Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
MIWIC1MDE
VOL. LX1X. No. 3
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
July 19, 1919
8in
*&o C o°£er
The Wisdom of Placing Orders Now
T
THERE is too frequently heard in the trade the question as to whether there will come in the near
future a period of overproduction, with all of its attendant problems, as the result of the efforts of
piano manufacturers to increase output to take care of the demand that does not have to be created,
but is waiting at their doors, or, more accurately speaking, on their order books. There are some
sage thinkers who pretend at least to believe that personal endeavors to keep in sight of orders must even-
tually result in the falling off of orders, and that the movement will result in a surplus of output'. In the
opinion of the most enlightened members of the trade any possible period of overproduction is so far distant
in the future that it is not even worthy of serious consideration at the present time, in the face of other ques-
tions of more important moment.
It is pointed out most emphatically that this is the day of high manufacturing costs, both in the matter
of supplies and labor; that the average manufacturer is facing this increased production expense because he
has on his books definite orders for his output. If perchance all such orders are filled, then the production is
going to drop in exact proportion to the demand, from the fact that the manufacturer is not going to tie
up his capital in stock to be stored on his factory floors.
In other days when credits were long, and the supply men inclined to be lenient, overproduction did not
mean tied-up capital so much as it meant the ability to wheedle long terms out of the man who was selling the
materials. Now the supply man demands cash, or its equivalent, and this in itself puts an entirely new com-
plexion on the situation.
The supply market has steadied during the past couple of years, as the piano manufacturer who anticipates
his supply requirements for a year or so in advance, for fear that there may be a sudden break in the market,
is very rare indeed. The big men of the industry are emphatic in their declarations that no such
drop is possible; that the increased labor costs alone will serve to keep prices at top notch for an indefinite
period.
The manufacturer is not inclined to gamble overmuch. He buys just far enough ahead to protect him
from shortage without laying him open to an oversupply at the wrong time. But following this lead, the
retailer who is sitting tight on the price question, who is buying his instruments from hand to mouth on the
expectation that the manufacturer is shortly going to have more pianos than he will be able to sell, and therefore
will be inclined to lower his prices, has the wrong idea. As things go now, the average piano man can play close
to the cushion and keep probably one or two pianos ahead of the game. If anything happens to the produc-
tion end, however, that surplus of one or two pianos is not going to protect him very long.
Placing orders at existing prices, therefore, either for supplies or the finished product, is not in any
sense desperate gambling on the future, but is simply a matter of good business. If present prices change
at all in the near future, it will be to drift in an upward direction. That many members of the trade in all
its branches are firm in this belief is evidenced by the fact that a great many of them will accept orders now only
on condition that prices will be based on general price conditions as they may be existing at the time the goods
are shipped.
The longer the dealer delays in placing his orders, and in seeing to it that instruments are shipped to
him, just to that extent does he gamble on the market conditions as they affect the product he handles. Some
years hence it may pay for the dealer to gamble on that basis, but it can be stated with confidence that during
the coming season he is going to pay for his instruments at least as much as he has to pay at the present
moment, and in all probability considerably more. The question would seem to resolve itself into whether
or not the retailer is going to sit tight, probably without stock, waiting for some miracle to happen.