Classic Mode

Music Trade Review

Issue: 1925 Vol. 80 N. 20

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
MUSIC TRADE
REVIEW
Cincinnati May Music Festival Shows
Increased Sales With the Local Dealers
Most Music Merchants of City Report Increased Volume of Sales Because of Large Influx of
Visitors for Event—Baldwin Adds Mezzanine Floor to Retail Store
/CINCINNATI, O., May 9.—The big event here illness with typhoid fever, and his associates
in musical circles this week has been the are glad to see him once more at his desk.
May Music Festival, which has just come to a
Edward Roberts, of the Baldwin retail sales
successful close. Naturally, the sales of dealers department, states that business is good, and it
in musical merchandise were increased by pur- is improving right along, which makes the pros-
chases of hundreds of out-of-town visitors who pect bright. The factory, he explained, is work-
remained several days in order to hear the pro- ing full time with a full force, and even then
grams they preferred.
it is hard to produce enough grands to meet the
While the weather has been cold and unsea- demand.
In order to relieve the congestion of the first
sonable, and not at all favorable to business
increases, the demand from local people was at floor of the Baldwin Piano Co.'s store, at 142
least up to the average. With the added pur- West Fourth street, a mezzanine floor has been
chases of visitors who came to the May Music added at the rear. This will be occupied by
Festival, the volume of sales of most houses some of the clerical force and the space vacated
was larger than normal. It is not thought that by them will be used for the display of mer-
business will diminish next week, because many chandise. The high ceiling of the room permits
prospective customers have put off buying, be- the addition of a mezzanine floor without de-
cause of the lateness of the Spring, and their stroying the beauty in the least, and if anything
it adds to the attractivenss of this part of the
purchases will then be due.
There is still some discussion here among room.
James A. Jacober, head of the publicity de-
members of the music trades in regard to the
practicability and advisability of adding a flat partment of the Otto Grau Piano Co., was
carrying charge to instalment accounts, to take elected vice-president of the Cincinnati Adver-
place of the present method of adding interest tisers' Club, at its annual meeting, held May 6.
to balances. In the opinion of Charles J. Mein-
berg, sales manager of the Starr Piano Co., the
flat charge plan would neither be just nor satis-
factory either to the buyers or to the seller,
and for this reason the company will not con-
sider the adoption of the proposed new method. Results of Questionnaire Sent Recently to
Manufacturers to Be Analyzed in Chicago
W. J. Furnell, of the Starr publicity depart-
During Convention Week
ment, is making a trip through southern Ohio,
calling on company agents.
The Technical Committee on Standard of
The John Church Co. is directing a great
amount of attention to keeping its show win- Musical Pitch of the Music Industries Chamber
dow displays in harmony with the trend of the of Commerce, of which Charles Deutschmann
times. That is, they keep the merchandise and is chairman, which has been working on this
decorations in harmony with the tendency to subject for some time will hold its next meeting
smaller living quarters in bungalows and so- during convention week at Chicago. Since the
called "efficiency apartments." The company's previous meeting questionnaires have been sent
window display this week shows "the smallest out to various manufacturers in the trade to get
upright piano made" and "the smallest repro- the evidence concerning the pitch now used so
that the committee will be in a position to make
ducing grand" that is obtainable.
"Business has improved considerably the past its report based upon actual evidence.
Nearly sixty questionnaires have already been
two weeks," stated Arthur Mergott, sales man-
ager of the Church establishment. Roswell received, filled out, and they are coming in
Burchard, president of the company, is on a daily. In addition, the National Association of
business trip to New York and other eastern Piano Technicians is gathering information
points. Howard Weber, of Chicago, general which will be made available to the committee.
The committee does not expect to make the
manager of the company, spent a day in this
city this week, while in this section on an in- final report at the convention as the mass of
evidence is such that a complete report embody-
spection tour.
R. E. Wells, of the local branch of Steinway ing recommendations will take much longer to
& Sons, has just returned from a visit to their get up than the committee at first thought prob-
Indianapolis branch house. Mr. Wells was ac- able.
The matter of pitch is proving to be of par-
companied by Mrs. Wells, who was the guest
of Mme. Yolanda Mero, the famous pianist. ticular interest to the pipe organ manufacturers
"Business is at about the average in our local who have difficulty with the pitch problem when
store and branches," stated Mr. Wells, "and installing organs in theatres and other places
where they are used in conjunction with orches-
grands are moving well."
Edward Johnson, famous tenor, and Mme. tras. The problem is likewise of vital impor-
Astral, English soprano, who were here all tance to manufacturers of band instruments.
week as artists for the May Music Festival, The desirability for a standard pitch for pianos
were the guests of the Baldwin Piano Co., and is obvious.
asked for the Baldwin piano for use during their
stay. J. A. Pastor, traveling representative for
the Baldwin Co., in Mexico, and Mr. Garrido,
Baldwin dealer in the City of Mexico, have just
departed, after spending several days here visit-
ing the company headquarters and inspecting Plans to Display Pianos and Other Musical In-
struments in Special Quarters in Residence
the factory and manufacturing processes. C. H.
District
Dickinson, of Chicago, vice-president of the
company, was in Cincinnati a few days last
CANTON, O., May 11.—An innovation in music
week, visiting the executive offices. Lucien
Wulsin, secretary and treasurer of the Baldwin merchandising in Canton and district was the
Piano Co., is back from Honolulu, Hawaii, opening last week of the new music home of
where he went to recuperate from a serious the W. S. Custer Music Co., in the residential
Standard Pitch Committee
to Meet at Convention
Custer Music Co. Opens New
Home for Music in Canton
Highest
Quality
MAY
16, 192S
part of the city. It is planned by the company
to exhibit its line of Baldwin pianos in the
music home as well as a complete line of
Sonora talking machines. The purpose of the
innovation, according to W. S. Custer, is to
enable the prospective piano and talking ma-
chine buyer to see the various types of these in-
struments in home environment. Opening of
the home was featured by a musical program
in which a number of local artists appeared.
The Custer home was arranged following the
purchase of the interests of William E. Strass-
ner by Custer. The firm was formerly known
as the Strassner-Custer Co.
The firm will continue to maintain complete
service at its original store, Cleveland avenue.
Convention Golf Tournament
Program Now Complete
Arrangements Made to Entertain Visitors at
Olympia Field Country Club on Friday of
Convention Week—Many Fine Prizes
CHICAGO, III., May 11.—The Music Industries
Convention Golf Tournament, which will be
held on June 12 at the Olympia Fields Country
Club, one of the largest private golf clubs in
the world, is open to everyone connected with
the music industry, including dealers, manufac-
turers and traveling men.
Players participating in the Music Industries
Golf Tournament will pay an entrance fee of
$10 which covers all tournament expenses, in-
cluding transportation to and from the club,
luncheon and dinner, with the exception of
caddie fees.
Competition in the morning will be nine holes
medal play, handicaps to apply. Players will
tee off in flights of four each, and there will be
first and second prizes for the low net scores in
each foursome.
Competition in the afternoon will be eighteen
holes match play. There will be first and sec-
ond prizes for the winners of each nine holes
in the afternoon play. In addition prizes will
be given for first and second low gross in the
afternoon as well as for first and second low
net.
Entries, with check for $10, should be sent
to Kenneth W. Curtis, chairman of golf com-
mittee, Kimball Building, Chicago. Accom-
panying each entry should be the name and ad-
dress of the player, his club handicap, if he be-
longs to a golf club, his five best scores for
1924, whether or not he belongs to a club, and
the address to which he wishes his transporta-
tion and tournament tickets sent. If any fail to
receive tournament tickets through the mail
they can be obtained at the information desk
in the lobby of the Drake Hotel.
Blackman Sales Co. to
Feature Premier Grand
Aggressive Kansas City Concern to Act as Sell-
ing Factor for Premier Small Grands in
Western Missouri, Kansas and Oklahoma
The Premier Grand Piano Corp., New York,
announces that arrangements have been made
with the Blackman Sales Co., 17 East Four-
teenth street, Kansas City, Mo., of which M. M.
Blackman is the head, whereby that company
will act as selling factor for the Premier Small
Grand in western Missouri, Kansas and Okla-
homa.
The Blackman Sales Co., organized some time
ago, is particularly well fitted to give the Pre-
mier excellent representation in the territory
mentioned for the reason that the company
maintains a strong traveling sales staff and
keeps in close touch with music dealers.
Highest
Quality
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
MAY
16, 1925
THK MUSIC TRADE
REVIEW
The Trade-in and Its Effect on the
Net Profit of Piano Dealers
The Fourth of a Series of Articles Based on an Exhaustive Survey Recently Concluded by The Music Trade
Review of the Part Which the Trade-in Plays on the Net Profit of the Retail Piano Merchant
Together With a Study of the Methods Which Will Remedy Its Evil Effects
LOSELY related to setting the allowance
on the trade-in is the question of the re-
sale price. This is essentially a matter of
proper cost accounting. It is a most important
factor in making the trade-in yield an eventual
profit to the retail dealer, and also one that is
too often neglected, with the result that at the
end of the year the black ink side of the ledger
usually shows results in an entirely different
manner than w T as expected.
The Basis of Price
The basis of the resale price of every trade-
in is, of course, the amount of the allowance
made. This is equivalent to the invoice price
in the case of new goods purchased. To this
must be added, first, the cost of putting the in-
strument in resale condition, and second, a
margin sufficient to cover general overhead and
net profit. The figure arrived at by this method
is the resale price.
Average Repair Costs
In the survey conducted by The Review
more than 300 retail piano merchants furnished
figures covering the average cost of putting
trade-ins in resale condition. Analysis of these
figures showed that the average cost of repair
work, including tuning, action work and replace-
ment of faulty parts, amounted to $30 per in-
strument. When refinishing of the case is re-
quired, this average cost mounted to $65. Con-
sidering that the merchants reporting were lo-
cated in every part of the country, and consider-
ing the variety of conditions which they have
to contend with, their figures showed a sur-
prising degree of similarity. Approximately 5
per cent of the merchants reporting stated that
they sold their trade-ins "as is," in a majority
of these cases disposing of them to second-
hand dealers without making any effort to re-
sell them in their own warerooms.
Selling "As Is"
One merchant, in his reply to The Review
questionnaire, stated that he sold his trade-ins
"as is," giving the buyer an estimate of the
work needed to put the instrument in playable
condition, and making the resale price the allow-
ance, plus overhead, plus that estimate. This
system is not widely used, however, and can
be left aside in considering the methods in gen-
eral use.
Charging the Expense
An interesting light has been thrown on the
methods in use in the average retail piano ware-
rooms by the replies furnished to the question:
"Is the cost of the repair work on trade-ins
charged to the merchandise account?" Of
those replying to that question, 62 per cent re-
ported that this was the method followed; 26
per cent stated that the work was charged to
the repair department; and 12 per cent to gen-
eral operating expense. Any analysis of this
problem will at once show that the two latter
methods are incorrect, and that the former is
the only method of handling this correctly.
The Merchandise Account
Charging the expense of repair work on trade-
ins to the merchandise account places this ex-
pense exactly where it belongs, since it is es-
sentially a cost. Trade-ins are carried in stock
inventory exactly as new instruments are, and
the basic cost of a trade-in is the allowance
plus the repair expense. That is the figure at
which they must be carried, providing the al-
lowance has been made upon the proper basis.
C
If an over-allowance is made in the face of
competition, the excess over the instrument's
true worth should naturally be charged to sell-
ing expense.
A merchant, in replying to The Review
o
John Doe Piano Co.
Trade-in Work Ticket,
JobNa.
Name,-
No..
WOFLK REQUIRED
WORK
TIME COST
MATERIAL
COST
TOTAL
Repairman-
Polisher
questionnaire, outlined the following system
which is used in his warerooms, in charging
this expense which seems an ideal one:
The moment a trade-in goes to the repair
department, a tag, which is shown with this
article, is attached to the instrument. The fore-
man of the department makes a close inspec-
tion of the instrument and writes in the space
provided what he considers must be done to it.
The men who work upon the instrument fill in
their time and the material used and then sign
the tag, which never is detached from the in-
strument until it is ready for display for resale.
Upon final inspection by the foreman of the
department, the card is detached and forwarded
to the office, where the cost of the work is
figured, and that, added to the allowance, repre-
sents the cost of the instrument in the mer-
chandise account. Trade-ins are handled in
this house exactly as are shipments of new in-
struments received.
The Repair Department
Charging the expense of this work to the re-
pair department, as a small minority of the
dealers still do, is an entirely incorrect method
of handling this matter. In the first place it
puts an unwarranted burden upon that depart-
ment in charging an expense against it with
which it has absolutely nothing to do. The
result is that this department shows a loss
through no fault of its own. This, however, is
not the most injurious side of this method. If
that was all that happened, there would be no
direct loss to the house.
Let us see what really happens when this
method is followed. The expense being charged
to repair department, it does not show in the
cost of the trade-in. As a result in nine cases
out of ten, the resale price of the trade-in is
simply figured on the allowance basis, and the
house gets no return for the labor and material
which have been put into the instrument. This
shows an eventual dead loss of approximately
$30 per used instrument sold. If 100 of these
are sold in a year, that means approximately
$3,000 for which there is no return, a consider-
able leakage, no matter how great may be the
business which follows this method.
General Operating Expense
If this expense is charged to general operat-
ing, and there is no reason at all why it should
be, a similar condition almost invariably ap-
pears, although some of this money is returned
through the overhead margin added to the re-
sale price. But this has the disadvantage of
increasing the general overhead upon all instru-
ments, both new and old, which are sold, and
where some lines are handled which have not
standardized retail prices, it puts their selling
prices out of proportion to similar grade in-
struments sold by competing dealers.
Anything in the nature of cost should be
charged directly to the merchandise account
where it really belongs. Correct methods of ac-
counting may appear of small importance to
some dealers, but it is invariably found that
where they exist there are consistent and per-
sistent leakages that in the long run have a
considerable influence in lowering the amount
of net profit made on any volume of business.
Overhead on Trade-ins
Practically every dealer replying to The Re-
view's questionnaire stated without equivoca-
tion that it cost as much to sell a used piano
as it did to sell a new instrument. Therefore,
it is essential that in setting the resale price
of a trade-in, the usual gross margin be added
to the cost of such an instrument. Of course,
this may be shaded at times to clear accumula-
tions of such stock, but when that is done it
should be realized that such shading constitutes
a direct mark-down, and it should be considered
in the same light as if this mark-down took
place on the sale of new goods.
Proper cost accounting is an essential factor
in eliminating the losses which constantly take
place in the retail trade on the handling of the
trade-in. Without it, it is almost impossible to
turn this source of loss into a source of eventual
net profit.
Kenneth R. McMahon Resigns
YOUNGSTOWN, O., May 11.—Kenneth R. Mc-
Mahon, vice-president and secretary of the Mc-
Mahon Piano Co., has severed his connection
with that company and is planning to leave
about May 25 for Los Angeles, Cal., to reside
permanently. Following several months rest
he plans to enter business there. Mr. McMahon
affiliated with the local firm five years ago, com-
ing here from Philadelphia. He will leave with
Mrs. McMahon and their children.
The Wisconsin Music Co., of Mayville, Wis.,
has recently filed papers of incorporation with
a capital stock of $25,000. Herman Rollfunk,
Henry Gutreuter and May Rollfunk are the
proprietors.
Consult the Universal Want Directory of
The Review. In it advertisements are inserted
free of charge for men who desire positions.

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