Music Trade Review

Issue: 1923 Vol. 76 N. 26

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
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• I V L J 1 LI T
VOL. LXXVI. No. 26. Published Every Saturday. Edward Lyman Bill, Inc., at 383 Madison Ave., New York, N.Y. June 30,1923 ""'goo*? 1 "
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Overhead and t h e Gross Volume of Sales
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OR many years music merchants as well as retail business men in other lines have been urged to keep
close tabs on the cost of doing business, this being one of the essentials to building up a successful
business institution.
The trouble has been, and in a great many cases continues to be, that the retailer gauges his busi-
ness success by his gross profits, and neglects to compile accurate figures showing just what charges are to be
made against those profits before he can realize the net profit to which he is entitled as a result of his efforts.
The Government has kindly, or unkindly, assisted in developing cost accounting by imposing income
and excess profits taxes which compel the retailer to make fairly accurate analyses of his business for the
purpose of making a proper tax report. But even under these conditions he often fails to take proper cog-
nizance of the amount spent in doing business, or ways and means for reducing that amount without at the
same time reducing sales volume.
Instances have come to light where piano dealers who are rated as successful and as enjoying very
substantial annual turnovers, have built up that turnover at a cost little short of startling, and as a result
obtain a net profit wholly out of keeping with the efforts put forth or the amount of capital involved.
It is significant that one of the largest and most successful dealers in reproducing pianos in the coun-
try is said to have realized something less than 5 per cent net profit upon his gross sales during 1922, and that
gross incidentally ran well into seven figures. That particular dealer is not going bankrupt by any means, as
the profit he realized was substantial, but it did not compare at all with the amount that would have accrued
to him on the strength ol the same investment and the same selling and exploitation effort put into other lines.
The condition seems to hinge largely upon exploitation work. Some years ago considerable attention
was paid to the player-piano along this line. Not only were the instruments advertised liberally, but concerts
and recitals were given and every effort made to put the public in touch with what those instruments accom-
plished. With the coming of the reproducing piano, the work of exploitation became an even more im-
portant factor, for not only was it necessary to show the public what the reproducing piano could actually
accomplish in a musical way, but it had to be convinced of the supremacy of the reproducer over the ordinary
type of player. This exploitation has many times been carried along upon an extravagant basis for several
vears. Of course it has been necessary for dealers interested in its handling to do much of this work at their
own expense for the purpose of supplementing the efforts of the manufacturers.
There is no question that this work of exploitation is both necessary and desirable, but there must be
determined a definite line of demarcation between that exploitation which brings quick results in the matter
of sales and that part which represents a surplus or temporary waste.
In the better known lines of reproducing pianos a more or less serious shortage has existed at most
times during the year and the retailer was limited in the amount of business he handled to the amount of stock
he received from the factory. The result was that where exploitation work has been carried on without cur-
tailment in the face of this situation it served to pile up an increasing charge against each instrument that it
was possible to secure and sell.
It rests with the dealer to determine just how much of the selling cost of the instrument can be devoted
properly to exploitation work. If it costs 25 or 30 per cent to exploit an instrument upon which the gross
profit figured on the selling price is 50 per cent, then that dealer is losing money. Just as a retailer can get
into trouble by being too prosperous and endeavoring to handle too great a volume of business on a limited
capital, so is it also possible for him to get into trouble by being too energetic in the matter of exploitation.
Cases which have come to light recently have indicated that this question of bringing operating and
exploitation costs within reasonable limits is a very live one and one that needs solution.
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
MUSIC
TRADE
RMLW
(Registered in the U. S. Patent Office)
PUBLISHED BY EDWARD LYMAN BILL, Inc.
President and Treasurer, C. L. Bill, 383 Madison Ave., New York; Vice-President,
J. B. Spillane, 383 Madison Ave., New York; Second Vice-President, Raymond Bill, 383
Madison Ave., New York; Secretary, Edward Lyman Bill, 383 Madison Ave., New York;
Assistant Treasurer, Win. A. Low.
J. B. SPILLANE, Editor
RAY BILL, B. B. WILSON, bRAID WHITE, Associate Editors
WM. H. McCLEARY, Managing Editor
CARLETON CHACE, Business Manager
L. E. BOWERS, Circulation Manager
Executive and Reportorial Staff
E. B. MUNCH, V. D. WALSH, EDWARD VAN HAULINGEN, LEE ROBINSON,
THOS. W. BKESNAHAN, E. J. NEALY, C. R. TIGHE, FREDERICK B. DIEHL, A. J. NICKLIN
A. FREDERICK CARTER., FREDERICK G. SANDBLOM
WESTERN DIVISION:
ARTHUR NEALY, Representative
BOSTON OFFICE:
JOHN H. WILSON, 324 Washington St.
Republic Bldg., 209 So. State St., Chicago
Telephone, Main 6950
Telephone. Wabash 5242-5243.
LONDON, ENGLAND: 1 Gresham Buildings, Basinghall St., D. C.
NEWS SERVICE IS SUPPLIED WEEKLY BY OUR CORRESPONDENTS
LOCATED IN THE LEADING CITIES THROUGHOUT AMERICA
Published Every Saturday at 383 Madison Avenue, New York
Enttrtd as second-class matter September 10, 1892, at the post office at Neiv York, N. Y.,
under the Act of March 3, 1879.
SUBSCRIPTION,United States and Mexico. $2.00 per year; Canada, $3.50; all other
countries, $5.00.
ADVERTISEMENTS, rates on request.
REMITTANCES, should be made payable to Edward Lyman Bill, Inc.
Exposition Honors Won by The Review
Grand Prix
Paris Exposition, 1900
Silver Medal.. .Charleston Exposition, 1902
Diploma.... Pan- American Exposition, 1901
Gold Medal
St. Louis Exposition, 1904
Gold Medal—Lewis-Clark Exposition, 1905
TELEPHONES—VANDERBILT 2642-2643-2644-2G45-2G47-2G48
Cable Address: "Elblll, New York"
Vol. LXXVI
NEW YORK, JUNE 30, 1923
No. 26
The Music Trade Review is now located in its new offices
at 383 Madison Avenue, New York City. It cordially invites
its readers, when in New York, to visit it and to make use
of its facilities.
The offices are in the center of the hotel
and music industries section of the city and convenient to
all transportation.
»t
X
X
K
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X
TWENTY YEARS OF TECHNICAL COMMENT
ITH the current issue of The Review the Technical Depart-
W ment,
under the direction of William Braid White, enters
into its one thousand and first week as a regular and valuable
feature of this publication. For nearly twenty years this practical
and pertinent commentary on the technical problems of the trade
has appeared each week without an exception, and sets a record
for the permanence of a feature.
It is the only department of its kind in any music trade paper.
It has continued to hold and develop new interest while attempts
to develop a similar department in other trade publications have
withered and failed. Mr. White's reputation as an authority on
the practical side of piano and player-piano discussion is recognized
nationally, and his contributions to The Review, which have at
times been expanded and presented in book form, have proven of
definite and unquestioned value to the industry.
OVERCOMING THE SUMMER DULNESS
HE term summer business in the piano trade may mean one or
T
two things, according to the individual dealer's view of the
situation. If he is content to rest on his oars and accept the summer
situation as a fixed condition then summer business is going to
represent a lull. If, on the other hand, he takes advantage of the
opportunities that are before him for catering to new fields and
putting into effect new sales ideas, then he has an excellent chance
of doing a volume of business that, while not approaching the peak
months of the year, at least will prove profitable and in the main
satisfactory.
There is a general inclination among various members of the
retail music trade to study summer conditions just as they do the
business situation at other times during the year, and to arrange
advertising and sales campaigns accordingly. The lure of the great
REVIEW
JUNE 30, 1923
outdoors is difficult to overcome, but there have been occasions
where retailers have accomplished this in the main to a large extent
by hooking up their piano sales arguments particularly with the
vacation season.
Then, too, the Trade Service Bureau of the Chamber of Com-
merce has made a careful analysis of summer trade conditions, and
as a result of that analysis a goodly number of dealers have been
able to offset some of the ill effects of the summer weather period.
July and August will probably never be developed to a point where
they will compare with December volume, but at least they can be
placed on a paying basis with proper display of energy and intelli-
gent direction, and this in itself is worth while, for the other months
of the year will generally take care of themselves.
GETTING MEAT FROM THE TRADE PAPER
merchant gets out of his trade paper that proves
W of HAT direct the benefit
to his business rests largely upon his under-
standing of its possibilities and the manner in which he takes ad-
vantage of them. Each week The Review, for instance, publishes
a number of articles of practical value to the retail music mer-
chant—articles that not only set forth trade developments but tell
him how successful merchants have financed their business, made
their collections, handled their sales organizations and conducted
the various departments of their business in general. The articles
likewise tell him how he, himself, may make proper use of the
information offered.
It happens all too frequently that the dealer reads the articles
in question and recognizes their value, but fails to put them in a
place where they will be available to him when the information they
contain is likely to prove of most value. Heavy bound volumes
of statistics, business law, etc., he places in a bookcase or quite
frequently piles on top of his desk where he can see them, whether
he uses them or not. When he reads his trade paper, however, he
may digest the articles contained therein, but he fails to file them
in a suitable place for reference, although they contain information
that may save or make thousands of dollars for him at the psycho-
logical moment.
In another section of The Review this week there appears an
article regarding the way various merchants have made the best
possible use of the information contained in trade papers in their
respective fields—information they could secure in no other way
except at heavy expense. They have learned experience is a costly
procedure, and that when the merchant has at hand for his guid-
ance the experience of others he is in a position to avoid many of
the pitfalls which ordinarily cause trouble.
SUPPORTING LOCAL ORCHESTRAS
organization of municipal orchestral associations has be-
T HE
come sufficiently common in the past few years to make it un-
necessary to emphasize strongly the desirability of such organiza-
tions or the excellent effect they may be expected to have upon the
music business. Local orchestras supported by public or semi-
public subscription serve to reflect local pride, and to draw interest
from those who under ordinary conditions, might not be classed as
music lovers.
The latest city to attempt to finance a local orchestral associa-
tion is Kansas City, where the music men are co-operating with
other interests in underwriting the premiums on a $3,000,000
twenty-year endowment insurance policy, the annual income from
which is to be devoted to the support of the organization. It is an
unique proposition that has rare possibilities, and the participation
of the music trade is a matter for congratulation.
THE AMERICAN NATIONAL PIANO CONTEST
suggestion made in the last issue of the Music Trade
T HE
Review for a national piano contest, limited to pupils of grade
and high schools which allow credits for music work, the contest
to be held in New York during the next annual convention of the
Music Industries Chamber of Commerce, is already arousing con-
siderable interest in the trade. The fact that the band contest at
the last convention was so successful, and the further fact that it
will be a permanent event, though held regularly in the West,
shows the wide field that exists for events of this kind and the
publicity and interest which such a contest will hold.
Piano men who have expressed their opinion on the suggestion
have shown dee]) interest in holding such a contest.

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