Hou,, Do YOU Establislt an Adaantage?

By loHN T. NORTHAM H arb or P I ywo od C or poration of Soutbern California

How many times have you said, or heard someone say, "Everything being equal, I will get.the business?" There is little doubt that anyone exposed to either Selling or Buying could report a fairly large number.

How many times, as a salesman, have you witnessed a prospective purchaser determine his source of supply, or how many times have you, as a buyer, selected your supplier by drawing names out of a hat-or by flipping a coin ? If everything is equal, some such method would have to be employed. It therefore might seem that this often-used statement is not a fact, due to the extremely few times any of us could report the use of such a method.

Buying, in a gre.at many instances, is selling in reverse, and just to provoke a little thinking, and possibly some discussion (no arguments, please), I would like to voice the opinion of a fellow who has been exposed to this business of "selling" for a number of years. I think the statement under consideration is definitely false, and that in order to obtain business, a salesman-or firm, MUST HAVE AN ADVANTAGE.

There are times when, in most businesses, it becomes necessary to dispose of certain "over-stocks," or material that may have been held in inventory too long, at prices below the general market. The price advantage usually established is shortlived in most cases. A price advantage on regular stock is usually an "advantage" for only a matter of hquls-qernpetition takes care of that.

Of course, we may sometimes experience a condition similiar to that of the merchant who paid $1 for an item and sold it for 98c. When asked by a fellow merchant how he could make money that way, he replied, "I don't, but look at the volume I do."

Far too many of us engaged in "buying & selling," and probably much too often, consider "Price Advantage" as the only advantage worth considering. It might be interesting, to at least a few, to take a brief look at not only this suggested advantage but also at some of the other potential ones.

Fiiendship can play an important parf but probably not as important as some may think. In the event everything else is equal, friendship could be the necessary advantage. However, there have been times when friendship ( ?) is overworked, or a little too much emphasis is placed on it.

Seldom will a true friend ask a buyer to give him business, or a salesman be asked to accept business, if it will be other than beneficial to both-much less detrimental to either. Therefore, we should look further into the development of an advantage. Most business, particularly at the I\{anufacturer and Distributor levels, is conducted on a "credit basis." There seems to be a definite attempt on the part of most of those in this field to use credit as a convenience, rather than as a financing agency. Although it is possible to purchase credit insurance, most firms employ a credit manager, to guard against over-extension of credit.

It appears that most business organizations require money to operate, and they like to be paid for the material and/or services they supply, and prefer this payment to be in accordance with an established plan.

There seem to be two ways in which an advantage could be developed in this category. Credit could be granted to a firm which is sold by the majority only on a cash basis. The other, and probably used more often than the former, is the "easing" of the actual terms of payment.

There are times when a firm may be basically sgund but, due to seasonal business, is lacking sufficient working capital to meet all obligations on a discount or prompt basis. Permitting extra time for payment may well be sufficient advantage to "get the business."

Most of my business experience has been at the Manufacturer-Distributor level, and in the Plywood-Building Material field. It is therefore quite logical that my discussion of this subject include some phases of that business. Ilowever, the points I wish to mention can certainly be converted to most other types of business, and at the other levels.

It has been said that plywood is the wood of a thousand uses. One of the problems facing the supplier of plywood is that it seems to take a thousand items to meet the demand. Few firms (if any) can carry in a stock warehouse all of the items requested. This applies to species of wood, as well as size and thickness. There may be those who attempt this and, at the same time, there are those who carry only the most popular items-or those which are used in great volume. This is usually decided by the "top management" of an organization, and is certainly affected by the investment capital available.

A salesman representing a firm with a.large, diversified inventory will most certainly point this out as an advantage-and even some buyers recognize it as such.

QUALITY is probably the most misused word in the building material business. According to "Webster," the word quality means grade. There can be "high grade," "low grade," "medium grade"-even "consistent grade."

In the fir plywood industry grades have been established, and almost universally adopted. These grades are fairly well known and understood by dealers, and many constant users. However, there are still many differences in fir plywood produced as a result of raw materials, manufacturing techniques, and grading at the mill.

Some mills produce panels which are consistently above (Continued on Page 58)

October Housing Storts fo lOT,OOO

Nonfarm housing starts declined to 107,000 units in October, the U. S. Department of Labor's Bureau of Labor Statistics announced, and the 5/o decrease between September and October was about as expected for this time of year. But starts this October were within 4fti of the record for the month, set in 1954, and bring the total for the first 10 months of 1955 to over 1,161,000 units. This is second only to the lGmonth record of 1,215,000 starts in 1950 and 135.100 ahead of the similar 10 months of 1954.

Masonite Storts New Deportment

Masonite Corporation has established a product application department and James C. James has been appointed its manager, according to T. M. O'Neil, manager of the product development and market research division. James has been assistant manager of the corporation's sales engineering department for the last three years. The product application department will operate temporarily at Laurel, Miss., where Masonite has one of its hardboard plants. Later it will be located in the Chicago area.