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THE DISTRIBUTION AGE

A STUDY OF THE ECONOMY
OF MODERN DISTRIBUTION

BY

RALPH BORSODI

AUTHOR OF "NATIONAL ADVERTISING,"
"THE NEW ACCOUNTING," ETC.

WITH AN INTRODUCTION BY

LEW HAHN

MANAGING DIRECTOR OF THE NATIONAL RETAIL
DRY GOODS ASSOCIATION

 

D. APPLETON AND COMPANY
NEW YORK   LONDON
1927

COPYRIGHT, 1927, BY
D. APPLETON AND COMPANY

 

PREFACE

   In the fifty years between 1870 and 1920, the cost of distributing the necessities and luxuries which we consume has nearly trebled, while the cost of producing them has been reduced by more than one-fifth. If the cost of distribution continues to rise at the same rate, before the end of the next fifty years, we shall have more people engaged in the work of distribution--selling, advertising, delivering, transporting, etc.--than we shall have in the work of production, than we shall have occupied in farming, stock raising, lumbering, mining, and manufacturing.

   It is evident that what we are saving through the lower costs of modern methods of production, we are losing through the higher costs of modern methods of distribution. The question is, "What can we do about it?"

   To answer that question constructively, I have found it necessary, first of all, to make a critical analysis of the distribution elements of the consumer's burden, and to direct attention to certain facts in connection with the marketing and distribution of the products which we consume, the importance of which has not been generally recognized. Most of these facts have to do with what I call physical distribution and "high power" marketing--the transportation of raw materials and finished products, and the methods of selling, advertising, and financing, which manufacturers today use in an effort to keep their factories "sold up" to maximum capacity of production.

   The first and second parts of this book are devoted to this analysis of modern methods of distribution. This study makes it plain that only about one-third of the consumer's dollar spent at retail is paid for production while two-thirds is paid for distribution. What will perhaps be most surprising to those who have made no study of this subject, this study reveals that it is the manufacturers rather than the retailers and jobbers who get the most of what the consumer pays for marketing and that they are principally responsible for the extravagances with which modern distribution abounds.

   The third and fourth parts of the book represent an effort to suggest what consumers, retailers, jobbers, and manufacturers can do in order to lower the cost of distribution. These two parts contain suggestions upon which individuals can act immediately--suggestions by which they can make their power as buyers the directing force in regulating the activities of every manufacturer, wholesaler, and retailer. But they also contain suggestions of an even more far-reaching nature--suggestions which should not only result in lower costs of distribution, but which contain the possibilities for very considerably improving the conditions of living and the cultural level of mode society. Unless the more prosperous consumers of the nation can be persuaded to turn themselves into gourmands, clothes racks, and gasoline-eaters and to devote their lives largely to the consumption of the endless quantities of things which mass production is evoking, we shall have to give a thought to the problem of enabling the poorer sections of society to live as comfortably as industrial progress today makes it possible, as well as to the problem of making it possible for most of us to live richly and beautifully in spite of the imperative need of consuming all that our production machinery is capable of producing.

   RALPH BORSODI

  

CONTENTS

INTRODUCTION BY LEW HAHN

 

PART I
THE COST OF DISTRIBUTION

I   THE DISTRIBUTION AGE

II   THE REAL PROBLEM

III THE RISE IN THE COST OF DISTRIBUTION

IV WHAT IS DISTRIBUTION?

V THE CAUSES OF THE RISE IN DISTRIBUTION COSTS

VI THE COST OF PRODUCTION AND DISTRIBUTION

VII   THE RISE IN THE COST OF PHYSICAL DISTRIBUTION

VIII THE RISE IN THE COST OF MARKETING

IX   THE RISE IN THE COST OF MERCHANDISING BY RETAILERS AND JOBBERS

 

PART II
MARKETING A LA MODE

X HIGH PRESSURE MARKETING

XI HIGH PRESSURE DISTRIBUTION

XII   HIGH PRESSURE WHLESALING

XIII   HIGH PRESSURE RETAILING

XIV HIGH PRESSURE SELLING

XV   HIGH PRESSURE ADVERTISING

XVI   HIGH PRESSURE CREDIT

XVII HIGH PRESSURE CAPITALIZATION

 

PART III
THE IMMEDIATE PROBLEM

XVIII THE ELIMINATION OF HIGH PRESSURE MARKETING

XIX CAVEAT EMPTOR

XX HOW MUCH IS A PACKAGE?

XXI   USELESS VS. USEFUL ADVERTISING

XXII QUALITY LIKE CHARITY COVERS A MULTITUDE OF SINS

XXIII HIGH PRESSURE MARKETING IS NONESSENTIAL

 

PART IV
THE ULTIMATE PROBLEM

XXIV CONSUMER BUYING POWER

XXV THE CREATION OF CONSUMER DEMAND

XXVI THE CONSUMER MARKET


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