Distributor

“ So long as the manufacturer does enjoy some such leverage, his marketing of complementary goods through an established system of distributorships will tend to effect some exclusion of competition, whether those goods be distributed by another through a sales-commission plan, or purchased and resold by the manufacturer, or indeed manufactured and sold by him. ”

“ The restriction of sales to unauthorized distributors by the members of a selective distribution system, where the supplying undertaking, directly or indirectly, sells the contracted products to selected distributors on the basis of specific criteria ”

“ Ag 122.02 Definitions. (1) 'Chain distributor scheme' is a sales device whereby a person, upon a condition that he make an investment, is granted a license or right to recruit for profit one or more additional persons who also are granted such license or right upon condition of making an investment and may further perpetuate the chain of persons who are granted such license or right upon such condition. ”

“ It means a distribution system whereby the provider undertakes to sell directly or indirectly, the goods or services which are the subject of the agreement, only to distributors selected by it, based on designated criteria, and whereby such distributors undertake not to sell the goods or services in question to unauthorized distributors. ”

“ That case concerned a newspaper distributor who sought to charge his customers more than the suggested retail price advertised by the publisher. After the publisher attempted to discipline the distributor by hiring another carrier to take away some of the distributor's customers, the distributor brought suit under § 1. ”

“ Thus, when the House Report, id., 1-2, expressed the Act's alim to regulate wholesales such as 'sales by producing companies to distributing companies,' and immediately thereafter cited the Kansas and Attleboro cases, the Report's unmistakable reference was to sales by an integrated 'producer-pipeline' to the local distributor. ”

“ This is the constant multiplication of intervening agents—middle-men, factors, brokers, speculators, contractors, and distributors of every sort—between the producer and the consumer, or between the primary owner and the ultimate owner of almost everything which is the subject of ownership and trade. Those two, who are the actual persons brought chiefly into relationship by the thing in question, are put quite out of sight of one another in most of the transactions of modern industry and commerce ”

“ There is no question that the ideal situation from the point of view of both the publisher and the public, is to have a very large number of distributors intensely vying with each other in both price and service. ”

“ There are 400 of the B agents, the large distributors. They recommend to the company efficient and reliable distributors in the localities with which they are respectively familiar, to act as A agents, whom the company appoints. There are 21,000 or more of the A agents. ”

“ The distributors are chiefly represented by the higher type of office workers, who are the "idea thinkers" of the business world, since they neither make nor handle products, but merely manipulate the symbols which stand for the products they seldom if ever see. ”

“ There are many circumstances under which there could be no possible objection to limiting the class of customers to which distributors or dealers resell goods, and there are many reasons why it would be reasonable and for the public interest that distributors or dealers should be limited to reselling to certain classes of customers. ”

“ From the moving platform to the show cases was a ten foot stationary floor, where the distributors and recipients were sitting on comfortable seats and were being shown different articles and negotiating transfers. As we were nearing a special display, Xora left us sitting, and lightly stepped off the platform. During her absence, Mr. Amony gave me some information.
"The attendants in our merchandising department are called merchandise distributors, not salespeople. We have no high pressure employees. Our distributive system is more simple than yours, which I have seen through television. ”

“ It does not include real estate, securities registered under chapter 551, Wis.Stats., or sales demonstration equipment and materials furnished at cost for use in making sales and not for resale. (3) 'Person' includes partnerships, corporations and associations.
Ag 122.03 Prohibition. No person shall promote, offer or grant participation in a chain distributor scheme. ”

“ Instead, then, of attempting merely to learn the dealer's demand for selling points, put part of your effort into learning the demands of the user of the machine. Consumer suggestion or demands are apt to come only after a period of use. Obvious ones are sometimes reported by the dealer, but very often they never come to the manufacturer through the reports of the trade in time to be of service. It took a period of years for the dealer to realize the importance of enclosed moving parts. ”

“ Similarly the publisher of books, maps or periodicals who sells his product through canvassers or agents is selling direct to the consumer. Again, if a retailing house does so large a business that it can advantageously engage in manufacturing some of the lines of goods it sells, it may combine production with distribution. One of the most important instances of this method of direct dealing is the mail-order house of Sears, Roebuck & Co., of Chicago, which manufactures in great quantities some of the goods—shoes for example—which it sells. ”

“ The wholesale dealer, by affording a ready market to the manufacturer, by taking his goods off his hand as fast as he can make them, and by sometimes even advancing their price to him before he has made them, enables him to keep his whole capital, and sometimes even more than his whole capital, constantly employed in manufacturing, and consequently to manufacture a much greater quantity of goods than if he was obliged to dispose of them himself to the immediate consumers, or even to the retailers. ”

“ While the ownership of a single retail or wholesale store resting in an individual, or in a partnership composed of individuals who make this business their means of livelihood, or in a group of investors in the form of a corporation, may be considered the normal unit, gradual integration is going on both from the producers' and consumers' ends of the distribution chain. ”

“ Distributing producers, or those who convey the raw material to the manufacturer, and the manufactured article to the consumer,—comprehending the commission merchants, wholesale dealers, importers, grocers, butchers, and shopkeepers of every description; their vast machinery being the ships, railroads, highways, waggons, horses, and men by which this distribution is effected. ”

“ THE output of the manufacturer finds its way to the ultimate consumer through a variety of channels. What these are will depend upon the manner in which the various mills are organized, and their respective policies as to the marketing of their products. Some mills, usually very large organizations, will have plants completely equipped, in every department, spinning, weaving, dyeing, printing, finishing, etc., and will process all of their goods themselves in every detail, offering them on the market in their finished form. ”

“ The factor often provides a store, together with a complete selling and office force, and every facility for receiving, storing, selling, and shipping the goods, and for financing the business. The salesmen of the house travel throughout the country, reaching all the important markets, and the managers of the different departments, who thus understand the needs of the market, are in a position to advise the mill with intelligence and exactness as to the kind of goods which should be made to meet the requirements of the trade. ”

“ While the difference of a cent or two in the rate of freight may not in the least interfere with the conduct of industry or commerce in the aggregate, such a slight difference, may perhaps determine whether a manufacturer obtain his raw material from this or that source of supply, whether a wholesale dealer obtain his stock from the manufacturer in one, or the manufacturer in another city, whether a retail dealer make his purchases from the wholesale dealer in this city or in that city. ”

“ It would make no difference whether one company or one individual owned all the factories fabricating the component parts of a single product, or whether such part were made in our independently owned factory, _if only all adopted the same service methods_. If we can buy as good a part as we can make ourselves and the supply is ample and the price right, we do not attempt to make it ourselves--or, at any rate, to make more than an emergency supply. ”

“ Figure 102 shows how many different concerns stand between the manufacturer and those who buy his goods; the manufacturer turns his product over to the commission man who unloads it on the jobber or wholesaler, who sends drummers on the road, who make the retailer buy it, who hands it out over the counter to his customers, who are merely acquaintances of his.
All of the middlemen make big profits while the manufacturer and the retailer have to be satisfied [175] with a very small margin and the consumer knows that he is paying several prices too many for the article he buys. ”

“ In regard to the latter class of goods, it is a matter of common knowledge that there has been an increasing tendency of late years to eliminate the middleman, and establish direct trading between producer and consumer. Just as the small shopkeeper will purchase from the manufacturer, and avoid the wholesale dealer, so, also, there are individual householders and others who eliminate even the shopkeeper, and deal direct with advertising manufacturers willing to supply to them the same quantities as could be obtained from a retail trader. ”

“ Good organization is the trend of modern business, and this is good organization—saving two or three handlings, truckage, some bookkeeping, et cetera.
II. The Manufacturers. Next to the country merchant, the manufacturer will be the largest beneficiary of the postal parcels delivery. Take, for instance, the hardware business. The manufacturer is obliged, under the existing conditions of trade, to maintain large stocks in an endless number of cities scattered over the country, or do what is the equivalent of directly maintaining the stocks—that is, to give extended credit. ”

“ A motor-car tire maker found it so difficult to break into the market through automobile dealers and garages that he sold his product to a mail-order house.
(g) Familiarity of Consumers with Product.—A new product must as a rule be sold through channels that may be abandoned after the public has begun to know the article. Office devices at first sold only by speciality men are gradually taken over by stationery stores. Frequently orders for new food products must first be secured by speciality men from customers before dealers will stock them and offer them for sale. ”

“ For example, this customer might be such a large customer that the volume of his orders would yield such a return to the producer that the producer, by distributing his fixedc harges over the resultingly increased volume of business, could absorb the freight differential without loss of profit to his business as a whole and without raising any charges to his other customers. The securing of this particular business might even enable the producer to reduce his own basic factory price to all his customers. ”

“ For example, a manufacturer of hardware selling direct to the retail trade found that his strongest competitor's policy was to sell to every dealer who would buy and to offer no exclusive sales arrangements, while he himself made a success by offering his goods only under exclusive sales agencies. ”

“ It certainly cannot, I submit, with reason, be said that there is not the same unity between the operations of a manufacturer who makes his goods in one state, and sells them in another, as there is between the operations of an express company. The sale of the manufactured goods is as essentially necessary to the profits of the manufacturer as is the manufacture of the goods themselves. ”

“ Manufacturers and merchants have severally the unquestioned right to distinguish the goods they manufacture or sell by a peculiar mark or device, so that the goods may be known in the market as the product or sale of the owner of the trade-mark, or device, in order that they may thus secure the profits which the superior repute of the goods may be the means of giving to the producer or seller. ”

“ It is true, therefore, of every particular producer or dealer, that a great demand, a brisk circulation, a rapid consumption, of the commodities which he sells at his shop or produces in his manufactory, is important to him. The dealer whose shop is crowded with customers, who can dispose of a product almost the very moment it is completed, makes large profits, while his next neighbour, with an equal capital but fewer customers, gains comparatively little. ”

“ The development of marketing relations between small producers and small consumers is a slow process that apparently cannot be forced. Again, certain specialities, complicated machines such as printing presses, power installations, made-to-order devices, and machines requiring much attention and service after the first sale, usually are sold direct by manufacturers to consumers through the medium of speciality salesmen. The salesman is the representative of the producer in the marketing transaction. ”

“ The same is true of the manufacturer, whose complicated, and it may be extensive, business relations with the producers and dealers who supply him with raw material, with the workmen who convert such material into finished wares, with the merchants or agents who market the products of his factory, all require his oversight and direction. ”

“ One of the most promising fields for American business enterprise I believe to be the organization of retail distribution, which, among other economies, can rid itself of the expense of solicitation. We have already great bazaars which combine the variety of a country store by assembling under one roof the special departments of ordinary city warehouses: is it not possible to organize for such marts stated circles of customers, on whose steady trade the proprietors can rely—circles sufficiently large for adequate support, independently of showy premises or other advertisement? ”