July, 1930] 



Operating Costs of Grain Stores 



17 



The proprietor of Store 49 recorded the amount of time required 

 for each customer and the number of patrons for a month. The time 

 varied from 5 to 20 minutes with an average of 6 minutes per cus- 

 tomer. The number of customers varied from 7 to 25 a day. 



DELIVERY COSTS 



The state survey indicated that 23 per cent of the grain sold in 

 1926 was delivered by the dealers to the customers. The dealers of- 

 ten expressed the opinion that the demand for this service was in- 

 creasing. Over half of the stores delivered grain without any extra 

 charge, as is shown in Table 12. 



Table 12 — Xumber of Stores Delivering Grain ayid Charges Made in Village and 



Outside as Reported in State Survey 



*One store charges 15c per bag for 10 miles, and another 20c per bag for 15 miles. 



INIuch of the promiscuous system of charging for delivery is due to 

 competition and lack of cooperation between grain dealers. When one 

 store manager charges 5 cents a bag for delivering or delivers free of 

 charge, the competitor usually does the same. The cost of delivering 

 then becomes part of the general overhead expense and is paid out of 

 the gross margin. Those men who are located five miles away and 

 have their ]xirchases delivered without extra charge are paying for 

 only part of the delivery service, whereas the men who buy grain at 

 the store at the same price are paying too much in that they are con- 

 tributing to the cost of the service which the other men receive. This 

 inequitable method of charging for delivery is not fair to the trade. 

 It is, however, possible that it costs as much to deliver nearby as 

 farther out because of smaller orders and more frequent demand for 

 service. 



Undoubtedly grain dealers are in a more advantageous position to 

 deliver grain throughout the greater part of the year than are the 

 customers to do their own hauling. In many instances the stores are 

 not located on a railroad siding, and all of the grain has to be hauled 

 to the store by team or truck. Usually these stores have their own 

 hauling equipment and are able to render deliveiy service. This prob- 

 lem has been worked out most satisfactorily where zoning systems 

 have been established along wdth regular routes which are covered 

 weekly. In this way the customer pays for the service rendered. 



