OT - Ford dealer commissions, 1906-1907

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Model T Ford Forum: Forum 2014: OT - Ford dealer commissions, 1906-1907
Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Tuesday, December 02, 2014 - 11:54 am:

Thanks to Trent Boggess, I have some "homework" for the winter. Armed with a few copies of sales ledgers, I broke down profits, by model and year, for a few Ford dealers. Some of the numbers are taken from news articles, the first several from sales ledgers.

I've found a few dealers who sold no Model K, and did not include those. I have one "mega" dealer, the Oakland location for Standard Auto Co. of CA. They sold a significant number of cars through the Oakland store, and had other sites, including one across the bay at San Francisco. The numbers are estimates, using commission percentages based on the Ford directors minutes. I reserve the right to be off in my estimates and counting. With the first example, a dealership from Milwaukee, I multiplied the gross commission by 25 to simulate today's value:











A few more later, including a portion of New York branch store numbers. For 1906, due to production delays with the Model N, the Model K provided much of the revenue for some dealers. Models F and B sales are not included.

Rob


Top of pagePrevious messageNext messageBottom of page Link to this message  By Trent Boggess on Tuesday, December 02, 2014 - 05:02 pm:

Let me add a little perspective to Rob's comments. The Ford Motor Company 's fiscal year for 1905-1906 began on October 1, 1905 and ended on September 30, 1906. The total number of cars produced in fiscal 1906 is listed in historical sources as 1599. That is fewer cars than were produced in either fiscal years 1904 or 1905.

Actually, Ford's very first fiscal year ended on September 30, 1903, but the fiscal 1903 production numbers are frequently lumped into the fiscal 1904 numbers.

One of the conclusions drawn out of the Early Ford Database is that most of fiscal 1906, October, 1905 through March, 1906, the Ford Motor Company was pretty much limited to selling off the last of the 2 cylinder cars and the last of the Model Bs. Model K production really doesn't get started until April, 1906, just in time for the 1906 selling season.

Model N production does not get started until July, 1906, and volume Model N production and shipping does not occur until August and September, 1906. By the end of September, 1906 about 800 Model Ns had been produced and shipped.

Given that fiscal 1906 production is listed as 1599 cars, and that about half of those cars were Model Ns shipped during the last 3 months of fiscal 1906, it is apparent that something less than 800 other cars of various models, including the newly introduced Model Ks, were shipped during the 1906 fiscal year.

Keep in mind that prior to the launch of both the Model K and the Model N, there would have been substantial up front costs for tooling, materials, and parts before the production of either Model actually began. Despite the successful launch of the Model K, Henry Ford and James Couzens must have been under severe financial pressure until the Model N cars began to be shipped. No doubt the other Ford stockholders were aware of the Ford Motor Company's financial situation during 1906. They also had the Selden Patent Suit hanging over their heads, and were a court judgement away from losing their entire financial investments in the Ford Motor Company. Is it any wonder then that stockholders like Charles Bennett, when offered a premium for their stock by Ford and Couzens, decided to lock in their profits and sell their Ford Motor Company stock?

Historians often point to the July, 1903 check book stubs as an indication of how close the Ford Motor Company came to bankruptcy before the first Model A was sold and when Albert Strelow (FMC's landlord at the Mack Avenue plant) finally paid in $5000 for his 50 shares. However, the spring and early summer of 1906 may have been no less stressful for Ford and Couzens.

Respectfully Submitted,

Trent Boggess


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Tuesday, December 02, 2014 - 05:19 pm:

Trent,
Thank you for the perspective on early Ford finances and sales. I should have added I broke the sales into fiscal years, Oct 1 to Sep 30, 1905-06 and 1906-07. The gross commissions are estimates. However, I was pleasantly surprised to see the amounts paid to Ford by the dealers were consistent. By this I mean it didn't appear Ford was discounting a particular model over a period of time. As time allows I'll look into the numbers more closely and I'm sure have more questions than answers.
Thank you for your work and research on our early Fords,
Rob


Top of pagePrevious messageNext messageBottom of page Link to this message  By Dennis Seth - Ohio on Tuesday, December 02, 2014 - 06:00 pm:

Thank you Trent and Rob for the early Ford car history. I find it very interesting reading. Please don't stop posting this information that leads to the production of the Model T.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Trent Boggess on Tuesday, December 02, 2014 - 07:34 pm:

For those who wonder about the relevance of the Model K and NRS series cars to the Model T, you just have to keep in mind that these cars were the immediate predecessors of the Model T, and that the Model T incorporates several design features that first appears on the Model K, N, R and S.

To understand the design of the Model T, you have to look at the designs of the cars that immediately preceded the Model T.

Respectfully Submitted,

Trent Boggess


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Tuesday, December 02, 2014 - 08:30 pm:

A few more.

Northwestern motor Vehicle Co., Minneapolis MN. I believe Erik mentioned Northwestern had a large sales area. I noticed some Model N going as far west as Montana on this ledger. This is also the first ledger I've seen Model S listed on prior to Oct 1, 1907 (end of the 07 fiscal year):



A few New York branch examples. In the first, the branch reports selling 1,400 runabouts and 130 six cylinder cars over the last ten months (1907 fiscal year).



This news clip reports seven six cylinder (K) and 40 runabouts (N and R) were sold in the last week. This does not reflect the reported 4 sales of the new K roadster, along with the demonstrator roadster that sold immediately:



This last spreadsheet shows reported (Ford audit) 1906 and 1907 sales, breaking down sales by model and applying commission:



I believe these totals demonstrate the importance each Ford model played helping Ford become the number one auto maker in the world in terms of cars produced.


Top of pagePrevious messageNext messageBottom of page Link to this message  By John H. Nichols on Tuesday, December 02, 2014 - 08:49 pm:

Rob

You should add the Caviat " I reserve my right to extend and revise my estimations," thereby sounding like an educated politician ( an Oxymoron?)

All in fun Rob, because like a lot of others,
I am getting educated about "Henry's least (not) favorite car


Top of pagePrevious messageNext messageBottom of page Link to this message  By Ted Dumas on Tuesday, December 02, 2014 - 11:48 pm:

What was the crankshaft diameters for the Model N. It seems to me the weak link in the Model T drive train is the crankshaft. Maybe if the N had broken a few crankshafts, the T would have been a little beefier. I suppose Henry could have copied from the K and used 5 main bearings, of course, that would have cost a few extra nickels.


Top of pagePrevious messageNext messageBottom of page Link to this message  By Rob Heyen on Wednesday, December 03, 2014 - 09:03 am:

John, I think I'll use that as my "disclaimer." :-)

Ted, I believe the NRS crankshaft dia. is 1 1/4, although that may be off a few thousandths. Maybe Hap, Jerry or someone reading this will have those dimensions available.

The Model K, by the way, has seven mains. How goes the crankcase, so goes the crankshaft. In other words, the crank was well supported with seven mains. The weakness, if any, was (in Dean Yoder and my opinion) the aluminum crankcase.

Rob


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