Evening star., 1925-12-13
SAYSLAX|TY HURTS
WASTE CHECKACE
Inadequate Records Cause of
Failures, Distributors
Committee Finds.

Practical steps to check the wastes
IN marketing, characterized by Secre-
tary Hoover as being of vast impor-
lance, are outlined in a survey of the
Expenses of Doing Business, the
results of which were made public
yesterday in prepa ration for the gen.
ernl meeting or the National Distr.Su-
lion Conference to be held here Tues
day and Wednesday.
The survey. made by committee
representative of all classes of dis
5ributorS. constitutes the first con-
certed effort on the part of business
10 trace all the items of marketing
expenses that go 10 make up the
consumers dollar, which are found to
range from "a cents in the case of
meats to 81 cents in the case OF
furniture.
The report OF the committee, of
which Robert r. Ellis, president OF
the Hessig Ellis Drug Company Of
Memphis. is chairman, discloses in
sharp outline the difficulties that are
encountered in attempting to check
the wastes in marketing, which are
held accountable in the public mind
for huge losses and consequent high
prices. These are due. the committee
finds, mainly to the lack of uniform
ity and adequate cost records.
Urges Adequate Records.
Adequate records the committee
says in its report, intelligent budget
ing and planning and the adoption OF
other recognized policies OF efacient
merchandising constitute important
means of lowering the cost OF dis
tribution.''
Progress in this direction has been
made in some of the retail trades. the
survey discloses, and to some extent
in wholesale trades, but information
on manufacturers distribution eX-
penses is meager. This the committee
attributes to some extent TO Govern
1nent restrictions in the past upon the
Interchange of information between
those engaged in the same kind OF
business.
Improbable competition is char
acterized as burden upon distribu-
1ion. The tendency of some manu-
facturers and wholesalers TO reduce
expenses by eliminating unprofitable
customers and by restricting their
sales effort 10 territory which can be
served economically is regarded as
one of particular significance.
The retailer is absolved Of large
part of the costs of marketing usually
classified as retailers expense. BY
OF the extent to which they are under
the control of the merchant it Is
disclosed that in many instances the
retailer is responsible directly for less
than z per cent of the cost OF re-
failing. Which of the so-called 'serv-
ices and conveniences may be
classed as contributory TO success
depends upon the conditions under
which a business Is conducted.
Percentage High.
In retail furniture stores this eX-
pense Is more than II per cent of
the total cost of doing business: in
retail grocery stores and hardware
stores it amounts to about per cent;
and In automobile tire and accessory
stores per cent. While these costs
are confined usually 10 certain retail
establishments, the practice differs IN
degrees in different stores, and the COM
mittee has found it impossible to ap-
proXimate even roughly the proper
tionate cost of these services and con-
veniences as related to the total cost
OF distribution.
"In studying wholesale expenses of
doing business IL was necessary to
distinguish between different methods
of distribution. In some cases the
manufacturer deals direct with the re-
taleT, IneTepE causing llc NlloleSdie
functions to he performed by either
or both of these distributors. In other
instances the distribution of commodi-
ties follows the so-termed 'conven-
tinal' method wherein the merchan-
disc flows from manufacturer to
wholesaler. to retailer. II should he
empha sized that the price paid by the
distributors in each of these stages
includes all costs and profits preced-
H. L
disc
Attention is also called to the enor-
mouse wastaGe due to failure. amount
ing in the aggregate to more than
100000 900 annually, from 35 to so
per cent of which is alleged to be
fraudulent or tinged with fraud