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THE MUSIC TRADE REVIEW
Sound Credit the Basis of Prosperity.
ROSPERITY is usually depicted as a beauteous damsel clad
in a more or less diaphanous robe, riding along on a sun-
beam, scattering roses with one hand and lavishly pouring out all
manner of good things from a horn of plenty which she carries in
the other. A more up-to-date picture of prosperity would be that
of a piano or talking machine dealer, possibly a little short on hir-
sute adornment and a little long on adipose tissue, with a piano
under one arm and a talking machine under the other, staggering
along under the weight of coin of the realm which came from the
late holiday trade.
Such is the idea gained from reports coming from many sec-
tions of the country relative to the unprecedented amount of busi-
ness done in the music trade during the Christmas season. The
picture is alluring, but the query comes as to whether it is painted
in lasting colors, and whether the acid test of the months to come
will cause the glowing pigments to lose their beauty and freshness,
because of the amount of careless credit which was used in their
mixing.
A very substantial, somewhat conservative dealer, when asked
concerning the holiday trade, said: "We enjoyed our share of
the Christmas trade, but the percentage of increase over our regu-
lar business was not nearly so great as that reported by many of
our fellow dealers. Had we accepted all the business which came
our way, we could easily have established a record which would
have compared favorably with the record made by any other house
in the city. We refused a large volume of business because the
credit of the perspective customer was unsatisfactory, and while
our total sales were not as great as they might have been, still we
believe that the number of returns and the amount of our outstand-
ing and hard-to-collect accounts will be exceedingly small during
the months to come."
While some dealers may be prone to regard the above state-
ment as savoring of sour grapes, such is by no means the case.
There is no question that many dealers and salesmen in the rush
and enthusiasm of a large volume of business, are inclined to let
down the bars of credit, with the result that their crop of profit is
sadly trampled.
Instances are. numerous where men on modest salaries are
moved to purchase a piano for the daughter of the family and
assume an obligation that they are frequently unable to meet. Say.
for instance, that the price of the piano is $300, and the terms 10
per cent, down and 2^2 per cent, monthly. This means that a man
with a family making probably $20 a week signs a contract to pay
$7.50 a month for 36 months. The first couple of payments are
generally met promptly, but there comes a time when doctors' bills
must be met and new clothes purchased and the payments on the
piano begin to lapse. The dealer may get $45, $60 or even $75 in
payment, but the interest charges on his money, the cost of putting
the instrument in condition for resale, drayage charges and the
proportionate burden of the overhead charges make the venture a
failure. In such a case were a dealer or his salesmen to hold out for
P
a two-year contract as a maximum, the prospect would hesitate to
obligate himself to pay $12.50 or more monthly and this disappoint-
ing experience would be avoided.
This policy may mean the loss of some sales, but in summing
up the business the proportion of profit on the business done will
be found very satisfactory.
There is a certain percentage of risk in all forms of credit
extended, whether it be in the piano installment business or the dis-
counting of notes. This percentage is natural, and cannot be over-
come, and the music dealer usually makes provision for this
necessary risk by adjusting his scale of prices to cover it. But
there is no excuse for the salesman who sacrifices his better busi-
ness judgment and accepts risky accounts in order to roll up a large
volume of business.
There are many times when a little judicious advice from the
dealer will make a safe customer out of an unsafe one. During
the last month a man came into a piano store and after inspecting
several pianos, finally selected one. The man's appearance and his
rather vague statements as to his financial ability caused the sales-
man to refer him to the sales-manager, who after a few pointed,
but polite questions, advised the man not to buy a piano, and pointed
out the obvious fact that his income was not sufficient to warrant
the extra monthly outlay which the installments represented. The
prospective customer departed, somewhat downcast, but not
offended, because of the careful and courteous manner in which the
sales-manager had talked with him.
Later in the day the man returned, bringing his son with him,
a young man of 22. The son explained that he was willing to pay
a certain amount each month towards the piano, and between the
boy and his father satisfactory arrangements were made, and the
sale was consummated. Had the sales-manager not pointed out
the inadvisability of the father buying in the first instance, the sale
would have been made at once, and the payments would in all
probability have ceased in a month or two, and the piano would
have been thrown back on the dealer's hands. A little sensible talk
from the manager turned this risky customer into a safe one, for
the man was made to realize the import of the purchase he wanted
to make, and was able to sufficiently impress his son with the same
idea, so that the boy was willing to do his share towards paying for
the instrument, something that would not have happened had the
manager not talked to the father in the first place.
Investigations of credit must be founded on individual cases.
No hard and fast rule can be applied to this branch of the piano
business, because of the human element that enters so largely into
the proposition. The wise dealer will surround himself with ade-
quate safeguards, founded on sound business judgment, and his
previous experience, to ward against the danger of unsafe accounts.
It is sincerely hoped that the volume of business done during the
past month, as well as in the months to come, is builded on a firm
foundation of stable credit. It is always well for dealers to put the
motto of sound credits above the slogan of a record business.
commentary on the "pennywise, pound foolish" policy which
actuates educational boards when the question of musical instru-
ments for school use comes before their attention. The great
majority of children receive in the public school the foundation
for whatever musical knowledge they may afterward possess. May
the Muses have pity on those whose conception of the grandeur
and beauty of music is obtained from the tin-panny tinklings of a
cheap piano, price $150, with all the trimmings thrown in!
$100,000 or over, the total capitalization of new companies
amounted to $2,061,348,300 during 1915, as against $1,581,418,000
in 1914. Of the total capitalization this year, the Eastern States
received the larger part, the sum of $1,426,267,100 being repre-
sented by the new companies formed in the East. The outlook
for 1916 is excedingly favorable for the promotion of new enter-
prises, on account of the return to better times in all lines of en-
deavor. The music trade will doubtless receive its share of this
increasing prosperity, and if the same strict business principles are
adhered to as conscientiously during the coming year as they have
been in the past few years, those engaged in the music trade field
can expect a volume of new and better business that will make the
foundation of the trade even better and stronger than it is to-day.
INDICATIONS of returning and permanent prosperity for the
1 coming year are shown by a tabulation of new charters issued
during the past year, which appeared in a recent issue of the
Journal of Commerce. Taking only companies capitalized at
WINTER* & CO.
220 SOUTHERN BOULEVARD, NEW YORK
Manufacturers of
Superior Pianos
and Player Pianos