Chapter XII.-IMPORTATION OF SPECIALTIES

The term "specialties" in American commercial parlance includes all that group of merchandise which requires selling, as distinguished from "staples," which usually move on such considerations as price, scarcity of domestic supply, or quality especially adapted to the needs of the user.

SALES TECHNIQUE VERSUS DISTRIBUTION

The sale of specialties depends upon creating, among American consumers, a desire for them; upon placing them where they can be readily obtained by consumers; and upon offering them at a price and quality that makes the consumer wish to buy them. This whole process, therefore, is handled by means of three mechanisms: (1) Advertising creates the desire; (2) display places them where they can be readily found; and (3) market analyses aid in selecting the products that are best fitted as to price and quality, for consumers of a given purchasing power and taste.

IMPORTED SPECIALTIES NOT ALWAYS COMPETITIVE

One of the interesting things learned in connection with our negotiation of reciprocal trade agreements has been that the real competitive status of a commodity cannot be determined from its customs classification. The item "distilled liquors," for example, may on the face of it appear competitive with domestically produced goods of the same designation; yet, when the market is analyzed, many types of imported distilled liquors will be found not to be competitive at all with American distilled liquors.

CONSUMER TASTE AND IMPORTED QUALITIES

The fact is that a distinct demand exists in the United States for certain imported specialties. If this demand is not satisfied, some consumers may turn to domestic products. Other consumers, however, will exhaust every means to get what they demand, no matter at what cost or trouble.

DIFFERENCES IN QUALITY AS A BASIS OF COMMERCE

With many countries now producing the same general types of merchandise, it is these differences in quality and workmanship that are rapidly superseding mere capacity to produce as a basis of commerce. It is this principle that has enabled us to grant concessions to other countries in reciprocal trade agreements that could be generalized unconditionally under the most-favored-nation clauses in our agreements with third countries, and still represent substantial concessions to the nation with which the agreement is concluded. Further refine

ment of our import schedules has been necessary to make proper designations of these classes and varieties of imported merchandise that have heretofore been grouped under general descriptions.

ADVERTISING IMPORTED SPECIALTIES

Most specialties are products for which a desire may be created through advertising. Other items border closely upon staples, in that the demand for them depends more largely upon consideration of price, supply and demand, and adaptability. They have been grouped as specialties, however, because some of them are sold in this country by means of advertising and retail display.

CONSUMER ADVERTISING FOR IMPORTED SPECIALTIES

Generally speaking, the basic demand for imported specialties is created by consumer advertising. Such mediums as the daily newspapers, which carry the department-store and gift-shop advertisements, circulars for mail or door-to-door distribution, magazine, streetcar, and even billboard advertising in some instances, are all useful in creating consumer demand for these products. Many foreign exporters pay, either directly or indirectly, for this type of advertising. Many of them make advertising allowances to importers, wholesalers, and large retailers, sometimes based on percentage of sales. Some of the famous French perfume manufacturers place their advertisements directly in American newspapers and magazines. In other lines, particularly those that are less competitive, consumer advertising expense falls upon the American retailer, the wholesaler, or the importer. No matter who bears the expense, the ratio of sales to advertising expense is generally a constant in each of the varying commodities. Some imported specialties require more continued and more intense publicizing than others, but in all cases where selling is necessary, the job of creating consumer demand will depend largely upon consumer advertising of some description.

DISTRIBUTOR ADVERTISING

The task of acquiring reliable and energetic sales representation for imported specialties is a problem similar to that of acquiring good sales agents abroad for American exports. Many foreign manufacturers advertise for distributors directly or expand their distributing facilities through the use of the "ask your dealer" device in their consumer advertising. Foreign manufacturers and exporters use this device rather than advertise directly for dealers.

SALESMANSHIP AND IMPORTED SPECIALTIES

The creation of consumer demand is not always the only problem of the importer who is seeking wider outlets for his imported specialties. The training and inspiration of the dealers' salesmen and of the salesmen of the importer or wholesaler are often tasks of major importance. This is especially true where the product meets strong domestic price or quality competition and must be sold on a price or quality appeal. Here salesmen must know the points of the imported product and must be trained to stress them when talking

to customers or dealers. Demonstration in department stores is a refinement and accentuation of this process. However, in the case of every product that must be sold through retailers or dealers, a certain measure of training of salesmen is necessary.

DEPARTMENT-STORE TRADE

Many of our imported specialties are distributed through department stores. Some of these stores send their buyers abroad each year in search of foreign specialties which they may import and offer to their customers. These buyers visit foreign factories and distributors and become imbued with the sales arguments which they in turn may pass on to the salesmen in their departments. Other department stores make their purchases of imported merchandise from agents, importers, and wholesalers, in this country.

GIFT-SHOP TRADE

The gift shops seldom send buyers abroad but buy from representatives of agents, importers, wholesalers, or jobbers in the United States. It is more difficult to train their salesmen to push imported specialties unless the profit to be made on such goods is attractive. For this reason the gift shops specialize generally in imported goods of quality or luxury grades in which the margin of profit is large, leaving for the department and chain stores those imported goods in which the price appeal is stronger.

CHAIN-STORE TRADE

One of the greatest chain stores in the United States started as a distributor of an imported commodity-tea. Today the 5-and-10cent stores offer a fruitful field for imported specialties. While many of them send buyers abroad, others purchase through agents, importers, and wholesalers of imported specialties in this country. Generally speaking, they concentrate on cheap goods and purchase in large quantities, in some instances taking the entire output of a foreign factory for a period of years under contract. Such contracts, however, are made only for goods of a type that could not be manufactured to advantage in this country and where there is consequently little risk of a sudden increase of duty or the imposition of other restrictions on import.

MAIL ORDERS FOR IMPORTED GOODS

Many American retailers of imported specialties place orders by mail directly with foreign manufacturers or exporters. Such dealers either have had business relations of long standing or transact their business on a letter-of-credit basis. Dealers in diamonds, books, maps, pictures, medicinals and pharmaceuticals, rugs, musical instruments, and linen handkerchiefs often buy directly from abroad in this manner. Foreign manufacturers and exporters circularize such dealers with catalogs and prices, and after satisfactory financial arrangements have been concluded, ship the goods direct. Many agents, importers, and wholesalers, located in great American ports and centers of distribution, receive orders by mail after circularizing