192 COOPERATIVE MARKETING 



managers, who forward the orders to the Supply Company. 

 Payment for orchard materials is also made through the 

 agency of the associations. 



It appears from the foregoing that the Supply Company 

 does not solicit business and does not attempt to do a gen- 

 eral retail business. It simply acts as the purchasing agent 

 for associations and growers for a limited variety of ma- 

 terials that are used in large quantities. By massing the 

 orders of all exchange members, much better bargains can 

 be made with the trade than if these orders were scattered. 

 Until recently the policy of the Supply Company has been 

 to resell materials to associations and growers at cost plus 

 the actual expense of transacting the business and a sum 

 that would afford a dividend of 6 per cent, on the capital 

 stock. But such a policy was very distasteful to whole- 

 salers and retailers, because they often had to lower their 

 prices to meet the quotations of the Supply Company, and 

 as the latter was operating at cost no profit was left to 

 legitimate dealers. Besides, this plan took away the ap- 

 parent advantage of dealing through the Supply Company. 

 So the method gradually being adopted is to sell to mem- 

 bers at market prices and make a refund at the close of the 

 season of all money saved to members through the ad- 

 vantageous bargaining position of the Supply Company. 



An additional advantage of this procedure is that the 

 benefits of cooperation are far more evident to the average 

 grower or association manager when he receives a check 

 for a substantial lump sum and realizes it represents what 

 he has saved through cooperation. His actual savings are 

 as great if he gets his supplies at cost rather than at 

 market price or if he receives his supplies at market price 

 and gets a monthly or quarterly refund, but an annual re- 

 fund is unquestionably the best method of assuring his 

 enthusiasm for and loyalty to the principle of the coopera- 

 tive purchase of supplies. 



