21. Weakness of retail the other hand, many attempted retail buying groUps have failed. Careful organization and a sense of group solidarity are necessary for success. The loyalty of the members sometimes cannot stand the strain of momentary price inducements elsewhere, and without the loyalty of the members the groups cannot suc ceed. Retail buyink exchanges of all kinds, almost without exception, operate on a strictly cash basis. They must do so, because the introduction of credit relations would bring added cost and possible loss. When a member has not the cash available, he must trade elsewhere. The smaller buying exchanges are often not in a position to make the bold merchandising strokes which the large jobbing house frequently makes; a hired manager for a large group of small retailers will not take the chances in buying for the future that the trained jobber's buyer is taking daily. Despite decreased operating expenses, the buying ex change is frequently tillable to meet the prices of reg ularly established jobbers.
22. Middleman's function must be The 'various forms of cooperative substitutes for the middleman, both retail and wholesale, must really perform the middleman's functions if they are to bay any large development. Soine of these functions are storing, credit granting, and constructive selling. In addition, many middlemen provide free delivery and other desirable services. These services cost money; they must be paid for whether they are per formed by an independent middleman or by some sub stitute for the middleman. The substitute claims to omit the middleman's profit from its charges, but in somc cases at least it has been found that the profit is swallowed up in increased costs of operations on the part of the inefficiently managed cooperative mid dleman.
Many cooperative groups are able to reduce oper ating expenses by omitting some of the usual items of middleman service; for instance, credit granting is almost universally abandoned by cooperative groups, and many of them make no deliveries. These omis sions result in undoubted savings at times. It should be remembered that to the extent that these savings are effected by reason of abandoned service, the co operative organization restricts its market. Some people cannot always buy for cash; the credit-grant ing middleman is an absolute essential for them. Some people demand and are willing to pay for sell ing service, delivery and other things that are usually lacking in a cooperative establishment.
23. Will the middleman be eliminated?—Despite the growth of consumer cooperation, the independent retailer will continue to do business as long as some consumers will not or cannot buy under the restrie tions of the cooperative method, and as long as con sumers continue to demand forms of retail service which the cooperative store, organized solely to re duce prices, cannot afford to give.
The independent jobber will also remain. As long as the competitive field is open, there will always be many relatively small dealers who will not belong to buying associations and who cannot buy sufficient quantities of each kind of goods to be able to com mand direct buying relations. For them, the jobber is an abs'olute necessity, and it is therefore safe to predict that, unless we exchange the competitive for the monopolistic system of industry, the jobber will continue to be a factor in the marketing of many kinds of manufactured products.