COOPERATIVE MILK-DISTRIBUTING PLANTS. 23 



tion in the sales policies. A deep cream line on bottled milk and the 

 thickness or viscosity of bottled cream are important factors in de- 

 veloping new business. A deep, distinct cream line often outweighs 

 all other considerations with consumers, since to them it is a visible 

 and tangible e^adence of quality and a daily indication of the business 

 standards of the company. It therefore is important not to diminish 

 the cream line on the bottled milk by the adoption of a low butter-fat 

 standard or by the selection of poor pasteurizing equipment or by 

 improper processing methods. 



In establishing a new plant it is important that outlets of sale be 

 developed and methods of distribution be determined before delivery 

 equipment is purchased or contracts for large supplies of milk are 

 made. In this matter it is well to proceed carefully and cautiously, 

 for if complete equipment for an extensive system of retail distribu- 

 tion be purchased and it is later found advisable to employ largely a 

 wholesale system through retail stores, not only will much of the 

 equipment be unnecessary, but it will not be suitable for wholesale 

 delivery. A thorough canvass of the market situation should be 

 made, including the trade demands and requirements, and when 

 profitable outlets are doubtful the establishment of the plant should 

 be postponed until they are assured, 



A nucleus for retail and wholesale business may be secured by 

 consolidation of routes discontinued by the patron members or by 

 the purchase of the business and good will of independent dealers. 

 The initial operation of a milk-distributing plant is usually the most 

 critical period in its existence, and failure to solve the problem of 

 sales organization and methods may result in insolvency unless 

 adequate capital has been provided to carry the organization along 

 until sufficient sales business has been developed to cover the heavy 

 overhead costs and make possible the development of a profitable 

 business. 



The channels of distribution may be classified as follows : 



(1) Direct to consumer by house-to-house delivery. 



(2) To consumers through retail stores. 



(3) To consumers through hotels, cafes, refreshment stands, etc. 



(4) To other dealers who may employ the previously mentioned 



channels. 

 The direct-to-consumer channel of distribution by house-to-house 

 delivery is most expensive, although a larger cash return is obtained, 

 as higher prices are charged, and usually a larger permanent business 

 may be obtained, since a satisfied customer may be made a permanent 

 one. Then, too, delivery direct to consumers' doors eliminates cer- 

 tain competition which may result from sales to retail stores. Direct- 

 to-consumer delivery has certain obvious advantages, and where the 



