Special Report

The Economics of Health and Beauty Aids and General Merchandise Distribution Among Retailers and Service Merchandisers

Walter J. Salmon, Robert D. Buzzell, and Ronald Curhan, 1980, 80-110

Distribution channels for health and beauty aids (MBA) and small-ticket general merchandise (GM).

Type of Report
Detailed presentation of findings from empirical study.

To compare performance results for alternative modes of distribution in order to identify the most efficient channels.

Data were collected from 15 supermarket firms, 5 convenience store companies and 15 service merchandisers via structured personal interviews and company records. Sales, cost, and performance data were gathered and analyzed separately for HBA and GM. Performance criteria were dollar sales and contribution per linear foot for retailers, and percentage contribution and contribution per dollar of average inventory for service merchandisers.


  • For both retailers and service merchandisers, HBA produced higher sales and higher contribution than GM.
  • GM provided higher gross margins than HBA for both retailers and service merchandisers. This was offset, however, by less sales per unit of space and higher handling expenses.
  • Retailers using service merchandisers to supply HBA and GM achieved higher sales and contribution per linear foot than did firms buying the products direct, probably because they allocated less space to the merchandise category. The difference in performance was more marked for GM.

The authors suggest how these types of findings, particularly if more precise gross margin and direct expense data were available, would aid retailers in making distribution and merchandising decisions and help service merchandisers in determining how to serve different customers.

Target Audience/Applicability
Retailers who carry HBA and GM, service merchandisers who supply them, and manufacturers of these goods; also academics interested in the economics of distribution.

Related Research
No prior MSI research on this specific topic.

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