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REVIEW
THE
VOL.
LXXXI. No. 14 Published Every Saturday. Edward Lyman Bill, Inc., 383 Madisao Ave., New York, N. Y. Oct. 3, 1925
8ln
»£.£°R 1 ; £° eacrentl1
Music Dealers' Instalment Sales and
Their Collection Problems
How Music Store Customers Pay Their Bills—Problem of Low Summer Collections—Typical Collection
Figures Reported by a Leading Music Store—The Good and Poor Collection Months — Compari-
sons With Other Retail Stores—First of a Series of Nine Articles by J. K. Novins
E
XAMINATION of the monthly collection
percentages reported by a music store
generally reveals a wealth of interesting
information bearing on the paying habits of
music customers and oftentimes affords a clue
JAN FEB MAR APR MAY J O t JULY AUG SEPT OCT 0 PEC
551
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39.0
44.3
credit conditions at these regular conferences. J ime
M.2
38.4
The credit man of a retail store in Davenport, July
August
31.3
30.6
la., noticed a sudden fall in collections during September
31.4
35.8
the Fall. This surprised him, as the Fall October
36.2
44.3
39.0
45.7
months, especially as the music stores are con- November
41.7
34.0
cerned, are generally considered very good col- December
This store also reported the following
lection months. He consulted the credit men
of several other stores in the same city and
found that they, too, were puzzled over the same
JAN FEB MAR APR MAY JONE JULY AUG 5EPT OCT W DEC
situation. In one Davenport store the collec-
tions during the Fall fell off as much as 5 per
cent for apparently no reason at all.
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The credit man began a little investigation
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of his own. He found that several companies
were offering coal at a reduction of 50 cents on
the ton to those who paid spot cash. Appar-
ently even such a small amount was sufficient
1924 Monthly Collection on Instalment Accounts
inducement to cause some people to neglect pay-
Reported by Denver Music Store
ing their bills to the retail stores Knowledge
monthly collections on all instalment a c c o u n t s :
of the situation enabled the credit men to put
1924
,924
on added pressure to collect Fall bills.
January
8.3
July
6.8
February
6.4
August
6.1
Incidentally, this same situation holds true in
8.0
September
6.6
many other cities. For instance, in Denver, A March
l' ril
7.0
October
7.3
Colo., music dealers and others informed the
M a y
6.4
November
6.6
writer of a depression in collections during the ) " " e
6.1
December
7.4
Fall months, for the reason that folks then have
These figures the writer charted out, as shown
to pay their household fuel bills. During the on the chart accompanying this article. The
Winter months Carl C. Schmidt, of the Schmidt writer also charted out the average monthly col-
Music Co., Davenport, la., said his collections lection percentages reported for the year 1924
fell somewhat because of the household fuel ex-
penses incurred by the residents.
JAN FEB MR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
Another time for poor collections, music deal-
ers and other retailers told the writer, is during
the Summer months. People go on their vaca-
tions. Therefore, during this time the music,
furniture and other retailers find it advisable
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to exert extra effort to collect money by start-
ing in as early as April. Music stores find col-
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lections better during the Summer months than
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do the other retailers. This is especially true
during June, and even along in July, at which
time other retail stores find collections poor.
Typical Music Store Collections
However, before we discuss the subject fur- 1923 Monthly Collections on 30-Day Charge Ac-
counts Reported by Denver Music Store
ther let us examine actual collection percentages
reported by a well-known music store in Den- by sixteen Denver retail concerns, which include
ver, Colo.
six department stores, five clothing stores, two
This store's record of collection turnover for shoe stores, a ready-to-wear store, a jewelry
store, and the music store whose collections
two years, 1923 and 1924, is as follows:
have just been recorded here.
1923
1924
laiuiary
55.6
43.2
Music Store Collections Vary Throughout Year
February
35.3
31.3
Examination of the chart shows the music
March
51.5
39.6
store
begins the year with high collections in
April
35.8
34.3
(Continued on page 4)
May
47.9
39.9
s
Average Monthly Collections During 1924 Re-
ported by 16 Denver Retail Stores
to the economic and other conditions that af-
fect these habits.
No well-conducted music store can afford to
overlook this detail. All the music dealer has
to do is to take the amount of balance receiv-
able at the beginning of the month and divide
it into the actual collections reported that
month. The product will give the collection
percentage, or collection turnover.
Whether you do a thirty-day charge or an
instalment business, you follow the same proce-
dure, only you figure the turnover separately
for each class of accounts. In the next article
the writer will describe how the music store
JAhf m Ml APR MAY JONE JOff AUG SEPT OCT NOV DEC
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1924 Monthly Collections on 30-Day Accounts
Reported by Denver Music Store
computes and analyzes the turnover percentage
figures.
In many cities the writer found that credit
men representing various classes of retail stores
get together from time to time to compare
their respective collection percentages and to
discuss the underlying factors involved. There
is no longer any of the old-time secrecy, and
the music man, as well as the other retailers,
in the same town learns a great deal about local
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