THE JOBBER'S STATUS 1. Jobber not to be abolished.—There is a constant ly increasing number of manufacturers who decline in whole or in part to take advantage of the jobber's services and an equal number of retailers who prefer to make their purchases direct from the manufacturer. Before investigating the reasons for the changing sta tus of the jobber and his declining importance in many kinds of merchandising, let us fix firmly in mind the fact that the jobber will not be eliminated. He may disappear in some kinds of business, and in others his functions may be greatly changed. But there is a wide difference between the elimination of some job bers and the elimination of the jobber. We are to ascertain, first, why it is that many retailers are will ing to forego the jobber's service to them, and second, why it is that many manufacturers are leaving the jobber partly or wholly out of their schemes of mar keting.
2. Increased buying power of retailers.—Why is the retailer seeking more and more to make his pur chases direct from the inanufacturer? The most im portant reason is probably the increased size of retail buying units. When a retailer can buy goods in large quantities, it is natural for him to wish to buy from the manufacturer at the same price at which the manufacturer would sell the same quantities to the jobber. He wants the jobber's profit for himself. When it is understood that many retail units—large specialty stores, department stores, chain-store or ganizations and the great mail-order houses—make larger purchases than all except the most extensive jobbing establishments, it is not to be wondered at that they are willing to take over the jobber's func tion of storage, provided they can obtain the same dis counts that are ordinarily given to the jobber.
The fact that some great retail buyers can and do get minimum prices by buying directly in quantities, influences the smaller retailers to form cooperative buying exchanges, by means of which purchases are pooled, and manufacturers are asked to give to the buying exchange the same prices that are obtained by the larger retail organizations buying individually.
When a single retailer or a group of retailers demand direct buying connections on the strength of their buying power, they consciously abandon the old idea that there should be certain prices to jobbers because they are jobbers and other prices to retailers because they are retailers ; they set up the relatively new idea that the only basis of price differentiation should be the quantity that can be purchased, no matter whether it is jobber, retailer or consumer who can buy that quantity.
3. ;Pressure of competition.—Many retailers, who do not possess large buying power individually and who do not belong to buying associations possessing large buying power collectively, are seeking new sources of supply which will enable them to some extent to meet the price competition of their larger competitors. They bring pressure upon manufac turers to reduce the quantities that will carry the largest discotmts and to provide facilities even for the smallest retailers to buy direct on the most favorable terms. They are trying, in other words, to force back upon the manufacturer the functions of storage, credit carrying, intensive selling, etc., which have heretofore been largely performed by the jobber, in the hope that prices will in some way be reduced. If successful, the utmost saving they can effect is the ex ceedingly small jobber's net profit, because the price of goods to the retailer must include the cost of stor age, credit carrying, selling, etc., no matter whether these functions are performed by the jobber or by the manufacturer.
4. Ease of bu,ying direct.—lletailers are encour aged in their attempt to purchase direct by the in creased ease of dealing with the manufacturer. The number of manufacturers' salesmen who will call upon retailers is constantly increasing; facilities for the quick and cheap transportation of even small ship ments direct from the factory to the store are much better than formerly; the possibility of ordering fre quently and conveniently by mail from the manufac turer is being realized more than ever before.