12. "Loss /eaders."—Mail-order houses cut prices on many nationally advertised articles on which quantity prices do not prevail to any extent and for which they must pay as much as local retail stores have to pay. This is not peculiar to mail-order houses, since the policy of offering "loss leaders" or of shading the profit on well-known goods in order to attract trade is confined to no one kind of retail dealer. If country dealers do not usually adopt this policy it is because they do not care to risk trouble with manufacturers who want their prices maintained, because their total business is not large enough to permit much price cutting on some articles with the expectation of making up the loss on other sales, or be cause they believe that this policy is not good merchan dising.
13. Statics of the small qnail-order house.—The small mail-order houses (of which there are many) la bor under the same selling disadvantages as the small retail stores. The general statement that mail-order houses can usually undersell local retail stores rests on the mistaken idea that all mail-order houses are large, and on the fact that mail-order dealers ordi narily confine their operations to districts where they are not in direct competition with large local retail establishments that have the same purchasing power as themselves.
14. Advantages of mail-order house not inherent. —Mail-order houses enjoy certain competitive advan tages which we have seen. The larger catalog houses have points of competitive strength which have nothing to do with selling by mail, but result from the size of the business or from unusually efficient management. Any large retail house or any effi ciently managed store, regardless of size, could have some or all of these advantages if it wanted to. Low prices resulting from quantity purchases, secret dis counts, and the principle of low profits and quick turnover, characterize the best 'nail-order houses and likewise many retail stores. The mail-order house, if it is large enough, can employ experts in all lines at large salaries ; it can specialize in good merchandis ing; it can comb the markets for the best goods; it can buy skilfully; it can use the trade-building pol icy of guaranteed goods, easy exchanges and con tinual effort to please the customer in every possible way; and it can bring business by the kind of adver tising that is almost one hundred per cent good. Many retail stores do the same things, and many others could do most of them if the stores were man aged with efficiency equal to that which directs the more successful catalog houses.
15. How the local store can compete.—Like its mail-order competitor, the local store has certain points of strength in competition which lie in the na ture of the business—they work for the merchant whether he is aware of them or not. The following are suggestive: 16. Purchaser sees what he is buying.—The pur chaser likes to see what he is buying. He can go to the store and actually pick out the article he is to get. If he is dissatisfied with his purchase he can usually make quick and easy adjustment without go ing to the trouble of reshipping the goods, writing letters and waiting several days for the adjustment to be made.
17. Quick delivery.—The store and the consum er's residence are usually comparatively close to gether. Delivery can be made quickly. This, per haps, is the greatest advantage of the local dealer— one that he should capitalize to the utmost. The mail-order buyer must ordinarily buy in compara tively large quantities in order to lessen the burden of transportation charges; the customer of the local store does not need to anticipate his needs—he can buy even the smallest amounts as he needs them. The overwhelming majority of consumers have no capital to expend in anticipating future needs; they must perforce buy for daily needs only, and they must, therefore, patronize their local dealers.
18. in a small town, the merchant is ordinarily on friendly terms with most of his customers. By right dealing he can readily build up a clientele of friends and acquaint ances whose good-will is valuable. A long period of fair dealing will also establish a good-will for the es tablishment that sells at long range, but the influence of a distant dealer upon his customers can never be so strong as that which the local merchant has upon his neighbors.
19. Personal the patronage of the retail store is generally local and limited, the owner is in a position readily to adapt his stock to local needs, to avoid slow sellers, and to hold trade by ca tering to individual and neighborhood peculiarities. A men's furnishing store in a western town main tains a careful card record of the requirements of each of its regular customers: When a man enters the store to buy a hat, the salesman knows the sort of hat he usually buys, and immediately offers it to him; and when the dealer wants to dispose of an odd lot of shirts, he sends personal notices to his custom ers who wear the sizes included in the lot. 1\To in ducements of price elsewhere could permanently alienate the customers of this store.