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THE
MUSIC T^ADE
VOL.
LXXI. No. 12
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
Sept. 18, 1920
Single Copies 10 Cents
$8.00 Per Tear
Keeping Business on a Sound Basis
T
HE success attained,by piano and music merchants during the Fall and Winter campaigns now opening,
and for that matter the stability of the music business as a whole, will rest in no small measure upon
the character of the terms demanded on instalment accounts. If terms are kept short, and retailers insist
upon getting substantial cash deposits and large monthly payments, then the business as a whole will
continue in a healthy condition. If, in the desire to pile up big sales totals, these same retailers start offering
long terms as an inducement then the result is very liable to be disastrous, especially to those inaugurating such
a policy.
In demanding cash and short terms retailers to- day do not have to blaze a new trail, as was the case a
few years ago, for short terms have-been and in most cases are to-day recognized as the only basis upon which
business can be done profitably. In practically every section of the country thirty months is fixed as the maxi-
mum term on instalment accounts, and in a surprisingly large number of cases individual piano merchants
insist upon a twenty-four months' limit. The public has been educated to these terms and to lengthen them just
now would not only undo the work of months, but bring about more or less financial hardship to retailers.
The practice of robbing Peter to pay Paul does not work out in the long run, and the music merchant who,
in his desire for more business, is moved to borrow money from banks and other sources at the prevailing high
interest rates in order to lend it to his customers on long term notes is simply digging a financial grave for him-
self and his business. He cannot expect at this time to have a manufacturer carry his paper as in days agone,
for the manufacturer has his own problems to face, and finds that money is not only difficult to get, but is only
obtainable at high interest rates. If he must borrow money it will be to finance his factory operations and not to
accommodate retailers who cannot take care of themselves. This is a logical attitude, and the retailer must
accept it as such.
Short terms on instalment sales are calculated to bring about sound business conditions. They simply
mean that after making a substantial first payment and a couple of monthly payments the piano purchaser has
a sufficient equity in the instrument to make it well worth his while to carry out his contract to the letter. This
large equity of the buyer also serves as a check upon repossessions, and this fact in itself should recommend
the practice to the music merchant.
Especially shortsighted is the retailer who offers long terms on certain classes of instruments, such as
used pianos and players, or lines that for one reason or another have been discontinued. He will declare, in
explanation, that he is benefiting his business by moving these old stocks on any basis and that the low terms
advertised on special goods do not apply to the regular lines. The general public do not know this, however,
and the effect is frequently disastrous. They see terms of $5 or $jo down and a dollar or two a week, and,
assuming that all the music merchants have gone back to the old system of doing business, demand long terms
on all purchases, and show an inclination to hold off buying when their demands are not met.
There will be plenty of business this Fall for the music merchant who goes after it in a businesslike
energetic manner. He will not have to use the cut-price, long term argument unless he himself wants to. There
is some talk of slackening up in industrial circles and hints that there is coming a certain amount of unemploy-
ment and a lowering of wage standards. The music dealer need only look ahead to see that the customer who
cannot make substantial payments now when conditions are really prosperous is certainly not going to be able
to carry on any other obligations should there happen to be any slowing up in industry.
The music retailer might well adopt the slogan credited to a certain Presidential campaign manager,
namely, "get the money." Progressive concerns all over the country have proven that terms within reason can
be maintained at all times if such a policy is insisted upon, which makes the carrying out of that policy largely
a problem that rests entirely with the retailer himself.