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Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
VOL. LXXVIII. No. 3 Published Every Saturday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y. Jan. 19, 1924
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Abusing the Instalment System in Selling
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A
PROMINENT member of the music trade recently offered it as his opinion that there was altogether
too much business being done on a long-time credit basis in both the sale of pianos and talking
L machines and that retailers had unquestionably overlooked many opportunities for closing cash deals
^ with prospects fully qualified to pay on such terms.
This particular trade member also declared that the spirit of credit was in the air and had strongly
impressed even those financially able to do most of their ordinary buying on a cash basis. For instance, men
not needing money secure a mortagage on their property and reinvest the proceeds, at the same time making
suitable deductions from their income tax report. Others who can buy a $3,500 reproducing piano for cash
without missing the money take advantage of liberal terms and spread their payments over twenty-four or
thirty months. Other men rated at a couple of hundred thousand dollars in Bradstreet's buy a $200 talking
machine on time and think nothing of it.
There is no question but that the argument against too much credit where cash should prevail is a
logical one. The public is not entirely to blame for this because much musical instrument advertising for years
has emphasized the fact that terms, and in most cases low terms, are acceptable to the dealer. In other words,
the advertisements have simply begged the public to use the dealer's money in supplying its homes with
musical instruments and buyers have been steadily educated to the fact that they are expected to take advan-
tage of the instalment system.
The piano man will declare that it is quite easy for the talking machine dealer to sell an instrument
ranging in price from $100 to $200 for cash, for in these days that sum of money does not seem large even
to the average wage earner. But it is quite another question, he thinks, to get cash for a piano or player
listed at from $500 to $3,500. On the face of it, the piano man's stand would seem to be logical were it not
for the fact that experience has proven that cash, or terms that approximate cash, are possible with many of
his customers.
There is one Eastern dealer, for instance, who, in taking stock of his business, found on his books as
instalment buyers on the usual twenty-four to thirty-month basis business men in the community well qualified
financially to pay him cash. In fact, men whom he knew had paid cash for motor cars ranging in price from
$2,500 to $5,000 were paying for pianos on long terms. He determined to find out if he could not obtain some
of the big-time cash business and instructed his salesmen to turn such customers over to himself or his sales
manager when the deal had been practically closed and terms were being discussed.
The result of an intensive campaign was that sales for cash increased between 250 and 300 per cent.
He found that a direct appeal to the financially responsible customer would surprisingly often convince him of
the value of cash buying as compared with instalment buying with its interest charges. He frankly told the
prominent business man that it was not policy for him to be classed with the laborer who bought a $400
player on terms of $10 or $15 per month. Where all cash was not available, he found it was quite possible to
get 50 per cent cash and three notes maturing in thirty, sixty and ninety days on reproducing instruments sell-
ing as high as $2,500. Naturally the cash was welcome and the notes could be discounted at the bank much
more easily than thirty months' paper.
The thought is not so much that the instalment business should be discouraged as a general thing, for
that business has really become the backbone of the trade. But it must be admitted that the public at large is
now well acquainted with the fact that musical instruments may be bought on terms and it is not necessary to
stress that particular feature so energetically in retail advertising. Every sale made for cash adds just so much
strength to the merchant's business, by preserving his cash capital and reducing that portion of his overhead
devoted to making collections. Cash business is to be had if it is gone after intelligently.