1917: The Agent's Year—Article VII.
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Agent or Branch ? A Situation which is a Partial Parallel to the Early Days ot Commercial-motor Manufacture.
By the Editor.
The agency member of the industry, who wrote articles .Nos. IV and VI for this series, dwelt in the second of his articles, published last week, upon the —to his mind—superior chums of the independent agent upon the manufacturer, as a business proposition, compared with the advantages tat the opening of his own branch depot by such a manufacturer. It is our desire to carry this branch of investigation a little further. We detect certain common leatures between the agency-development situation which is ahead of us and the trade-development situation by which some of the oldest members of the commercial-motor industry were confronted 20 and fewer years ago. In several cases, we come down to much more recent times.
Making Money By Other Means During Establishment.
Did the original manufacturers of commercial motors in this country make their money at the outset out of commercial motors ? The answer, within common knowledge, is in the negative. A few of the pioneers, of course, did not make money at all. We shall, whilst primarily concerned for the purposes of this article with the manufacturers who have survived, refer incidentally to some of those who have disappeared from the industry. The following tabular statement gives a selection of typical names, going back to the year 1896, and to the right-hand side of each of these names the other branch of activities upon which the energies of the principals were, contemporaneously with early commercial-motor work, directed for the purpose of money-making:— The foregoing list, it is only fair to state, does net purport 'to be in stria chronological order, although it is approximately correct in that. regard. The point which it is sought to emphasize, and which it must be agreed is made good on perusal of the list, is this the period of experiment and partial establishment of the commercial-motor industry, on the manufacturing side, was in a considerable number of instances very materially helned for the pioneers by the existence of their other and established lines of business.
The Lessons of Trade Hisiory.
We think that manufacturers will do well to ponder the bearings upon agency-organization developments e2(.;
which these glimpses into commercial-motor history present to them. ..The establishment o1 a-number of branch depots is largely a -matter of expenditure, thougn not, we admit, solely a consideration of money availdole. Nobody likes to-have branches which are not likely to be, after a reasonable interval of time., running on a self-supporting basis, yet the manufacturer, who seeks. to lay down, equip, and staff a number of such depots, exposes. himself to that risk in a marked degree. The advantage which the established local agent possesses over the newly-found branch manager is not to be. viewed in any single particular. A good local agent. possesses manifold advantages, and not the least of these is his ability to carry the burden of a suitable local establishment in part by having in existence several other branches of trade between which to divide the overhead charges. The agent, like the owner of a commercial motor who provides his own traffic for his own. vehicle., can divide management and supervision, as well as rent and other general charges, over his business as a whole, as one knows is in practice. deuce the commercial-motor manufacturer, on the other hand, in opening his own branches, is in a position which may be compared with that. of the motor-haulage contractor, who has to charge the whole of the aforementioned outgoings against the one source -of revenue. True, the cornmercial-motor manufacturer thereby obtains sole control. He must do so at his own cost.
The Local Agent's Other Sources of Income.
We have found, during the past six or seven years more particularly, while travelling about the country, that those agents who have so far been successful in handling commercial motors are men who have not expected to live on the proceeds of that branch of their businesses. Some of them have had successful businesses which are quite distinct from any branch of the motoring industry, exactly as was the case with our old friends in the industry itself at, the outset. They have, accordingly, been able to reach the paying stage with commercial motors without the accumulation of a considerable adverse balance on profit-andloss account. There are many would-be agents, conversely, who have sought to do commercial-motor business without a sufficiency of connections or resources running in parallel, who have not made good. They have not been able, like some commercial-motor manufacturers whom we might name, to carry the burden of a large adverse balance, nor to see the day on which, from the -profits of later and prosperous years, such old deficits might be extinguished by writing off. The day is quickly approaching when more and more agents should make money with certainty out of commercial motors. Numbers do so now.
It appears to us that some at. least of our leading motor manufacturers will deliberately prefer to deal through existing agents. All of them cannot do so, for we fear there are insufficient agents of the right calibre and class to go round. All the good agents should be sought out and secured, in any event, before there is too much launching out into the " adventure " of branch depot, if after-peace developments are to be at once prudentt, and thorough. Data of sales and costs for a London depot are no fair criterion for deoots in Leeds. Nottingham, Newcastle, Southampton, or other towns in the Provinces. We have mentined but four at random, and without any intended significance. The country needs "mapping out."