THE MANUFACTURER AND DOMESTIC MARKET 129 



Ownership of Retail Establishments 



We turn finally to the last of the methods by which the manu- 

 facturer is making his power felt upon the finished-products market. 

 This is by the direct ownership and operation of retail establishments. 

 As a method of distribution this innovation is as little subversive 

 of the usual equilibrium of trade as any irregular method. Each 

 establishment takes its place simply as one among other competitors. 



Let us consider the actuating motives as they present themselves 

 to various classes of manufacturers. Take, for example, the sewing- 

 machine makers. In the sale of certain kinds of goods a somewhat 

 elaborate demonstration is necessary, and after sale, occasional 

 repairs, both of which require the presence of an expert more skilled 

 than the average storekeeper. Experience shows that the experts 

 are best chosen, trained, and superintended as direct agents of the 

 manufacturer. When sales made in this way are of sufficient density 

 to warrant the permanent location of an agent in a neighborhood, 

 and when the articles are sufficiently attractive to make the opening 

 of a public place of business with a stock-room worth while, the 

 system of traveling agents gives place to permanently located retail 

 agencies. The firm controlling the largest number of retail agencies 

 in this country is probably the Singer Company, which has eight 

 hundred stores in the United States, besides many in other parts 

 of the world. Automobiles, safes, phonographs, and typewriters 

 are sold in part by this system. 



The case presented by the sale of carriages, wagons, plows, and 

 agricultural implements generally is very similar to the above. 

 Here an added motive for the direct control of retail agencies lies 

 in the economy of shipment by car-lots. An agency, because it 

 pushes the make for w r hich it was established and carries a full, line 

 of the goods, is able to take a larger proportion of its supplies from 

 the factory in car lots than the average independent dealer. If, 

 therefore, the goods to be distributed are very bulky, so that the 

 question of car-lots is important, the establishment of a few agencies 

 in the chief markets may be profitable because they will be able, 

 through their own sales, to take goods in car-lots, and they will also 

 serve as transfer-houses in distributing supplies to smaller markets. 

 If numerous agencies are desired to penetrate and hold a field, the 

 expense may be lessened by selling the goods of other makers on 

 commission. If the establishing concern makes plows, its agencies 

 can add on and sell goods germane to a plow agency, such as reapers, 

 wagons, and carriages. By selling on commission, car-lots of assorted 

 goods can be frequently sent out, keeping the stock fresh without 

 overloading the agencies. 



The direct retailing of shoes presents an entirely different case 



