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Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
MUJIC TRADE
VOL. LXVI. No. 25
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
June 22, 1918
Single Copies 10 Centi
$2.00 Per Year
Increased Production Costs Mean Higher Prices
T
HERE are piano manufacturers in this country right now who fear that they may have to curtail
operations, not because of shortage of labor or materials, or restrictions in other directions, but simply
through the fact that they cannot get from the dealers a sufficient increase in prices to cover the greater
costs they are actually facing in producing their instruments.
The fault in this particular is not wholly the dealer's. His business is to buy on the best basis that
he finds possible. The fault does lie with those manufacturers who, working under increased production costs,
nevertheless let their desire for sales volume overcome their financial astuteness.' The thing apparently is to
get the piano out of the factory and on the dealer's floor, regardless of whether there is profit in the transaction
or not.
Competition in business always makes for the health of the business, provided it is the right kind of
competition, but price shaving in the face of current conditions is an error that some manufacturers may
have cause to regret. The stability of the industry rests upon every manufacturer, as well as every dealer,
making a profit on his goods. This is no time for flirting with finances. Ordinary strategy will not save a
business weakened through poor methods.
Just at this time any manufacturer who sells on too close a margin is not only weakening his own business
but is damaging every manufacturer in the trade. He is working against the common good, not only of
manufacturers, but of dealers. Until peace is declared, and perhaps for years afterwards, the safety of the
music trade wall depend upon the solidity of the industry as a whole. This fact should not be forgotten by
members of the trade in the eagerness to secure immediate returns.
We are to-day facing steadily increasing costs in both manufacturing and retailing fields, the failure to
consider which will work out disastrously. While the obvious costs of doing business, such as are generally
included under the term "overhead," are usually kept in mind by both manufacturer and dealer, there are
new and formidable items of expense which have come into being owing to the war, which must be included
by the manufacturer and dealer in the prices at which their instruments are to be sold to the public, if a
legitimate profit is to be made.
The various taxes which were included in the old War Revenue bill, and which will probably be increased
by the new measure which is now up for consideration by Congress, must be considered by manufacturers
and dealers right nozi 1 . These are fixed charges that must be passed along to the public, because taxes, like
death, cannot be dodged.
The proportionate increase in the cost of doing business, including war taxes, may not be easy to figure
out in many enterprises, but these taxes are a fixed charge that must be considered and considered carefully and
correctly, and provision made for them from year to year, as long as we are face to face with Government
demands for money to run the war. Income taxes and excess profits taxes are going to reach far deeper into
business income than ever before, and all businesses, no matter how insignificant, will be affected. Business
men must keep their affairs in such shape that they will know where they are at, so that they can meet any
demand of the Government tax department safely and promptly. Patriotism, good business methods and
common sense alike make this imperative.
These are days when it is not so much the volume, but rather the quality of business that counts, and in
view of Government curtailment the demand is bound to exceed the supply in the musical instrument field for
some time to come.
There is no reason to sacrifice prices in either wholesale or retail fields. Manufacturers and dealers
must see to it that the increased cost of doing business is fully covered in the prices which they charge for
instruments. Any other course will be suicidal.