To: HeyRainier who wrote (328 ) 2/24/1998 4:01:00 AM From: HeyRainier Read Replies (2) | Respond to of 1720
[ What to Buy--Fifteen Points to Look For: POINT 4 ] From: Common Stocks and Uncommon Profits In this competitive age, the products or services of few companies are so outstanding that they will sell to their maximum potentialities if they are not expertly merchandised. It is the making of the sale that is the most basic single activity of any business. Without sales, survival is impossible. It is the making of repeat sales to satisfied customers that is the first benchmark of success. Yet, strange as it seems, the relative efficiency of a company's sales, advertising, and distributive organizations receives far less attention from most investors, even the careful ones, than do production, research, finance, or other major subdivisions of corporate activity. There is probably a reason for this. It is relatively easy to construct simple mathematical ratios that will provide some sort of guide to the attractiveness of a company's production costs, research activity, or financial structure in comparison with its competitors...Because sales effort does not readily lend itself to this type of formulae, many investors fail to appraise it at all in spite of its basic importance in determining real investment worth. Again, the way out of this dilemma lies in the use of the "scuttlebutt" technique. Of all the phases of a company's activity, none is easier than from sources outside the company to learn about the relative efficiency of a sales organization. Both competitors and customers know the answers. Equally important, they are seldom hesitant to express their views. The time spent by the careful investor in inquiring into this subject is usually richly rewarded. ...However, outstanding production, sales, and research may be considered the three main columns upon which such success is based... ...A one time profit can be made in the company which because of manufacturing or research skill obtains some worthwhile business without a strong distribution organization. However, such companies can be quite vulnerable. For steady long-term growth a strong sales arm is vital.