Selling by mail is by no means, as many suppose, an American novelty. France, Germany and Eng land have their mail-order emporiums. One large Paris mail-order house sells gowns, hats, jewelry, lin gerie, and toys by catalog in every country of West ern Europe. The German mail-order houses sold even in South America. The expansion of the mail order business there, however, is greatly restricted by the fact that some of the countries lack parcel post and money order facilities.
The advantages of mail-order business are obvious. Cash is received before the goods leave the store house; small parcels arc easily handled and require little customs formalities; the catalog may list and picture many more articles than it is necessary to carry in stock, since they may readily be obtained as soon as a demand for them arises. On the other hand, mail-order trade involves a large amount of detail and the employment of large office forces. A dis advantage of the foreign mail-order business is that packages can be "entered" only at specified post of fices, in the foreign country where the customs in spection may be had. It is necessary, therefore, for the consignee if he does not live at one of these places, to appoint a representative there, to receive the goods and forward them.
The European mail-order house frequently sells c. o. d., or, as it is called on the continent, contre rewbours. In this case 25 per cent is usually required with the order, the balance to be collected upon deliv er•. This small payment is an effective check on refusals and will approximate the expenses involved in shipping and returning the article.
5. Establishing retail stores.—Retail establish ments are maintained in many of the larger cities of Western Europe and South America by some of the well known shoe manufacturers of this country. The method should not be attempted by any manufacturer who has not followed the same policy at home, for retailing is full of pit-falls for the unwary. For sell ing highly specialized goods, like machinery, on the other hand, in the use of which the customers must be trained, which need the care of specialists to be kept in good repair, and which may perhaps be paid for in partial payments, stores may be the only effective selling method. The largest manufacturers of sew - ing machines, for example, maintain retail establish ments in all parts of the globe. The method necessi
tates a huge investment in plant and stock, and en tails high charges for insurance, depreciation, interest and salaries of sales people. Few articles are adapted to this method of selling.
6. Consigninevt.—The easiest way to introduce goods into a foreign market is to send them on con signment. Foreign firms are usually willing to dis play and stock goods at no cost to themselves. The more vital question is: will the goods be sold, will the consignee, not having invested, have the same interest in pushing them, that he has in pushing those in which his capital is tied up ? Unsold goods in foreign markets represent a much greater loss than at home. High freight rates and frequently high duties have added to their cost. It is difficult for the exporter at home to know how to shift the goods to some other place where they may be sold ; he has not the knowledge of other nearby mark ets. He generally must fall back on a forced sale in the locality where the goods were placed in consign ment, possibly an auction. This means spoiling the market for later sales.
Naturally the consignor is at the mercy of the con signee. In the sale of manufactured goods not sub ject to publicly established prices, the consignee may sell at a better price than he is willing to remit to his principal. In case of a forced sale this is no uncom mon occurrence. Some exporters set a minimum price below which they will not allow the goods to be sold, but this may prevent a sale at a slightly lower price and in the end involve a greater loss. Consign ment is, therefore, not used to any large extent in selling American manufactured goods, except in "dumping" or in the case of transactions which mis carry. It is an emergency measure. In short, the inexperienced exporter should avoid consignments as one of the dangers of foreign trade.
European exporters not infrequently undertake what are called conto meta transactions. This is a re ciprocal consignment or a commission sales agree ment. Usually both charge commission on all sales, while carefully kept accounts draw interest on open balances. Such agreements between firms of differ ent countries are usually for indefinite periods and are undertaken only by houses of established reputation.