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MARCH 22,
THE
1924
MUSIC TRADE
REVIEW
THE POINT OF REVIEW
HK announcement of the prize-winners in the sales contest
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recently conducted under the auspices of the Estey Piano Co.
brought one striking fact to view and that is that those who were
responsible for formulating the conditions under which it was held
did not permit themselves to be dazzled by mere volume of sales,
but in awarding the prizes took into consideration all the other
elements which go to make up a good retail piano sale. Had volume
been the criterion, that is the sole criterion, by which the prizes
were awarded, unquestionably the contest would have been a greater
influence for harm than good, and its result would never have been
the large number of good sales which it created for the dealers
whose salesmen participated. But, when the salesman who was
striving for a prize considered that terms, down-payments and other
elements placed points to his credit, as well as the volume of the
sales which he made, his attitude changed entirely and the high-
power salesmanship, which such contests usually create, that is
the urge to make sales at any cost and with no due regard for ulti-
mate profit, was immediately eliminated from their work.
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us see what the contest accomplished. The gross sales re-
L ET ported
amounted to $742,719, over a period of three months,
the duration of the contest. On this gross, down-payments of cash
amounted to 28 per cent, and of the total number of sales made
16 per cent were entirely for cash. Without any question at all
this is a higher percentage than the average existing in the trade
at the present time and shows unqualifiedly that many sales are
made today on long terms when there exists no real necessity for it
save the fact that the salesman finds it easier to sell in that way.
Considering the terms on which the instalment sales were made,
we find that 32 per cent were under eighteen months, and 26 per
cent under twelve months, while of the total number of sales, 95
per cent were under thirty months. These figures again are prob-
ably much better than the average existing in the trade and show
what can actually be accomplished when there is a real incentive
for the salesman to do it.
K . m %
HESE figures hold an object lesson for the average piano
dealer. There has always been among the retail dealers too
much of a desire to sell, that is, to sell on any and all terms in order
to move the goods. Some of the most spectacular failures in the
retail trade have been traced to just that particular basis. The
dealer has been dazzled by a heavy gross volume of business and in
the drive for that has permitted both himself and his salesmen to
lose view of the fact that a sale is never a real sale unless the mar-
gin of profit is protected. It has meant the accumulation of long-
time paper, which is invariably poor paper in its ability to pay out
within its contractual limits, a heavy collection expense with a large
percentage of past due, heavy interest and discount costs, and all
else that goes with this condition. As a result the overhead repre-
sented in the average sale has been considerably increased, and in
many cases without the dealer knowing it, with the result that the
profit has neared the vanishing point and the dealer himself has been
unable to meet his current obligations from his current collections.
When this point is reached in a retail piano business, usually things
are beyond remedy and there is little that can be done to place it
on its feet once more. The whole thing is due to the desire to sell
at any cost and the delusion regarding the actual facts of the case
which always follows in the train of such a desire.
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conditions have been placed before dealers more times
T HESE
than can be counted. Their invariable reply to their exposition,
when they replied at all, was that to do business he had to do it on
such terms. The Estey Piano Co. contest shows what a big mistake
he is making in taking such an attitude and it also places the direct
responsibility for such a condition upon his own shoulders. The
reason for this is simple. It shows that the retail piano salesman
can sell upon a different basis than the average one prevailing and
that it is up to the dealer who directs a retail selling organization to
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bring him around to a different attitude. It is not a difficult thing
to do; the Estey Piano Co. did it by holding this contest without
having the direct personal contact with the salesmen that the dealer
has with the men he employs. What the dealer must do is make the
salesman realize that his standing with his house depends not alone
upon the volume of sales he makes, but upon the quality of the
sales he makes as well, and that this in the long run figures equally
in his ultimate compensation. Once this is done there will be a
good deal of a change in retail selling, that is, if it be done at all
widely.
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E hear a lot to-day regarding the overextension of retail
credits. Some go so far as to call it a menace to the finan-
cial stability of the country. Without going so far as to agree with
this statement, it is unquestionable that instalment credit is abused.
Put into effect at first simply to make it possible for a larger number
of people to buy such products as pianos where the value of the
unit sale is comparatively large and thus impossible for them to pay
in one sum, in the piano trade to-day it has come to be regarded as
the usual way of selling, so much so that many salesmen never think
of asking a prospect to pay cash; in fact, the element of cash, out-
side of the size of the clown payment, rarely enters the sale at all.
Yet there are thousands of pianos sold to-day to people who are
perfectly able to pay cash and who would pay it if the salesman
who is making the sale would take a little trouble to try and get it.
Following the paths of least resistance may be all very well, but they
usually lead in a direction that is not the proper one to follow.
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real outstanding feature of the Estey Piano Co. sales con-
T HE
test was this object lesson. We do not remember ever having
seen it shown so plainly before in the history of retail piano selling.
It has definitely established that the average retail piano sale is made
on terms that are longer than they should be. It has shown that
many evils in the trade, which the dealer has considered as a part of
his burden, are quite unnecessary and come from a wrong viewpoint.
It has demonstrated that the volume of outstanding retail paper is
far beyond what it should be, were a little reason and common sense
used in making it through sales. The contest was national in its
scope and was open to practically all comers, good, bad and indiffer-
ent salesmen. It represented a cross section of the trade, not picked
men. That is what makes it all the more valuable and why its con-
tribution to a more detailed knowledge of actual selling conditions
should lead to a measure of reformation at least. And that reforma-
tion is needed at the present time, for there exists to-day a tendency
to go back to the old methods of long terms and small down-pay-
ments, a tendency which is confirmed by the most casual study of
retail piano advertising at the present time.
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AESAR was warned to beware of the Ides of March. Well,
now 1 that they are past, we might as well say that the piano
dealer is in a like case, for the middle of March these days means
a falling off in business. But to draw conclusions therefrom that
a period of general business depression is threatening is nonsense.
The piano dealer has been doing what everybody else has been do-
ing—he has been paying the first instalment of his income tax. He,
like all the rest of us, has been curtailing his expenditures. When
you have to pay actual cash to the Government you don't spend any
more than you have to until you are over the shock. As a result,
for a while at least, people are not buying pianos. As Walter Hep-
perla, of the Premier Grand Piano Corp., said last week, the average
income tax instalment is about equivalent to the down-payment on
the purchase of a piano and the Government gets it, for the piano
dealer has no way of penalizing the person who refuses to give it to
him in exchange for his instruments. A temporary lull is all we are
in for and that is soon going to pass. So stop wailing and get down
to business—the only way the dealer is going to get his instalment
back is to sell more instruments—and, of course, sell them on better
terms.
THE REVIEWER.
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