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6
THE
MUSIC TRADE
REVIEW
MAY
23, 1925
Solving Radio Distribution Problems
The Talking Machine & Radio Men, Inc., of New York City, Drafts Code of Principles Covering Radio Mer-
chandising Problems Which Has Been Endorsed by the Membership—Code Covers Points of
Interest to the Retail Dealer, the Distributor and the Radio Manufacturer
T
HE principal question in connection with
radio, which some time ago was that of
obtaining sufficient production of worth-
while receivers, has switched entirely to one
of distribution as production in many cases has
caught up with and exceeded demands to a
point where liquidation of surplus stock has
become necessary.
This matter of distribution is being given in-
creasing attention as the radio industry settles
down and becomes stabilized on a basis which
it is hoped will prove permanent. And the dis-
tribution problem does not consist entirely of
placing the various and sundry lines with an
adequate number of dealers but rather it has to
do primarily just now with enabling those deal-
ers to handle radio receivers and equipment
on a basis that will produce both volume of
business and adequate profits.
Working Out a Solution
Perhaps the most earnest attempts that have
been made to bring together various radio in-
terests, including manufacturers, distributors
and dealers, for the general consideration of
distribution problems with a view to developing
some definite rules that would prove of direct
advantage to all the several interests, have been
those of the Talking Machine & Radio Men,
Inc., New York.
This organization has encouraged radio man-
ufacturers and distributors to meet with the
dealers on numerous occasions and discuss with
them merchandising matters. Some two months
ago it called a meeting of radio manufacturers
and their distributors in conjunction with the
executive committee of the Association for the
purpose of ironing out some of the difficulties
that have crept into the trade.
Due to the fact that the radio interests are
largely unorganized, it was found rather hard to
bring about definite agreements in the matter of
merchandising policies. But at several meetings
leading questions were threshed out and a ques-
tionnaire sent to all radio manufacturers asking
for opinions on certain definite matters, it be-
ing suggested among other things that a head,
or dictator, for the entire trade be appointed
to direct activities along correct lines as is the
case in the baseball and motion picture fields.
As a result of these conferences and the con-
sideration of the replies sent in to the question-
naires, the Executive Committee of the Talking
Machine & Radio Men, Inc., has drafted a code
of principles covering radio merchandising
which at the meeting of the Association on May
13 was endorsed by the membership at large.
The code represents much careful thought, and,
in addition to giving sound advice to dealers,
makes recommendations to the manufacturers
which may be regarded as drastic in certain
cases but which nevertheless are designed to
make for confidence and stabilization in the
trade. The code in full reads as follows:
Limiting Number of Lines
1. Success in business comes from concentra-
tion. It is therefore that we recommend that
the general handling of sets by dealers should
be discontinued. A dealer should handle the
products of no more than three manufacturers;
and these products should cover the field in
price, style and hook-up; thus, by confining
themselves to four products, the proper presen-
tation and sales push can be put behind the
products of the manufacturer. Proper repre-
sentation given to manufacturers will encourage
them in their future development. In selling
the four products we earnestly urge that the
dealers employ every precaution to select manu-
facturers
who use proper
merchandising
methods and whose past can commend itself to
the dealer, to the end that the industry can as
rapidly as possible be put on a real business
basis and be taken out of its goldmine rush
days.
We believe that a real dealer's franchise
proposition, backed by an earnest endeavor by
the manufacturer to make the franchise a valu-
able one, may be the solution of the difficulties
of the trade. At this time, however, we made
no recommendation that there be a general
issuance of franchises.
Featuring Products of Reputation
2. For the dealer's own protection, he should
handle only such sets as are standard, nationally
advertised and steer clear absolutely from any
stenciled merchandise. Such merchandise be-
comes practically valueless as soon as the height
of the season is passed and his profits then are
tied up in unmovable inventory on which great
losses are taken. Very frequently the dealer
makes a handsome profit during the season and
gives it all back in the way of losses on inven-
tory at the end of the season, having gotten
nothing more than a mere living out of his hard
work. Standard merchandise purchased at a
living discount and backed by a manufacturer
of reliable standing, financially and otherwise,
is profit insurance.
The Question of Proper Service
3. We recommend that all dealers be pre-
pared to give proper service upon sets sold,
and that the service portion of their business
be stressed in advertising and window displays;
so that the public will have an assurance that
after a set is installed in their home the dealer
service will stand back of the set, and see to it
that it continues to function properly. The
proper service given to a consumer will develop
the dealer's good will and bring him an endless
amount of repeat business, thereby assisting in
the reduction of his percentages overhead and
the increase in his net profit. An investment
made now in service work and a service depart-
ment will reap a big return. In lieu of a home
service department arrangements can be made
with certain well-known service organizations
now being used by some of the leading re-
tailers.
4. We recommend that an immediate effort
be made to train yourselves and your clerks so
that intelligent service and advice shall be given
not only to purchasers in regard to the opera-
tion and maintenance of their sets, but also to
all prospective purchasers.
5. We recommend that all sets that are ad-
vertised for sale or displayed in store windows
or in stores be advertised and marked under
their "stripped" price only and never equipped;
unless the set is one of those in which the parts
are made by the manufacturers of the set, in
which event the set shall be marketed under its
complete price, fully equipped. When advertis-
ing complete sets, all accessories should be
named.
Suggestions to Manufacturers
6. We earnestly recommend to the manu-
facturers of the country that there be only one
discount price offered to dealers, regardless of
the quantity purchased, and that the price offer-
ed should enable a dealer to make a fair profit;
also that at no time should the manufacturer
offer further discounts for quantity purchases,
thus putting all dealers on an equally fair basis.
7. We desire to call to the attention of the
manufacturers of the country the fact that more
jobbers do not necessarily mean more business;
that there should be fewer and better jobbers.
That they should earnestly endeavor to see to
it that those receiving jobbers' discounts are
real jobbers and not the purchasing agents for
chain stores, department stores, etc.
8. We earnestly recommend to all manufac-
turers that if they change their models or their
prices they notify their jobbers and dealers in
writing at least ninety days in advance of the
change and at termination of said ninety days
that a satisfactory adjustment be made.
Copies of the Code of Principles have been
sent to all associations in the music trade
throughout the country with the suggestion that
they be adopted and endorsed either in part or
in toto, and that the various associations make
other recommendations along the same lines
looking to the benefit of the trade from a na-
tional standpoint.
Working to Stabilize
the Radio Industry
Dayton Fan & Motor Co. Adopts Exclusive
Territory—Distributor and Dealer Franchise
Plan
The Dayton Fan & Motor Co., Dayton, O.,
manufacturer of Day-Fan receiving sets and
other radio products, has adopted an exclusive
territory-distributor and dealer-franchise plan.
Its distributors will be a selected list of outlets
in the key cities of the country, the dealer out-
lets being selected by jobbers. The Day-Fan
list prices which have been guaranteed to the
trade until June 1 will, on that date, be again
announced with guaranteed prices and discounts
for a full year.
D. A. Graham, vice-president of the company,
in making the above announcement recently
said, "We are all vitally interested in the stabil-
ization of the radio industry and until the
fundamental ills now affecting the trade are
corrected with a suitable distribution policy
and other constructive measures the present
situation will continue.
"With the change from a seller's to a buyer's
market, the workings of competitive law were
felt and the wecding-out process is now under
way. The moves made now will result in
either the sound progress of the industry as a
whole and the individual companies in particu-
lar, or it will retard the industry's progress for
a length of time and will necessitate the with-
drawal or the elimination of those who are not
contributing to its health. Fortunately, there
seems a desire on the part of those prominently
connected with radio to clean house and to
embark on sales plans and policies which will
assure their selected jobbers and dealers a
profitable business, one carrying an assurance
of future growth along constructive lines.
There is much yet to be contended with. There
is a period of distress in some portions of the
industry that yet must be passed. There are
indications, however, that the outstanding man-
ufacturers see a clear way for a new era and,
with distributors and dealers following plans
in like channels, the development of radio will
advance along permanent and not chaotic sales
lines."
Will .T. Ellsworth, who for many years had
been on the sales staff of the McKinley Music
Co., Chicago, recently joined Robbins-Engel,
Inc., and is presenting this firm's products to
the trade.