ABSTRACT
WHERE prices are fixed-that is, where the retailer is asked to buy for resale a branded 'article, possibly with a fixed or even labelled price-the problem of the regulation of margins and discounts at once arises. Why the manufacturers of such articles should desire to regulate the retail price of their wares we shall discuss later; we must first consider under what different conditions the regulation of margins takes place. In their relations with retailers, manufacturers selling branded goods are always anxious not only to maintain the price they are asking from the retailer, but also to fix and maintain the price he is asking from his customer; the manufacturer follows the retailer into the shop. Formerly the retailer bought his commodities at a bargaining price and sold them at the price the market would bear; now he is tied to the necessity of selling his stock of such goods at a price fixed beforehand, and is forced to content himself with the margin or discount allowed to him. He may still be able to enlarge his profits by increasing his turnover, but he cannot increase his profits by raising the selling price or even by selling much larger quantities at lower prices. His attention is now exclusively concentrated on the turnover he might realise, and on the margin or discount he can secure from the manufacturer." This margin, however, is by no means uniform. It depends upon many circumstances. First of all, the retailer may have to deal with a single manufacturer whose products have, in spite of competition, acquired some' sort of exclusive value. Such value is of quasi-monopoly character. Years ago it was said that no grocer could do without Huntley and Palmer's biscuits. This state of affairs, once regarded as unique, is now the case with thousands of products which have acquired a reputation and
9 standing for their branded article; we found that the creation of consumers' acceptance or insistence by advertisement, and so on, is not the only characteristic which may give the branded article some sort of quasi-monopoly value. We have also described the advantages of the branded article which make for what may be called "retailers' acceptance j"; the retailer may prefer to make his purchases from a branded line of goods and not " in bulk from the numerous samples sent to him ".I If the manufacturer succeeds on that ground he will have created retailers' acceptance which might be exploited in a quasi-monopolist attempt to influence prices or margins.
