148 Repokt of Farmers' Institutes 



The middleman is usually supposed to get more than his right- 

 ful share. He occupies a shadow'y — one might almost say a 

 shady — realm between producer and consumer, — a twilight zone 

 into which the producer and the consumer equally pay tribute for 

 nothing at all. This is not a fair statement, but it reflects the 

 popular idea. The world will never get rid of the middleman. 

 He is a necessity; and, while some of him may go, his place is 

 fixed in the scheme of marketing and distribution, and his serv- 

 ices are necessary. 



Some maintain that the retailer gets too much. I think he does, 

 because of too much overhead charge, too much competition ; but 

 he usually does not get more than he must have to make a living. 

 I know from my own personal experience that under usual condi- 

 tions in most cities and towns, the retail grocer can not survive 

 unless he gets an average gross return of 20 per cent on his goods. 

 In other words, he must get at least $1.20 for every $1.00 he 

 spends for goods, or he will go to the wall. In Ithaca, because of 

 the peculiar services rendered, the long hauls, the great variety 

 of goods to be handled for an exacting buying public, and the 

 money tied up in credits, I doubt that a grocer can get along on 

 less than a gross return of one^fourth of the money paid out for 

 stock-in-trade. 



We found out that most consumers were more insistent on 

 quality than on low price, though they thought that they should 

 have a low price because we dealt with producer and manufac- 

 turer directly. 



For example, the backbone of our entire business was an excel- 

 lent grade of butter put up by a cooperative creamery, run by 

 Danes in Litchfield, Minnesota. We paid for direct shipment in 

 refrigeration car one cent more than the highest quoted price on 

 the Kew York produce exchange on date of shipment. Seller 

 and buyer had the quotations, and there was never any question 

 about fairness of price. It was sold to our members at a three 

 cent advance over the price paid. When butter was low we there- 

 fore made a proportionately greater profit. When butter was 38 

 in New York we settled with the creamery at 39, and our mem- 

 bers paid 42 cents. A cheaper butter at five cents less had very 

 little sale, maybe 20 pounds a week ; whereas our Litchfield but- 

 ter averaged more than 400 pounds a week. 



