- 43 - harvesting, and packing costs are the main services that caused commission rates to be on the high end of the range. Dr. Cook further stated that some U.S.-based distributors also offered extensive technical assistance in the form of production methods to their Mexican growers, and many had field staff operating in Mexico. She asserted that where those costly services were provided, they were reflected in the commission rates, sometimes reaching 10 to 12 percent. According to Dr. Cook, when a distributor does not provide grower financing, the range is more likely between 5 and 10 percent; and when production-related technical assistance is not involved, the range tends to be between 5 and 8 percent. She stated further that volume, i.e., the overall size of the deal, also significantly affects the rate. Dr. Cook stated: In this case, it was SCP/Dole that funded advances to the Related Growers and thus bore the cost of tying up this capital. In addition, the SCP Deal was a large volume deal and economies of scale were applicable. GAC provided no production technical assistance or field personnel; while Dole itself performed part of the marketing services, via loaned salesmen and trade advertising.18 Given these factors, GAC would not be expected to receive a commission at the upper end of the industry range. Rather, it is my opinion that given the large expected volumes and unique character of the SCP Deal, if a percentage commission rate would have been utilized, it would likely have been on the lower end of the typical range observed in Nogales, approximately 6 percent. 18Dole provided one to two salesmen that worked at GAC's office in Nogales selling produce for GAC. These salesmenPage: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Next
Last modified: May 25, 2011