The following came from Investor’s Business Daily, Monday, March 31, 2014:

Montgomery Ward Filled Catalogs, Stores, Coffers

So many people told Aaron Montgomery Ward he would go broke trying to sell merchandise by mail.
Their points:

• Postage costs for the first mail-order catalog would be huge.
• Shipping the goods would be even more expensive.
• With no illustrations in the catalogs, people wouldn't buy anything without seeing it first.
• Stores were more convenient.
• His promise to give a full refund if the customer was not 100% satisfied would ruin him.
• Ward (1843-1913) was undaunted. He began his grand experiment in 1872.

By the time he died, Montgomery Ward & Co. had annual revenue of $40 million a year (almost a billion dollars in today's money). This laid the foundation for the launch of a chain of stores in 1926.

"The mail-order catalog was a uniquely American innovation," Bernard Carlson, author of Teaching Co.'s DVD "Understanding the Inventions That Changed the World," told IBD. "Ward believed that the emerging railroad system would enable him to bring a wide array of quality merchandise at low prices to residents of rural areas, where customers were paying too much for a limited choice of shoddy goods. His Wish Book, as it was nicknamed, became the only book other than the Bible to be found in many homes and schools."

Jersey Boy

Monty, as he was called, was born in Chatham, N.J. When he was 9, his family moved to Niles, Mich., and bought a general store . It turned out to have neither the stock nor the customers promised, wrote Nina Baker in "Big Catalogue: The Life of Aaron Montgomery Ward."

The Wards struggled to make ends meet, so at 14, Monty apprenticed at a barrel factory earning 25 cents (worth $7 now) a day, working 14-hour days, six days a week.
One day, a customer who owned brick-carrying boats came in for help. Monty, by now working furnaces, provided advice, and the captain, impressed, hired him. The kid's new salary was $12 a month, or $345 today.

"You'll probably be making the same here in 30 years, if your back holds out," the captain said. At 18, Ward was developing skills in shipping lumber, grain and produce out of the captain's headquarters in St. Joseph, on Lake Michigan. The captain also owned a general store, and the boy commented on the lack of help for customers and how poorly the merchandise was displayed.

His new task: Improve it.

By 20, he was manager of the store for $100 a month and board.

But soon, he realized suppliers were dumping their defective products at the store, figuring the hayseeds would be happy to get anything. Ward said "Enough!" He insisted on getting the same quality as city stores. The merchandise upgrade attracted more customers.

In 1865 he moved to Chicago to sell products for a lamp distributor.

Three years later he became a traveling salesman for a dry goods wholesaler out of St. Louis.

As the newest rep, he was given the least desirable territory — the Midwest boondocks — and heard complaints from farmers about the quality and prices at their stores.

Meanwhile, he knew that few products were available by mail. That gave him an idea.

"The proliferation of railroads and improved postal service after the Civil War made mail order much more feasible," said Larry Schweikart, co-author with Lynne Pierson Doti of "American Entrepreneur." "Ward realized he could cut out the wholesalers and sell a wide range of items directly to farmers through a catalog, shipping merchandise to train depots inexpensively, where customers would pick it up. This would allow him to offer lower prices for better products than they could buy locally. He decided to locate the new business in the rail and manufacturing center of Chicago."

But how to get people to buy products sight unseen?

One way: Write vivid descriptions. So Ward perfected his copy-writing skills. Even when his company boomed, he checked every detail in the catalog.

Another key was to provide an ironclad guarantee: He'd take back anything customers weren't happy with and refund their money in full. No one doing business by mail had ever offered that; many stores even refused to accept returns.

He could not convince friends or family to invest in his efforts, but gradually he assembled an inventory.

Then the Great Chicago Fire of 1871 upended everything.

The Comeback

Ward started over in just one year by convincing two partners to put up $2,400. Springboarding from that, he mailed the first Montgomery Ward & Co. catalog — really just a sheet of text describing 163 items — according to Baker.

That year, 1872, was big for Ward. He was 29 and newly married to Elizabeth.

Yet the rising entrepreneur heard it from the competition.

Mom-and-pop stores denounced him and publicly burned his catalogs. More trouble came the next year, when his partners bailed during an economic panic. He brought in his brother-in-law, Richard Thorne, and the co-founders struggled until a big break that year.

"Ward received a contract from the National Grange, a farmers' co-operative buying organization with 200,000 members, opening a massive new market," Schweikart said. "He gave Grange members a 10-day grace period on payments, which was an innovative arrangement."

Ward soon added not only woodcut illustrations of products to his catalogs, but also pictures and signatures of his managers and buyers, personalizing the company.

In 1878, Montgomery Ward sales reached $1 million — worth $24 million now.

Ward bulked up his catalog to 240 pages with 10,000 items by 1883. View Enlarged Image

By 1883, the catalog had grown to 240 pages with 10,000 items.

Ward's lesson is to understand exactly what it will take to make customers comfortable enough to buy.

Also crucial to profitable growth was efficient order fulfillment, and Ward was a pioneer.

Step On It

"To achieve maximum speed and efficiency, the warehouses in Chicago were filled with conveyor belts and hundreds of workers," said Carlson. "They divided each order into categories, and each department was given 15 minutes to send the goods to the assembly room. If something didn't arrive in time, the order was shipped and the departmental budget was fined the extra shipping cost."

Ward finally faced serious catalog competition in 1896. It came from Richard Sears, whose mailings led the way for today's Sears Holdings. Four years later, Sears Roebuck surpassed Ward in sales, with $10 million to Ward's $8.7 million, and the two would battle for dominance throughout much of the 20th century.

Ward was succeeded by William Thorne, a son of the co-founder, and in 1926 the first Montgomery Ward store opened in Plymouth, Ind. In just three years, building on its strong national reputation, the company had 531 locations.

The Great Depression slowed growth, but the company rebounded to become the nation's leading department store after the war.

But in the early 1960s, Montgomery Ward was slow to follow competitors like J.C. Penney, Dillard's and Macy's to the suburbs and later lost customers to discount stores such as Target and Wal-Mart.

In 1985, Montgomery Ward stopped publishing its catalog for the first time in 113 years. In 1997, Montgomery Ward & Co. filed for bankruptcy, emerged leaner two years later, but failed again and was liquidated in 2001, closing 250 stores and laying off 37,000 employees. In 2004, Direct Marketing Services bought the intellectual property assets and launched an online catalog, successfully selling many of the same categories of merchandise, accompanied by Ward's money-back guarantee.

In 1946, the Grolier Club, an outfit of book lovers, exhibited a Ward catalog alongside Webster's Dictionary at an exhibit of the 100 most influential books in U.S. history.

Forbes' editors and readers named Ward the 16th most influential business leader of all time.

Click here to view the following information about A. Montgomery Ward at Wikipedia

Aaron Montgomery Ward (February 17, 1843 – December 7, 1913) was an American businessman notable for the invention of mail order.

The mail-order industry was started by Aaron Montgomery Ward in 1872 in Chicago. Ward, a young traveling salesman of dry goods, was concerned over the plight of many rural Midwest Americans who were, he thought, being overcharged and under-served by many of the small town retailers on whom they had to rely for their general merchandise. Ward continues to be described as the protector of Grant Park in Chicago, Illinois.

Early years

Aaron Montgomery Ward was born on February 17, 1843, in Chatham, New Jersey. When he was about nine years old, his father, Sylvester Ward, moved the family to Niles, Michigan, where Aaron attended public schools. He was one of a large family, which at that time was far from wealthy. When he was fourteen, he was apprenticed to a trade to help support the family. According to his brief memoirs, he first earned 25 cents per day at a cutting machine in a barrel stave factory, and then stacking brick in a kiln at 30 cents a day.

Energy and ambition drove him to seek employment in the town of St. Joseph, Michigan, a market town for outlying fruit orchards, where he went to work in a shoe store. This was the initial step toward the profession that would later send his name across the United States. Being a fair salesman, within nine months he was engaged as a salesman in a general country store at six dollars per month plus board, a considerable salary at the time. He rose to become head clerk and general manager and remained at this store for three years. By the end of those three years, his salary was one hundred dollars a month plus his board. He left for a better job in a competing store, where he worked another two years. In this period, Ward learned retailing.

Field Palmer and later years

In 1865, Ward located in Chicago, worked for Case and Sobin, a lamp house. He traveled for them, and sold goods on commission for a short time. Chicago was the center of the wholesale dry-goods trade, and in the 1860s Ward joined the leading dry-goods house, Field Palmer & Leiter, forerunner of Marshall Field & Co. He worked for Field for two years and then joined the wholesale dry-goods business of Wills, Greg & Co. In tedious rounds of train trips to southern communities, hiring rigs at the local stables, driving out to the crossroads stores and listening to the complaints of the back-country proprietors and their rural customers, he conceived a new merchandising technique: direct mail sales to country people. It was a time when rural consumers longed for the comforts of the city, yet all too often were victimized by monopolists and overcharged by the costs of many middlemen required to bring manufactured products to the countryside. The quality of merchandise also was suspect and the hapless farmer had no recourse in a caveat emptor economy. Ward shaped a plan to buy goods at low cost for cash. By eliminating intermediaries, with their markups and commissions, and drastically cutting selling costs, he could sell goods to people, however remote, at appealing prices. He then invited them to send their orders by mail and delivered the purchases to their nearest railroad station. The only thing he lacked was capital.

Montgomery Ward mailing catalog

None of Ward's friends or business acquaintances joined in his enthusiasm for his revolutionary idea. Although his idea was generally considered to border on lunacy and his first inventory was destroyed by the Great Chicago Fire, Ward persevered. In August 1872, with two fellow employees and a total capital of $1,600 he formed Montgomery Ward & Company. He rented a small shipping room on North Clark Street and published the world's first general merchandise mail-order catalog with 163 products listed. It is said that in 1880, Aaron Montgomery Ward initially wrote all catalog copy. When the business grew and department heads wrote merchandise descriptions, he still went over every line of copy to be certain that it was accurate.

The following year, both of Ward's partners left him, but he hung on. Later, George Robinson Thorne, his future brother-in-law, joined him in his business. This was the turning point for the young company, which grew and prospered. Soon the catalog, frequently reviled and even burned publicly by rural retailers, became known fondly as the "Wish Book" and was a favorite in households all across America.

Ward's catalog soon was copied by other enterprising merchants, most notably Richard Warren Sears, who mailed his first general catalog in 1896. Others entered the field, and by 1971 catalog sales of major U.S. firms exceeded more than $250 million in postal revenue. Although today the Sears Tower in Chicago is the United States' tallest building, there was a time when Montgomery Ward's headquarters was similarly distinguished. The Montgomery Ward Tower, on the corner of Michigan Avenue and Madison Street in Chicago, reigned as a major tourist attraction in the early-1900s.

Public life: the fight for Grant Park

Ward fought for the poor people's access to Chicago's lakefront. In 1906 he campaigned to preserve Grant Park as a public park. Grant Park has been protected since 1836 by "forever open, clear and free" legislation that has been affirmed by four previous Illinois Supreme Court rulings. Ward twice sued the city of Chicago to force it to remove buildings and structures from Grant Park and to keep it from building new ones. Ward is known by some as the "watch dog of the lake front" for his preservationist efforts. As a result, the city has what are termed the Montgomery Ward height restrictions on buildings and structures in Grant Park. However, Crown Fountain and the 139-foot (42 m) Jay Pritzker Pavilion were exempt from the height restriction because they were classified as works of art and not buildings or structures. Some say the Pavilion is described as a work of art to dodge the protections established by Ward who is said to continue to rule and protect Grant Park from his grave. Daniel Burnham's famous 1909 Burnham Plan eventually preserved Grant Park and the entire Chicago lakefront.

From the 1910 federal census, Montgomery Ward lived with his wife and daughter at Pasadena, Los Angeles County, California. The family at the time consisted of:

• Head Montgomery Ward 67
• Wife Elizabeth Ward 59
• Daughter Marjorie Ward 26

Legacy

Montgomery Ward died in 1913, at the age of 69. His wife, Elizabeth, bequeathed a large portion of the estate to Northwestern University and other educational institutions.

The Montgomery Ward catalog's place in history was assured when the Grolier Club, a society of bibliophiles in New York, exhibited it in 1946 alongside Webster's dictionary as one of the hundred books with the most influence on life and culture of the American people.

A bronze bust honoring Ward and seven other industry magnates stand between the Chicago River and the Merchandise Mart in downtown Chicago, Illinois and a smaller version of that bust is located in Grant Park.

The Chicago Park District Board of Commissioners recently named a new park in honor of A. Montgomery Ward. It is located at 630 N. Kingsbury Street, only a few short blocks away from the old Montgomery Ward & Co. Catalog House Building at 600 W. Chicago Avenue, Chicago.

Forbes magazine readers and editors ranked Aaron Montgomery Ward as the 16th most influential businessman of all time.

Despite the collapse of its catalog and department stores in 2001, Montgomery Ward & Co. still adheres to the once unheard philosophy of "satisfaction guaranteed" as an online retailer.