Two Hours Above the Weir

Dear friend,

The riddle first, as the tradition demands. Back in the old town, a mill put a saw shed in above the weir, and for one summer every cooper in the parish was quietly cheaper to be.

Two coopers in the town I have never named, the same oak and the same six shillings a firkin.
Both learned in June that the mill would sell staves ready split, and both saved two hours on every cask.
No dairyman knew what a firkin cost to make, and none had asked for less.
One gave the two hours back in the price, and called it fair dealing.
One left the price where it stood and spent the two hours instead.
Same oak, same saving, same pair of hands. Which of them had the better year?

Hold your answer. Story time.

The Story

Both men were good coopers. Either could raise a butter firkin that stood true on a wet flagstone and did not weep at the chine. Both charged the dairies six shillings, and both had spent fifteen years splitting their own staves out of the log with a side axe, which is heavy, dusty work a man does early in the day. Then the mill put in a frame saw and sold staves ready split, at a little above the cost of the log. The bundles cost more than the timber had, but they took two hours of axe work out of every cask.

The first cooper thought for a week and then did a thing that felt to him like honesty. He wrote to his four dairies, told them his staves now came from the mill and the work was quicker, and said that from Michaelmas a firkin would be five shillings. He was thought well of for about a fortnight. Then five shillings became simply what a firkin cost, as all prices become simply what a thing costs. He took more orders and worked later into the evenings, and in December he counted more casks than in any year of his life and rather less money in the tin. In February the mill put the bundles up by a shilling, and he had nowhere to put that shilling but his own pocket.

The second cooper bought from the mill and said nothing to anybody. Six shillings, as before. What he had was not a shilling but two hours in every cask, and he spent them like a man who had bought them. First a lad to char and hoop. Then, with the lad on the hoops, he began delivering: a borrowed cart in the autumn, his own by the spring, firkins at the dairy door on a named day.

In the April following, the new creamery on the turnpike wanted sixty firkins a month, delivered. The first cooper could not take it, having no lad, no cart and no spare hours. The second took the whole of it at six and threepence, the threepence being for the delivery, which was now a thing he sold rather than a favour he did. One man had given his two hours to four customers who never asked and did not notice. The other still had his, in the shape of a lad, a cart and a creamery.

The Lesson, Since You've Earned It

A saving you found is not a discount your customer earned. When the cost of doing your work falls, nothing has happened at the customer's end of the bargain. The firkin is the same firkin, holds the same butter, and is worth to the dairy exactly what it was worth in May. What changed is a private arrangement between you and your morning, and no principle of fair dealing obliges you to publish it.

Traders go wrong here because they price from the inside out. You know your costs to the penny, so the cost feels like the solid thing and the price like that cost with a margin stuck on the end. Hold that view and every fall in cost must become a fall in price. Your customer, who cannot see your costs, is weighing your figure against what the thing is worth to him and against the next man's figure, which is the whole of the matter. I have written before on what a price says before you do and on selling the locking door rather than the forty minutes. If you may not charge by your hours when they are long, you need not discount by them when they grow short.

There is a worse consequence than one lost shilling. The saving is the only return you get on the trouble of improving, and a man who hands every gain to his customers has arranged things so that getting better at his trade pays him nothing. He will stop, not by decision but by drift. The kept hours bought a lad, the lad bought more hours, the hours bought a cart and the cart bought the creamery. That is how a small trade grows, one kept gain at a time, each buying the next.

Two cautions. The first is that where the article is identical and the price published, the saving will be competed out of you whether you volunteer it or not. There the answer is not to cling to the old figure but to spend the saving quickly on something a rival cannot copy by Christmas: a shorter wait, delivery, a second pair of hands. Spend it deliberately rather than over the counter. The second is that some savings are genuinely the customer's. If the gain came from something he did, a larger order, longer notice, payment on the day, write it into the terms tied to that behaviour. A reduction announced out of good feeling is a price for nothing at all, and you may only give it once.

Three questions, for the week in front of you:

1. What do I do faster or cheaper than a year ago, and what do I charge for it now? Set the invoices for a job you have done twice, last year and this, side by side. Where the time halved and the figure fell with it, you have paid yourself nothing for learning your trade.
2. Which of my reductions this year was asked for, and which did I volunteer? Mark each discount with the name of whoever asked for it. The unmarked ones were gifts to people who never knew they had them, and they are now your prices.
3. What did last year's savings buy? If you can point at it, a tool, a day off, a lad, money in the bank, you kept it. If you can point at nothing, it went into your prices.

The Answer to the Riddle

Same oak, same saving, same pair of hands. Which of them had the better year?

The second cooper, and not by a little. He ended with a lad, a cart, a creamery on the turnpike and his price intact. The first ended with more casks, longer evenings, less money, and a shilling from the mill he had to swallow whole, having given away his room to move. Only one of the two was ever asked for his two hours, and that was by himself.

The verse:

The saw above the weir took two hours from the cask,
And not a dairy in the parish knew the hours had been there.
One gave away a shilling that no living soul did ask,
One kept it, bought a cart, and took the creamery's whole share.

Until next time. Go and find one job you now do quicker than you did a year ago, and set today's price for it against the price you charged then.

P.S. Note the asymmetry. A price you cut is cut in public and for good, and the customer who gains cannot see the gift and so cannot thank you for it. A saving you keep is private, reversible, and can be spent on that same customer in ways he does see: the named delivery day, the shorter wait. If you must give the gain away, give it in a form somebody will notice.

Also in the archive: The Millwright's Two Pounds, Five for the Money of Three and The Prices Nobody Argued With.