Inequalities in Wholesale and Retail Trade

Wages in the Pharmaceutical Industry [Apothecaries]

³⁸ ‘Pharmaceutical profit’ denotes something uncommonly extravagant.

• This great apparent profit, however, is frequently no more than reasonable wages.

The skill of an pharmacist is a much nicer and more delicate than that of any artificer.

• The trust reposed in him is of much more importance.
• He is:
  • the physician of the poor in all cases.
  • the physician of the rich when the distress is not very great.
• His reward
  • should be suitable to his skill and trust.
  • reward is in the price of his drugs.

All the drugs the best pharmacy will sell in a large town may not perhaps cost above 30-40 pounds a year. If he sells them for 300-400 pounds, or at 1,000% profit, this may be the reasonable wages for his labour charged on the price of his drugs. Most of his profit is actually wages.

Groceries and Retail

³⁹ In a small sea-port town, a little grocer will make 40-50% from a stock of £100.

A wholesale merchant in the same place will make 8-10% on a stock of £10,000. The trade of the grocer may be necessary for the conveniency of the inhabitants. The narrowness of the market may not admit a larger capital. Man, must not only live by his trade, but live by it suitably to the qualifications it requires.

Besides possessing a little capital, he must=

• be able to read, write, and compute
• be a tolerable judge of 50-60 sorts of goods

This includes knowing their prices, qualities, and the markets where they are to be had cheapest. He must have the knowledge of a great merchant. Only his lack of capital hinders him from becoming one. 30 or 40 pounds a year is not too big a compensation for a person so accomplished. Deduct this from his great profits and little above ordinary profits remain. A majority of his apparent profit is real wages.

⁴⁰ There is less difference between the apparent profits in retail and wholesale in big cities than small towns. If a grocery owner employs £10,000, his wages must add very little to the real profits his great stock. In a big city therefore, a wealthy retailer’s apparent profits are more on a level with the wholesale merchant’s profits.

Retail goods are generally cheaper in big cities than small towns. Grocery goods are generally much cheaper Bread and meat frequently as cheap. This is because the prime cost of retail is the same in big cities and rural villages. It costs no more to bring grocery goods to a big city than to the rural village. But retail profits are smaller in big cities because the bigger market of the city gives employment to more stocks. More stock employed lowers profits. Even if the prime cost of retail bread and meat is higher in big cities than rural villages, its smaller profits make it as cheap as those in the rural villages. The prime cost of wholesale goods, such as corn and cattle, is bigger in big cities than rural villages as they must be brought from farther away. This is probably why the price of bread and meat are nearly the same in parts of Great Britain while the prices of corn and cattle are different.

⁴¹ Profits in both wholesale and retail trade are generally less in big than in small towns

But great fortunes are frequently gained from small beginnings in big cities and rarely in small towns. Small towns and rural villages have a small market Trade there cannot always be extended as stock extends A person there may have high profit rates But his total accumulated profits can never be very great In big cities, on the contrary, trade can be extended as stock increases. The credit of a frugal and thriving man increases much faster than his stock.

His business is extended with his credit and stock His total accumulated profits is extended with his business Great fortunes are seldom made even in big cities by any one regular, established, and well-known branch of business. Great fortunes are created instead from a long life of industry, frugality, and attention. Sudden fortunes are sometimes made by speculation. The speculative merchant has no regular, established, or well-known business. “He is a corn merchant this year, and a wine merchant the next, and a sugar, tobacco, or tea merchant the year after.” He enters into businesses likely to be profitable and quits it when its profits are likely to decline. His profits and losses, therefore, are not as regular as any established and well-known business. A bold adventurer may sometimes gain a big fortune by two or three successful speculations. But he is just as likely to lose by two or three unsuccessful ones. Speculation can only be done in big cities. Only big cities have the extensive commerce needed for speculation.