146 MARKETING AND THE MIDDLEMAN 



The average retailer's margin here (22J/2 cents) is typical of 

 all retail margins, namely, the largest taken by any middleman. 

 Small volume of sales and not large profits account for it. 



Tobacco. The Kentucky Agricultural Experiment Station has 

 issued a report (Bulletin 202) on the Marketing of Burley Tobacco 

 in central Kentucky. This study shows, as in other commodities, 

 the largest handling charges are those of the retailer. 



The distribution costs are divided into three main categories 

 retailer's gross profits, jobber's gross profits, and the manufac- 

 turer's gross receipts. Here are the results of the interesting study: 



Where the Money Goes Price 67.08 Cents, One Pound, Average Brand, Plug-cut 



Smoking Tobacco 



I. Manufacturer's receipts: 



Growers gross receipts (one-half is profit) 8.0 



Preparing leaf for manufacture 5.8 



Cost of manufacturing 12.8 



Selling costs 2.5 



Advertising costs 5.1 



Freight 2.3 



Internal revenue tax 8.0 



Manufacturer's net profit 3.8 



II. Jobber: 



Operating expenses 3.6225 



Net profit 1.7441 



III. Retailer: 



Operating expenses 10.7332 



Net profit 2.6833 



Total cost to consumer 67.08 



Citrus Fruits. Oranges, lemons, and grape-fruit are among the 

 very perishable commodities; are consumed thousands of miles 

 from the point of production, and are consumed also at seasons of 

 the year several months from the time of their being picked. The 

 President of the California Fruit Growers Exchange has given us 

 a careful statement of the various margins in this industry. 



The Consumer's Dollar 5 

 (Thirty Citrus Fruit Markets: 5485 reports for the year 1914) 



1. Grower 26.7 cents 



2. Picking and hauling 2.4 



3. Packing 7.4 



4. Freight and refrigeration 20.5 ' 



5. Jobber cost to grower to sell to jobber. 1.5 ' 



6. Jobber 8.2 ' 



7. Retailer 33.3 ' 



100.0 



California Peaches. Six thousand peach growers in California 

 organized for collective marketing. According to their 1918 

 report, the producer received the following fractions of the con- 

 sumer's dollar: 



1916 crop. . . 77 cents 



1917 80.3 " 



5 Powell, G. Harold, Address delivered at the Eleventh Annual Meeting 

 Western Fruit Jobbers Association. 





