Price Cutting

By President Central O. V. Wilson California Lumbermen's Club

A few days ago the writer heard a man say that the average retail lumberman is a fool. He was referring to the fact that when business gets a bit quiet the average lumber dealer begins to cut prices as if that would stimulate a demand for more lumber. I would not say that they are all fools, but some of them appear to have become somewhat unbalanced at times.

Lumber is a very small part of the cost of construction and if it were donated fiee of charge and delivered on the job it would be impossible to increase building industry in the community IA/o over normal. This being the case, why cut prices ? If it were possible to increase your volume of business only enough to take care of the loss resulting from the cut, you have made nothing for yourself, but have left a condition in the community that will be hard to overcome when you desire to get back to normal profits. IJnless you can materially increase your volume and at the same time hold your overhead down, there is no dane reason for cutting prices. This you cannot do.

The time for price cutting is when business is good. Then you can afford it, having a large volume at a small margin of profit. But to cut prices when business is slack is the leight of folly. You have a small volume, your percent of profit should be greater because your overhead remains about the same under both conditions. A man in business is certainly entitled to a legitimate profit under all conditions. The retail lumber business is such that no rne dealer or group of dealers in a community can create a demand for their merchandise by reducing their profits. It cannot be done in that way.

Wherr the electrical engineei wrote his little booklet, "Power on the Farm," he did not expect every farmer who read his booklet to buy a Westinghouse motor, but he did expect to create a desire on the part of the farmer to use more electricity on the farm and- this desire would create a demand for more electrical equipment and by this increased demand he would get his share of the incieased business.

The lumbermen must work along the same lines. They must create a desire on the part of the people to own their homes. This can best be done by co-operation and pulling together. Each one will get his -share bi ttte increaied de"mand for building material. We believe that the new slogan, "Build A Home First," will prove to be a great stimulus to business. The automobile manufacturlr has this slogan, "Two Automobiles For Each Family.' To overcome this extravagant luxury we must resorf to the sentimental, the most sacred place on earch, "F{ome"; not a two or three room apartment, but "Home," "Home Sweet Home."

The Central California Lumbermen's Club caught the inspiration and was the first in the West to initiate a campaign using as a slogan "Build A Home First." Details of this czimpaign were turned over to the Hoo-Hoo Club of Central California to work out and put over. On June 6 all lumb.er yards, planing mills, building and loan associations and realtors opened up a new era of co-operative advertising by placing steel signs, stickers and posters on buildings, trucks and cars. This campaign may cost the club h thousand dollars, but it is expected that the increased demand for building material will many times cover the cost.

Another thing that will tend to increase business is "Know Your Stuff." It was at a meeting of the Central California Lumbermen's Club that "Gus" Russell decided to conduct a questionnaire contest on the lumber industry. This contest created quite an interest throughout the entire state and showed many of us that we do not know our "Stuff" as we should. We trust that some one will follow this good example and put over another one next year.

Salesmen of structural steel go direct to the architects and show the advantages of their material. Salesmen of lumber substitutes are advertising to the limit and co-operating in every way possible to aid the retailer in selling their product, but where is the manufacturer of real lumber that gives a "Whoop" for the lumber dealer after he gets his check for the last car load?

We must know the merits of what we sell and sell on merit and not price alone. The principle of price cutting is wrong and when the retail lumber merchant can set a legitimate price on his merchandise and then have the backbone to demand that price he will get some self-respect, and the lumber industry will be placed upon a higher plane and sounder basis. His business will carry more dignity and he will be more highly respected by his fellow men.

Nothing can please a contractor more than to get the lumber dealers to "Fighting." He will "Peddle" bids and tell a few lies and when the lumbermen fall for his ingenuity, he will laugh at his success and lose confidence and respect for the poor "Sucker." Merchants, bankers, plumbers, painters, contractors and all other crafts 'have their own organizations but let two lumbermen be seen upon the street together and the passer-by will say, "Luml>er Trust," "A raise in price of lumber," etc.

Men of the retail lumber business, let's awaken, shake off our lethargy and rise to the opportunity and stand back of the product of the forest. Boost our own business and demand a fair price.

In addition to Workmen's Compensation and Public Liability, let us explain our five-point Automobile Coverage for your individual pleasure cars' your salesmen's cars and trucks. Full coverage for all automotive equipment in a single policy at Substantial Savings in cost.