Magazine Article Details Industry’s Ills 1954
Feb. 25, 2020
Electrical Wholesaling Magazine published an article in August 1954 entitled, “The Ills of the Industry and What You Can Do About Them.” The article was unique in that accompanying the text of the main body of the article were marginal comments by a number of prominent members of the electrical industry. We’ve captured examples below.
On manufacturers local warehouse stock
“The manufacturer still needs the distributor’s selling, credit and delivery facilities even if he has a local warehouse stock. The distributor is ill advised to support such an operation. If a manufacturer opens a local warehouse and sells non-stocking distributors at the factory price – thereby absorbing the cost of warehousing – how can a stocking distributor compete in price with one who has the goods sold before he takes them from the manufacturer’s local stock?”
On making money
“Every year the head man should teach an employee course entitled ‘How to make money.’ He would explain the difference between lots of sales and lots of profit.”
On selling experience and knowledge
“The distributor fails when he does not sell to his customers the benefits of his experience and knowledge of the business, and the ethics of his company, rather than simply trying to get an order at a price.”
Where price cutting starts… and stops
“Price cutting in any company, either distributor or manufacturer, emanates from the top. Therefore, control could be easily handled.”
A little home spun philosophy
“Price cutting always reminds me of an old fellow in our town and the trouble he has with winter underwear. He was a short legged man, and every pair of red flannels he bought would be too long for him, so he would get his scissors and snip two or three inches off the legs. The first time they were washed they would shrink until they didn’t cover his ankles, so he would pull the legs down until they did cover his ankles and sew an extra strip around the waist. Every year he had the same complaint; “You know if I cut if I cut just two inches off them ankles, I got to sew on a whole yard to keep my belly button warm.”
On price vs. service
“As a distributor, all you have to sell is service. When a salesman makes price his only effort, everything else you do goes out the window.”
On educating employees about profit making
“My experience from many visits with wholesaling organizations is that the heads of wholesaling operations are pretty well acquainted with their industry problems and their cures… but that employees, even those in responsible positions, are not. The boss is not the Simon Legree who is selling the business down the river: it is the employees who can’t refuse an unprofitable order. The first thing that I would recommend to the head of every wholesaling operation is that he completely, thoroughly and repeatedly educate all his salesmen, buyers and key employees in the basic principles that make for a profitable operation. Many of the commercial sins the distributors accused of committing are the result of lack of understanding, or a cover up for inefficiencies of subordinates.”
And the final paragraph of the article could just as well have been written in 1984 as in 1954. It reads: “It’s up to you.”
“During the rest of the year, wholesale customers are going to buy a huge volume of electrical apparatus and supplies. You distributors are going to sell most of it. The quantity they buy will be affected very little by whether you gross 10 percent or 15 percent of it. However, such a 5 percent difference could determine whether you make a profit or sustain a loss. The executive of one large electrical supply house recently told me, ‘1954 is the year to get through.’ He could be right, and strangely it is all up to you. The volume is here. The manufacturers will provide the goods. It is only a question if you are good enough businessmen to see to it that you get adequately paid for the service you render.”
The foregoing material is quoted (in part) from an article in Electrical Wholesaling magazine, August 1954.
Source: CEDA: Fifty Years of Service – An Historical Review of the Canadian Electrical Distributors Association, 1934 to 1984, Kerrwil Publications. Please feel free to reach out to us any time if you have great photos, historical anecdotes or perspectives. We would love to hear from you; linegoyette@kerrwil.com.
