and forty-one hundredths to nine and ninety-four hundredths percent, with the bulk of figures showing around one and eight-tenths percent.
According to advanced business practise the cost of doing business should be based on these fourteen points:
1. Charge interest on the net amount of the total investment at the beginning of the business year, exclusive of real estate.
2. Charge rental on real estate or buildings at a rate equal to that which would be received if renting or leasing to others.
3. Charge, in addition to what is paid for hired help, an amount equal to what the proprietor's services would be worth to others; also treat in like manner the services of any member of the family employed in the business and not on the regular payroll.
4. Charge depreciation on all goods carried over on which a less price may have to be made because of damage or any other cause.
5. Charge depreciation on buildings, tools, fixtures, or anything else suffering from age or wear and tear.
6. Charge donations and subscriptions paid.
7. Charge all fixed expenses, such as taxes, insurance, water, lights, fuel, etc.
8. Charge all incidental expenses, such as drayage, postage, office supplies, livery expenses of horses and wagons, telegrams and telephones, advertising, canva.s.sing, etc.
9. Charge losses of every character, including goods stolen, or sent out and not charged, allowances made customers, all debts, etc.
10. Charge collection expense.
11. Charge any other expense not enumerated above.
12. When it is ascertained what the sum of all the foregoing items amounts to, prove it by the books, which will give the total expense for the year; divide this figure by the total of sales, and it will show the percent which it has cost to do business.
13. Take this percent and deduct it from the price of any article sold, then subtract from the remainder what it cost (invoice price and freight), and the result will show the net profit or loss on the article.
14. Go over the selling prices of the various articles and see what are profits; then get busy in putting your selling figures on a profitable basis and talk it over with your compet.i.tor as well.
_A Credit Policy for Retailers_
While the minor factors governing a credit policy for retailers vary with local conditions, the fundamental principles are alike everywhere, and should have the
_Premiums for Retailers_
House-to-house dealers are the largest users of premiums among coffee distributers. Most of them operate under what is known as the advance-premium method.
The plan followed by house-to-house dealers until about 1910 was to issue checks redeemable in premiums after a certain amount of tea, coffee, or other products had been purchased. This practise has not been entirely abandoned; but in most instances, the premium is now handed to the consumer in advance of the initial purchase, in consideration of the buyer's promise to use a stipulated quant.i.ty of tea, coffee, or other merchandise. The driver of the wagon generally carries a portfolio ill.u.s.trating numerous premium items redeemable through the purchase of varying amounts of merchandise.
Many retail coffee stores also employ premiums, using both the old-style and "advance" methods. This type of store, however, is being supplanted by the chain grocery store.
Some independent retail grocers use premiums to a limited extent. These usually carry a small line of premiums, featuring a piece of kitchenware, or other inexpensive item, with bulk coffee.
It is significant that one of the largest chain-store organizations in the United States--the Great Atlantic & Pacific Tea Company--uses few premiums today, although its business was founded on the premium idea.
[Ill.u.s.tration: AN AMERICANIZED ENGLISH GROCER'S SHOP
Ernest Carter's store at St. Albans, England, operated under the name of Thomas Oakley & Co., has a distinctly American atmosphere, accounted for by the fact that the fittings were supplied by an American manufacturer, the Walker Bin Co., of Penn Yan, N.Y. The tea and coffee department is shown in the foreground. The coffee is roasted in the window]
Trading stamps, which are sold to grocers and other merchants by firms making a specialty of this form of premium-giving are little used nowadays. The average retail grocer is antagonistic to trading stamps, as a result of the methods of certain unscrupulous stamp-dealers.
Legislation against trading stamps is in effect in many states.
[Ill.u.s.tration: SOME PACKAGE COFFEES THAT ADVERTISING HAS MADE FAMOUS]
CHAPTER XXVIII
A SHORT HISTORY OF COFFEE ADVERTISING
_Early coffee advertising--The first coffee advertis.e.m.e.nt in 1587 was frank propaganda for the legitimate use of coffee--The first printed advertis.e.m.e.nt in English--The first newspaper advertis.e.m.e.nt--Early advertis.e.m.e.nts in colonial America--Evolution of advertising--Package coffee advertising--Advertising to the trade--Advertising by means of newspapers, magazines, billboards, electric signs, motion pictures, demonstrations, and by samples--Advertising for retailers--Advertising by government propaganda--The Joint Coffee Trade publicity campaign in the United States--Coffee advertising efficiency_
In a work of this character the chapter on advertising must of necessity be in story form. It may tell what has been accomplished in advertising coffee, and perhaps point the way to greater achievement. In so far as possible, the story is supplemented by ill.u.s.trations, which here tell the story even better than words.
Advertising to the trade or the consumer calls for expert advice. There are successful trade journalists who are competent to supply such advertising counsel; and new-comers in the field should consult them first. These men are in the best position to suggest the means for successful accomplishment. They know the men who are best qualified to render a.s.sistance for all media, and are glad to recommend those who can be most helpful.
Jarvis A. Wood has said that advertising is causing another to know, to remember, and to do. If we agree with this excellent definition, then the first coffee advertisers were the early physicians and writers who told their fellows something about the berry and the beverage made from it.
Rhazes and Avicenna told the story in Latin, and appear to have recommended a coffee decoction as a stomachic, as far back as the tenth century. Many other early physicians refer to it. Thus it was that coffee was solemnly introduced to the consumer as a medicine. The first step made by the berry from the cabinets of the curious, where it was known as an exotic seed, was into the apothecaries' shops, where it was sold and advertised as a drug. Next, the coffee drink was advertised and sold by lemonade venders; then by the proprietors of the coffee houses and cafes; and finally the coffee merchant sold and advertised the green and roasted bean.
Rauwolf told the Germans about it in 1582; Abd-al-Kadir wrote his famous _Argument in favor of the legitimate use of coffee_ in Arabic about 1587; Alpini carried the news to Italy in 1592; English travelers wrote about the beverage in the sixteenth and seventeenth centuries; French Orientalists described it about the same time; and America learned about it long before the green beans were offered for sale in Boston in 1670.
Because of its frank propaganda character, Abd-al-Kadir's ma.n.u.script may rightly be called the earliest advertis.e.m.e.nt for coffee. The author was a lawyer-theologian, a follower of Mahomet, and as such was eager to convince his contemporaries that coffee drinking was not incompatible with the prophet's law.
Soon the news of the day became the advertising of the morrow. In 1652 appeared the first printed advertis.e.m.e.nt for coffee in English. It was in the form of a shop-bill, or handbill, issued by Pasqua Rosee from the first London coffee house in St. Michael's Alley, Cornhill; and the original is preserved in the British Museum.
It is pictured on page 55, chapter X, and is worthy of close examination. It reads:
The Vertue of the _COFFEE_ Drink
First publiquely made and sold in England, by _Pasqua Rosee_.
The Grain or Berry called _Coffee_, groweth upon little Trees, only in the _Deserts of Arabia_.
It is brought from thence, and drunk generally throughout all the Grand Seigniors Dominions.
It is a simple innocent thing, composed into a Drink, by being dryed in an Oven, and ground to Powder, and boiled up with Spring water, and about half a pint of it to be drunk, fasting an hour before, and not Eating an hour after, and to be taken as hot as possibly can be endured; the which will never fetch the skin off the mouth, or raise any Blisters, by reason of that Heat.