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ASTOR.
THE
VOL. LVI. N o . 2
REVIEW
Published Every Saturday by Edward Lyman Bill at 373 Fourth Ave., New York, Jan. 11, 1913
SING
W E OO 0 P P ER\EAE E N T S
How About the Net Profit?
I
T is always easier to locate problems than to work out answers to them. Every man in business en-
counters problems of all kinds in manufacturing and in retailing. If the selling problems could be
eliminated from our business life we would approach the millenium by rapid strides, for we would
be able to eliminate much of the worry which causes business men to grow old before their time.
We cannot solve problems by ignoring them—we must face them; and it is difficult for an individual
working alone to solve a big, common industrial problem. It is by discussion and by the exchange of ex-
periences and by co-operation along broad lines that we can all make progress most rapidly.
Selling problems may be fairly divided into two classes: First, those which can be best accomplished
by the manufacturers as a whole working together, and the problems'of factory origin. The latter re-
lates to factory organization—to supplies—to credits and to other conditions which may be interwoven
with the business.
Second, those problems which relate to the retailing of pianos in all its ramifications; and this, to my
mind, is a very great problem.
What is selling? What constitutes a sale?
Real selling is the disposal of goods at a profit.
It does not require a keen or accomplished merchant to give goods away; but, selling pianos at a
profit so that a straight financial advance can be shown at the end of the year is a job for good salesmen
and good business men.
In brief—business exists for the net profit.
It is all very fine for those who like to build up a great volume of business simply for the sake of
talking about it; but the final test of success is the net figures.
The prime joy for which most business men are working is to make money. A great many mer-
chants in retailing pianos fool themselves with the belief that they are making money when a critical
analysis would show different results.
They are not adequately posted as to the real costs and they delude themselves with the idea that
because they are selling pianos they are making money.
Therefore, to my mind the dealer represents a big problem because if he does not make money the
manufacturer becomes a sharer in his misfortune.
We talk about good dealers. Now, a dealer cannot remain good very long unless he can make money
—unless his business will show a net profit—that is, unless he has got a long bank account, and precious
few men are thus generously endowed. Then, unless he makes money he must get out of business or
he Will simply drift along for a time, only to fail entirely in the end.
To my mind the one essential to impress upon every dealer's mind is the thought that he is selling
pianos to make money and that he should conduct his business with an eye to the net profits and not to
the gross sales. Once he has this firmly fixed in his mind he will instil it into the heads of his salesmen;
and after a while the net profits of the business will increase.
That leads me up to a matter which I have long advocated and that is the establishing of fixed.prices
—list prices if you will—for pianos of reputation—list prices which represent genuine value.
If the prices of instruments were fixed by the manufacturers themselves there would be more net
profits in the business for everyone engaged therein.
I do not mean that it is possible to fix an arbitraryprice, from which there can be no deviation for all
pianos.
That is impossible at the present time; but if the manufacturer himself establishes a price standard
the dealer must necessarily cut into his own profit if he sells below it; and, if he has the idea of making net
profits in his business steadily increase he will stay pretty close to the list price for his pianos.
It has been easy to accomplish this in the talking machine trade; and there is no business in the world
which is conducted upon cleaner or more harmonious lines.
(Continued
on page 5.)
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