Classic Mode

Music Trade Review

Issue: 1924 Vol. 79 N. 4

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE MUSIC TRADE
REVIEW
JULY 26,
1924
THE POINT OF REVIEW
all the discussion which has followed the recent convention
I N regarding
the topic of overhead in the retail piano store, the nub
of the question has been somewhat blurred because of the way in
which mark-up and overhead have been discussed conjointly and
together. Now, as a matter of fact, it is quite impossible to talk
intelligently on the subject of retail mark-up on pianos without hav-
ing definitely established, to some degree at least, the percentage of
overhead that appears in each sale of an instrument. So far as
The Review knows, there has only been one investigation of this
important subject ever conducted in the retail music trade, and that
was by The Review itself, the results of which are available in
pamphlet form. They developed the fact beyond argument that
overhead in the individual music store varied but slightly where the
dealer had an accounting system which told him exactly how much
it cost him to sell a piano, but they also showed that there were
many dealers—a surprisingly large number, in fact—whose knowl-
edge regarding their overhead costs was hazy and by no manner of
means as complete as it should be.
Ut
MS
%
ERE is a condition that should be reformed within the shortest
possible space of time. A dealer can never know his proper
percentage of mark-up unless he knows his percentage of expense.
That is one reason why such low net profits appear on many piano
dealers' books. That is one reason why pianos are sometimes sold
at ridiculous prices, taking into consideration their wholesale cost
and the overhead selling expense involved, and which leads to that
ruinous: competition in price, which at recurring periods is such a
marked condition in the trade. In fact, as in all other lines of retail
selling, lack of knowledge regarding overhead is essentially the
greatest evil confronting the retail merchant.
H
piano dealers' accounting is admittedly somewhat of a
R ETAIL
complex problem, involving as it does the handling of a large
number of instalment accounts, and these on average longer time
than exists in any other retail trade. But this complexity is no
excuse. The Music Industries Chamber of Commerce has even
gone so far as to issue a publication which takes up these problems
in detail and which gives the basis of an accounting system which
is simple and direct. This is but one solution for this problem;
there are any number of other ways in which a proper system can
be worked out.
J»
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NCE a merchant has concrete knowledge of his overhead, the
question of mark-up can be given consideration. It is claimed
that the present-day mark-up is not sufficient to cover costs, over-
head and yield a good profit in the business. Judging by the results
of The Review's investigation, there is perhaps truth in this state-
ment, as the net profits reported by merchants therein were small
and, in a majority of cases, below the 10 per cent which those fur-
nishing the facts on which the investigation was based agreed with
practical unanimity was a fair net profit in the business. But there
is another alternative besides an increased mark-up for the solution
of this problem. That is a lower overhead. Piano dealers are not
noted for their economy. Too many of them, seduced by the ap-
parently wide margin between selling price and cost, spend money
recklessly in their selling work, and spend it without an eye to the
results it brings, which is infinitely worse than direct extravagance.
It is probably true that a majority of the retail piano merchants,
if they knew their overhead exactly, could reduce it considerably by
wise economy without in the least impairing the efficiency of their
organizations or lowering their gross sales.
&
$
#
HE great trouble with the average retail piano merchant in this
entire question is that mark-ups have largely been left to his
own individual action in the trade, the national one-price being a
development of comparatively recent years. The speaker on this
subject in the convention, in fact, went so far as to declare that a
national one price was nearly impossible, due largely to the fact
that freight costs varied so widely that dealers could not maintain it.
O
T
There is really no basis for this statement. If he would investigate
the selling policy of one of the leading player manufacturers, and
one who was a pioneer in successfully maintaining a national one
price, he would discover the remedy for this freight problem in the
fact that this manufacturer ships f. o. b. the dealer's city, no matter
whether that be Portland, Me., or Portland, Ore. Prorating freight
costs is an old business policy and a successful one Or, if this
policy is not followed, it is a simple enough matter to sell to the
customer either; f. o. b. factory, as is done in the automobile in-
dustry, or to add a certain percentage for distant shipping points,
as is done in other industries whose problems are very similar to
those existing in the piano industry.
A S a matter of fact, the national one price would seem to be the
*• *• eventual solution for the retail merchant's mark-up problem.
Granted the manufacturers' discounts from the ultimate selling
prices are liberal enough, and in the piano industry there is no ques-
tion that they would be, he would be forced to bring his overhead
costs in line with his discounts. That is the policy pursued in the
talking machine industry, so practically every music merchant is
familiar with it. It would put an end, practically speaking, to price
competition which is caused largely by varying mark-ups, and would
bring a degree of stability to the retail piano business which it has
only had in accordance with the advance of this policy in the trade.
It would do away with the careless methods of accounting which
lead to extravagant overheads and would in fact simplify the whole
problem which confronts the merchant. Only a casual study of this
question would give the proof of these statements.
MI
M?
M?
O business can be conducted if the mark-up is not sufficient.
That goes without saying. But at the same time mark-ups
should not be increased unless it is established beyond a doubt that
they are not sufficient. For a high-mark-up means a higher price
to the ultimate buyer and a higher price to that important person
means a curtailment in volume with a consequent curtailment in
turnover. And if this takes place the advantage of the increased
mark-up is at once lost and the retail merchant is, to all intents
and purposes, worse off than he was before. The piano industry
to-day cannot afford a curtailment of its market; what it really
needs is an expansion of it, for it is unquestionable that, consider-
ing the wealth and population of this country, the number of in-
struments sold annually is not in accordance with its potentialities.
And with conditions as they are to-day, the reform here must come
from within the industry, not from without it in a change in its
relations with the people who buy its products.
M?
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facts must be taken into consideration in discussing
A LL the these
problems of overhead and mark-up. The entire problem
has only been! scratched so far in the consideration that has been
given it. It would seem that if the present mark-up is not sufficient
to give the average dealer a fair profit, granted he runs his business
efficiently, the real facts of the matter could be easily discovered.
Retail merchants in general are not usually silent when they are not
getting a fair return. This is so with a good many houses in the
retail piano business. But there are a good many others who are
making money. It is probably a question of relative efficiency, but
that cannot be decided entirely until the general facts of the situa-
tion have been discovered. What we need more than anything else
at the present time is exact knowledge of the dealers' overheads,
and that cannot be had until the dealer himself knows what they
are. Better accounting systems are needed, especially with the
medium-sized and smaller dealers who constitute the bulk of the
outlets for the products of the industry's factories. Until that is
done the question of mark-up will remain without a real solution.
It requires more capital to-day to run a retail business than ever
before; the expense is higher for all factors in that have gone up;
the profit, relatively speaking, has remained the same. What is
wrong? Lack of exact knowledge of the overhead in nine cases
out of ten.
T H E REVIEWER.
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
JULY 26,
THE MUSIC TRADE REVIEW
1924
Taking the Long View of the Player
Seeing the Piano and the Player-Piano as Complementary Elements of the Same Large Idea, With a Proper
Place for Each and Every Type of Instrument That Time and Experience Has Shown to Be
Practical, Is the One Way in Which to Consider the Industry Properly
imitating him in every possible way. Doubt-
less this is the history of all trades; but it is
a discouraging history, nevertheless.
That which one would like to see done by all
the thinking minds in our industry is indicated
in the first paragraph of this article, where the
duty of a trade journal is being considered.
We should like every manufacturer and every
merchant to be able to do what a trade journal
should, above all others, invariably do; namely,
take the long view and try to see the relations
and inter-relations of the industry as a whole.
The worst mistakes most of us make are mis-
takes which arise from our persistent habit of
looking each at his own little corner of an in-
dustry, and imagining its problems (foreshort-
ened by being held close to the eye until we
can see naught else) to be the problems of the
whole group.
The Long View
At the present time we of the piano and
player-piano business need particularly to learn
to take the long view and to see the problems of
our industry as a whole. It is to be presumed,
as was intimated at the beginning of these para-
graphs, that most piano and player men are in
The music industries have their faults, no the business because they like it and not be-
doubt, but one fault they have not: they are cause they think it holds unsurpassed opportu-
not nurseries for get-rich-quick artists. Those nities for rapid personal gain. It is not a game
whose ideas of business are confined to the con- which makes for quick wealth, but a game to
sideration of means for making the utmost in which men stick because it is fascinating and
personal profit in the shortest time, steer clear they are fascinated by it. There are good prof,-
of the manufacture or selling of musical instru- its in it, very good profits, to those who know
ments. There are both manufacturers and deal- how to earn them, but principally it is that the
ers, unhappily indeed, whose notions of their game itself is a fascinating game. Every sea-
appropriate place in the world are limited by soned piano or player man will agree that this
the narrowest views of personal gain; and the is so.
dealer whose point of view was exposed by
Men who like the game they are in, and stick
a piano salesman in a letter published in The to it because they like it, ought never to be
Review two weeks ago is not wholly unique. afraid of the future, for they ought to have
Yet, on the whole, our trade is an honest and become accustomed long since to taking the
a decent trade, from occupation with which long view and seeing the problems of the in-
men do not commonly amass great fortunes, dustry as a whole. They ought to be able so
but which offer to men of the appropriate ca- to do because they ought to be thoroughly con-
pacity adequate rewards, both financial and vinced that the music industries are going to
social. Piano men, on the whole, are as good live and not to die, and that the piano, in its
a lot of men as the country can produce any- pneumatic shapes especially, will always be that
where.
unsurpassed music bringer for the home, which
it now unquestionably is. Men who believe
"Safe" and Timid
Unfortunately, as in all groups, the policies this—which is the truth—are men who ought
which prevail are, for the mass of group mem- never to be afraid.
What Is This View?
bers, the timid and the "safe" policies. De-
spite the obvious fact that the great material
What, then, is meant by "taking the long
and technical successes are always made by view" and how can one see the problems of the
those who mark out new paths, the tendency industry as a whole? The answer is not diffi-
in general is always to watch carefully the cult and not complex.
trend of things and then to follow slavishly
The long view of our industry, which is the
whatever trend appears to be most marked. one and only correct view, is the view that sees
Thus, to take example from the player-piano the piano and the player-piano as complemen-
business in all its branches, we perceive that tary elements of the same large idea, which sees
its whole development has been markedly re- that there is a place and a proper place for each
tarded by the timidity of the masses of the and every instrument and type of instrument,
manufacturers and the merchants, who have felt for each and every type of music roll and for
that it was all right to share in profits made each and every type of price-level which time
possible by the audacity of path-breakers and and experience have shown to be practical; the
pioneers, but who have had neither inclination view that sees the industry not as a group of
nor ability to do their exploring for themselves. warring elements, but as a body fully equipped
Every step which has been successfully taken with limbs and organs which, despite their di-
during the development of the player-piano, versity of function, are, nevertheless, wholly
technically and commercially, has been taken by interdependent, the view which sees that there
some lone pioneer, who has usually had to fight is but one aim and one duty, which are the aim
the united opposition of a trade which within and the duty of creating a nation-wide distribu-
a very few years afterwards has been strenu- tion of every thing or idea, every instrument
ously endeavoring to make up for lost time by or piece of goods of any kind which contributes
H E business of those who write editori-
ally in trade journals is to set forth those
principles and practices which observa-
tion, experience and the writers' individual way
of looking at things together lead them to be-
lieve best for the interests of the trade they
serve. What they thus consider to be for the
trade's best interests is not always or neces-
sarily that which the common feeling of the
trade may at any time be leading it to say and
do. Merely to follow the procession and to
repeat like a parrot the phrases which happen
for the moment to be popular with manufac-
turers, merchants and their respective subordi-
nates is to destroy the best reason for the ex-
istence of trade papers, which should be neither
mere retailers of gossip nor parasitic flatterers
of trade opinion, but counselors, observers and
friends, offering the best advice and informa-
tion they can discover, but neither irritated nor
disapppointed if what they say is oftentimes
neglected and treated with indifference. If their
counsel be good, it will sooner or later come
into its own; and then, after all, no one need
care about the name of the man or the institu-
tion whence emerged the first suggestion.
T
Highest
Quality
in any way towards increasing the consumption
of music by the American people.
Those who take this view will not say that
the reproducing piano is better than the pedal
player-piano, or not so good. They will not
say that the upright piano is better than the
grand—or worse. They will not fight shy of
radio, or condemn it, any more than they will
abandon their own business to run after it.
They will use it for what it can give them and
no more. They will not fight each other or
destroy their influence with one section of the
community by confining themselves to the pro-
motion of what can only be appreciated or
bought by another section. In a word, they
will work for large ideas, and they will remem-
ber that the business will prosper, for each man
in it, proportionately as it prospers for every
other man. They will, therefore, co-operate,
and will never commit the fatal sin of trying to
gain at the expense of a brother.
That it is to take the long view; and that
also might be given as a fair explanation of
how to see the problems of the industry as a
whole. For those problems are one; and that
one is simply this: "How best can we increase
the consumption of music, not of one kind, but
of every kind, among all the people?" He who
sees these things and makes them his own takes
the long view.
Kranich & Bach Open
Chicago Quarters Aug. 1
New Warerooms in Straus Building, Michigan
Avenue at Jackson, That City, Are Practically
Ready
Word has been received this week at the
executive offices of Kranich & Bach, New York,
from Roger O'Connor, manager of the Chicago
branch of that company, that the final decora-
tions and arrangements in the new warerooms
there are being .completed so that entire
occupancy may take place August 1. The new
quarters in the Straus Building, Michigan avenue
at Jackson, have been fitted up to suit the needs
of Kranich & Bach and are modern in every
respect. Mr. O'Connor writes that he is con-
fident that the Chicago branch is embarking on
the most successful season of its existence, and
has worked out an extensive sales campaign.
Hill Piano Go. Moves
HUNTINGTON, W. VA., July 21.—The Hill Piano
Co. has just removed to new quarters at 921-
923 Fourth avenue and has resumed business at
this address. C. V. Miller, proprietor of the
concern, stated that an increased line of pianos
and phonographs would be made possible in the
new store.
Charles Duerk Go. Chartered
Papers of incorporation have been filed re-
cently for the Charles Duerk Co., which will
handle pianos in New York City. The company,
which has an authorized capital of $10,000, is
composed of the following officers: N. and A.
Brooks and P. S. Benson. J. McLaren, in the
Tribune Building, will act as attorney.
Highest
Quality

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