I9I5 



and $1.90 per box for lemons to pro- 

 duce the fruit, handle it, and place it 

 on the cars for shipment. 



WTiether the cost of transportation 

 will be reduced only the future can 

 develop. At the present time the indus- 

 try is shipping the fruit under rates 

 established by the railroads and sus- 

 tained as reasonable by the Interstate 

 Commerce Commission. They represent 

 .$1.00 per hundred pounds on lemons and 

 .$1.15 per hundred pounds on oranges. 

 The orange rate represents 20.5 per cent 

 of the consumer's dollar, based on the 

 representative prices of 1014. The aver- 

 age haul of oranges is approximately 

 2,500 miles, absorbing thereby a larger 

 proportion of the consumer's dollar 

 than other products contribute where 

 the sources of production and con- 

 sumption are closer together. 



The position of the jobber in the 

 distributing system is widely misunder- 

 stood. To the so-called middleman the 

 high cost of distribution is popularly 

 ascribed, and there is a widespread 

 agitation that he be eliminated. This 

 investigation shows that 8.2 per cent of 

 the consumer's dollar, or a mark-uj) of 

 14.2 per cent, represents his margin, 

 and that he is not the leading factor in 

 the cost of distribution. The jobber per- 

 forms a distinct function that must be 

 performed by someone in assembling 

 the fruit in the towns and cities, in de- 

 veloping trade with the countless retail 

 dealers in the rural districts and cities, 

 and in blanketing the credit and other 

 distributing risks for the producer. 

 His function is somewhat similar to 

 the banker, who furnishes the monev 

 through which trade can be conducted, 

 except that his business is not so highly 

 organized, is not under state and federal 

 direction and control, llie abuses are not 

 so easily corrected, and they are there- 

 fore featured in the popular mind out 

 of proportion to their true relation to 

 the business of the middleman as a 

 whole. The jobbing interests of the 

 country owe it to themselves to see that 

 the unprincii)led middleman is elimin- 

 ated; that practices of every kind that 

 are unfair to the producer are cut out; 

 that any practice that slows down the 

 natural forces of competition and there- 

 by reduces consumption be brought 

 under strict rcgidation. In no other 

 way can the legitimate function of the 

 fruit jobber in bringing the producer 

 and retailer together be properly de- 

 veloped and safeguarded against radical 

 legislative action that may in the end 

 be undesirable for both the producer 

 and the consumer alike. We would 

 suggest that the jobbing interests of the 

 country seek the co-operation of the 

 Bureau of Markets of the United States 

 Department of Agriculture, to the ena 

 that a co-oi)erative, systematic investi- 

 gation of all the conditions surrouniling 

 the function and the practices of the 

 jobbing trade be made. This investiga- 

 tion would reveal the wastes in the 

 wholesale distributing system and it 

 would furnisli the basic facts on which 

 the jobber's relationship to the iiublic 

 and to oiu' modern industrial life i-vdd 

 be more clearly understood. Other 



BETTER FRUIT 



industries, such as the cold storage 

 interest, the railroads, the handlers and 

 shippers of fruit, poultry and eggs, have 

 been greatly benefitted by co-operative 

 investigations with the constructive 

 branches of the federal government. 

 It is not too much to hope that such a 

 co-operative investigation would have a 

 far-reaching influence on the economic 

 phase of the wholesale distributing 

 business and on the relationship of the 

 jobber to the producer, to the retailer 

 and to the public at large. 



This investigation brings out clearly 

 that the most important factor in the 

 cost of distribution, next to the cost of 

 transportation, is the retail distribu- 

 tion, which represents one-third of the 

 consumer's dollar. The amount of the 



Page 7 



demands, and the cost of the fruit is 

 but one of the factors in the consumer's 

 price. The simpler the service, the less 

 the overhead cost, and, in those cases, 

 the consumer pays primarily for the 

 fruit, with only a comparatively small 

 overhead charge added for service and 

 profit. 



The retail distributing business is a 

 vital link in the chain between the pro- 

 ducer and the consumer. The desire 

 for fruit is awakened by suggestion, by 

 seeing attractive displays of fresh, lus- 

 cious fruit in the windows of the store, 

 on the counters, or in other forms of 

 disi)lay. It is stimulated by the attrac- 

 tive fruit stands and by the push carts 

 laden with golden oranges, by advertis- 

 ing in the magazines, the newspapers, 



Fluctuations in Carlot Jobber's and Retailer's Prices. 



Jobber's Cost 



'. Jobber's Selling Price 



: Retailer's Selling Puce 



consumer's dollar represented by the 

 gross retail cost is four times the 

 amount represented by the jobber's 

 cost. II is more than the proportion 

 absorbed by the cost of transportation 

 and the jobber's cost combined. It is 

 nearly equal to the amount returned for 

 the fruit on the tree, which includes the 

 cost of production and the grower's 

 profit, and the cost of picking, hauling 

 and packing. 



There are several classes of retailers 

 engaged in the fruit business: the fancy 

 fruit store, the high class grocery store, 

 the average grocery store, the chain 

 store, the fruit stand and the fruit 

 vender. The present retail system is 

 largely the result of the demands of the 

 consumers which each class serves. A 

 retailer's overhead charge includes store 

 rents, salaries and wages of employes, 

 interest on capital, cost of jjurchasing, 

 re-sorting, disi)laying, storage, and de- 

 livering goods, taking orders, telephone, 

 light, heat and other store expenses, 

 losses from decay and deterioration, 

 taxes, insurance and other necessary 

 expenses. Most of the expenses are 

 also inchuled in the jobber's overhead 

 costs. Where the fruit is sold from 

 push carts and street stands, some of 

 the expenses are eliminated or are re- 

 duced. In the fancy fruit stores and in 

 the large groeei'y stores which cater to 

 the well-to-do, these overhead charges 

 are naturally larger. They make u|) the 

 cost of the service wliicli the consunuT 



the street cars and other advertising 

 mediums. It is promoted by i)rices 

 which bring the fruit within the reach 

 of the average consumer. The retail 

 dealer, more than any other factor, 

 creates this appetite appeal, because he 

 comes in direct contact with the con- 

 sumer, and he stimulates or retards it 

 by charging reasonable or exorbitant 

 prices. 



The retail dealer nuist therefore know 

 how to make artistic fruit displays if he 

 is to catch and sustain the interest of 

 the consumer. The fruit must always 

 be fresh in appearance, free from decay 

 and apjjetizing in every way, and tlie 

 price must be reasonable. If the ajjpeal 

 to the consumer's appetite is not strong 

 and continuous, the retailer does not 

 increase the consumption. If the price 

 is not reasonable, the fruit cannot be 

 purchased by the average consumer. If 

 the sales are not rapid, it wilts, loses 

 color, decays and is a drag on the hands 

 of the retailer. I'nder these conditions 

 the retailer, unless he is a fruit si)ecial- 

 ist, does nothing to encourage sales. 

 The unattractive fruit is ilestroying the 

 desire on the part of the consumer, the 

 losses from bad condition are excessive 

 and the retailer must add a margin 

 lar«e enough to cover these losses and 

 risks. Attractive displays and tpiick 

 sak's, at a reasonable niargin of profit 

 111 each transaction, increase the per 

 canita consumption and make a satis- 

 l';>clory profit for the dealer at the end 



