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So, if your BULLETIN comes to you some time in the near future minus illustrations of any kind, you may conclude that we have joined an antiengravers' association and refused to pay trust rates!

The engravers' movement started in Chicago, we are told, where an advance in prices running all the way up to 200 per cent was put into effect, and plans were laid to organize 34 other cities on the same basis. Detroit was "organized" three or four months ago.

But trouble was encountered when New York was struck. The matter was brought to the attention of the district attorney, and unless the organization back of the movement, no matter how loosely constructed it may be, either disbands or mends its ways, it is announced that action will be brought under the anti-trust laws.

In the meantime, however, don't worry about the pictures in the BULLETIN. We'll try to keep right on supplying them, somehow!

But now that we have to pay double prices for printing paper, due to the war, why couldn't the engravers let us alone for a while?

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inventor a million dollars, buying the process outright.

It now develops, however, that the Maxim company has merely closed a contract for the exclusive manufacturing rights. Nevertheless this is extremely significant. The big munitions company evidently sees much merit in the proposition; special laboratories are to be built and every facility afforded to develop the invention to its fullest commercial possibilities. Thus a relief from the present high price of gasoline may be in sight.

The process hinges, it is stated, on the liberation of hydrogen. The invention is said to be revolutionary in character.

The Abbott Alkaloidal Company, Chicago, has issued a statement positively denying the newspaper reports pertaining to the explosion which occurred in the company's laboratories in April. Particular exception is taken to the statement that the company has been engaged in the manufacture of ammunition or explosives.

The result of the referendum vote taken by the Chamber of Commerce of the United States on the issue of price maintenance has been announced. By a vote of 693 to 237 the Chamber is committed to the principle of price protection.

*

The New York legislature adjourned without passing the Hamilton-Fertig bill, a measure designed for the purpose of subjecting manufacturers of proprietary preparations to the control of the State department of health.

The Era Directory, recently published, places the number of drug stores in the United States at 46,561.

FOR THE JULY BULLETIN.

The Bulletin next month will contain something of special interest on the soda fountain. A member of the Bulletin staff is now in the East and will seize upon the occasion to interview some of the largest and most successful soda men. The material he is collecting will be made the subject of one or more articles beginning with the July issue.

EDITORIAL

A COMMON FALLACY.

In the business literature of the day one sees a good deal of advice on the subject of turning over one's stock as many times a year as possible. Some of this advice is wise. Some of it is very misleading.

In a book published within a year or two, entitled "Keeping Up with Rising Costs," the conclusion is finally arrived at in the last chapter that the answer to constantly increasing expenses is found in more turnovers. In other words, if a merchant will only turn his capital frequently enough, he will convert losses into profits. This is the one solution given by the author to the great problem of rising costs and decreasing yields.

But stock turnovers comprise no such panacea as this would indicate. Let us examine into the facts with some care.

You understand that such writers, when they talk about increasing the number of stock turnovers annually, do not mean by this an increase in annual sales. That is an entirely different question. If you keep your stock moving by selling more and more goods, you are going to boost your business and make more money-there isn't any doubt about that. But then we are primarily discussing increased sales and not increased turnovers.

What is usually meant by turning over your capital more frequently is merely this, that you reduce your investment by carrying a smaller stock in order that, with sales at a certain point, you may do business on less money. Everything that is said in this editorial must be read with this distinction clearly in mind. Take, for instance, the figures representing the average drug business that have been printed in this journal on many occasions during the last few years. The sales are $10,000 a year; the cost of goods sold is $6500; the expenses are $2500; and the net profits are $1000. The percentage of expense is 25 based on the selling volume. The percentage of gross profit is 35, and the percentage of net profit is therefore 10.

This represents with considerable accuracy the average drug store, both as to volume of business and profit yield.

Now what reference has stock turnovers to

a business of this type? It has often been claimed that a druggist ought to realize at least three turnovers a year. Inasmuch as the cost of goods sold annually is $6500, he will thus have to reduce his investment to a point as low as $2200. This is doubtless pretty small for a business of this size, but assuming that such a point can be reached, we then find that a net profit of $1000 for the year has been made on a stock investment of $2200. Without mentioning the investment in fixtures, and considering the stock alone, the druggist has, therefore, made his capital yield him 45 per cent. But if, now, he is a poor merchant according to the views of these profit mathematicians, and is only able to turn over his stock 11⁄2 times a year instead of 3, his investment will become $4400 in place of $2200, and he will then only be making 221⁄2 per cent on his capital instead of 45.

This looks ominous, and it is very easy for a clever writer and a good arithmetician to convince such a druggist that he has failed lamentably to make the most of his opportunities. He has carried too much stock, he has paid too little attention to turning over his capital, and he has made only half as much

vield on his investment as he should.

But what is the essential truth behind this somewhat sophistical argument?

This imaginary druggist that we are talking about has committed the crime of tying up $4400 in stock instead of $2200. His investment is therefore $2200 too much. What has he suffered as a result? Simply this-he has lost the interest return on the extra $2200. That's all. Estimated at 5 per cent, this is a mere matter of $110 for the year.

For, if the druggist had kept his stock down to $2200, and had invested the remaining $2200 outside his store, as would otherwise have been the case, the money would have earned him 5 or 6 per cent-probably not more. He might, therefore, have added something like $110 or $120 to his net income for the year, but this isn't any such sum as we are often led to believe can be realized from turning one's stock over twice as rapidly. Not here do we find an infallible remedy for all the ills of store-keeping.

On a purely percentage basis, it is easy to show that such a merchant has only made his investment in stock yield half what it should, and that instead of realizing a net profit of 45

per cent he has only managed to complete the year with 222. But figured in real dollars,

the difference in actual cash at the end of the year is after all very slight, and this difference might easily be more than made up in other ways.

When a dealer, anxious to keep his stock turning as rapidly as possible, cuts it down too low, he loses the attractiveness which a larger assortment has for many customers. Sales are often lost because a druggist hasn't got what people ask for, and when a man reduces his stock too much, he is crippling himself in a hundred different ways. Frequent buying in small lots, moreover, usually means the loss of best prices and discounts, and it involves more bookkeeping, larger freight and express bills, and more trouble and expense generally.

So that, when the whole thing is summed up for the average druggist, the question is just about as broad as it is long. By all means turn over your capital as often as you can. This is good business. It is good finance. But don't think that it has any magic power to increase your profits materially, and to turn your business from a failure into a success.

WHAT IS A CLERK WORTH?

Investigators who have studied the problem of retail merchandising up and down the line have discovered that clerk hire represents from 8 to 10 per cent of the annual volume of sales. This is the one largest item in the expense account, and next to it in point of size is of course the proprietor's own salary.

Managers of department stores have figured the thing out very scientifically, and some of them have arrived at the conclusion that a salesman should be paid a salary roughly based on his sales. In other words, no clerk should receive more than 8 per cent, say, of the volume of business that he turns in. It has frequently been found, however, that the highest priced salesman is really the most economical, and that the dub who gets $5 a week is often an expensive luxury. In one case, for instance, a girl drawing 10 per cent of her sales was receiving $5 a week, while another drawing 3 per cent was getting $15 a week. The opportunities for making sales were about equal in both cases. The fifteen-dollar woman, however, was so successful that customers would wait for her when she was busy with other patrons rather than have another clerk

attend to their wants. Here we see the vast difference between clerks, and why it is that one should be paid three times as much as another. As a matter of fact, the sales girl receiving $15 a week was underpaid, while the apology for a clerk who was getting $5 a week was being grossly overpaid.

If the druggist ever happens to work this thing out scientifically, he can determine pretty accurately that he is safe in paying a clerk up to 8, possibly, or even 10 per cent of his volume of sales. If, on the other hand, a clerk is paid materially beyond that, it may be well to look into his efficiency.

PRETTY CONVINCING LOGIC.

Nowadays many manufacturers in different lines of trade are finding it difficult to keep up with their orders. They have more business than they can attend to. Under the circumstances some of them have discontinued their

advertising, and one such manufacturer wrote E. St. Elmo Lewis asking him what he thought of such a step.

Lewis replied as follows:

The oversold manufacturer is reaping two results to-day, either the results of consistent advertising in the past, or the benefits that are coming to all manufacturers in a hungry market. If he is in the first class, he should advertise to-day because he will want business five years from to-day; if he is in the latter class, he should advertise to insure that he will get more than his competitive share when the market is glutted.

That there is no necessity for overadvertising is selfevident, but we take it that your question means exactly what it infers, and that is-shall he cut out all advertising? The manufacturer with a short view of merchandising will cut out his advertising when he gets behind on orders; the manufacturer with the long view will continue advertising on the same principle that a man realizes he is going to be hungry day after tomorrow, no matter how well he has dined to-day. The tramp lives from meal to meal. That is the difference between the long view and the short view of the whole problem.

This is the answer of an expert-of a man who has frequently been called into council by large manufacturers to help them outline their selling and advertising campaigns. He knows what the game is. He knows why to play it and how to play it.

Lewis's advice applies to the manufacturers this year who are cutting out their advertising. It applies, though perhaps in less measure, to the retailer who is tempted to do the same thing.

Don't!

RIGHT NOW!

Last month an editorial appeared in the BULLETIN which has attracted a great deal of attention and which has brought expressions from all parts of the country.

We suggested that right now is the time to make an effort to win more business for the prescription department.

Very recently a letter came to us, from which we quote: "It is my opinion that we have a splendid opportunity to increase our business by urging physicians to prescribe instead of dispense. The present high prices that generally obtain have got the doctors guessing; they do not want to give up some of the drugs and preparations they have been in the habit of using, and they hardly can afford to dispense them at present prices. The laity has become reconciled to high costs as far as drug stores are concerned, and I believe that now is the time to strike, and by persistent and concerted action all along the line I am sure the doctors will see the logic of the situation and write prescriptions as they never wrote them before."

Surely if physicians can ever be brought "to see the logic of the situation," now is the accepted time. Such an opportunity never existed before, and in all probability never will exist again.

We repeat, therefore, the admonition voiced last month: go to your dispensing physician and ask for the business. There can be no harm done, at the worst.

Point out the facts that prices are constantly advancing, and that in all likelihood they will continue to advance for some time to come.

If you cannot persuade the physician to abandon the practice at once, suggest that he do so gradually as his stock becomes depleted. Do not overlook this unusual opportunity!

Another fatal poisoning case out in California is due to the administration of barium carbonate instead of barium sulphate in x-ray work. Druggists should be extremely careful. In this case, however, the victim was a dentist who volunteered to become a subject in an experimental test, and no blame attaches to the store at which the drug was bought. Barium sulphate is harmless; barium carbonate a deadly poison.

ABOUT PEOPLE

PARKE, DAVIS & CO.'S NEW AUDITOR.

It is gratifying to see men rise in the world and come into their own. The resignation of H. D. Allee as auditor for the corporation of Parke, Davis & Co., of this city, afforded the Board of Directors an opportunity to promote Norman McLeod, who had been traveling auditor of the organization for ten years, and who in that capacity had visited branches of the house all over the United States. He had even been to the London Branch on two or three occasions.

Born in 1875, in London, Ont., Mr. McLeod got his first training in the Canadian Bank of Commerce. He was sent to several

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of the branches of the bank throughout the Dominion, and made such a reputation that he was captured by the Detroit Stove Works and made general accountant of that corporation. Later on he was promoted and made assistant secretary and assistant treasurer. Ten years ago this month he entered the service of Parke, Davis & Co., taking the place of traveling auditor, and has now been promoted to the auditorship.

Mr. McLeod is a man of both ability and popularity. His promotion to this important position has been greeted with pleasure by all of his numerous friends.

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