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NOVEMBER 15,
THE
1924
MUSIC TRADE
REVIEW
Piano Terms, Credits and Collections—(Continued from page 3)
most of these indicated that the trend was
steadily towards lowering the maximum and
that, as a result, the average piano purchaser
was being educated not to expect almost un-
limited time in completing the purchase of the
piano.
Increased Cash Payments
A careful study of these reports would seem
to indicate that the most effective way of reduc-
ing the maximum terms on which a sale is
made, is to increase the down payment. Dealers
generally reported that they were gradually in-
creasing the size of the initial payment without
reducing the size of the monthly payments and
that this in turn permitted them to decrease
their maximum. This is largely a problem of
training for the retail sales force itself as the
size of the first payment depends ultimately on
what the salesman strives to obtain and the
success which he has in accomplishing his aim.
Here is a striking indication of the close inter-
relation between the merchandising policy of
a retail piano merchant and his financial meth-
ods showing how impossible it is to separate
them.
Average Terms
It used frequently to be said in the retail
piano trade that the maximum terms on a re-
tail sale set by the house tended inevitably to
become the average terms as the salesman, in
following the paths of least resistance, was
content in making the sale to give the prospect
as much time as possible which was naturally
as much as would be accepted by the manage-
ment. This, the reports made to The Review
show, is no longer the case. Average terms
to-day are far below maximum terms. The
following table gives the average duration of
the outstanding paper of those retail houses re-
porting to The Review:
AVERAGE TEKMS
East
South
Middle West
Far West
National Average
25 months
21 months
21.7 months
19.3 months
21.75 months
These figures show some surprising results.
It would generally be thought that the South
would show a longer average time than any
other section of the country, yet as a matter
of fact the East holds that position in The
Review's survey. Probably the reason for this
is that a good proportion of sales in Southern
territory are made so as to swing from crop
period to crop period, the resources of this
section being largely agricultural. The figure
reported for the East is probably due to the
fact that that section has large masses of com-
paratively low-paid industrial workers who re-
quire a longer period than the average to pay
out a retail piano lease. The matter of average
terms is largely controlled by the condition and
nature of the clientele to which the merchant
caters, and nowhere better is this shown than
in the above table.
Average and Minimum
A glance at the graphic chart accompanying
these figures shows that the maximum is no
longer in any case tending to be the average
terms on which sales are made. Merchants in
some sections have proportionately reduced
their average terms in relation to their maxi-
mum terms, this being especially the case in
the Far West where the difference between
the two is greater than in any other section
of the country. Average terms in the East run
approximately eight months below maximum,
in the South eleven months below maximum,
in the Middle West nine and one-half months
below maximum, and in the Far West over
eleven months below maximum. The average
terms for the country run ten months below
maximum. Taken all and all there is a sur-
HighMt
Quality
prising similarity between the reports from the
different sections of the country.
Percentage of Cash Sales
The number of cash sales in relation to the
gross number of sales in the retail piano trade
has always been a matter of conjecture. The
following figures have been compiled from The
Review's survey:
CASH SALES
East
South
Middle West
Far West
National Average
21.5 percent
16.3 per cent
21.7 per cent
11.75 per cent
18.06 per cent
Cash sales in the Far West seem to be sur-
prisingly low, especially when taken in con-
nection with the low average and maximum
terms maintained by houses in that section of
the country. This, it may be presumed, is due
to a large number of short term sales, made on
S O U T H - \
MIDDLE WEST~£|.7%
FAR WEST
W15o/ O
AVERAGE"-18.06%
Percentage of Cash Sales Reported
direct notes and paying out at maturity. The
East and the Middle, West lead in their per-
centages and the South shows up surprisingly
well. A glance at the accompanying graphic
chart gives a clear idea of the relation of each
section of the country to the other and to the
national average. It is surprising to find cer-
tain sections of the country reporting one sale
out of five on a cash basis. Evidently salesmen
are again being trained to work for cash and
this training is bringing results.
Practically all dealers reported that the great-
est percentage of cash sales was to be found
in the sales of high grade instruments, a con-
dition which was to be expected. A few, how-
ever, stated that medium grades yielded the
highest percentage of cash. None reported that
low grade instruments were in this class.
Collecting Interest
All reports agreed in stating that the mer-
chants who made them collected interest on
their unpaid balances. However, there was a
wide variation in the methods used. A few
houses have definitely stopped the interest
practise and adopted a cash and credit price,
or, in other words, a discount for cash. It
seems that this is a growing practise in the
trade, providing as it does a tangible induce-
ment to the prospective customer to pay cash,
one that is much more attractive than the
mere statement that he will save the interest
on the outstanding balance.
A statistical study of methods of paying in-
terest brought out the following:
The East
Of all dealers reporting in this section of the
country, 72.2 per cent reported that they col-
lected full interest on unpaid balances. Those
not collecting interest by this method were 27.8
per cent. Of the latter 80 per cent had both
cash-and credit prices, the cash price being a
discount from the credit price, and 20 per cent
reported that they collected interest on past due
balances only. Of those who collected interest,
50 per. cent collected it with the instalments,
25 per cent when the sale was complete, 16.6
per cent semi-annually, and 8.4 per cent quar-
terly on the average unpaid balance.
The South
Southern dealers reported 88.2 per cent col-
lecting interest on unpaid balances on outstand-
ing paper, and 11.8 per cent as eliminating in-
terest charges by having both cash and credit
prices. Of those collecting interest on the un-
paid balances, 71.4 per cent reported they
collected with the instalments, 21.4 per cent
when the sale was complete, and 7.2 per cent
as using both methods being guided therein
by the desire of the customer and the nature of
the circumstances of the sale.
Middle West
Dealers in the Middle West reported 100 per
cent that they collected full interest on the
unpaid balances of instalment sales. Their
methods of collecting were stated as follows:
With the instalments, 63.6 per cent; when sale
is complete, 21.2 per cent; both methods, ac-
cording to the circumstances of the sale, 6.6
per cent; semi-annually, 4.2 per cent; and an-
nually, 4.4 per cent.
The Far West
In the Far West 100 per cent of the dealers
reporting stated that they collected full interest
on unpaid balances, 78 per cent stating that
they collected with the instalments as paid,
and 22 per cent when the sale was complete.
The Importance of Interest
From these reports it can be seen that the
average retail piano merchant has finally come
to a realization of the importance of collecting
interest on what is really money loaned to a
prospective customer in order that he may be
able to afford to purchase a piano. In selling
closely upon instalments, the interest in many
cases constitutes the largest part of the net
profit which the dealer makes upon the sale,
and neglect to collect it means in these cases
what is practically a loss.
Few dealers to-day allow the interest to ac-
cumulate until the sale is paid out. This is a
distinct improvement in trade practise, as a
heavy interest payment coming due when the
customer has really considered that he has fin-
ally paid for his instrument, leads to much
controversy and in many cases to inability to
obtain the interest at all. For when this con-
dition arises the merchant has but little re-
dress and usually fails in the long run to obtain
what he has.
Weaver Go. Issues New
Catalog of York Line
Styles 15, 16 and 17, the Style E Player and the
York Baby Grand Shown and Described in
Book
The Weaver Piano Co., Inc., York, Pa., has
just produced a new catalog on the York piano
which it manufactures. This piece of literature
is comprehensive in scope and describes the
line in detail. It is sixteen pages in size and
well illustrated with half-tone engravings. The
frontispiece shows the remarkable growth of
the Weaver plant since its foundation in 1882
in a series of photographs showing the original
plant that year, the factory in 1892, in 1898 and
finally the large group of buildings comprising
the plant of the present day. The York piano,
styles 15, 16, 17 in upright models, are described
and illustrated, also the style E player and the
York baby grand. Interesting articles are in-
cluded on "Music in the Home", "Musical Edu-
cation" and "Churches and Schools." Many
quotations are given from letters received from
York owners. A particular feature is found on
the last page in an interesting non-technical
description of the many constructional features.
Highest
Quality