It may not be without effect on the advertising manufacturer. The idea of many cooperatives is ex pressed by the statement, a few years ago, of the head of a cooperative league in New York: There is nothing in the cooperative movement to interest the advertiser or business man except as future competition to them. We, as well as other cooperators, consider the greater part of advertising, as done at present, a pure eco nomic waste, and hope to eliminate it, or at least to reduce it to some gystein of simple announcements. The object of cooperation is to organize the consumers, eliminate compe tition and the cost of selling and buying. Each industry manufactures for a known market answering a demand that is known with scientific exactness. Therefore, when fully developed, cooperation eliminates advertising.
This is not the place to defend advertising or ad vertised goods. Just now we are interested only in the promised effect of cooperation on the manufac turer. It is pointed out in this statement. Coopera tive stores as they develop into chains, and as they begin to control factories, almost universally develop private bra,nds of their own. Advertising is not dead in Great Britain, even tho the cooperatives are strong there, and it is not to be expected that it will be killed here even if cooperation makes greater strides. Yet cooperation might mean new and strong competition for the manufacturer who seeks legitimate contact with the public thru advertising.
14. How to meet the cooperative movement. non-advertising manufacturer, too, will be adversely affected. To the extent that the cooperatives them selves invade the manufacturing field, and they must do so if they are to realize to the full the advantages of cooperation, the independent manufacturer will find his market narrowing. There is nothing that can be done to stop the cooperative movement, even if it were desirable to try to do so. If it is a good thing for consumers, it is bound to come in some form and to some degree; laws and resolutions can't stop it. The only thing for retailers, jobbers and manu facturers to do is to see that their activities are con ducted on the narrowest margin of expense, that they get goods as cheaply as possible to the final con sumer, and that their service to consumers becomes such that it will continue to be demanded by many consumers regardless of the spread of the cooperative idea.
15. Direct selling by manufacturers.—We have been considering attempts of consumers to find sub stitutes for the middleman. The manufacturer, also, is in some cases doing his part to change the normal distributing system. Chains of stores owned and
operated by manufacturers are common in some lines. The possibility of extending such chains is limited. Ordinarily a single manufacturer can put one of his chain stores in only a comparatively large commu nity, and it is only in a few lines that the manufac turer's chain store is a possibility.
A. suggested modification of the chain of stores owned by a single manufacturer is a chain owned by a group of non-competing manufacturers. For in stance, a hat maker, a manufacturer of men's cloth ing and a shoe manufacturer might combine to sell their products in a chain of retail establishments. The difficulties of cooperative effort of this character have kept manufacturers from trying it. Even if it were a workable plan, it is doubtful whether the co operative chains would have greater opportunity for wide development than the chain of a single manu facturer.
Manufacturers are loath, as a rule, to establish chains of stores. Manufacturing and retailing are two distinct activities; it usually takes a distinct type of training and ability to bc successful in each. The manufacturer is apt to think that be can use his cap ital to greater advantage in extending his manufac turing facilities than in branching out into retailing. There are few manufacturers' chains, and it is seldom that a new one is established.
Direct mail sales by manufacturers to consumers are common. It is not conceivable, however, that they can ever become an important competitive fac tor in merchandising; the inconvenience to the con sumer in ordering by mail from a large number of different manufacturers will forbid the general use of this method of selling. There must usually be some clearing-house arrangement to give time and place utility to the goods of the distant manufacturer.
16. Substitutes for the jobber.—Opponents of the present marketing system say that if there were fewer retail stores, if in each community there were only one or two large general stores, or, in the larger towns, only a few large specialty stores in each line, the jobber would be unnecessary. They contend that the jobber is needed chiefly by the relatively small stores which cannot purchase in large quantities and which cannot hire buyers to see the many salesmen of many manufacturers. There can be no doubt that semi-monopoly in retailing would eliminate the jobber, because, with the elimination of the majority of the stores, the few that were left would be able , to grow to such size that they could buy everything direct.