Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
FAIR TRADE
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you. One man may consider it unfair
competition for you to advertise a new
88 note spinet piano for four hundred
dollars, but if you actually have such a
piano for sale, there is nothing unfair
about it. On the other hand, if you ad-
vertise such a piano and you don't have
it, or it isn't new, or it hasn't 88 notes,
or it isn't a spinet, then that qualifies
as unfair competition.
Discount Selling
What are the most frequent com-
plaints that we receive at Association
Headquarters? The complaint which ex-
ceeds all others is that of discount sell-
ing—for it can be practiced by three
groups, retailers, wholesalers and manu-
facturers or in other words anybody
with something to sell. Complaints on
this subject are bitter and justifiably so.
for discount selling can be vicious—
however—there is nothing legally unfair
about selling at a discount unless the
item being sold is fair traded of which
there are relatively few in the music in-
dustry. There is absolutely nothing you.
a local or state group, or NAMM can do
to stop discount selling. The law pro-
tects the individuals right to sell his
merchandise at any price he pleases and
to whomever he pleases. If he chooses
to give it away, that too, is his business.
The only manner in which a retailer or
w/iolesaler can be stopped from selling
Brand X at a discount is for the manu-
facturer of the item to cancel the fran-
chise or cease shipping the seller. Even
then, if the seller is resourceful and de-
termined to sell Brand X. he can buy it
from other sources.
How to Report a Violation
If the wholesaler in question is sell-
ing at a discount, or selling direct to
consumers, and if he is a member of the
National Association of Musical Mer-
chandise Wholesalers, then he can be re-
ported to the NAMMW. as violating that
Association's code of ethics. Don't report
loosely however. Seeing a letterhead of
the XYZ Wholesale Company on a band
director's desk doesn't necessarily mean
that the wholesaler is doing business
with him. I know of cases where this
has occurred, and the letter was actually
a brief statement of why the school's
order could not be accepted, and a pol-
ite suggestion that the order be placed
with the very merchant who jumped to
the wrong conclusion. Always be fac-
tual. Get names, dates, places, merchan-
dise sold or any other bona fide evi-
dence to substantiate a complaint. If
the wholesaler is not a member of the
NAMMW then there is no recourse thai
can be taken. In every business under
the sun, sales are lost to those who sell
for less. It must be expected, and to not
expect it. is to be idealistic and unwill-
ing to face facts.
At this point bear in mind that it is
illegal for a group of individuals, or an
organization, including NAMM. to at-
tempt to influence sources of supply.
NAMM cannot ask a manufacturer to
cease supplying a person selling at a
discount, and we certainly cannot threat-
en, intimidate or seek to coerce a manu-
facturer or wholesaler in any way what-
soever.
Itinerant Merchants
Probably the second most common
complaint is that regarding the activities
of itinerant merchants, who have secur-
ed one or more lines of merchandise.
These persons usually have no store,
only their home as a base, and make
most of their sales to schools in the
smaller cities and rural areas. Here
again, the rights of an individual are
basic. The individual has the inherent
right to buy from whomever he pleases,
and to sell to whomever he pleases. No
group, nor NAMM, can interfere with
this individual. Certain individual ac-
tion can, however, be taken. Most muni-
cipalities require vendors' licenses;
many states require the collection and
reporting of sales taxes. There are local
laws governing the activities of itinerant
merchants, and you as an individual
may seek the enforcement of existing
state and municipal laws.
A frequent complaint received from
members concerns the loss of franchised
lines of merchandise. At the outset, it
must be understood that the granting of
franchises is the sacred right of manu-
facturers, and is not open to the influ-
ence or attempted influence of any indi-
vidual or group. What the manufacturer
has given—so can he take away. When
a merchant appeals for help on a lost
franchise, he is beyond the point of as-
sistance. A primary cause of cancelled
franchises is inactivity. This inactivity
comes in many forms, but I believe the
greatest cause is the tendency of alto-
gether too many merchants, to spread
their efforts too thin. Whether by acci-
dent or design, a merchant defeats him-
self in trying to handle too many com-
petitive lines of instruments. A mer-
chant may work hard on a certain line,
gain acceptance of the product in his
trading area, and spend money in pro-
moting its pestige only to receive a "we
are sorry to inform you" letter some
morn in". Heartbreaking it is true--but
it is all part of the business risk. The
best way to avoid this is to choose the
lines which you believe to be the best,
do a good merchandising job on them,
and win the confidence and loyalty of
the manufacturer.
What NAMM Can't Do
Let us summarize here the things that
cannot be done by IVAMM, or any other
group organized or unorganized. These
limitations are imposed by law, and are
not limitations determined by rule of
thumb in order to duck nasty situations.
Expressly prohibited are:
1. Developing rules or standards of
what shall be considered fair or
unfair competition.
2. Attempt to influence sources of
supply r .
.'». Compiling lists of those who either
do or do not practice fair compe-
tition.
1. Fake concerted action, openly or
concealed, to induce conformance
to any policy or course of action
in any matter wherein group ac-
tion is not clearly within the lim-
itation of applicable law.
f>. Attempt to enforce the law through
direct action on your own initia-
tive—or by-pass law enforcement
agenceis.
Perhaps at this point you feel you are
licked and have no recourse whatsoever
to trade abuses and yellow retailing.
Well—if you do—take heart, for there
are many things you can do. Here are
a few:
What Merchant Can Do
1. If you have knowledge of a viola-
tor of the trade practice rules, report it
to the Music Industry Trade Practice
Committee. This organization is a clear-
ing house for complaints, with the main
purpose of settling controveries by per-
suasion, or by pointing out to the of-
fender that his practices are in violation
of the trade practice rules, before the
matter gets to the FCT. Furnish the
name and address of tne offender; indi-
cate whether it's a proprietorship, part-
nership or corporation; indicate whether
the firm is a retailer, wholesaler or
manufacturer; give a description of the
unfair practices which you believe are
illegal; indicate the advertising media
used press, radio, etc.; indicate wheth-
er to your knowledge the firm does bus-
iness across state lines, or if the adver-
tising transcends state lines; attach ex-
hibits of offending advertising, etc.; ad-
vise whether or not the offense has been
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THE MUSIC TRADE REVIEW, FEBRUARY.
1954