Jfr[Raxtera(b,

3450 Wilshire Blvd.

Los Angeles 5, Colifornio

PhoneDUnkirk 8-9591

Almedq

Plqnt: Foot of Sqnlo Fe Ave., Long Bcoch small sales and the increased personnel necessary in order to do business on a retail basis costs money, so he eventually raised his price. In the meantime, the retail lumbermen couldn't afford not to do something about the situation, so they scratched their heads and found better ways to purchase their materials, better handling methods, and decreased their price.

At the present time this problem is working itself out. The jobber has found that he cannot do retail business unless he gets retail prices, and the retailer has found that he can do a better job when pushed.

Competition in itself is not bad, so long as we know rvhat we are doing. The important point is, are we competing on a comparable basis? The trouble is, we as an industry are very apt to think of cornpetition in terms of prices and not to consider the qualitv of materials, the service and the credit extended.

The prices that we are meeting today from sources outside of our own industry are for materials and services that fall far belor,v r,vhat '"rrc' ordinarily offer. One of our big faults lies in the fact that we do not know the true value of our own service and therefore we don't have confidence in our prices.

Another casc that <lemonstrates this point is the story about a salesman that u'as working for a large lumber yard in the Los Angeles metropolitan area, selling large tract jobs. He was exDeriencing considerable difficulty on price from brokers, wholesalers or mills that were going direct on tract jobs. He was unable to convince the manager of the company l-re 'ivorkcd for that he should cut his price, so

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he decided that he would short-circuit the r'vhole procedure -get some mill to sell the tract direct in his name; the mill would do the paclcaging, the collecting and take care of the deliveries. He would sell the jobs just as he had been doing before, except that now he would charge $3.00 per thousand for his services, which would be much larger than his old salary. Hr. was able to convince some of his tract-operator customers that tl-ris rvas a very good idea and that they could save considerable money.

The way the deal r,vorked out was that the mill added $5.00 for their packaging and the cartage to the job-site. The salesman added three dollars in the price for himself. This resulted in a selling price of $8.00 over cost and considerably belorv the price that retailers were charging. It looked for a while like the retailer was going to be completely out of the picturB and that all future tract jobs would be sold on this L.asis. But again it didn't work out.

The contractor soon got into trouble because there were shortages, overages, irnproperly graded material and no economic way to handle the problem. When the contractor {ound that his labor cost was going up on the jobs because of the inefficiency in the manner in which he rvas purchasing his material, he soou decided that the price he rvas paying the retailer for material and service was in reality a bargain.

Our salesman in this case made some good money for a while, but now he carr't seem to sell a job. He hates to go back to work for a rctailer on a salary basis and is facing bankruptcy because he thought you could short-circuit a