Building Material Manufacturers and Dealers are Given an Obiect Lesson in Modern Merchandisin$ Trends

Lumbermen's Credit Bureau Louisville, Ky.

Editor of Printers' Ink:

I wish to thank you .very kindty for your letter of the 25th in answer to my telegram asking for information on Sears, Roebuck's merchandising policy. Needless to say I appreciate very much your promptness and especially the data you have given me.

I have read all the articles listed in your letter and have found a good deal of desirable inforrnation in them. I notlce that these articles, in outlining the retail policy of the mail-order houses, mention the fact that they do not give delivery service or part-payment plan' However, I noticed the last time I was in Sears' Chicago store that they feature ready-cut garages on the instalment plan and ready-built house patterns.

I know they have a large sash and door factory at Norwood, Ohio, and that their ready-cttt building material comes from Cairo, Ill. In building their $500,000 store here in Louisville they are buying the lumber for the job from what they call their Southern mills. A large local piano factory, which is owned and controlled by Sears, Roebuck, is making the store fixtures.

With the knowledge that Sears, Roebuck have sources of supply for lumber and other items going into construction work, it has occurred to our lumbermen's organization that they undoubtedly will make some effort locally to sell garage patterns, house patterns, sash and doors, etc., in direct competition with the lumbermen.

It was because of this that I tried to find out what their policy was in other cities. I am taking steps to get in touch with other lumber organizations in cities rvhere Sears, Roebuck maintain retail stores, and hope to obtain something of their actions in other cities. If you have any data along this line, I will be very glad to hear from you.

LUMBERMEN'S CREDIT BUREAU, W. E. DIFFORD, Secretary.

The mail-order houses are today doing for the retail building material dealer (and, of course, for manufacturers also) what they did for the average general dealer fifteen or twenty years ago. They are demonstrating to him certain merchandising policies which he will have to observe or adapt if he is going to remain in business.

A short time after receiving Mr. Difford's letter, we had an opportunity to discuss it with A. B. May, sales manager of the Interior Lumber Company, of Minneapolis. Mr. May's firm owns and operates a chain of retail lumber yards

-lumber "stores" is really what they are-in Minnesota, Wisconsin, South Dakota and Iowa.

"The big thing the building material dealer now has to do," he said, "in addition to allying himsefi more closely with advertised branded merchandise in his line, is to ofier his customers {acilities for financing their purchases' Unless he does this he is going to find mail-order competition increasingly hard to meet-if, indeed, he can meet it at all."

Just what does Mr. May mean ?

The purchase or construction of a home is just about the biggest single financial transaction the average man makes in his lifetime. The building of even a garage or a barn is a sufficiently sizable proposition to cause him to do some careful planning. In financing his bu,ilding, up to now, he has had to recourse to banks, building and loan associations, mortgage companies and, in a limited degree, to private capital. But, in substantially every case, he has had to arrange for the financring himself. If he could raise the money he could build; otherwise, he had to do without.

It is interesting to try to imagine where the automobile business would be today if manufacturers had confined their efiorts strictly to making and selling cars and ignoring the problem of how their customers would pay for them. The same thing is true of farm equipment, pianos, radios, and a long string of the more expensive household accessories, including iceless refrigerators. We have frequently set forth in PRINTERS' INK the solidity, conservatism and economic soundness with rvhich the financing of these commodities is provided for. What it amounts to is that the dealer gets cash for the article he sells, the purchaser paying a carrying charge to cover the interest and expenses.

What Mr. May means, then, is that the building material man must provide similar facilities for his trade. And this, answering Mr. Difiord's question, is just what Sears, Roebuck & Company are doing at the present time-thus clearly revealing the rvay, once more, for independent dealers io follow. We are referring to Sears here because this is the mail-order house mentioned specifically by Mr. Difford. There are others, such as the Gordon-Van Tine Company of Davenport, Ia., rvhich are {oing similar work in indicating to lumber dealers the path out of the wilderness-without, of course, intending it that way any more than does Sears.

What makes the situation much more critical for the lumber dealer today than it rvas for the general dealer a couple of decades ago is the fact that Sears no longer depencls entirely upon its catalog or its main distributing houses to do its merchandising in building material lines. Sears, as is well known, is establishing a chain of depart- ment stores; and each one of these is, in effect, a point from which energetic sales effort in behalf of building material lines is carried on. And then, in certain.sections, it has distributing yards which handle building ma:ierial only.

A typical plant of this nature is in Newark, N. J., which represents an investment of about $3,500,000. Working out from Newark, the firm has salesmen engaged in soliciting sales of ready-cut houses, garages and other buildings. Free delivery is made within a radius of forty-five miles and the benefits of the instalment plan are extended.

It is our understanding that Sears expects, or at least hopes, eventually to have all the strategic marketing points of the country covered for the sale of building materials as is the case in the Newark district and elsewhere. With this strictly localized distribution in the larger centers, with the catalog steadily at rvork gaining the fill-in business in isolated points and with the compan'y providing universal facilities for deferred payments, it is easy to see what other building material dealers must do.

Take, for instance, the situation in l-ouisville.

It seems to us that the Lumbermen's Credit Bureau, of which Mr. Difford is secretary, could rvell be made the nucleus of a co-operative arrangement among lumber dealers of that vicinity rvhereby financing facilities could be offered to customers of all the members. The Bureau also could merchandise the immutable fact that a successful dealer in this classification has got to operate much more than an old time lumber yard; he must have in stock all the essentials entering into the construction of an average building. I{e must remember also that the advertised brand, for which consumer acceptance has been established,

E. W. HEMMINGS IN fiORTHWEST

is for him just as much as it is for the hardware man or any other dealer lvho sells his class of merchandise.

The individual dealer naturally would have to work out his own salvation on the selling end. But wjth the financing facilities and a sufficiently varied line of merchandise, as above srlggested, he ought to be able to do this in a manner reasonably free from complication. Sears has no monopoly on energetic selling any more than it has upon the other essentials entering into the transaction. As nearly as we can see, these localized distributing points established by the mail-order firm make sales by utilizing the good old system of going after prospects in an intelligent manner and asking them to buy. We know of no reason why the local dealer should not do the same; and doubtless he can do it much better than can the mail-order firm-if he u'ill.

The building material industry has been notoriously backward in its interpretation and utilization of modern merchandising methods. Individual manufacturers and certain associations have done rather a good job in their way; but they have to fight the apathy, or worse, of dealers. Past experience has shown that if dealers cannot be talked or educated into doing *.omething they ought to do for their orvn benefit, they can be scared into it. From present indications it seems that the mail-order houses, with their rapid extension of localized distribution through their chain stores, are doing the scaring in an effectual way that really rvill amount to something. We predict that the building material interests, both manufacturing and retail, will see the point in a hurry and apply the proper corrective measures.-(Ed. PRINTERS' INK")