The Coconino sun. (Flagstaff, Ariz.) 1898-1978, 1921-12-02
CROCERS TELL THEIR
Side OF THE STORY

OF every dollar spent by the con-
sumner, but 81 cents represents the
cost of production and the material
which goes into it. However, only IA
cents represents profit between the
producer and consumer, including all
the various steps of distribution; the
other 40 cents goes for service.
Such is the gist of report made
to congress recently by Representative
Sidney Anderson, chairman of the
joint congressional commission of ag-
ricultural inquiry.
The retailer was not censured for
his part in the transaction. Rather,
the consumer was blamed for demand
ing and expecting so much service.
This includes packing, transportation,
grading, selling, advertising, display,
rent, wages, overhead, delivery, etc.
One great difficulty he declared was
that distribution has not been SO
thoroughly studied as have the prob
lens of production. Production he
declared goes forward without any
definite relation to market. The sa-
lient points in his report were as fol-
lows:
Merchandising consists largely of
selling the consumer what he wants
when he wants it and making him
pay for it. A witness before the COM
mission recently put the elements of
merchandising in the following order:
First, the exact article or the exact
type of goods desired or that will ul-
timately satisfy; second, a pleasing
environment and third, pleasing,
dependable quality of merchandise,
and last, price.
"This viewpoint is fairly typical of
merchandising today. Goods are sold
not so much by offering a price as
by offering service, convenience, de-
pendability, reputation, credit. The
consumer pays for all this, as well as
for what everybody does not know
about running his own business. 1t
is like the invisible tax-easy to pay
because it is not apparent, camou-
tagged in the price. In general, 81
cents of the consumers dollar repre-
sents the cost Of producing the arti-
Gle and the cost of the material that
went into it; Ia cents represents all
profits and 40 cents the cost of SER
vice.
Reduction of service costs can
come only through better understand
ing Of the problem by both the mid
dleman and the consumer, through
better organization Of the business of
distribution by the middleman, and by
the organization Of his requirements
by the consumer. The sciences Of dis
tribution, of finding markets, Of re-
lating outputs to market, are all in
their infancy. We know very little
Of many factors that influence con-
sumption, such as unemployment,
wages and consumer psychology, con-
venience, satisfaction etc. The same
genius of organization that has been
applied to production must be applied
to distribution. Some people say
there are too many middlemen; prob
ably there are, but they could not ex-
list without customers, and they could
not make their wages or profits with
out serving someone's convenience In
selling or buying.
"After all the producer and the
consumer are the largest factors in
the problem. They are the most nu-
merous, but they are at the same time
the least influential, because the pro-
ducts and the selling power Of the one
and the requirements and the buying
power of the other are unorganized. If
we can find way to organize the pro
ducts, and the requirements and
buying power of the consumer on the
other hand, and if we can apply the
same genius Of organization to dis
tribution that has been APPLIED to pro-
duction, we will have taken a long
step in the solution Of the problems
Of distribution" Commercial Bull
LATIN