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The Middleman in Lumber Business 



Editor's Note 



The tollowiiiu aitiilp is bv a well-known wholesale hardwood opwalor. and presents sundry reasons "why the 

 wholesaler is," and whv he will continue lo Iw an important factor in the distribution of lumber. It is published 

 without comment, and ' communications in like or contra-argument on the .same subject are solicited. 



Ideas are created each day and service is nearing perfection. Bet- 

 ter service costs more in proportion. Express charges, for instance, 

 are more than freight charges on account of quicker delivery. '¥his 

 is the day of service. There is a great demand for it. People demand 

 it, yet it is indirectly responsible for the increased cost of living. 

 For instance, it is stated that traveling costs much more than it used 

 to and yet most people prefer to save time by taking the fast trains 

 on which an extra fare is charged. That is service and they are pay- 

 ing for it. Food is much higher in price than it was years ago, but 

 remember that the housewife went to market with a basket, selected 

 the things she wanted and brought them home herself. Now she caJls 

 the grocer by telephone, orders what she wants and the grocer delivers 

 it. Of course prices are much higher because the grocer has to go 

 to the market, bring it to his store and then deliver it to the cus- 

 tomer "s home. Service charges only. The grocer has to keep wagons, 

 drivers, telephone girl, etc. Who pays? You, always! Why? Be- 

 cause you are being saved all the time, labor and worry of marketing 

 — you simply spend three minutes on the telephone ordering. The 

 grocer, then, is your servant and his charges are added to the 

 original cost of the goods. Are you willing to go back to the days of 

 inconvenience, the days of slow travel, slow service, work twice as 

 hard and save a little only on the cost of living? There is hardly one 

 out of a thousand that really would. 



Ever stop to think of the chaotic condition this country would be 

 in if all the wholesalers and middlemen were to be eliminated? The 

 writer is speaking not only of his own business but of every com- 

 modity. Take produce — eliminate the jobber of farm produce, and 

 the farmer would have to sell his own stuff. In turn this would mean 

 peddling it out to the consumers — a traveling market. In other 

 words, we would be about thirty years back of the game. Then again 

 it takes the farmer 's time, which is more valuable right on the farm 

 looking out after his growing crops and where he is absolutely needed 

 aU the time. If he puts a man on the wagon to sell it, that man's 

 time costs money — and it doesn't bring the results. The jobber of 

 farm-produce simply gets what the farmer would pay a man or less- 

 more often the latter. A large sale is made instead of piecemeal. 

 Why go any further? The middleman sells his stuff and the farmer 

 gets his cash. This is an explanation of the middleman that leaves 

 no questions unanswered, nor is there any room for argument. 



What applies in the produce business applies in general to all other 

 lines — understand, I say general, because the trade-channel may be 

 longer or shorter, depending on the business. 



I heard a lumber miUman say recently, "But if we sell through 

 wholesalers, we lose our identity with the trade." So you do, Mr. 

 MUlman, with the consumers, but let me say to you that your identity 

 is far more valuable to the wholesaler than it ever will be to the con- 

 sumer. If you were manufacturing a trade-marked article I would 

 not say this, but you know right well that no two cars are alike, even 

 from your own stock. What you are after is to sell your stock to the 

 best advantage in the most economic way. The wholesaler is vitally 

 interested in you. In many cases he finances you. Remember that he 

 serves a community of people. He is watching out for the new points 

 in connection with your manufacture and your product that will 

 improve his sales and that will interest his community, which in turn 

 kiiows him and relys on what he says. Now how about that, Mr. 

 Millman? Are you a community specialist? Are you here or there 

 in this community, in that one? Are consumers here interested in 

 you in some far off place. Could you expect them to be? 



If you don't believe this, Mr. Millman, just take your stock-sheet 

 and visit some consumers in a far off section where you are unknown. 

 Unless you sell under the market price or unless there is a tremendous 

 shortage of lumber, you wUl not make sales. Of course if you do sell 

 for less than the market, this argument won't hold, because I can 

 —26— 



send out a "dispenser" with a stock-sheet and low prices and he'll 

 get all the orders wanted. You won't need a salesman in that case. 



Consumers live in a little world of their own. Access to them is 

 had by the "concentrate" — the wholesaler in their section who looks 

 out after their interests; who knows just what is going on in their 

 plants all the time; who knows their financial standing and how 

 much they are to be trusted. Can you, Mr. Millman, in a far off 

 place keep in touch with consumers scattered all over the country? 



Now understand me rightly. I 'm talking from an economic stand- 

 point. I claim that the wholesaler represents the lowest sales cost 

 per thousand feet. Of course you can put a man on in every section, 

 but the salary, office expenses, traveling expense, etc., will be more 

 in proportion than what you would pay a wholesaler by selling for a 

 little less. So get that straight — economic handling. 



On being asked why he preferred to buy from wholesalers rather 

 than direct from the mills, one of the largest buyers iu the East said, 

 ' ' Well, they are right here on the ground. I can get them on tlie 

 'phone and don't have to wait days for an answer. The wholesaler 

 is in close touch wdth his mills; he understands conditions where I 

 haven't the time to study them; the wholesaler gives me splendid 

 service and it more than pays when you consider the little more in 

 price over the general mill's price. Most of the mills charge about 

 what the wholesaler does anyway. Perhaps I may be used to dealing 

 with a certain mill. Suppose it is out of the stock I want. Per- 

 haps I have been dealing with it only and don't know where to get 

 the stock. That's the wholesaler's business and he keeps posted so 

 that when I want a car of lumber he can get it. I haven't the time 

 to look around. Y'es, I get stock-sheets from the mills, but what 

 do I know about their stock, especially the value of it? I leave it to 

 the wholesaler; he knows, for he visits the mills and sees what it is 

 and the value of it. ' ' That hits the nail on the head, especially the 

 "value" part of it. Consumers haven't time to spend looking into 

 these things. They leave it to the wholesaler. In other words, 

 ' ' service ' ' again. 



Here's what one of the largest mills in the country says — this 

 from the sales manager: "Consumers? No, sir! We do business 

 with the wholesaler in his respective market. We get cash always 

 and are nearly always sold up. The wholesaler gets good serv-ice from 

 us — we always give the percentage of 14-foot and 16-foot, the widths 

 and average width, dryness, special points, prices and rates — all the 

 information he could possibly ask for. That saves his writing up and 

 we having to answer. All he must do is to send the orders. We keep 

 them fully posted, however. Would it pay us to have salesmen? No, 

 indeed ! That would mean an increasei of many thousands of dollars 

 on the payroll and the little extra we 'd get wouldn 't anywhere near 

 pay for it. Anyhow, we couldn 't keep in as close touch with the 

 consumer as the wholesaler does. We're specialists in manufacturing; 

 the wholesaler is a sales specialist. We 're content and — ^making 

 money. ' ' 



There are the two sides and both from representative men in their 

 respective lines of operation. This is a progressive age. Start the 

 mill-to-consumer idea and you're not progressing. You're going back- 

 wards. 



Watch the wholesaler at work. Suppose one of his mills writes 

 that the block of oak will average 11 inches and will run eighty per 

 cent 14-foot and 16-foot. The wholesaler gets out about fifty letters 

 describing the stock to his community. He knows every man that 

 will be interested. He knows every man who wants long lengths. 

 Prom an economic standpoint again, could a millman circularize a list 

 of names in a community and get the results that the wholesaler in 

 that section could? That's answered already — the mill couldn't do 

 it. Why? Well, in the first place every section contains men of a 

 different business type and each man has his individual character- 



