The Expanded and Annotated My Life and Work

SEEK CONTINUOUS PRICE REDUCTIONS
My financial policy is the result of my sales policy. I hold that it is better to sell a 
large number of articles at a small profit than to sell a few at a large profit. This 
enables a larger number of people to buy and it gives a larger number of men 
employment at good wages. It permits the planning of production, the elimina-
tion of dull seasons, and the waste of carrying an idle plant. Thus results a suit-
able, continuous business, and if you will think it over, you will discover that 
most so-called urgent financing is made necessary because of a lack of planned, 
continuous business. Reducing prices is taken by the short-sighted to be the 
same as reducing the income of a business. It is very difficult to deal with that 
sort of a mind because it is so totally lacking in even the background knowl-
edge of what business is. For instance, I was once asked, when contemplating 
a reduction of eighty dollars a car, whether on a production of five hundred 
thousand cars this would not reduce the income of the company by forty mil-
lion dollars. Of course if one sold only five hundred thousand cars at the new 
price, the income would be reduced forty million dollars—which is an interest-
ing mathematical calculation that has nothing whatsoever to do with business, 
because unless you reduce the price of an article the sales do not continuously 
increase and therefore the business has no stability.
If a business is not increasing, it is bound to be decreasing, and a decreas-
ing business always needs a lot of financing. Old-time business went on the 
doctrine that prices should always be kept up to the highest point at which 
people will buy. Really modern business has to take the opposite view.