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THE MUSIC TRADE REVIEW
The Rise in Manufacturing Costs and the Question of Prices Discussed by a Manu-
facturer and a Retailer—Two Different Views on the Suggestion That Wholesale and
Retail Prices of Players Be Advanced to Cover the Increased Cost of Construction
"Now, seeing that the manufacturers have statesman-like act at the present juncture, see-
done the only thing they could do—or at least ing that wholesale prices are probably due to
the sane ones have—what right have the retail go up still higher before they go lower."
men to kick? In the first place, when normal
conditions return—as they surely will, per-
THE RETAILER'S OBJECTION
haps quite suddenly—the manufacturers will be
"Nothing would please me more than to be
forced by competition to get back to earlier
prices; unless indeed the present increases are able to get better retail prices for my goods,
by that time found to be, after all, normal. especially for player-pianos, where present con-
ditions pinch us most severely," said a Mid-
Anyway, if the present rise is unjust, it won't
Western retailer to The Review. "As things
last a week after the resumption of normal con-
now are, with the long time, the mail-order
ditions.
houses, and the scare methods used by sensa-
"In the second place, did you ever hear of
tional sales-conductors, the profit in the player-
any line of business where an increase of costs,
piano is about a gone quantity, and there is lit-
involving a necessary rise in wholesale prices, tle chance of things getting any better. Of
is not followed also by a parallel rise in retail course, the highest class instruments, which
prices? Of course you never did!
In any sell at high prices, and for which one can get
other name or brand industry with which I am either cash or something as good at the bank,
acquainted, the manufacturers would not only are different, for they are not sold on com-
raise their wholesale prices, but also dictate petitive prices, for one thing, and for another
at the same time the new retail prices; because thing, there is a fair margin of profit anyhow.
in any case they would fix and maintain the
"But the trouble is with the popular player-
retail price from the first. The public, being
piano; the sort of instrument that sells for
quite accustomed to the natural justice of the $450 and under. I well remember a few years
fixed maintained price, would accept the in- ago smiling at the thought that one could ever
creased price without a murmur.
sell profitably a reliable player-piano at as low
"The whole trouble is that the piano business as $500! To-day they are offered at $375 and
has drifted into a retail condition that is wholly less!
unsound. We have gained the reputation of
"Where is the remedy? Why, of course, you
running a business where purchase is a game will say, raise prices. Sure, but how can I?
THE MANUFACTURER'S VIEWS
of wits between seller and buyer, where you If the association would endorse such a move,
"It is generally understood that the country
are urged and badgered to buy something you and some sort of pressure were brought to
was never more busy and prosperous than it
don't really need, knowing all the time that bear by all the manufacturers on their retail
is to-day. It is a fact well established that
if you hang out long enough, you can get it representatives to force them to uniform action,
the piano business was never more active than
at your own price. Of course, I know that then it would be all right; but until there is
it is to-day. The demand for grand pianos and
player-pianos is enormous.
Everybody is the big dealers, the big one-price houses, don't united action, nothing will stop the cut-throat
rushed to death. Yet everybody is complain- do anything like this; but the rank and file of manufacturer and the cut-throat dealer from
ing that profits are actually either stationary the retail dealers were, up till recently, uni- offering player-pianos at prices that allow posi-
or decreasing. Does this sound like sense? It versally tarred with the black brush of price tively of no real profit at all.
"When I say 'no real profit at all,' of course
does not," remarked a prominent manufacturer unsoundness; and many of them are still. Cer-
tainly the bad repute which the piano acquired I mean to speak of prices that, in the proper
to The Review.
through this vicious system still adheres to it. calculation of overhead charges, will not, on
"What's the answer? Well, I don't suppose
And I think that any retail trade objection to long terms, furnish a proper covering profit.
The Review is conducting a puzzle department,
so I will elucidate. And yet the facts are proposed raises in retail prices originates in Such prices are prevalent to-day in the trade;
known to all, and anyone must draw from them the knowledge that, whatever the public might but an individual concern is helpless to prevent
do, the retailers themselves would cut their or alter conditions.
the conclusion I offer.
own throats again when it came to competi-
"The whole trouble arises from the failure
"The cost of making a player-piano, for in-
tion.
of manufacturers to fix a price on all name
stance, is to-day rapidly becoming incalcul-
"In any circumstances, raising prices j s one goods, and from the tendency on the part of
able
All that we can know for certain is that
the cost of virtually every item of raw material of two things. It is increasing your profits disreputable houses to sell player-pianos out
continues to go up, and that the end is not in or it is maintaining them at some desired stand- of their class. This latter tendency depreciates
sight. Of course, I am no alarmist, and I ard from which they are slipping. What is all prices, makes the whole business disrepu-
know that these conditions cannot continue for- there wrong about that? On no grounds that table, and finally tends to center the attention
ever. Partly they are due to a real shortage I can see can any legitimate argument be ad- of the buyers on price-competitive instruments
rather than on instruments of quality. It gives
in essential elements, partly they come from vanced against so sane and natural a course.
"For dealers are not making good enough the public the idea that no player-piano, or
the natural tendency of makers, enjoying a
monopoly, which will only be temporary, to profits in present conditions, and with prices straight piano either, is worth what is asked
take from their victims all they can. It may forced up by the manufacturers inevitably, their for it, and so encourages the vicious notion that
profits will be smaller than ever.
enormous profits are made in the business; all
be piracy, but it cannot be helped.
"The only right way to get at this matter, of which tends to create a demand for lower
"Anyhow, seeing that the law of supply and
demand operates against us manufacturers, it of course, is for the manufacturer to fix the prices and still longer and easier terms.
"At present retail prices cannot be success-
would seem fairly reasonable to insist that it retail prices at least on all legitimate name-
work in our favor as well. We ourselves— famous pianos. Then the problem will solve fully raised anywhere, on the average. Manu-
my own company—have put up prices, and we itself. As for dealers not being able to get facturers should fix their retail prices, maintain
propose to put them up again if things get any good prices, that is something I simply do not them and bring the pressure of the various
worse.
We indeed are not even yet quite believe for a moment. The man who cannot trade bodies to bear on all who attempt to get
Until
covering our additional expenditures; but we j^et a fair price for a piano—and all retail prices around the spirit of such price-fixing.
are preventing an absolute loss per instrument, are to-day, in my judgment, 20 per cent, too the price of pianos and player-pianos is at least
for if we permitted that to go on for very low on an average—has no right to call him- fairly graded, and fairly uniform within grades,
long, the present rush of business would put self a piano dealer or salesman. Such a man as it is in the automobile business, there will
us out of business before Christmas. Unhap- should be selling something else. When pianos be little expectation of realizing the profits to
pily, the argument of the Hebraic clothier to and player-pianos are sold by the retailers on which retailers are fairly entitled."
the prospective purchaser of a marked-down their merits and on good demonstration, the
Tin- Wick Pipe Organ Co, Highland, 111.,
suit, won't work with us. You know the argu- public will pay the price for them; but not until
held a meeting of its stockholders October 27
ment: 'Soitenly, ve loose $10 by efery soot then.
ve sell at dis price, but den, ma tear friend,
"I think that for The Review to advocate to vote on the proposition of increasing its
ve do sooch a pig pizness, ve make it all up,'
a general raise in retail prices would be a most capital stock from $60,000 to $90,000.
Everybody who knows anything at all about
the player industry knows quite well that the
costs of all materials entering into the mak-
ing of player actions continues to rise. We
have prices prevailing for glue, rubber cloth,
shellac, tubing, brass and other essentials, not
to mention lumber supplies, which are any-
where from 15 to 150 per cent, higher than those
of two years ago. The same is true to a paral-
lel extent with the materials that enter spe-
cifically into the manufacture of pianos, from
tuning-pins to veneers.
Some manufacturers have already announced
a' raise in wholesale costs.
Others are con-
templating the same course. Shall all do like-
wise? And what will be the effect on retail
prices if they do? Shall these, too, be put up?
Will the result of such action be beneficial
to the trade? These and many other similar
questions are involved.
We have obtained, therefore, expressions of
opinion bearing on both sides of this matter,
from a manufacturing and from a retail rep-
resentative. These are presented below. The
plan is again followed of eliminating person-
alities from this department, which is conducted
for the ventilation of arguments; not for the
advertisement of persons.