MAHKETIXC; 



MARKETING 



1999 



"store, or by handling liiroct shipments from the pro- 

 ducing center to tlic market. 



(b) Broker. 



The term "broker" is commonh' applii-d to that class 

 of middlemen who may buy Kupi)lies from shiiijiers, 

 eommi.ssioii men. or at auctions in the ([uantity and 

 grade they desire and immediately resell it to reiailers 

 in small lots. .\ broker may have a business along a 

 definite line, .as citrous fruits or ajiples, developetl in a 

 section of a large city, and kceji in close toiieh wdth the 

 needs of his customers (usually men dning a small and 

 mixed business and very frciiueiitl_\- foreigners not 

 familiar with the English language) and sup))ly them 

 from day to day. Frequently these men do a large 

 business without an office or permanent headquar- 

 ters or any equipment. They know each morning the 

 needs of tlieir customers for the day; and accordingly, 

 buy the goods in large quantities, which are deliv- 

 ered directly from the purchasing-point to the retail 

 dealer. The difference in the largo-lot buying price 

 and the small-lot selling price becomes the broker's 

 profit. 



(c) Conunission men. 



The field occupied by "commission men" in the prod- 

 uce trade is well defined and understood. It is an 

 import.ant one, and they are real factors in the distribu- 

 tion of produce of all kinds. The commission man, firm 

 or company, ha-s permanent headfjuarters iu the prod- 

 uce-selling neighborhoods of the city, usually a store 

 and necessary equipment, and rent cold-storage space 

 a-s their needs require. They adverti.se and have agents 

 or solicitiors located in the producing regions to induce 

 the growers to ship to them all or only one kind of any 

 produce they may grow, as fruit, vegetables, butter, 

 eggs, and poultry. This is usually sold very shortly 

 after it is received to customers who may be brokers or 

 large consumers, as hotels; but usually they are proprie- 

 tors of groceries, fruit-stores, or -stands. Such a method 

 makes it necessarj' for the commission firm to keep in 

 close communication with the two great classes, the 

 growers and the consumers. They are in reality a go- 

 between or connecting link between these two classes. 

 They have, as a class, received for a long time very 

 severe criticism for making false reports upon the con- 

 dition of produce on its arrival to them and also for 

 making untnie returns to the grower, but these instances 

 are no different from those that probably exist in many 

 other lines of business. There are many honest com- 

 mission firms that have been ver^- important factors in 

 assisting growers to build up a profitable business. The 

 grower must do his part honestly to give the commission 

 man a chance, and the seller must work for the interest 

 of his shippers. Sincere cooperation is necessary upon 

 both sides. The best results have been obtained in 

 cases where an honest, fair-minrlcd grower has cooper- 

 ated with an honest commission dealer over a series of 

 j'ears. If the grower packs his ])roduce in a uniform way 

 and gives the dealer the opportunity to develop a class 

 of trade for that particular grade and to know about 

 what he can depend upon receiving, he can secure and 

 hold permanent customers. 



The grower may very materially cooperate with the 

 commission man anfi assistTiim to secure better prices 

 if he adopts and consistently uses an attractive label 

 on packages of superior produce. Buj'ers of all cla.sses 

 quickly learn to what extent they can dcp('n<l u[)on a 

 labeled or trafle-marked package. Thousands of i)ack- 

 ages of fruits, oranges anfl lemons espr>cially, htc solil 

 entirely upon the rejiutation behind the label upon the 

 end of the box. A label once adopti^l and honestly 

 used by a grower should not. be chatiged or altered in 

 any way; if so, any accumulated benefit will be quickly 

 last. It must be understood that large quantities of 

 profluce are sold to persons who cannot read the Eng- 



lish language but. will remember a jjieture or design iti 

 conneclion with a grade of produce. 



Inuiiediately after the produce is sold, the returns 

 .arc made to the grower, accompanied with a state- 

 ment showing the selling ])riee, the commission for 

 making the sale, the transportation, cartage, storage 

 and other shipping expenses deducted- 



(d) Dialers. 



A group of men to be found in the produce trade may 

 be classed as straight buyers or dealers. They are not 

 so nvmierous as commission men, but in some lines of 

 liroduce-handling are very important factors. These 

 dealers usually buy produce direct and outright from 

 the growers. It may be immediately sold, but it is fre- 

 quently stored, and sold to the regular customers of 

 the dealer. This type of marketing produce is often 

 somewhat limited to such staples as apples, potatoes or 

 onions, but may include the shorter-lived commodities 

 ;xs berries, peaches and green vegetables. It is straight 

 direct deaUng upon the part of the producer and the 

 dealer. The producer knows exactly how much he will 

 receive for the quantity of produce he has and the dealer 

 knows the price he must charge his customers. It is the 

 business of the dealer to keep well infonned upon crop 

 conditions and prospects in all jiarts of the country for 

 the commodity he is specializing in, or those that may 

 compete with it, and to keep the needs of his customers 

 supphed with a grade of produce their trade demands. 



Many growers have enjoyed such business relations 

 with dealers over long periods of years, both parties 

 cooperating and keeping in clo.se touch with each other, 

 resulting in their mutual good. 



(e) Auctions. 



In m.any of the larger cities, great quantities of prod- 

 uce are sold by auction. Companies may be organized 

 by several men engaged in the general produce trade; 

 by a group of producers; by a group of buyers; or they 

 may be formed by independent comijanies. The charge 

 for making the sale is a percentage upon the gross 

 receipts and is not often more than 5 per cent, fre- 

 quently less. These auctions are, in most cases, located 

 in the large distributing centers, but in a few instances 

 they are located at the producing region. 



The large quantities of fruits and vegetables imported 

 into the country are nearly all sold through the auctions, 

 as are many of the products from the Pacific coast and 

 other western regions; also from Florida and some other 

 regions where products of one kind are extensively pro- 

 iluced. Auction selling is a very rapid way of moving 

 large quantities of produce in a short time. Frequently 

 as many as fifty carloads are sold in a few hours. 



Produce may be sent to the auction company by 

 carlot growers, shippers, buyers, dealers, associations, 

 or other receivers. It is purchased b}- men whose busi- 

 ness it is to buy for large stores or chains of stores, 

 brokers, or large consumers. 



The auction company controls a warehouse where the 

 jjroduce to be sold is displayed; an auction- or sales- 

 room where the actual selling is done, and offices. A list 

 or manifest of the contents of the carload to be sold is 

 for^varded by the shipper to the auction company and 

 received some days in advance of the car. The cars 

 are unloaded during the night and the produce sys- 

 tematically arranged in "lines;" i.e., citrous fniits, aU 

 of one variety, brand, anrl size are placed in a separate 

 pile. The top pack.age is cjpened for inspection. At a 

 ilefinite tiirie, the wareroom is opened to buyers to per- 

 mit an inspection of the produce before selling begins. 

 Each buyer is jirovided with a list or catalogue which 

 is compiled by the auction company from the car mani- 

 fests received in advance, and contains a list and brief 

 description of the produce to be offered for sale. 



The following page from a fruit auction catalogue 

 (reduced in size) will require some explanations: 



