Page 66 - Past Chair Book-Pre 2020

to The Xatiolial Supply and Machinery Dealers’ Association

the hands of the consumer it would be condemned; what would
you do?” Tie said he would stop it, that he would not allow it to
interfere with the consumer’s good will. I followed that up by
suggesting “Why will you allow a distributor of your goods to
ruin your good will by destroying ninety-five per cent of your
consumers?” I used the further argument that our salesmen are
largely on a profit sharing system. We believe that is an ideal
way of paying salesmen instead of paying them a salary and
expenses, to give them a certain liberal percentage of the profit.
I used that as an argument with the manufacturer, because the
tendency of the travelling salesman is to push the sales and to
treat lightly the lines of goods which do not pay much.
I think you have the right to go to the manufacturer and
tell him that inasmuch as you are putting your capital and intellect
in the goods, it is his duty to stand back of you and insist on the
maintenance of his prices. If you suggest the method of proced­
ure of withholding the entire profit for three or six months, and
have that paid to his distributors after they have certified—I
think in your state, Mr. McIntosh, they require it?
M r. M cI ntosh : No, they do not.

M r. F e r n l e y : All that is necessary with us is for the head
of the house to sign a certificate.
In the resolution before you the proposition is that the rebate
or premium shall be sufficient to cover, first, the expense of doing
business, and, second, a reasonable net profit. That is very
important to bring home to manufacturers; I was very much
interested in your discussion yesterday, and I felt like congratu­
lating the action of the wholesale hardware business that they
have not been driven down to eleven and a quarter per cent as
against ten.
In the hardware business we maintain about fifteen, and we
try to get twenty. The manufacturer says “That is more than we
are making.” He figures differently. The manufacturer in
figuring up the cost puts in the selling and expense. When he
tells you what the goods cost, he includes the expense of selling.
It it not so with you. When he states the cost, he puts the cost
laid down in your place, and not the expense of selling. When