11. Arguments opposed to private brands.—In op position to private brands we find a long line of in fluential factors in trade. First among them are the majority of nationally advertising manufacturers. Then there are most of the other factors concerned with advertising—advertising agents, newspapers and magazines, and other interests which might be ex pected to oppose any movement that is based largely on opposition to the influence of advertising. Third, there is a small but influential group of jobbers. Finally, there is a great body of retailers who have often expressed their preference for goods ad vertised by the manufacturer over those that are branded by the jobber and are unknown to the con sumer. Some of the arguments in opposition to pri vate brands are the following: 12. Unfairness to manufacturers.—It is charged that the jobber who pushes his own brand is unfair to the manufacturers of competing brands that he car ries. In a certain sense this charge is reasonable. Suppose that a hardware jobber has his own brand of saws, and that he also purports to aid in the dis tribution of the saws of a half dozen manufacturers who sell their product under their own trade-marks. If his salesmen do not push his private brand unduly, if they simply say to the retailer, "Here are seven good brands; take your choice," there cannot be much criticism of his activities. But this usually is not the purpose of the private :brand jobber. His salesmen have orders to push his goods. They do not all attempt to substitute, but many of them do. This is where the unfairness comes in. The jobber be lieves he should be supported by the manufacturer as a legitimate middleman, and then he often turns around and competes, as a manufacturer, with the manufacturer whose support he solicits. It is diffi cult to see the validity of arguments in support of this practice. The jobber says he is forced to adopt it in order to make a profit, but by taking this atti tude Ile is undoubtedly helping to break down the manufacturer-jobber-retailer system of distribution upoh the continuance of which bis existence as a job ber depends.
Of course, if a jobber frankly pushes bis private brands, and if this fact is known by manufacturers who urge him to place their own brands on his price list, the jobber cannot be charged with unfairness even if he complies with their requests. He may be helping to break down the jobbing system, but he is not unfair with the manufacturers; they put them selves in his power with their eyes open. The un fair nature of the jobber's private brand activities appears only when the jobber demands as a right that the manufacturer sell his goods thru the jobber alone, even resorting to questionable coercive measures at times to accomplish this purpose, and then, having obtained the manufacturer's cooperation, turns around and does his best to push his private brand at the ex pense of the manufacturer's goods. This practice is by no means unknown, and it certainly does not help to clear up the present confusion regarding the job ber's status.
13. Hots) unfairness can be avoided.—It is entirely possible, however, for a private brand jobber to con duct his business in such a way as to avoid any implication of unfairness, and to free himself entirely from the anomalous position in which many private branders find themselves. He has only to decline to
handle goods of manufacturers which compete with his private brands.
This would be a straightforward attitude which could not be open to criticism, and it is the attitude that many jobbers are rightly taking. It is unneces sary for a jobber to handle one manufacturer's line exclusively in order to be fair to that manufac turer; if Ile handles several manufacturers' compet ing goods on an equal basis, supplying them with out prejudice to retailers who want them, he is doing his duty as a general distributor. But if he tries to compete with his own sources of supply he is helping to drive manufacturers into that direct-sell ing system which means the continually decreasing importance of the jobbing business.
14. Buyers demand advertised op ponents of private brands point out that the jobber is in business because he serves the retailer, and thru him, the consumer. If the retailer wants advertised goods and the jobber will not supply them, the job ber is not fulfilling his function of service. Further more, it is suggested that the jobber who is forced to tell the retailer that he will not handle or cannot ob tain advertised goods that are in great demand, loses prestige with the retailer who likes to concentrate his purchases and to look to one or two jobbers for all his supplies.
15. Less profit on private manufacturers say to the jobber as they say to the retailer: Perhaps the profit on each sale is less on advertised than on privately branded and non-adver tised lines, but if the national advertising is properly done, it will result in a demand that will mean easy sales, small selling expense, rapid turnover of capital and larger total profits than could be obtained from the sale of a line which has to be sold by the expensive method of unassisted personal salesmanship. Some body must create the demand if the goods are to sell profitably. If the manufacturer does not do it, the jobber or the retailer has to do so, and the advertis ing manufacturer believes that his method is the cheapest ultimately to the consumer as well as to those who handle his goods.
16. Advertising gives better quality for less money.—Advocates of nationally advertised, trade marked goods say that such goods are usually of better quality than unadvertised, privately branded goods. This is true, even if the private brander wants to give full value, because good advertising increases sales without proportionate increase in selling cost, thereby decreasing the unit cost to sell; and the largely increased sales mean large scale production with pro portionate reduction in the unit cost to manufacture. It is not true that good advertising increases prices. On the contrary, it is capable of lowering them, or, if the price is not lowered, the advertising manufac turer is in a position to give better quality at a given price than his private brand competitor.