Music Trade Review

Issue: 1930 Vol. 89 N. 10

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Collections
the Keynote of
^Successful
oelline
H E instalment method of selling mer-
chandise has advanced in leaps and
bounds during the last twenty-five years.
It is much easier to sell an article for
one hundred dollars or more if it is sold at $10
down and $10 per month than it would be to
sell the same article for cash. The instalment
method secures a larger number of purchasers
who are able to supply themselves with the
necessities and some of the luxuries because of
this method of selling. While instalment sell-
ing is productive of a large amount of business,
it is absolutely necessary that contracts be
turned into cash and this is where the collec-
tion department steps in and makes this method
of selling a success. An instalment house with-
out a good collection department might just as
well go out of business; it is a vital necessity
and so recognized by all successful instalment
houses.
The various forms of contract known as the
security vary from chattel mortgages to condi-
tional sale contracts. In some States the con-
tract takes the form of a lease, the property
being merely rented with a provision that upon
the payment of a certain specified sum which
is the purchase price, the title to the property
will be conveyed to the lessee. The laws of
the various States make it necessary to sell in
such manner as to conform to the State statutes.
It would not be possible in this article to go
into all the various methods of selling which
prevail in all States. I will take up the two
most prevalent methods, the chattel mortgage
and the conditional sale, and for further in-
formation I will refer you to your own State
statutes on the subject.
In selling on a chattel mortgage, a note or
notes are taken for the balance due on the pur-
chase price. These notes are described in the
mortgage which is given as security for the
payment of the notes. The title passes when
the goods are sold to the purchaser who gives
the mortgage as security for the payment of
the notes. It is necessary to record this mort-
gage to prevent a third party from purchasing
the merchandise from the customer and secur-
ing title to it. In this way notice is given to
any subsequent purchaser that the goods are
not fully paid for. If he then purchases he can-
not retain the goods, but must surrender them
to the mortgagee, who by recording holds a
first mortgage.
T
By R. J. CASSELL
Formerly Collection Manager,
Grinnell Bros., Detroit
R. J. Cassell
may be recovered if you conform to the law on
Conditional Sale Contracts
the subject. In fact, all that is usually neces-
A conditional sale contract is practically a sary is to send your truck and most delinquent
promissory note with certain conditions an- customers will allow you to reclaim the prop-
nexed. The title remains in the vendor until
erty. This is known in instalment selling as
the full amount is paid. There is usually a
repossession. Instalment selling, as stated, in-
clause which states that after full payment has
creases the volume of your business, and is
been made the vendor will convey the title to
widely used by thousands of houses all over
the vendee. The States differ in regard to the
the United States. The losses from this method
matter of recording or filing a copy of these
are comparatively small if the house has a good
contracts, so I will not attempt to give you
collection department.
Capital Required
It is obvious that a sufficient amount of capi-
tal must be at hand if you are going to place
your goods on instalment contracts. Doubtless
this shortage of capital has been the downfall
of many instalment houses. The banks will
sometimes loan to a dealer, taking his note and
also collateral security in the contracts; there
must, as a rule, be at least twice the amount
of dollars in collateral as the amount loaned.
This method enables a merchant to secure
money with which to finance his business if •
selling on the instalment plan.
The turnover is slow; if you sell on thirty
months' time, your turnover would average fif-
teen months if the payments are made each
the law on this subject. The conditional sale
month. You can see how vital it is to have
contract is to my mind the most satisfactory
an efficient collection department that the pay-
method of selling, if the laws of the particular ments may be made exactly according to con-
State in which business is to be transacted
tract.
recognize this form of contract.
Importance of Collections
Some dealers prefer to sell on a lease rather
This matter of available capital is a big prob-
than a chattel mortgage. As stated, the lease
lem to every instalment dealer, and I cannot
is merely a rental form used with a promise
impress upon my readers too strongly the very
to convey title after a sufficient amount has
vital importance of a competent collection man-
been paid in the form of rent to cover the
ager and an efficient collection system. Instal-
purchase price.
ment sales are not real sales until the collec-
There is a book published by the Ronald
tion department have secured at least one-third
Press of New York City entitled "The Law of the purchase price. The instalment sale can
of Conditional Sales," by F. B. Haring, which
be made much more secure if the first payment
covers this matter of contracts thoroughly, and
is of good proportion. But this in turn les-
is of great value to dealers.
sens the number of sales, so the safe method is
Advantage of Instalment Selling
to be prepared, and preparation means a good
collection department. The salesman should
In selling on a contract, the goods are given
(Please turn to page 19)
as security. If payment is not made the goods
The necessity of collect-
ing payments promptly
is stressed by collection
expert who discusses, as
well, some of the prin-
ciples and purposes of
instalment selling gen-
erally.
5
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
The Music Trade Review
recognized as being just as essential as the three R's and is placed
on the same basis by the school. This movement, he holds, will
wean parents away from the idea that music is simply a fad and
cause them to regard it as an important educational factor. Once
this idea becomes general the demand for instruments will increase
rapidly. The report, if it does nothing else, should encourage piano
men with the thought that in advocating and working for group
instruction they are proceeding along the proper lines.
REVIEW
(Registered in the U. S. Patent Office)
Published on the First of the Month by
Federated Business Publications, Inc.
at 420 Lexington Avenue, New York
Publishers of Antiquarian, Automotive Electricity, India Rubber World, Materials
Handling & Distribution, Music Trade Review, Novelty News, Rug Profits, Sales Man-
agement, Soda Fountain, Radio Music-Merchant, Tires; and operates in association with
Building Investment, Draperies and Tire Rate-Book.
President, Raymond Bill; Vice-Presidents, J. B. SpilLane, Randolph Brown; Secretary
and Treasurer, Edward Lyman Bill; Comptroller, T. J. KeJly; Assistant Treasurer,
Win. A. Low.
B. BRITTAIN WILSON, Editor
CARLETON CHACE, Business Manager
F. L. AVERY, Circulation Manager
RAY BILL, Associate Editor
E. B. MUNCH, Eastern Representative
WESTERN DIVISION: FKANK W. KIRK, Manager
333 No. Michigan Ave., Chicago. Telephone: State 1266
Telephone: Lexington 1760-71
Cable: Elbill New York
In order to insure proper attention all communications should
be addressed to the publication and not to individuals.
Vol. 89
A
OCTOBER, 1930
10
Business Is On the Mend
S The Review goes to press there is a noticeable im-
provement in the demand for musical instruments as
indicated by orders being received by manufacturers.
This is not to say that there is any strong spurt in business or that
conditions have become normal over night, but it does mean that
retailers are buying more freely and in many cases in larger quanti-
ties, which is taken to indicate that musical instruments are being
moved from wareroom floors into homes. Travelers who have re-
turned from trips through various sections of the country, almost
without exception report a greater interest on the part of dealers.
They are still keeping stocks pared to the 'bone and are buying
from hand to mouth, but nevertheless there is enough retail business
to keep their orders coming to the factories. There are even those
who predict that there will be a shortage of new pianos before the
first of the year, not at all an improbable situation, because of the
curtailment in factory operations that has been made by many
manufacturers. All in all it looks like a good fall and holiday
business, not record-breaking perhaps but nevertheless substantial.
A
OCTOBER, 1930
How an Outsider Views the Trade
T the behest of several prominent piano manufacturers
a business authority of wide reputation and experience
has made an exhaustive study of the general music
business with special reference to the cause of existing conditions
and to future possibilities, and as a result of his unbiased survey
he has rendered a most interesting and illuminating report. He de-
clares, in short, that musical instruments have not been superseded
by other commodities of more modern character as was the horse-
drawn buggy superseded by the automobile, but that the interest
of the public had been allowed to wane largely through lack of
effort on the part of the members of the trade.
In suggesting a solution, however, comes the most interesting
part of the report, for the investigator, not particularly interested
in music, reached the same conclusion that has already been reached
by many clear thinkers of the industry, namely, that the future of
the musical instrument business and particularly the piano business
rests with the musical training of the child. To make this training
effective, however, it will be necessary to persuade the educational
authorities of the country to grant full school credits for music
study and thus impress parents with the idea that music training is
I
I The Annual Radio World's Fair
HE annual Radio World's Fair in New York is over
and those who looked for the public to crowd Madison
Square Garden throughout the week, as in previous
years, were disappointed. The lack of public support does not in-
dicate a waning interest in radio, but was due—in no small measure
—to the fact that there was little or nothing of revolutionary char-
acter to attract it. It means that radio has reached a point
of stabilization where even the most progressive manufacturers
are content to be satisfied with refining, rather than rebuilding,
their receivers. To the dealers who have seen large stocks in their
stores made obsolete over night through the introduction of some
radical improvement by the manufacturer, this tendency toward
stabilization will prove welcome. In enables both the dealer and
the public to buy with confidence and makes for a sounder and
more profitable business. Certainly the speculative, hit-or-miss days
in radio seem to have passed.
I
Primarily for Music Advancement
T is likely that before another month is past some definite
announcement will be made regarding changes in the policy
in operating the National Bureau for the Advancement of
Music, or rather of the determination of the committee in charge
of the work to have the Bureau go back to first principles and
operate with a view to developing musical interests in a broad way
rather than advocating the adoption of any particular type of in-
strument as an interpreting medium. The plans are still in process
of formulation, but it is not violating confidence to declare that the
future program will be distinctly neutral so far as it concerns the
activities of various groups of manufacturers. The Bureau, in
short, will work for the cause of music itself with the idea of pro-
moting interest in the art and leaving it to the manufacturers of
musical instruments themselves to direct that interest into those
channels that will benefit them most.
This declaration of policy, it is stated, has been made neces-
sary because the time was approaching when it would be impossible
for the Bureau to function successfully with its efforts broken up
in a variety of channels, more or less competitive, even though
directed toward the same general end.
A
The Ohio Convention
LTHOUGH the attendance at the annual convention of
the Music Merchants' Association of Ohio held in Cin-
cinnati early last month was rather disappointing, it
was evident that those standard-bearers of the music trade of the
State who did make it their business to be present came with the
full intention of accomplishing something. The various round table
sessions, a regular and successful feature of the Ohio meetings for
the past couple of years, again proved their worth by affording
opportunities for the Association members to exchange worth-while
ideas on the various phases of the business, including the merchan-
dising of pianos, band instruments and radios. Those who did
attend the sessions found them well worth while, and if nothing
else was accomplished, Secretary Rex Hyre was persuaded to occupy
the office for another year at least, even at a personal sacrifice. This
in itself was a most worthy accomplishment, for the success of the
Association to date has been due in no small measure to Mr. Hyre's
personal efforts.

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