MANAGEMENT 283 



and the price agreed upon. This is selling in bulk. Among the 

 agricultural specialties, or even in the sale of fruits and vege- 

 tables, the method of selling by sample is frequently adopted. 

 The whole quantity is not inspected, but samples are shown and 

 the price is fixed on the basis of these samples. On the large 

 produce exchanges, such as the Chicago Board of Trade, how- 

 ever, such standard products as wheat, pork, etc., are graded by 

 responsible authorities, and the buyer then merely buys so many 

 bushels or pounds of a certain grade. He is indifferent as to 

 what particular bulk he gets, so long as he gets the requisite 

 quantity of the required grade. He does not even see a sample. 

 This is selling by grade or standard. 



The first of these methods is the most expensive, and the 

 last is the least expensive method of sale, but the last is pos- 

 sible only in a few cases. Wherever it is possible, a good deal of 

 social energy may be saved by its adoption, and, moreover, the 

 margin between what the producer gets and what the consumer 

 has to give is much smaller than it is in any of the other cases. 

 The middleman is enabled to handle products in very large 

 quantities ; therefore a very small profit on each unit of the 

 product enables him to pay the expense of his business and to 

 leave a profit for himself. Where this method is not possible 

 the dealer must do a great deal of inspecting, and this involves a 

 great deal of dickering on the market. Every such expenditure 

 of time and energy has to be paid by the producer or by the 

 consumer, or by both. This larger payment shows itself in a 

 wider margin between what the producer gets and what the 

 consumer pays than is necessary where the fourth method of 

 selling is practiced. The difference between selling by sample 

 and selling by grade or standard is well illustrated in the cases 

 of cotton and wool. The former can be easily graded but the 

 latter cannot. Accordingly the former is sold by standard or 

 grade, whereas the latter is sold by sample. 



