Pricing and Terms. 



For about two-thirds of the companies submitting data, it was indi- 

 cated that selling prices in retail outlets were generally fixed by the main 

 office. This was accomplished through periodic price lists. For most of the 

 others, the individual retail outlet determined its own markup over cost; 

 some companies suggested markups over cost at each outlet. Quoting special 

 quantity rates and submitting bids for sales to institutions were left to in- 

 dividual retail outlets in about two-thirds of the cases. 



There was variability in the terms quoted relative to charge for delivery, 

 credit, cash discounts, and quantity discounts. These often varied with differ- 

 ent outlets affiliated with the same company. They also reflected the differing 

 emphasis on method of sale from company to company. 



Parent companies and/or their outlets obviously incur additional costs 

 for deliveries and credit. There are also economies on quantity sales. Thus, 

 the important question here is whether their customers obtain consideration 

 for doing their own hauling, paying cash, or buying in quantity or pay the 

 same as those who receive delivery service, use credit, and buy in smaller 

 amounts. Within the past year some additional companies have moved from 

 the latter policy toward the former, a desirable step in aligning services 

 and prices. 



At the time these particular data were collected most companies and 

 a majority of the retail outlets contacted either charged for delivery direct- 

 ly or extended a discount on store pickups, sometimes coupled with consider- 

 ations for cash or quantity. The usual charge for delivery or discount for 

 pickup was 5 or 10 cents per 100 pounds. Where the producer unloaded from 

 the car and hauled, he was extended an additional 5-10 cents per 100 

 pounds discount by some companies. 



The subject of credit can be separated into short term (up to 30 days) 

 or longer term (60-90 days or over). The avowed policy of only a few 

 units was "no credit". Most units, however, extended "free" a courtesy 

 period of 7-30 days in consideration of the spacing of producer income 

 checks or the particular billing practices they followed. Within the short- 

 term "free" credit range, there was sometimes no additional discount for 

 spot cash. The usual discount for spot cash or payment within the short- 

 term period was 5 to 10 cents per 100 pounds. On longer-term credit in- 

 dividual outlet and/or company management approval was generally re- 

 quired. Six percent interest was the rate usually charged on these accounts. 

 Some units are known to be currently over-extended on longer-term credit, 

 and there have been a certain number of forced settlements in the State 

 in recent years. This situation is sometimes a danger of attempting to main- 

 tain or build volume in established territory or under conditions of un- 

 planned production expansion. The indirect cost of precarious credit policies 

 falls in the long run upon cash and credit customers alike. 



Quantity discounts were quite generally specified; only a few units 

 indicated none. At the retail unit level, the most common quantity discounts 

 came at one and five tons. For the former, the average was 10 cents with 

 a range of 5-20 cents per 100 pounds. For the latter, the average was 18 

 cents and the range 15-30 cents per 100 pounds. Reported carlot discounts 

 ranged from 25-65 cents per 100 pounds, including unloading by the pur- 

 chaser and cash. Where prices were quoted at producer's railroad point, 

 $1.00 per ton discount was quoted on a straight vs. a mixed car, 



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