Distributors At Work
( Originally Published 1939 )
THE AGRARIAN family worked at production and distribution with-out distinguishing one process from the other. It was all work toward one definite end-whether one was plowing and planting, manufacturing or processing, or engaged in ultimate or intermediate distribution. The boy who carried the wood in from the wood-shed was simply putting the finishing touch upon a process which began with cutting down a tree; or, to be still more comprehensive, began with the family's need for fuel and its search for raw materials with which to supply the need.
The process of distribution did not begin in the woodshed, how-ever. The actual building of the woodshed to perform the storage function might logically be considered as part of the process. Food and water might have to be carried-distributed-to the wood-choppers. Even carrying the ax and saw to the woods was so necessary to the function of chopping that no one tried to make a theoretical distinction between the two processes.
New Economy More Complex
In this new economy the jobs are all divided and sub-divided, but production and distribution are as necessary as ever. Food and fuel still have to be produced and stored and there has to be distribution both before and after the storage. Goods have to be distributed not only for personal consumption but for consumption by the organizations engaged in production and distribution. Factories, for instance, are consumers not only of raw materials but of equipment and supplies, and if there is any advantage to the consumer in having a factory system, he must expect that a large part of production and distribution must go into its maintenance.
Also, it must be remembered that what it costs to distribute factory-made products depends not only upon the efficiency with which the task is carried on, but upon how great the task of distribution is. On the old homestead with little machinery and no steam or electric power very little could be produced. But distributing the products of a family to the family was a relatively small job compared with distributing the products of a modern factory to all the people who want those products, scattered as they are throughout the whole United States.
No wonder, then, that there must be not only retailers but also middlemen,. Manufacturers, if they decide to sell direct to the consumer, must first set up their own organizations to perform the retail and wholesale functions. Thus they do not sell direct to the consumer but simply sell through their own hired wholesalers and retailers. They do not thus eliminate the middleman but merely put him on a salary or commission basis. Whether this is an ad-vantage to the ultimate consumer or not depends upon how economically and efficiently the necessary intermediary function is performed.
In any event, in our machine economy with its high degree of sub-division of labor and specialized functions there must be not only many stages of production but a constant recurrence of the distributive task throughout the whole process of making things available to people. Distribution begins when raw products leave the farm or mine and continues repeatedly throughout the process until they finally reach the consumer in finished form. Retail distribution of consumer goods is but the final stage.