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Because I am convinced that our great problems in the field of economics during the next half century are bound to be distribution problems, I am glad that Ralph Borsodi has written this book on "the Distribution Age." It is a book which should be read by all. The retailer, unless he is content to pass out of the picture as an independent factor, must learn what Borsodi is trying to teach, namely that the retailer cannot honestly and effectively serve the consumer by accepting nationally advertised and branded merchandise as the easiest way. The consumer too must interest himself in Borsodi's thesis unless he desires steadily to reduce his own consuming power. And the manufacturer--even the manufacturer most committed to the use of national advertising--owes it to his own permanent success to strain his tolerance to the limit by getting the nub of Borsodi's contention plainly in his mind. The consuming public is a good old steady cow but there is a point beyond which its milk supply must show strong symptoms of failing.
In looking back over the changes that have taken place in the world of business during the last thirty years I am most impressed with the altered status of the smaller one line retailers. To cite just one line which is typical of others, let me take the retail druggist. A Mr. Andrews was the neighborhood druggist when I was a boy. He was a chemist and because physicians then relied largely on prescriptions he devoted a good portion of his time to that work. In his odd moments he compounded from his own formulae various ointments and lotions and emolients. All these bore his name on labels which now would be regarded as archaic examples of the printer's art, although even now I find myself comparing them, to the advantage of the old druggist, with the torrent of preparations which today is offered to the consumer. The whole neighborhood had faith in the local druggist's preparations and he was a real figure in the community. How his net profit would have compared with that of the modern druggist I do not know. I doubt that any modern drug retailer could have the satisfaction and the respect of his customers that Mr. Andrews enjoyed. He was his own man.
Today that is all changed. Mr. Andrews' preparations have given place to countless rows of proprietary articles all branded and advertised by the big concerns that make them. The work that Andrews and his kind did has passed into the hands of a few large concerns and today every drug store carries exactly the same things. There is no individuality about any drug store that would lead a customer to walk a block out of his way to patronize one rather than another. Competition among druggists has passed out, except for a certain competition of accessibility and what is left of the competition on price. With the efforts of the manufacturers of these advertised articles to compel all retailers to sell at the same price there isn't much of price competition left either and the druggists thus robbed of their right to be independent agents have joined the clamor of the manufacturers and are shouting to a benevolent national government to eradicate the last and only opportunity for free competition by the enactment of legislation to give the manufacturer complete power to control the retailer's selling price.
Because I sincerely believe that it is not good for the community to have the independent retailer changed into the puppet of the nationally advertising manufacturer I am glad that Mr. Borsodi has made this study of the economic consequences of what he calls "high pressure marketing."
The last half century has witnessed prodigious increases and improvements in the field of production. All the engineering genius of the world has been focused on the job of turning out commodities. Distribution has escaped attention, except that every now and then some one has anathematized the "middleman." During the last decade, especially, there has been a frank avowal of admiration for and faith in the efficacy of a "Fordized" industry with forced distribution by the producer. Fortunately, this theory is on the way out. It is being replaced with a slightly clearer conception of the fact that the consumer, after all, must have a word or two now and then as to what he wants. The future should redemonstrate the lesson of the past that it is cheaper in the end to produce what the consumer wants and sell it as the normal answer to the demand than it ever can be to make what the manufacturer wants to make and force its consumption by high pressure selling and advertising.
Unless the retailer is the consumer's purchasing agent he has no warrant for existence and if he accepts the position of selling agent for the manufacturer he must pass from the picture. In our economic scheme of things there is an important place for each factor in the chain of production and distribution. It is the manufacturer's job to produce the merchandise. The jobber's task is to carry the stocks. The function of the retailer is to proclaim the merchandise to the consuming public and to sell it with such service as his class of trade requires, at the lowest possible price commensurate with the quality and service which his class of trade demands.
When the manufacturer insists on appropriating to himself part of the function of the retailer by an attempt to control the consumer market he should be very sure that he can prove beyond question that he can fulfill that function more economically than the retailer can. If he can do that then the retailer must be willing to stand aside, for economic development will thrust him aside whether he is willing or not. The identification of merchandise by branding and the forcing of distribution by national advertising and high pressure selling do not put goods in the consumer's hands at lower prices. Instead they increase the cost and so reduce consumption. Therefore the retailer who hooks himself on to the national advertiser's scheme is betraying his public's trust and selling his own birthright for considerably less than a mess of pottage.
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