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THE
flUJIC TIRADE
VOL. LXII. No. 4 Published Every Saturday by Estate of Edward Lyman Bill at 373 Fourth Ave., New York, Jan. 22, 1916
SIXG
$%O°PER S YEA
YEAR
How Dealers' Co-operation Can Reduce Piano Costs,
Early and Systematic Ordering on the Part of Piano Merchants Will Minimize the .
Manufacturers' Overhead Expenses, Thereby Offsetting the Increasing Cost of Materials.
URING the past few months there has been a general discus-
sion relative to the necessity of increasing the wholesale
prices of pianos which has served to impress upon the great
majority of dealers the fact that piano manufacturers are facing
conditions which have not heretofore existed in the piano industry.
The revival of prosperity, bringing with it a country-wide
demand for pianos, has made it necessary for manufacturers to
scour the country for adequate and sufficient supplies of all varie-
ties. When this source of supply is finally located there is in-
variably an increase in the price asked for the article or material.
The increase varies with the individual article, and in many
instances the most recent quotations are ioo per cent, higher than
those previously given. Detailed figures as to these increasd
prices and the alarming shortage of piano supplies have appeared
in recent issues of The Review, and each succeeding week brings
another advance in some important article entering into the con-
struction of the piano and player-piano.
The dealers are taking cognizance of this situation, and many
have expressed a desire to co-operate with the manufacturers in
every practical way to keep the prices at their present basis, or if
that is not possible, to make the increase in price as small as con-
ditions will permit.
Several of the leading manufacturers have already announced
an advance in the wholesale prices of their pianos, admitting their
inability to manufacture a piano commensurate with the prestige
of their product at the prices which have been in vogue the past
few years. On the other hand, a number of manufacturers have
reduced overhead expenses in certain directions or postponed neces-
sary improvements in their plants in the hope of avoiding an increase
in prices, but this is only a makeshift and cannot long continue.
A phase of the increased price situation which so far has not
been discussed, but which is along the lines of efficiency in factory
production, has been brought to the attention of The Review by
one of our leading manufacturers, who said:
"A proper co-operation between the manufacturers and dealers
would go far to minimize the increasing of wholesale piano prices
which at the present time is an absolute necessity in the trade.
This co-operation may, in a measure, surmount the tremendous
advance in raw materials, supplies, etc., which have become so
general in the past few months—provided, of course, there is real
co-operation on the part of the dealer.
"It should be realized at the very start of any discussion of
this situation that the piano manufacturer works with the same
overhead charge if his factory is running at capacity or if it is
running on a 75 per cent, basis. Rent, heat, light, labor and gen-
eral expenditures are practically the same in either case.
"It therefore seems logical to assume that if the manufac-
turer is provided with sufficient orders to keep his factory busy
or on a normal production basis the year round, his overhead
charges will be placed at a level which will permit of his making
a sufficient saving to balance the increased costs of supplies.
"In other words, the manufacturer who is equipped to produce
3,000 pianos annually can do so with practically the same over-
h,eac| charges as are entailecj in a production, oj 2,OQO pianos, The
D
reduction of his overhead expenses will enable him to make a
pro rata reduction on each piano manufactured, which saving will
serve to balance his increased manufacturing costs as to supplies,
materials, etc., and remove the necessity of advancing wholesale
prices. This can only be accomplished, however, if the dealers will
make every effort to increase their business the coming year along
safe, practical lines and will place their orders with the manufac-
turers regularly and consistently.
"During the past few years there has been a tendency on the
part of the average dealer to live from 'hand to mouth,' and order
instruments only when absolutely imperative. As a result, when
conditions in his particular city or section enjoyed the slightest
boom or wave of prosperity, his stock was in no shape to present
to his patrons and orders by telegraph or special delivery were
despatched to the manufacturers. This method has hardly assisted
the manufacturer in reducing his overhead charges; on the con-
trary, it has materially augmented them. While waiting for the
dealer to place his orders his overhead charges continued, although
he was not shipping the instruments which these charges warranted.
"With the start of the new year, however, conditions should
be radically changed. There is now no necessity for the dealer
to order a piano as a customer purchases one, as the country is
enjoying an era of commercial stability which is practically as-
sured for a long time to come. Let the dealer place his orders
along steady, co-operative lines, and the manufacturer will not be
obliged to advance his wholesale prices this year as.extensively as
he otherwise would."
The views above presented are certainly worthy the attention
of piano dealers .throughout the country. There has been in the
past a woeful lack of consideration of the interests of manufac-
turers on the part of some dealers. It is well known that pianos
cannot be made over night—that it takes a long period to turn out
instruments that are absolutely satisfactory to both seller and
buyer, and yet too many merchants procrastinate in ordering stock.
In recent times orders have been placed with the "rush" in-
struction attached. Now, this is not at all necessary this year,
for dealers can see sufficiently far ahead in a business way to
approximate the number of pianos and players which they can
sell, and if they get in touch with the manufacturers and place
their orders so that the factories can be kept going to the limit,
turning out pianos at the minimum of expense, there will be a
saving effected that will be very considerable not only for the
manufacturers, but for the piano merchants.
No piano manufacturer to-day can avoid charging more for
pianos in view of increasing costs, but he can keep these costs down
to a minimum by keeping his plant so continuously busy that the
overhead charges are minimized and in this way the piano merchant:
benefits in the matter of prices.
This is a subject that might be taken up with profit by the
National Piano Merchants' Association at its executive meeting
next month, to the end that members be urged to co-operate, with
manufacturers in keeping the cost of manufacturing as lp,w as pos-
sible. It is a move along the true lines of efficiency ^nd for th,$
advantage of both manufacturer and dealer.