16 BULLETIN" 266, TJ. S. DEPARTMENT OF AGRICULTURE. 



CARS BILLED DIRECT TO BROKERS. 



A rather uncommon practice is that of the billing of cars direct to 

 brokers in the markets by individual growers. When goods are 

 standardized and the broker can effect a sale, subject to inspection, 

 merely upon notification of shipment, this method may be practicable, 

 but in the majority of cases the average grower will be unable to 

 utilize this method. Brokers handle practically nothing in less than 

 carload quantities, and if it is desirable to ship produce directly to 

 market in less than carload lots, it will be necessary to make use of 

 some commission merchant. Nevertheless, this method is open to 

 any car-lot shipper, provided he meets the requirements of such 

 distributors. Brokerage charges for selling vary from $5 to $20 or 

 more a car, depending upon the commodity, the average charge for 

 deciduous fruits being $15 per car. With oranges, lemons, and grape- 

 fruit the average brokerage charge is 5 cents per box. 



The advantage to the shipper of using a broker is that the broker 

 is supposedly the representative of the shipper and will look out 

 primarily for his interests. He does not handle any funds and his 

 brokerage is fixed, regardless of the selling price of the goods. He 

 can be of great assistance to the shipper in preventing unwarranted 

 rejections or in securing proper allowances where rejection is justi- 

 fied. In other words, he acts as the personal representative of the 

 shipper on the market. 1 



In reality, however, the broker is prone to favor the buyers in 

 order to keep in good standing with the trade. Also, there is a 

 temptation to accept orders for more cars than the market can stand, 

 simply to get the brokerage, with resultant low prices to the growers. 



COMMISSION MERCHANTS. 



The most common outlet for the producer who is shipping in less 

 than carload quantities is through the commission merchants in 

 large markets. In the larger markets a gradual falling off is noticed 

 in straight commission business. Dealers as a whole prefer the more 

 businesslike method of outright purchases either at point of origin or 

 destination, and lack of standardization and grading is probably the 

 only hindrance to a more rapid reversion to this method of buying. 

 Road salesmen often solicit consignments for their firms in addition 

 to the regular solicitors. Stencils are supplied by most of these 

 companies, giving the address of the firm and a number identifying 

 the shipper, with which the farmer can mark his shipments. When 

 this is done all details of marketing will be attended to by the com- 

 mission firm. Usually these firms also render account sales to the 



i For selling methods of the various wholesale agencies on the market, see Bulletin 267, U. S. Dept. of 

 Agriculture. 



