Does it cost more to send a salesman to that little town, ten miles off the main line, to take Jones' order than the profits on his business? Is there as much profit in working _this_ territory as some other? Measured by the standard of _net profits_--not volume of sales--is Brown a profitable salesman? Compared with White, what is his efficiency? These are some of the questions to be answered before it can be claimed that the statistical department has reached its highest state of efficiency. The success of modern merchandising is measured, not by the volume of business transacted, but by profits. In days gone by, the merchant liked to be able to say that he sold more goods last year than any of his competitors; today he is better pleased if he has made the most money. A net profit of 10% on a business of $500,000.00, is more attractive than a million-dollar business without profit. Commercial costs may be divided into two classes--sales costs and administrative costs. Of the two, sales costs are the more important; if sales costs are not kept down, there will be nothing left from which to pay administrative costs. =Sales Costs.= In the broadest interpretation, sales costs include every expense properly chargeable to the sale of goods. For statistical purposes it may very properly be divided into direct and indirect, or general selling expense. Direct sales expense is made up of salaries and traveling expenses of salesmen--items which can be definitely determined and charged against definite sales. Indirect sales expense is made up of advertising, salaries of the sales manager and his office assistants, expense of entering orders and billing, packing and shipping expense, and all similar items properly chargeable to the expense of marketing the goods--items which, while chargeable to sales, cannot be applied directly to individual sales, nor to specific territories. Figuring sales costs is a specific function of the statistical department which is sometimes referred to as _profit figuring_--an appropriate term, since the principal object of gathering sales statistics is to determine profits. As a preliminary to figuring profits, it is necessary to have an accurate record of the _cost_ of the goods sold. In a manufacturing enterprise, it is expected that this information will be supplied by the cost department; in a trading business, the statistical department must make the calculations.