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THE
flUJIC TIRADE
VOL. LXXVI. No. 12 Published Every Saturday by Edward Lyman Bill, Inc., 373 4th Ave., New York, N. Y.
Mar. 24, 1923
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The Nerve-Center of Retail Piano Selling
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HE three principal factors to he considered in any well-organized retail business that hopes to be stic-
cesssful are advertising, selling" and collecting, and in every respect the greatest of these is collecting,
for that is the nerve-center, particularly where sales are made on an instalment basis.
The retailer who desires to make the most frequent turnover of capital, or who seeks to keep his
capital in liquid form through discounting his paper or with other financial agencies, must give earnest thought
and attention to making his collections regularly and promptly. If he neglects this all-important matter his
business will not only be limited, but his credit is placed in a dangerous position.
Many retailers who still refuse to learn from their own experience or from that of their competitors
hesitate to use pressure in making collections for fear that, by offending the purchaser, they may lose the business
of himself and his friends. As a matter of fact, if business is lost for that reason, it is very likely to be the
direct fault of the dealer, not because he sought to make collections promptly, but because at the outset he did
not impress upon the purchaser with sufficient force the fact that the sales contract was a definite business
obligation and that its terms must be met.
It is generally conceded that poor collection methods are responsible for at least 60 per cent of the re-
possessions in the trade. A substantial down payment and fairly short terms are first considerations in mak-
ing sales stick, but with that detail attended to it is up to the collection department, through a firm policy,
mixed with the proper amount of courtesy, to see that the terms are lived up to.
It has been emphasized on numerous occasions that the most important collections are those of the pay-
ments coming due during the first six or eight months after a sale is made. By impressing the purchaser at
the outset that he is expected to meet his contract obligations the likelihood of laxity in making payments is
reduced. Then, too, the collection of substantial monthly payments for a half year or more, added to a proper
initial payment, gives to the purchaser an equity in the instrument that he hesitates to lose through repossession.
Many piano men have had experience with customers who lag in their payments yet who have had the
use of an instrument for ten months or a year with only a very small equity—perhaps only a quarter of the
purchase price. By that time the novelty of possession and initial interest has worn off, and when the collector
becomes insistent he is likely as not to be told to take the instrument back if he sees fit. The customer is sitting
pretty because he knows that he can get a brand-new piano or player from another concern in the same city
and, even should he be compelled to live up to the second contract, he has had the use of the first instrument
for a year at a small rental fee.
The retailer who insists upon his collections being made properly is not only protecting his capital in-
vestment as represented in the instalment lease, but he is really favoring the purchaser who, with little business
experience, is likely to be careless in financial matters.
The repossession of more than one piano can be traced directly to the dealer who allowed the collections
to lag until the amount due was so large that the customer could not meet it. The individual who can arrange
to pay $10 or $15 promptly each month, if he knows he has to, is likely to be hard put to meet a demand for
overdue payments that amount to $50, $60 or more.
The retailer who discounts his instalment paper with banks or discount companies knows from experi-
ence that those financial concerns make their collections promptly and upon the contract dates or that he has
trouble on his hands. The dealer who, in his turn, follows the same course with his customers and insists that
sales be made on a business rather than a friendship basis is building a sound financial bulwark. Poor collec-
tions inevitably lead to business troubles that are distressing though they may not perhaps be fatal.
The collection department is the nerve-center of a retail business and its success is usually the suc-
cess of the concern.
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