POSSIBLE ECONOMIES IN DISTRIBUTION Avoidable Waste.—The following statements outline briefly a few of the details of distribution which it seems certain must receive attention in order to secure more economical distribution. No doubt many more could be added. Poor roads greatly increase the costs of bringing the farmers' crops and produce to market, costs that must be added to the price that consumers eventually pay. Inadequate truck and railway transportation is another ele ment that makes a considerable addition to the costs.
Delay in transportation as a factor of expense in distribution has not been given the attention that it deserves. Poor location of terminals makes a great deal of expensive cart age necessary. Congestion of traffic in city thoroughfares is a growing i cause of increased costs in distributing .goods. Inade quate, inefficient, poorly located storage facilities cause huge losses. Inadequate, unauthoritative and inaccurate collection and dissemination of market information such as is needed by pro ducers, distributors and consumers is responsible for great waste. Through lack of such information business in many lines now passes constantly from glut to famine and back again. Poor packing of merchandise, inefficient loading, rough handling and uneconomical methods of handling are causes of waste and there fore of higher costs of distribution.
To refer more specifically to the activities of marketing through wholesalers and retailers, there is a startling loss of the wholesale salesman's time in finding customers, in making appointments, in fruitless interviews. The time of both salesmen and buyers is lost. Probably less than a sixth of a sales man's time, averaging salesmen of all classes, is actually employed in selling or even in displaying and describing merchandise. Any thing that can be done to improve this condition would increase efficiency and decrease costs.
Advertising is or should be an invaluable aid to marketing. In the list of expenses of distribution it occupies a prominent place. There is certainly room for improvement in its administration. Much study has been given in some organizations to such problems as the proper selection of mediums and the right use of the space taken. No doubt much greater progress can and will be made in the future in these directions, but the greatest loss in advertising seems to be in the lack of faith of the public in the advertising. If people gave more credence to advertising, much less of it would be needed to secure the same result. The remedy, of course, lies in the direction of raising the standards and shutting out the dishonest advertiser. (See ADVERTISING.) Duplication.—Duplication in delivery organizations by retail
stores is a source of economic waste. There are many who think that there are too many retail stores. Would goods be sold for less if there were fewer? Probably not, because a large part of the competitive losses now occurring are borne by the dealers themselves in unpaid services. It may be argued that if their num ber were reduced the rentals for the locations that would be elimi nated could be saved. This cannot be definitely checked by such experience as has been recorded in any public way. Concentration of retailing seems invariably to result in increasing rents. In fact, rents tend to increase faster than sales, so that the fewer the stores the higher the share of the landlord. More study is needed to determine the exact effects of restriction of the num ber of stores on costs of distribution. Further there is the fact that the store plant is unused for a large part of the time. Store hours are by custom and legislation steadily growing shorter. This means that the capital invested in stock and plant has fewer hours in which to produce.
Finally, there is undoubtedly an enormous loss due to unfairness and dishonesty, a loss that is now carried in large part if not wholly as an expense of distribution, being added to the price paid by the consumer. Failure to return containers lent by distributors seems a small item, but in such a business as milk distribution in large cities the loss to milk distributors due to non-return of empty bottles is enormous. Uncollectable debts and the cost of collecting delayed payments are important items in the expenses of distribution. Disregard of contracts in such matters as refusal of goods after placing orders, failure to deliver goods after orders are placed, abuse of the privilege to return goods, claims for adjustment and many other similar items make up large losses. Unfair competition, efforts made not to increase legitimate business but to impede or even to destroy competitors, commercial bribery, "graft" and the exercise of monopoly, all burden distribution expense far too much. A source of consider able loss is theft by employees, burglars and shoplifters. Some retail establishments count upon a fixed percentage on their sales representing losses due to this cause, a percentage that is added to the gross expenses which form part of the selling prices.
Many of the losses of the distributive business, including theft, breakage, fire and so on, are covered by insurance, the cost of which is carried as an expense against the distributing process. Anything that can be done to reduce these losses will by that much reduce expenses of distribution and prices of goods.