The first thing you'll
see in the invoice below is the enormous amount of Purchase Tax,
at face value equating to 57.7%, but considering the £1
discount maybe this is over 60%? However, not all is quite as
it first seems...
If you've an eye for small print...
look at the sales conditions at the bottom of the receipt. What
do you make of this?
In those days (1956) there was
a trading condition dealing with "Resale Price Maintenance"
or RPM whereby manufacturers sold their products to dealers on
the understanding that they adhered to the manufacturers list
price. The list price was calculated to allow small dealers to
make enough profit to run their businesses whilst ensuring there
was competition between brands. Large chain stores could buy
at a quantity discount but were forced to sell at list prices.
This meant two things. Chain stores made a larger profit than
small businesses but couldn't force small dealers out of business
by cutting prices. This then was the age of busy high streets.
Lots of small shops offering personal service to customers rather
than what we have today... lots of charity shops using the vacant
premises of bankrupt dealers and huge supermarkets with perpetual
phoney cut-price special offers.
If you were well connected or
knew wholesalers' staff you could buy stuff at decent discounts
and this is what Mr Taylor did...
What about the £1 discount
below? Well, it's 3.5% and probably not enough to cause waves
in the industry, but if it became common practice might result
in Messrs Wireless-Electric Ltd losing their Grundig dealership,
and even the supply of radios in general, depending on how their
customers and suppliers reacted. I include "customers"
because I think this particular company is a wholesaler and,
if another customer eavesdropped on the sale and realised they
were effectively selling retail they may object. Big shops with
a regular turnover of specific makes would be supplied by manufacturers
directly through travelling salesmen called "Reps"
or by local wholesalers if sales were ad hoc.
The explanation of how Mr Taylor
purchased this radio is in a clue written on the sales brochure
pictured later. Large companies often negotiated with their suppliers
sizeable discounts for their staff. Frequently this was a third
off. Not quite as attractive as it sounds however. The list price
was quoted as 55 guineas. Now, in those days quoting a guinea
was really cheating as it effectively made a buyer relate 55
guineas to 55 pounds, but of course a guinea is a pound plus
5%. A sort of imaginary tax.
The receipt mentions "BAC"
so Mr Taylor worked for The British Aircraft Company at Bristol
and it was that company that guided rich employees to Wireless-Electric
The actual list price of this
radio was £57:15:0d (inc PT) so a buyer offered a third
off might expect to pay £39:3:4d. Not so because the chancellor
expects to be paid the purchase tax included in the 55 guineas
which is £16:1:0d. So, deduct a third from what's left
(which is £57:15:0d - £16:1:0d = £41:14:0d)
and you get £27:16:0d then add back the chancellor's cut
and you get £43:17:0d. Now this is more than Mr Taylor
originally expected, which was £39:3:4d, so some negotiationg/explaining
resulted in a further £1 knocked off; still £3:13:8d
extra. This doesn't sound much but was in fact half a weeks wages.
The Purchase Tax official sum
seems to have been about 38.5%.
RPM was sort of heavily frowned
upon by MPs in 1956 (the year this radio was sold) but by1964
RPM was made illegal. This however instigated the term "Manufacturers
Recommended Price" later used as a bargaining tool by discounters.