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THE census of 1870 lists 7,262 commercial travelers.
The census of 1920 lists 179,320.
In 1870 commercial travelers were .06 per cent. of the total number of persons ten years of age and over employed in gainful occupation.
In 1920 they were .43 per cent. of the total number of persons employed.
The percentage of the population classified as traveling salesmen increased 716 per cent. in the period of fifty years, while the actual number engaged in this branch of distribution increased 2,469 per cent.
The transformation in methods of salesmanship is as startling as the increase in numbers of those engaged in selling. Modern methods of salesmanship and of sales-management represent an almost complete abandonment of rule of thumb methods. The happy-go-lucky salesmanship of the pre-McKinley era has been replaced by methods based upon scientific analysis of the psychology of the prospective buyer. The scientific methods of today have, however, failed to reduce the numbers of salesmen necessary to the accomplishment of the task of selling. In production, the development of more efficient processes is followed by a reduction in the numbers of laborers necessary to the performance of a given task. In distribution, efficiency engineers and scientific management are apparently being flouted. The science of salesmanship becomes more and more scientific each year, and yet more and more salesmen are necessary in order to dispose of the products of our factories.
Prior to the Civil War, the traveling salesman was practically non-existent. The traders of the pre-railroad period visited the markets in person, for one reason because it was often necessary for the merchant to freight the merchandise back by wagon under his own direction.
The prototype of the modern salesman was the "greeter" of the early saloon era. These greeters were employed by the wholesalers to greet and entertain visiting merchants. Manufacturers employed few salesmen because their products were disposed of to the wholesalers, generally through independent brokers, and the demand for factory products was on the whole sufficient to make intensive selling by them unnecessary.
As the manufacturers emerged more and more as the dominant factors in distribution, the number of salesmen employed by them increased. The movement to eliminate the wholesaler and to subordinate the wholesaler and retailer to a system of national distribution required the use of large numbers of specialty salesmen by the manufacturers. With their appearance on the scene, the numbers of traveling salesmen increased with amazing rapidity.
The late Arthur E. Sheldon was the founder of the school of high pressure salesmanship which dominates methods of selling today. A keen student of psychology, Sheldon discovered than an understanding of certain facts in psychology would be of great assistance to the salesman having to persuade reluctant buyers to buy.
Prior to the formulation of the principles of salesmanship by Sheldon, salesmen were the products of an apprenticeship lasting years, which familiarized the prospective knight of the road with the nature of the product, the sources of the raw materials, the methods of manufacture, and standards of quality and value.
The embryonic salesman started his career by taking care of stock in the wholesale house which he sought to represent. He continued in this capacity until years of actual handling of the merchandise had thoroughly familiarized him with grades, kinds, stocks, and methods of ordering, shipping, accounting, and credit. A pleasant personality was of course an asset to the salesman, but the ability to hypnotize the prospect was not permitted to obscure the need of familiarity with the product which the salesman was to sell.
The salesman of today is under no such necessity to master some line of merchandise. He is a master not of merchandise, but of psychology. The text books on modern salesmanship and the courses in scientific salesmanship are not courses in which merchandise is studied. They are courses in applied psychology.
If it were to be generally accepted that individuals buy because they want goods, and consult catalogues and salesmen merely for the purpose of ascertaining the price, the very foundations of modern salesmanship would be overthrown.
There is, of course, a real need for the salesman. The buyer must somehow or other secure information concerning the merchandise for which he is in the market. If there were an even equation between the demands of the market and the offerings of the producers, the work of the salesman would be reduced to that normal basis of furnishing information which is at present merely a beautiful ideal. Unfortunately, the pressure upon the producer to sell is so much greater than the capacity of the consumer to buy that high pressure methods of selling have invaded pretty nearly every industry.
The result is that buyers suffer from a veritable plague of salesmen. They can escape from them only by arbitrarily limiting the days of the week or the hours in the day when they will see salesmen. Salesmen travel hundreds of miles, stop at expensive hotels, principally in order that they may cool their heels the greater part of their days waiting for buyers to see them. Is it any wonder that this method of selling--normal and natural in most cases--costs much more than it should?
An interesting analysis of the cost of selling is made by William R. Basset, President of Miller, Franklin, Basset & Company, accountants, in an article discussing this subject from the standpoint of the manufacturer. (Advertising and Selling Fortnightly.)There are three reasons according to Mr. Basset for uneconomic use of salesmen:
Pride, advertising in periodicals of national circulation, which, unless much of the circulation that is paid for is to be wasted, must be accompanied by national distribution, and the general lack of knowledge as to what it costs to sell.
Take the small business which is selling say $300,000 a year in a small territory in the vicinity of the plant. Its total cost of selling is $24,000 a year, which gives, as commonly figured, a selling expense of 8 per cent. If this figure has been maintained for three or four years most people assume that some occult power has ordained that 8 per cent shall now and forever be the selling expense for that business provided some nefarious outside influence like cut-throat competition does not knock it into a cocked hat.
It follows, according to that line of reasoning, that $1,000,000 worth of business can be secured at a selling cost not greater than $80,000, and $10,000,000 worth (which is what national distribution would mean) for $800,000. In fact, since the factory increased volume often brings a lower rate of overhead, it is usually expected that with national distribution the percentage cost of selling will go down. Perhaps it would drop to 7 per cent or even to 6 per cent-who knows?
Yet it may cost nothing to sell an old customer who sends his $100 order through the mail, and it may cost $500 to open a new account with an order of the same size.
In some parts of the country a salesman for this company could make only one call a day at a cost ranging from $80 to $130 per call.
Usually the direct cost of the salesman--his salary and expenses--is much the smallest part of the total.
It is not possible in a short article to describe in detail all of the calculations that must be made to determine the cost per call for even one business. It will be apparent, however, that each man must bear a fair share of the general sales expense.
He must be supervised. There is expense in the general and branch sales offices for clerks, stenographers, rent and supplies. The officers of the company, such as the president, give some of their time to sales problems, so the salesmen must bear part of that cost.
Presumably the advertising makes his way easier, so he should be charged with some part of it, the amount to be determined in ways which will hardly be the same for any two concerns. Sometimes it may be right to charge him with a share of the general advertising. Certainly any direct advertising sent to the people he sells will be borne by him. And usually any advertising which he furnishes to his retailers should enter into the cost per call.
When all of these proper items of selling expense are figured in it is not hard to see why the cost per call often runs over $100 as it did for the manufacturer whose problems I am describing.
The owners of this concern were convinced that all wholesalers were about as useful to the economic system as is a tape-worm to the human body. Consequently they went direct to the retailer in all territories.
When the sales in the territories west of Denver were charged with the actual cost of selling on the cost per call basis instead of with the per cent selling cost for the company as a whole, it became evident that fully a third of the net profit made in the East was being lost in the West.
As a result the company approached several strategically located jobbers in the West who, between them, could effectively cover the territory. These jobbers were willing to handle the line on a margin which left the manufacturer an entirely satisfactory profit. Because the jobbers' salesmen were already traveling the territory with other lines the jobbers could make a profit. Everybody was happy.
It appeared in cold figures that an order of any size from an old account was far more profitable than one from a new dealer. Yet this company spent, in round figures, a quarter of a million dollars a year merely to replace the dealers who had left the fold. Many of them strayed because they felt they were not getting the attention they should get and believed that other manufacturers would value their orders more highly.
Out of the abundance of his experience, Mr. Basset comes to the conclusion that the mania for volume of sales results in less profit to manufacturers. As Mr. Basset puts it, "There is hardly a large business that has come under my observation but what could make more money by doing less business."
To the philosophic turn of mind, there is something excruciatingly funny in this demonstration of the fact that high pressure salesmanship is not only unjustified from the standpoint of the consumer, but that it is unjustified from the standpoint of the manufacturer himself.