"It's a crime, that's so-what," Flowers blurted indignantly. "And that's
where Freer Enterprises comes in. Very shortly, we're going to enter the
market with an electric razor retailing for exactly one dollar. No name
brand, no advertising, no nothing except a razor just as good as though
selling for from twenty-five to fifty dollars."
Tracy scoffed his disbelief. "That's where you're wrong. No electric
razor manufacturer would sell to you. They'd be cutting their own
throats."
The Freer Enterprises official shook his head, in scorn. "That's where
_you're_ wrong. The same electric appliance manufacturer who produced
that razor there will make a similar one, slightly different in
appearance, for the same price for us. They don't care what happens to
their product once they make their profit from it. Business is business.
We'll be at least as good a customer as any of the others have ever
been. Eventually, better, since we'll be getting electric razors into
the hands of people who never felt they could afford one before."
He shook a finger at Tracy. "Manufacturers have been doing this for a
long time. I imagine it was the old mail-order houses that started it.
They'd get in touch with a manufacturer of, say, typewriters, or
outboard motors, or whatever, and order tens of thousands of these, not
an iota different from the manufacturer's standard product except for
the nameplate. They'd then sell these for as little as half the ordinary
retail price."
[Illustration]
Tracy seemed to think it over for a long moment. Eventually he said,
"Even then you're not going to break any records making money. Your
distribution costs might be pared to the bone, but you still have some.
There'll be darn little profit left on each razor you sell."
Flowers was triumphant again. "We're not going to stop at razors, once
under way. How about automobiles? Have you any idea of the disparity
between the cost of production of a car and what they retail for?"
"Well, no."
"Here's an example. As far back as about 1930 a barge company
transporting some brand-new cars across Lake Erie from Detroit had an
accident and lost a couple of hundred. The auto manufacturers sued,
trying to get the retail price of each car. Instead, the court awarded
them the cost of manufacture. You know what it came to, labor,
materials, depreciation on machinery--everything? Seventy-five dollars
per car. And that was around 1930. Since then, automation has swept the
industry and manufacturing costs per unit have dropped drastically."
Public-domain text, read in full here on John Shaqi.
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