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ONE HUNDRED and SEVENTY-FIVE YEARS

AGO, October 1, 1781, James Lawrence was born. He is the man made famous in United States history with the words, 'jDON'T GIVE UP THE SHIP".

. . . We are well known fpr the products and service we render to Southern California Retail Lumber Dealers We won't say "famous" but, if you haven't tried us, give us a call and you'll see what we mean . . because we just won't give up until your order is filled promptly and efficiently.

The lmporlqnce of Costing Tickets in the Retoil Lumber Business

(Continued from Page 4)

The second benefit to be derived from costing tickets is the resulting better control of pilferage and thievery. The retail lumber industry has the reputation for thievery within its own ranks. A situation is known where a branch yard manager got away with merchandise that affected profits to the extent of over lo/a. The obvious conclusion is that this is true only because we make it too easy for the employee to go astray.

The practice of estimating a gross profit percentage based on last year's experience,.plus a safety factor of a couple of points, for use on monthly operating statements, is the primary villain in this instance. If we knew exactly what our gross margin was, developed from daily sales, we would then be in a position at the end of the year, after having taken inventory, to determine exactly what our inventory loss should be.

There should never be an i,nventory gain in a retail lumber yard operation. We know that there are certain losses due to normal deterioration of material and obsolescense. There is little, il any, accurate information available in our industry today as to exactly what this figure is as a ratio to sales. It may be l/o,2/o, or even possibl1 5% to sales.

Costing all of the tickets all of the time would enable a company to determine its true gross profit. If an inventory loss is €xcessive, an immediate investigation can be made to find out where the leaks are.

Once an operator satisfies himself as to what a normal inventory loss should be, he can then investigate until he finds the leak that caused inventory losses in excess of this point. Budgets should allow for inventory shrinkage, and this allowance should be shown as a part of normal overhead expense.

Think rvhat it rvould mean to the average operator today if he could add even 2/o net to his profit.

We do not believe there is a lumber vard operator in tl.re country lvho is trying to make too little profit, or to lose money. The only reason for unsatisfactory profits is lack of knowledge of what 1\,'e are doing, and our inability to .put our fingers on our weaknesses. It is not generally diflicult to rectify a situation if one is sure where the problem lies.

Admittedly, we know prices are too low, but unless we can pinpoint the problem, that is not sufficient information. Are the prices too lorv to the consumer, the contractor, the project builder, or are they too lorv in a specific item of merchandise, or is it in the whole general pricing and mark-up policy?

Pinpoint your price problem and you will be able to do something about it. Pinpoint your profit problems by costing all of your tickets all of the time. Proper knowledge of gross profit margin will result in better prices.

Through proper accounting, acquaint j'ourself with the kind of mark-up necessary for the various kinds of businesses in which you are engaged. Realize that, as an industry, we have operated largely on a 'ivholesale basis. When we go into consumer sales we are, for the first time in our history, really going into the retail business.

Mark-ups in the retail business, as far as retail and consumer sales are concerned, are little, if any, different than those of the typical department store. When we consider the retail segment of our sales, there is even the possibility of operating costs beirig higher in the lumber industry than in other retail industries because we actually give more service in order to secure our business than do other types of retailers.

It is impossible to satisfactorily operate a business without tools. Accept the idea that tools are necessary. They are involved in accounting and in pricing.

As your first step, cost all of your tickets all of the time. This job, properly done, will result in better profits for you.

fimber €rop Opened Up

According to C. T. Gray, president of Stockton Box Company, and C. A. Connaughton, regional forester of the California Region-U. S. Forest Service, the harvest of more than one billion board feet of intermingled private and national forest timber in the Long Canyon Working Circle within the trldorado National Forest is now assured through a mutual agreement for joint development of a road system to remain in effect for 30 years, or about the period of time necessary to complete the first cutting cycle on national forest lands.

Cormel Building Boom

Carmel, Calif.-Construction homes is planned in the Carmel of 2,N0 country-club type Highlands area.