8. New chain of distribution.—In modern distribu tion the commission merchants and brokers, so promi nent in earlier marketing, have lost their old position of importance in many manufactured lines. There are notable exceptions, of course, but these two trade agents seem, in a large number of cases, to have been the first to feel the movement to simplify channels of trade for manufactured goods. The functions of the jobber and the wholesaler have also lost their distinc tive features. The jobber and the wholesaler have practically been merged, and the two words are now used interchangeably.
There is no typical chain Of modern distribution. Almost every industry has its own system of middle men, and often the different units in the same industry vary widely in their methods of reaching the market. For instance, shoes are sold in large quantities thru chains of stores owned or controlled by the manufac turer; other manufacturers sell direct to independent retailers; while still others continue to utilize the tra ditional jobber-retailer method. In the grocery field, on the other hand, the traditional method is still the conunon one; probably ninety per cent of grocery specialties as well as bulk staples are sold by the man ufacturer to the jobbers, each jobber in turn selling to many retailers. Even in groceries, however, there are many departures from this procedure. A few manufacturers sell direct to consumers; an increas ing number leave out the jobber and deal only with the retailer; others sell first to agents or brokers, who later sell either to jobbers or to retailers or to both.
9. Selling staple goods.—Despite the many meth ods that are used to carry manufactured goods to con sumers, it is possible to generalize regarding chan nels of trade, as far, at least, as four great staple lines are concerned. We have already said that probably ninety per cent of all groceries pass thru the manufacturer-jobber-retailer channel. The same thing is true of drug store lines, hardware and dry goods. In these four lines the typical method of sell ing is still the traditional one. The total trade in these goods is a very large proportion 6f total retail trade. Hence if we are to recognize any normal cur rent in modern trade, it must be that which flows from the manufacturer to many jobbers, from each jobber to many retailers, and finally from each re tailer to many consumers. It is true that many manufacturers do not follow this course—millions of dollars' worth of goods are sold direct to the con sumer; immense corporations conduct manufactur ing enterprises, and then sell the products of their factories thru great chains of retail stores owned by themselves; hundreds of manufacturers have elim inated the jobber from their sales schemes. Never
theless, in the distribution of the four great staples, groceries, drugs, hardware and dry-goods, as well as in the marketing of many other commodities, the manufacturer-jobber-retailer-consumer system is still strongly intrenched; and it is in the shifting relations among the four members of this chain of distribution that most of the complicated problems of modern marketing have their origin.
10. is important to have definite ideas about each of the four normal links in the chain of distribution. The consumer, defined by the Cen tury dictionary as "one who destroys the exchange able value of a commodity by using it," buys goods for consumption and not to sell them again. Tho this definition is simple, the decision who is and who is not a consumer is not easy in every case. The re tail grocer may hold that a hotel or a restaurant is a consumer, and that, as a consumer, it should buy its supplies from the retail dealer instead of from the jobber. The wholesale grocer, on the other hand, may maintain that the hotel is in reality a dealer be cause it sells, altho in somewhat altered form, most of the food that it buys. In general business usage, however, there is little confusion about the meaning of the term consumer ; it means the ultimate con sumer—the individual who uses the things Ile buys for himself, and who does not sell them again either in their original or in altered form.
Retailer.—The term retailer is derived from two words meaning "to cut again." It was originally applied to a class of middlemen who purchased cloth by the piece or in quantities and then cut off smaller amounts for sale to consumers. Speaking generally, the modern retailer is a distributor who buys goods to sell them again without change in form to buyers who are not dealers. He usually sells to consumers, but he may also sell to manufacturers. The phrase with out change in form is an important part of the defini tion, since a man who buys goods and changes their form in any. way before he sells them is to that extent a manufacturer and not a retailer. That his cus tomers are buyers who are not dealers distinguishes the retailer from the jobber.