SELLING RADIO
IN MUSIC STORES
Review of Practices and Profits of Music Mer-
chants Made by Radio Retailing Is Com-
mented Upon by Official of the Music
Industries Chamber of Commerce.
SOME TIMELY COMMENTS
Chairman of Trade Service Bureau Points Out Some
Discrepancies in Analysis of Figures and
States Views Generally.
What selling practices and methods are being used
by music and phonograph stores in handling radio
today? What are the selling costs of such stores on
their radio lines? What profits are they making on
radio? And what do music and phonograph dealers
think of this new radio business?
To get the definite information on these and other
points relating to radio sales by the retail music
trade, "Radio Retailing" has been conducting a study
of music stores, of which a preliminary report has
been made It is based on the information evoked
from questionnaires sent out to 700 retail music
dealers in connection with the plan of the Music
Industries Chamber of Commerce, and on the facts
gathered by individual investigators of "Radio Re-
tailing."
Representation Grows.
"Taking the country as a whole, probably six
music stores out of every ten are today selling
radio," says the report. "Among those dealers who
had previously handled phonographs, the ratio of
dealers now handling radio sets is of course higher
—perhaps 80 per cent—but the piano stores, which
have been slower to take up radio, hold down the
ratio for the music trade as a whole." Continuing
the report says:
Few music or phonograph dealers are found to
have a separate "radio department" for handling
their radio business. Radio is considered by most
of them as "just another musical instrument." Sep-
arate records or department accounts are kept in but
a limited number of places, the general practice in-
stead being to "lump" radio sales in with phono-
graphs, pianos and players, and other musical mer-
chandise. The records of a number of music stores
which have segregated their radio operations were,
however, obtained by questionnaires and by personal
calls.
The Dealers' Urge
Radio broadcasting may have delivered a serious
blow to the sale of phonographs and records. Deal-
ers found their sales falling off at a terrifying rate.
Action was necessary, and those music dealers who
got early into radio were able to offset the ebbing
tide, with a new golden flood from the sale of radio
sets. Some phonograph dealers have thus actually
built their total gross sales and net profits far above
what they were in the old phonograph days, and
some ex-phonograph dealers are now actually de-
voting all their time to radio selling.
Unlike the usual practice in the selling of phono-
graphs, where the dealer has carried only one make,
or at the most, two, the same dealer has felt it
necessary in radio to carry as many as ten different
makes of sets. In fact, some music stores were
15
PRESTO
April 18, 1925.
found which had even gone so far as to carry a
stock of twenty to tweivty-nve different radio manu-
facturers' outfits, to meet the demands of the buying
pubic.
The Sales Plans.
Seventy-five per cent to 85 per cent of these sales
are made on the installment plan. Especially is this
true with the higher-priced sets. Twenty-five to
33 T /2 per cent is required as an initial payment; the
balance the customer is allowed to pay over a period
of eight to ten months. In some cases the initial
payment is lower—10 to 15 per cent—but the period
of time over which the payments shall run remains
about the same, varying only in individual instances.
In most cases a charge of from $6 to $10 is made
for installing a set. This amount includes cost of
aerial, lightning arrester, ground, etc., plus the cost
of labor. Some dealers do this installing free, but
such a plan is fast being discarded. The music
merchant has found it hard enough to make any
profit from sales only, let alone supplying free in-
stallation and service.
The Service Problem.
It is this servicing problem that seems to be a
bugbear with many music dealers, and there is no
standardized or uniform policy with regard to han-
dling it. By far the majority charge from $1.25
to $1.50 an hour. However there are some stores
which give service free.
The whole question of stock turn in radio is an
important one. No matter what store is handling it,
there can be a uniform rule for all.
All in all, though the music dealer feels that he has
made nowhere near a fair profit on his radio business,
he is optimistic as to the future of radio selling. He
believes that another two or three years will see the
radio industry more stable, resulting in a better profit
for the retailer. He believes that a more uniform
practice will come among retailers as regards service
charges, etc., that many of the so-called gyps will be
eliminated, that there will be more harmony in the
trade, more co-operation among dealers, jobbers and
manufacturers. And for him—well, more business
and a better business for radio, in his opinion, will
show vast improvement, industrially and financially,
as time progresses.
Mr. Dennis' Views.
Interesting comment on the report is made by C. L.
Dennis, manager of the Trade Service Bureau, in spe-
cial booklet of the Music Industries Chamber of
Commerce containing a reprint of the report. In
complimenting Radio Retailing on the excellent pres-
entation of facts Mr. Dennis pointed out "a dis-
crepancy between your analysis of the figures ob-
tained and your paragraph on the relationship of radio
to the phonograph business, for which we wish to
offer an explanation to our members, and you doubt-
less will want your readers to have it also." Continu-
ing, Mr. Dennis says:
Let us agree with your statement that "radio broad-
casting may have delivered a serious blow to the sale
of phonographs and records," and yet we find two
leaders in the latter field, Victor and Brunswick,
broadcasting better programs of music than radio
has previously known, thereby increasing their «ales
of phonograph records.
This indicates that the phonograph interests,
dealer and manufacturer, are not to be left stranded
by any "ebbing tide" which you mention, but are
riding on the crest of a new wave of progress.
Wants to Be Shown.
The "new golden flood from the sale of radio sets,"
described in the one paragraph from which we quote,
remains to be demonstrated, with the average music
dealer. The figures from our joint inquiry with you
into radio costs in the music store, and also your fig-
ures previously gathered from department stores, do
FOSTER & WALDO TO
OCCUPY NEW BUILDING
Progressive Minneapolis Music House Will
Be Provided with More Space for Con-
stant Growth,
Construction of a four-story, re-inforced concrete
building, to cost $125,000, was started April 15, at
816-818 Nicollet avenue, Minneapolis, Minn. Foster
& Waldo Company, the old established music dealers,
will occupy the building. Plans were consummated
for a long time lease on the property, based on a
valuation of approximately $270,000.
Erection of the new building will mark the fourth
time the Foster & Waldo Company has outgrown its
quarters, in its forty years of business there. The
move to the new structure will be the beginning of
another successful era in the history of this progres-
sive music house. The firm of Foster & Waldo is
typical of the constantly growing northwest and, as
an admirer in the piano industry said recently, "keeps
several laps ahead of progress."
OLD LINE IS CONTINUED.
The Trenton Music Co. is the name of the firm
which succeeds the Huckins Music House at Trenton,
Mo. The new owner is C. D. Maxwell, who formerly
was in the music business in Chillicothe, Mo. The old
line of musical instruments will be continued by Mr.
Maxwell, who will add a line of radio.
HOLDS FORMAL OPENING.
Paul Winters held a formal opening April 15 of his
new piano store at 444 West Fair street, New Phila-
delphia, O., where he is handling Bush & Lane, Cable,
Conover, Kingsbury, Wellington, Sohmer, Brambach
baby grand and Story & Clark Repro-Phraso.
not bear out the statement that "Some phonograph
dealers have thus actually built their total gross sales
and net profits far above what they were in the old
phonograph days "
Admitting the sales and the vast selling possibilities,
we see no evidence of a "golden flood" of net profits.
Radio merchandising must be stabilized, and more
evidence must be forthcoming than we now have, be-
fore we can demonstrate "net profits far above what
they were in the old phonograph days." Unless it
was intended to con line that comment to a few deal-
ers, some of whom doubtless have made money from
radio sales, the figures of 2.6 per cent average profit
uii sales do not confirm this point.
Select Type Chosen.
Then, too, the music dealers whose figures were
available for your analysis are the alert type, who
know more about their costs than do others, or per-
haps they are more inclined to show what they have
done than others who cannot show profits. Even
these alert music dealers, proven to be producers of
greater sales profits than the department stores de-
spite nearly two per cent higher merchandise cost,
are dubious about their servicing expense. Doubtless
this is a bugbear to all radio dealers, except the fly-
by-night "gyps," who must be weeded out before
radio finds its rightful place in music store mer-
chandising. The price-cutting which is rampant to-
day, the obsolete sets still unsold, the overstocks and
unstabilized production, as well as the unknown serv-
ice costs—all cast their shadows over the "golden
flood" of net profits, which we think has yet to reach
the retailer of radio.
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moving cover. Satisfaction guaranteed or money refunded.
BOWEN PIANO LOADER CO.,
Winston-Salem, N. C.
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