I 



44 . N. H. Agri. Experiment Station [Bui. 300 



COMMENTS 

 Advantages and Disadvantages of the Auction Method of Selling 



An auction is generally considered a good price setting mechanism 

 because the buyers themselves set the price by bidding against one 

 another. It is also supposed to set more accurate market values on 

 the different weights and grades as prices tend to fluctuate freely as 

 influenced by supply and demand. If functioning normally, all eggs 

 will move at a price and so the auction offers a ready outlet for any 

 quantity of almost any size and grade twice each week. Producers 

 appreciate having this certain outlet. 



From the buyers' standpoint, the auction offers a definite market- 

 place at which he can usually go and obtain any quantity of the qual- 

 ity, color and size of egg he requires for his customers at frequent in- 

 tervals. Because of the fluctuations in supply of an individual pro- 

 ducer due to conditions within his flock, and the use or sale of hatching 

 eggs, the buyer is not sure of a supply when he buys direct. Some 

 producers may be tempted to sell elsewhere at a higher price and the 

 buyer may find he has made a trip for nothing — or he may have to 

 hunt up still another producer to obtain the quantity needed. The 

 buyer finds that he may waste a great deal of time "hunting for eggs", 

 especially in the short season. 



The auction has really been the first type of market which has con- 

 centrated a large supply of high quality native eggs at one point. 

 When this fact becomes generally known, it constitutes a very valua- 

 ble type of advertising. One of the principal criticisms by users of 

 native eggs has been the lack of volume and uncertainty of supply. 



There are, of course, always a few people who feel that the auction 

 holds down the price because buyers will not pay more than the auc- 

 tion figure. This may actually be true for some, but since the auction 

 price has averaged above the Boston Wholesale market and since the 

 Boston Wholesale price was previously the basis for arriving at a price, 

 it would seem that auction prices have tended to raise the level of 

 prices, at least relative to the Boston Wholesale quotations. 



We may sum up a few of the advantages and disadvantages as 

 follows: 



Advantages 



1. Brings together a large supply of native eggs at one point. 



2. Offers a product to buyers properly marked as to grade and 

 weight. 



3. Gives producers a continuous outlet for any quantity of eggs. 



4. Returns are made promptly. 



5. Eggs are sold on basis of merit (grade and weight). 



6. Producers receive a candling report on every case which en- 

 ables them to intelligently make improvements. 



7. Reports on prices obtained are available to all and so tend to 

 greater uniformity of prices for all eggs of a grade. 



8. Places a market within the State, and the nearer the market is 

 to the producer the greater influence he has in its control. 



