Something about sugar

by George M. Rolph

As matters stand, people living in the frozen valleys of Alaska, in the scarcely accessible regions of the Rocky mountains and in the lumber and mining settlements of the West, many miles from railroads, can obtain their supply of sugar with almost the same facility as the residents of New York or San Francisco. A system of distribution that makes this possible leaves little to be desired, and a word or two concerning it will be timely at this point.

Sugar is sold by the refiner to the wholesale grocer through the medium of the refinery’s broker. From the wholesaler it goes to the retailer, who in turn delivers it to the consumer.

Brokers are important factors in distribution. In every large city and consuming center, each refinery is represented by its own brokers, who keep in constant touch with all the wholesale grocers and manufacturers of their district.

A thorough knowledge of men and methods, sound business principles, diplomatic talents of no mean order and the capacity to act rapidly, but coolly, in business crises are found combined in the successful broker. He occupies a position between the seller and buyer, and it is just as much his prime duty to see that in all transactions full justice is accorded to both as it is to sell the sugar.

Every refinery having its own broker in each consuming center, it follows that the competition for business among the brokers is very keen. When a broker obtains an order from a jobber or manufacturer, he telegraphs it to his principal. The order is usually confirmed and the goods shipped promptly. For his services the broker receives three cents for every one hundred pounds of sugar sold. This compensates him for the services of his salesmen and himself, his office expenses and cost of telegrams, which is heavy.

Manufacturers of foodstuffs of which sugar is an ingredient, buy their supplies through brokers. They do not resell the sugar as such, but use it only in the manufacture of their own special products.

Wholesale grocery jobbers, of whom there are about twenty-five hundred in the United States, are also very important factors in the distribution of sugar. As a rule, they are located in the large centers of population, and have efficient organizations for the purchase and resale of all kinds of foodstuffs. They deal in as many as three thousand different commodities, and their expense of doing business is apportioned over all of these items, thus reducing to a minimum the expense of handling any one of them. Generally speaking, they have large establishments where stocks of all kinds of goods are carried ready for immediate distribution. The aggregate capital tied up in these stocks throughout the country is enormous, but necessary, as the jobber must at all times be ready to deliver to the retailer whatever is wanted in any of his lines. Wholesale jobbers occupy a unique position in the scheme of things. They are to the commerce of the country what the bankers are to its finances. In other words, they are the bankers of commodities. Their operating staff consists, first, of the buyers, and, second, of the salesmen.

The buyers are men possessing special knowledge concerning the various articles handled by the house. For instance, in the grocery line one will buy nothing but teas and coffees, another canned goods, another sugar, and so on. These men as a rule have devoted years of study to the particular commodity which they are delegated to buy. They are shrewd, keenly alert and always ready to take advantage of market fluctuations in their favor. The margin of profit between the buying and selling price of any commodity is usually so small that the acumen of the buyer is an important factor in the final results.

The salesmen are trained, tactful, tireless and efficient. They travel from town to town and place to place, visiting every nook and corner where human beings congregate, in order to sell the goods carried by the firm. While his calling is a most useful one, the life of a “knight of the grip” is not always pleasant, as he meets with many deprivations and discomforts.

To compensate him for capital invested, for the expense of doing business and for the losses he incurs in bad debts and declining markets, the jobber probably obtains a gross return of fifteen cents on each one hundred pounds of sugar he sells.