Sunday, February 15, 2009

Feb. 17: “Satisfaction or your money back”

Do you know who this is?
-Was the originator of mail-order sales in the United States
-His first business inventory was destroyed by the Great Chicago Fire
-Had to quit school at the age of 14

The mail-order business today is the route that many people prefer in finding products, value, and providing an ease of effort that is often not available in regular shopping expeditions to the stores. The concept of a mail-order business is a little over a hundred years old, with most people attributing its origins to Sears and Robuck. However, in reality the origins of the mail-order business lie in the mind and hands of Aaron Montgomery Ward.

Aaron Montgomery Ward was born on February 17, 1844, in Chatham, New Jersey. When he was about nine years old his father, Sylvester Ward, moved the Ward family to Niles, Michigan. Aaron attended public schools. The Ward family was large, and were not wealthy, so at the age of fourteen he was taken out of school and apprenticed to a barrel making shop, both to learn a trade and to provide financial assistance for his family. He first earned 25 cents per day at a cutting machine in a barrel stave factory, and then stacking brick in a kiln at 30 cents a day. Eventually he would leave the mechanic’s work, seeking employment that provided more of a challenge for his active mind and greater financial reward.

He moved to St. Joseph, Michigan, finding employment as a salesman – first in a shoe store and later in a general country store, where he earned six dollars per month plus board – a sizable salary for the era. He would remain at the store for three years, rising to head clerk and then general manager. When he left the store his salary was one hundred dollars a month plus board. Why did Montgomery leave his lucrative position? He was offered a better job at a competing store, where he worked for another two years. It was during these five years that he learned the complex art of successful retailing.

In 1865 Montgomery moved to Chicago, Illinois, going to work for Case and Sobin, a lamp house. He would soon move to a new job, working for the leading dry-goods store in the city: Field Palmer & Leiter, the forerunner of Marshall Field & Co. He would work there for two years, then moved to another dry goods business, Wills, Greg & Co. Here he made numerous train trips to southern communities, visiting crossroads stores, listening to the complaints of country store proprietors and their rural customers.

It was during this time that he conceived a new merchandising technique: direct mail sales to rural residents. It was a time when rural consumers longed for the comforts of the city, yet all too often were victimized by monopolists and overcharged by the costs of many middlemen required to bring manufactured products to the countryside. The quality of merchandise also was suspect and the hapless farmer had no recourse in a caveat emptor economy. Montgomery shaped a plan to buy goods at low cost for cash. By eliminating intermediaries, with their markups and commissions, and drastically cutting selling costs, he could sell goods to people, however remote, at appealing prices. He then invited them to send their orders by mail and delivered the purchases to their nearest railroad station. The only thing he lacked was capital.

None of Montgomery’s friends or associates would join him in his revolutionary idea at first. By 1871 he had been nearly ready to start business when his entire stock of supplies was destroyed by the Great Chicago Fire in October, 1871. Finally, in August 1872, Montgomery and two fellow employees, with an initial capital of $1,600, began selling merchandise by mail from a cramped office and shipping room at the corner of North Clark Street and Kidzie Street, Chicago. Surrounded in their office by hoop skirts, lace curtains, red flannel, and more, Montgomery sent out his first catalog – a one-page list of 162 items. The catalog was sent to farmers’ cooperatives throughout the rural Midwest. In 1873 – after the first year of business, his two employee-partners left the organization, to be replaced by his future brother-in-law, Richard Thorne. By 1874 his price list had grown to 32 pages and was bound into a catalog. Soon his catalogs would be filled with color illustrations, woodcuts, and drawings to better show the products. By 1875 the Montgomery Ward & Company coined the phrase, “Satisfaction or your money back.” By 1883 the catalog had grown to 240 pages with approximately ten thousand items. By 1895 the catalog was over 600 pages, containing six kinds of bicycle bells (from .30 to $1.10); a piano ($200); a buggy ($60). Other offerings to rural America included sewing machines, iron beds, bathtubs, book titles, chairs, watches, pages of jewelry, Colt six-shooters, and commodes. The man or woman interested in matrimony could by a solid-gold eighteen-karat wedding band for five dollars. When a new catalog was received, the well thumbed through previous year’s catalog was relegated to the privy out in back of the house.

It was a case of the right idea at the right time. Montgomery offered the rural farmers and small townspeople a wide variety of merchandise and could keep his prices low by eliminating the middleman. The homesteaders pushing west took the catalog with them, providing him with an expanding geographic base of customers.

His catalog was copied by other entrepreneurs, the most successful being Sears and Roebuck, who mailed their first catalog in 1896.

Aaron Montgomery Ward died on December 7, 1913, at the age of 69 and is buried in Rosehill Cemetery and Mausoleum, Chicago, Illinois.

His legacy? In 1946 the Grolier Club, a society of bibliophiles in New York, included a Montgomery Ward catalog on its list of the 100 American books that had most affected American life, noting "no idea ever mushroomed so far from so small a beginning, or had so profound an influence on the economics of a continent, as the concept, original to America, of direct selling by mail, for cash." CNN Money report had, perhaps, the best statement about the contributions of Montgomery: “Legacy: Ward founded the world's first mail-order business, Montgomery Ward Co., in 1872. Countless other catalog-based companies have followed in his footsteps, including information-age retailers like”
No biographies are available at our local library.

Book Rags
Engines of our Ingenuity
Morning Call

Portrait: Wikipedia Commons
Catalog Cover: University of Delaware
Mrs. Potts Irons: White River Valley
Signature: The National Cyclopaedia of American Biography

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