Music Trade Review

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REVIEW
THE
VOL. LXVH. No. 12
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
Sept. 21, 1918
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A New Policy on Sales Terms
A CHICAGO piano manufacturer has notified his trade that hereafter the outside limit of time for accounts
/ % shall be four months. Another manufacturer in the same city has requested all dealers to cease selling
/
% at retail on terms that require more than two years for liquidation.
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The Government has agreed to give our industry enough iron and steel to keep it alive until next
March. Production will be "down." Demand is already "up." For the first time in the history of the piano
trade, the market is a sellers' market. It is harder to get the goods to sell than to sell the goods we have.
Necessity is, or ought to be, the mother of invention. New conditions breed new practices, and progress
is the only possible alternative to stagnation. The long term practices of the trade were based upon an exist-
ing condition of long standing. That condition, however, no longer exists.
The existing situation is unique. Piano manufacturers are unable to fill their orders. Piano dealers are
unable to obtain pianos to sell in quantities to suit, or come near suiting, their requirements. Meanwhile manu-
facturing costs have steadily increased and wholesale prices have been necessarily raised in accordance. Yet
those prices are still lower in proportion than the prices of any other standard line of goods, price being sup-
posedly based on a due relation between cost and profit.
The value of a dollar is measured by what it will buy. The dollar of 1918 compared with the dollar of 1916
is worth about 60c. At the same time, more dollars than ever are being earned.
Wherefore, costs must rise. They must continue, in fact, to rise just so long as this condition exists; this
condition of the cheapened dollar and the growing quantity of dollars earned. Wherefore, likewise, prices must
go up; or piano making will cease to be profitable.
But if pianos cost more and more, it is manifest that more and more money must be tied up in the produc-
tion of each one. If, again, as we know to be the case, supplies are scarce and contracts for them uncertain, it
is equally manifest that the financing of an adequate stock must be more and more of a problem to the manu-
facturer. The latter therefore must deal with his financial resources in a manner wholly different from that
which for so many years before the war amply sufficed.
In a word, the manufacturer must get his money back more rapidly and more easily. He must turn it over
more quickly. He must therefore shorten his terms, or else increase his prices out of sight.
Can the dealer stand the new order of things? Obviously he can. He must indeed change his methods of
doing business somewhat. But this is just what everybody else is doing. Closer terms from the retail con-
sumer can be obtained, just as soon as the dealer realizes that the demand for music is just as strong as ever,
and in most cases stronger, since the war began; and that persistent pushing will not only enable him to sell
goods but to sell them on his own terms and at his own prices.
Piano dealers are enjoying the rather unusual experience of being able to choose their customers, to
dictate terms and allowances, and to transact business on as nearly a cash basis as is possible in any retail busi-
ness where the unit of purchase involves a comparatively large amount of money. These conditions augur
prosperity for the entire industry, and the augury will become an accomplished fact if piano dealers will study
the situation aright, and remodel their former methods of doing business so that they conform to present-day
needs and circumstances.
New conditions breed new policies. Let us inaugurate the policy of talking value, and abandon that of
apology and cheapness. It can be done and it is being done. Those who are trying it persistently are not
complaining; in fact they are rejoicing.
Let us cease to sell pianos on the basis of how little they cost, and try selling them on the basis of how
much they are worth. This will be, in fact, more and better than policy; for it will be honesty.