A nationwide rail system created a national market in place of local and regional markets and gave rise to mail-order houses. Efficient express companies, utilizing widespread rail facilities, could speed packages to villages throughout the country and could serve most of the populace. The U. S. Post Office reduced rates and began rural free delivery in 1896, but it did not inaugurate parcel post service until 1913. In 1879, however, CONGRESS aided rural Americans and mail-order houses when it provided that packages of up to four pounds could be mailed throughout the country at the flat rate of one cent an ounce. Mail-order houses existed prior to the Civil War, but they stocked only a few items and their market was limited by inadequate transport.
In 1872, the year after the great Chicago Fire, Aaron Montgomery Ward began his mail-order business in Chicago, a rail hub. To keep his prices low, he would buy in bulk with cash and eliminate middlemen by selling and shipping directly to the rural consumer for cash. He established close ties to the Granger movement and claimed to be “The Original Grange Supply House,” selling goods to Grange cooperative stores and to members of that farm organization. He further cultivated the good will of his customers with the slogan “satisfaction guaranteed, or your money back.” In 1889, with sales at $2 million and profits at $115,000, Ward and his partners established Montgomery Ward & Company, and by the 1890s its catalog—the “wish book” containing 24,000 items—had brought the department store into the home and changed forever the buying habits of rural Americans.
In 1891 Richard Warren Sears and his associate in retailing watches, Alvah Curtis Roebuck, formed a partnership that became Sears, Roebuck and Company to compete with Montgomery Ward. Sears took great risks, expanded during the depression of the 1890s, bought out the nervous Roebuck, and in 1895 acquired Aaron Nusbaum (who pulled out in 1901) and his brother-inlaw Julius Rosenwald as partners. With Sears, who was a gifted salesman with a knack for advertising, handling the merchandising and Rosenwald, a brilliant organizer, conducting the rest of the business, Sears, Roebuck took off, passed Montgomery Ward, and grossed $10 million in 1900. In competition with Ward, Sears did not innovate but met Ward head on, claiming lower prices, superior goods, better guarantees, more selections, and simpler order forms. Although Sears, Roebuck advertised widely, its best advertisement was its catalog—a larger wish book than Montgomery Ward’s—that by 1908 had 100,000 items, including automobiles. But in that year Sears’s risk taking was more than Rosenwald could stand and he forced Sears to resign as president.
Further reading: Boris Emmet and John E. Jeuck, Catalogues and Counters: A History of Sears, Roeb-uck and Company (Chicago: University of Chicago Press, 1950); Cecil C. Hoge Sr., The First Hundred Years Are the Toughest: What We Can Learn from the Century of Competition between Sears and Ward (Berkeley, Calif.: Ten Speed Press, 1988).
World History
