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From supermarkets, other businessmen, notably appliance makers, have learned an important lesson: fewer, but bigger dealers provide a larger market for their products than a long string of small dealers. Many have already begun to prune their franchise holders; some are even inclined to close their eyes to cut-rate discount houses simply because they move such vast quantities of goods. Although big appliance makers, such as General Electric and Westinghouse, still keep their distributors, they are shipping more and more goods directly to their dealers. This enables them to cut costs by pooling orders from dealers in the same area and shipping "split carloads" of goods, to them jointly, thus saving in shipping costs by eliminating the higher "less than carload" premium price.
Does the trend toward big distributors mean that the small retailer is doomed? Not necessarily. But it does mean that more of them will be forced to pool their buying power and shipping needs through such organizations as the Independent Grocers Alliance of America (TIME, Sept. 21) to get the same savings as big retailers do from carload purchases, centralized warehouses and mechanized handling.
Manufacturers have also learned an important lesson: overconcentration of production often merely buys factory efficiency at the expense of economic distribution. More and more, manufacturers are building smaller plants designed to serve individual regional markets. Thus, on both ends of the distribution chain, manufacturers and merchants are coming to realize the same thing: the only way to cut down distribution expense is to organize it on the same large-volume, low-profit principle as production.