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REVIEW
THE
VOL. LXXX. No. 10 Published Every Saturday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y., Mar. 7, 1925
8ln
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Faulty Used Piano Merchandising
Lowers Sales of New Pianos
Selling Campaigns Planned to Reach All Classes of Community to Dispose of Accumulated Trade-ins Create
Competition With Sales of New Instruments and Cut Down Volume Therein—An Example
of a Selective Campaign — The Overhead in Used Piano Merchandising
up.
UT your finger on the used piano and
you find the big reason why the pro-
duction of pianos has not increased at
the proper ratio with the population and wealth
of the country."
That was the statement made by a well-
known dealer the other day in the course of a
discussion of the peculiar condition the piano
industry has confronted during the past ten or
fifteen years whereby a rigid limit seems to be
set to the output beyond which it does not go.
During this time, despite fluctuations of produc-
tion, the maximum of 1913 has been ex-
ceeded but once, if the statistics available are
to be considered as reliable. Why there should
be no continuity of progress in growth is diffi-
cult to discover and as a result this man's views
were extremely interesting.
Used Piano Competition
"The used piano on its resale," he said, "nat-
urally competes with the new instrument. The
percentage of trade-ins is always high, due I
think to the fact that sales resistance with a
prospect who is already a piano owner is less
than with the new prospect who has to be sold
bn the instrument itself as well as on the im-
mediate purchase of it. Then, too, with the
popularity of the player, the small grand and
the reproducing piano, we have had an accen-
tuated exchange condition which has been a
natural result and beyond our control. This has
led to a situation where there are some dealers
who sell more used instruments than they do
new ones, buying their stock in the open mar-
ket. While as yet we have no second-hand
piano dealers, that is, retail ones, similar to used
car dealers such as exist in the automobile
trade, we have many of them who are gradual-
ly coming to this condition, and who should
have the name if the proportion of used instru-
ments in their sales were considered."
There is the situation outlined as clearly as
it can be. The question naturally arises as to
whether the retail piano merchant whose busi-
ness consists largely of selling new instruments
can find merchandising methods for used pianos
which will eliminate this competition and con-
fine the latter strictly to their legitimate mar-
ket. For there is a real demand for these, one
that it is necessary to fill and one that must be
filled if the average retail business is to function
at a profit. To sell both instruments by the
same methods and to appeal to the same mar-
ket, however, would seem but to increase this
competition and but to develop it still further.
There is a growing realization of this condi-
tion in the retail trade. As an example take
a recent used-piano campaign undertaken by
the Griffith Piano Co., Newark, N. J., in one of
/I RECENT
article in The
Review
IM. showed the heavy volume of gross
sales required in the average retail piano
warerooms to dispose of a given number of
new instruments.
Unquestionably one fac-
tor in this condition is the competition
which exists in the sales of new and used
instruments.
The present article gives an
example of how one dealer, realizing this
situation, selected the prospects for the lat-
ter type and found that it worked not only
to sell used instruments at a lower overhead,
but removed a real element of competition
and clashed in no way with the former type.
•—EDITOR.
its branch stores located in a fair sized city.
The campaign, according to the company, was
successful, yet it was quite different from the
usual methods employed to sell used pianos
with the advantage that the selling appeal was
made entirely to a class of the community
where the proportion of prospects for new in-
struments was probably at its lowest.
The advertising campaign was carried on by
the mails entirely, the list used being compiled
by the following method: The local telephone
books and directory were gone over by a girl
in the office who was fairly familiar with the
people in the city, and in the average city of this
type it is not difficult to have such a familiar-
ity, and the names divided into two classes.
The second of these to whom the appeal was
made consisted of those of lower purchasing
power, especially the so-called "white-collar"
classes. The laborer and mechanic, save the
better paid groups, were also eliminated, as they
are more or less a field for the popular priced
player-piano.
When this list was completed a mail cam-
paign was inaugurated and carried over a short
period with results which were very remarkable.
The advantages of this plan are apparent. A
concentrated group carefully selected lowered
overhead involved in the drive since there was
an extremely low percentage of waste in the
advertising. The element of competition was at
a minimum as most of this group, while anxious
to buy the best grade of instrument possible,
were in no position to meet the payments com-
mensurate with the price of such instruments.
The difference in price was sufficient to over-
come whatever prejudice they might have
against the purchase of a second-hand instru-
ment. In short, this campaign moved the goods
and moved them in such a fashion that the
field for the sale of new instruments was left
entirely untouched.
Needs Wider Development
There is no question that this is a side of
piano merchandising which is susceptible of
wide development. The usual plan of moving
used instruments by periodic sales addressed to
the general buying public is costly in two ways
—first, due to the proportionately large percent-
age of waste in the field, and secondly, to the
reaction on the sales of new instruments. Both
of these elements are extremely important. .
Taking this generally, the sale of a used in-
strument cannot carry the same proportion of
overhead as the sale of a new instrument. This
is due to the fact that allowances are usually
high, repair and refinishing charges .are expen-
sive in these days of high labor costs, and
carrying charges rapidly mount. All these ele-
ments represent the first cost of a used instru-
ment. Add the average overhead to these, plus
a legitimate margin of profit, and the price in
many cases delays eventual sale with the result
that carrying charges consistently shorten the
possible gross margin. Whatever economies
can be effected in selling expense lead directly
to a quicker turn-over of the used stock, per-
mitting as they do a more attractive price to be
made without affecting the ultimate returns of
the sale.
Despite the difficulty of merchandising the
used instrument, it is more or less handled in
the average warerooms by hit or miss methods.
Some two years ago a striking example of this
was shown in the warerooms of a well-known
New York dealer who does a yearly business
that runs into large figures. This dealer had a
(Continued on page 9)