Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
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VOL. LXXVIII. No. 11 Published Every Satirday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y. Mar. 15, 1924
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The Need for Considering Overhead
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HERE are earnest and worthy efforts being put forth by the officials of the National Association of
Music Merchants to develop a program for the annual convention of that body in New York in June
which will measure up fully to the demands of the present trade situation and prove of sufficient interest
to insure a representative attendance of dealers from all over the country, men who believe in a general
discussion of their various problems.
This task is no small one, since subjects must be chosen the discussion of which will prove of the
greatest value to the greatest number, and because there are a number of matters handled at previous conven-
tions which are frankly declared by association members to be more or less worn out.
President Watkin, in an earnest effort to have the association take up work of general benefit to its
membership, has appointed numerous committees to investigate the various problems that have developed in the
retail trade, including that of providing a suitable place for the piano in the modern home or apartment after it
is sold, and others of equal importance.
It would seem, however, that there are some major matters that might well be given attention at the
convention, not in the belief that a quick solution can be found at the meetings, but that the way may be shown
to an eventual satisfactory solution of the questions involved.
Undoubtedly one of these major matters, and in our opinion the most important, is that of overhead in
the retail music trade. There is no question but that the cost of doing business, particularly in the retail piano
trade, is altogether too high and its decrease is calculated not only to provide greater profit for the dealer him-
self but to bring about price adjustments likely to increase turnover materially.
The Review some months ago rendered the trade a distinct service by making an extended survey of
overhead costs in the retail music industry, which proved so interesting that it was necessary to reprint the
articles in booklet form for distribution among those who realized the value of the information and who sought
it for their files.
Actual figures indicated that the average total of overhead expense of the retail music store was 36.34
per cent of sales. Not only is this figure entirely too high, as compared with other lines of business handling
products of a similar or even greater retail value, but it is simply an average and there are a surprising number
of music merchants admitting overhead expenses based carefully on detail figures that amount to as high as 43
per cent of their total sales.
Another deplorable fact is that the average net profit in the retail music business is something less than
10 per cent, a figure by no means impressive and not calculated to wean any great amount of capital from other
admittedly more productive fields.
This question of overhead cannot be solved at any one meeting or at any one convention, but it is a
matter that is worthy the earnest consideration from those who seek to place the trade on a sounder basis.
.,... There is no question but that the industry has made material strides during the past decade, despite the
statements of those who can themselves see no real advancement. The fact remains, however, that there is still
possible much improvement in methods of doing business—improvements that will bring about a greater volume
of distribution at the existing cost of doing business or at least will reduce the overhead on the present volume
of sales.
The matter of overhead and its adjustment does not rest entirely with the accounting department and it
is not simply a case of figures. The problem is one that requires for its solution the co-operative methods of
every department in the establishment, the plugging of leaks and increased efficiency in selling. If the music
merchants at the forthcoming convention can provide for a serious consideration of overhead and the means for
its decrease, that fact alone will justify the means