Parker Shows Retail Profits Below 20 Year Average

Under date of July 31st, E. C. Parker, of Los Angeles, president of the California Retail Lumbermen's Association, issued the third of a series of very interesting and practical letters concerning the mechanics of retail lumbering in California. His first letter was dated May, 1937, which gave actual statistics to show that the average retail lumber price in California in L937 rvas LESS than a twentyyear average. In June he sent the second letter giving actual wage statistics, showing that in 1937 the lumbermen's labor expense is about 24% }{IGHER than a twentyyear average.

This latest letter presents actual statistics to show that the GROSS margin of profit on lumber sales at retail in L937 is LOWER than the twenty year average. Explaining how he arrived at his conclusions, Mr. Parker says:

"As we have stated before, the lumber industry does not have available combined statistics for the state, and we have been obliged therefore to take statistics applicable to Metropolitan Los Angeles, but we feel that they will show the trend for most of the state. For twenty years the writer has been recording month by month the average ex-vessel price and the average "going" sales price on representative Iumber items. For purposes of this ar.ralysis we have taken the ex-vessel price ol 2x4 16'No. l Com D.F. SIE as being representative of Common Douglas Fir and have added the cost of wharfage and hand.ling, freight or cartage to Los Angeles, and labor piling into the pile, and then have taken the average "going" price at which this item 'n'as sold F. O.B. the pile. The sale's price divided into the difference between the "on the pile" cost and the sale's price would give the per cent of gross profit on sales. \\re have used 1x12 B&B KD DF S4S & Sanded as representative of finish and have added to the Rough ex-vessel price tl.re cost to lay down in pile at Los Angeles; 1x4 B&B VG DF Flooring [as been used as representative of Flooring & Ceiling with the proper amount added to ex-vessel price for cost in pile at L. A. ;2x6 16' No. 2 Com Ro Rr,vd as representative of Redwood Com with the proper amount added to exvessel price for cost in pile at L. A.; and 2x6 Clr Hrt Rlrcl S4S as representative of Redlvood Clears rvith the proper

I There's not much proit in relliog the taw lunber that goes into hand-made, nailedtogether, make-shift kitcheo frrrniture...lumber which arl dealer caa furnish.

BIJI there's reel ptoig zn d a happy cus. tomer, every ti-e you sell PEERLESS Built-in Furniture. So write today for irterestiog details of how PEERLESS will increase your busrness aoo your profts.

To Help You Sell More Doors

IHE ilrEE[ER 0s000rl

10-10 Sales Plan

Means Money in YOUR POGKET

Get complete information about the plan that is increasing the profits of hundreds of dealers. A plan based on the 10 points of superiority of "the country's most complete line'of doors" *d u tul"t policy that ahords BIG oppor' tunities.

More WOCO and LAMINEX Doors have been sold than any other single make.

amount added to ex-vessel price for cost milled & dry in pile at L. A. In arriving at the average Gross profit for the 20 years and for each 6 month period, tl-re influence or weight of each item averaged is proportioned in accordance rvith its relative importance. After analyzing one hundred million feet of actual sales, lve gave Common Douglas Fir an influence or weight of 8A%, Douglas Fir Finish 7/o, Douglas Fir Flooring and Ceiling 5%, Common Redu'ood 5%, and Clear Redwood 3%. The percentage of Gross profit for twenty years was arrived at ancl called 100% on the chart, then the percentage of Gross profit for each six month periocl rvas arrived at and charted in accordance s'ith its percentage oI the twenty year average."

Then follor.vs trvo cl.rarts s'hich demonstrate clearly and undoubtedly the truth of Mr. Parker's statement that the gross profit for the year thus far in 1937 1s LESS than it n-as for a trventy )'ear average. Nfr. Parker's letter then concludes :

"The charts shorvn in this letter only bear out what t'e l.rave stated in our previous letters of N{a_t' 19 and June 30 and are further borne ont by actual book records that the gross margin of profit on the goods solcl bv lumbermen in 1937 is somewhat less tl-ran a tlr.enty I'ear average. This is in spite of the fact that the most important factors of cost and expense to lumbermen such as Fecleral aud $1a1s income taxes, Capital Stock tax, Citi- & County property taxes, Olcl Age pension and unemplovment taxes, sales taxes, City licenses, \\'ag'es, salaries, and general expenses of all kinds are higher than a trventy year average. Everl lumberman knows aside from the high level of taxes, wag'es, salaries, and general expense items that the amount of office detail necessary to compile the various tax and other such reports, and the amount of expense necessary to give the extravagant "service" to customers, is very much higher than a twenty year level. Apparently rvith the gross margin of profit the same or less than a twenty year average and with the cost of doing business higher than a tr,r,'enty year average, the only hope for lumbermen is for there to be an abnormal volume of business. How often and horv long do Iumberrnen enjoy an abnormal volume of business?

"Is there nothing that can be done to correct the conclitior.r in our industry?"

BIG TREE Brand Certified CALIFORNIA BBDWOOD SHINGLBS

A cornplete stock of air-seasoned or kilndried shingles ready for irnrnediate delivery.