June 18, 1927.
PRESTO-TIMES
have in mind a policy issued by one of the large fire
insurance companies that protects both the dealer
and the customer against loss by fire, regardless of
where the merchandise may be located, and against
breakage in transit, at any time, even though the
customer may move without notice to the insurance
company or the dealer. Such liberal protection
It Enables the Music Merchant to Realize the should represent quite an inducement to the customer,
and the cost to the dealer is not great.
Same Net Profit on His Installment
There is some difference in opinion among retail
Business That He Does on
music merchants as to what constitutes a fair carry-
His Cash Trade.
ing charge, but most of the larger houses have agreed
on a charge of 50 cents a month on each $100 of
deferred balance. Thus, if the retail cash price of an
A GOOD COLLECTOR
instrument is $650 and there is a trade-in allowance
of $75 and a cash payment of $75, making a total
It Saves Office Overhead, Avoids Sending Bills to a credit of $150, the balance which the customer wishes
to defer over a period of, say, 24 months, amounts to
Large Number of Customers and Helps to
$500. A charge of 50 cents per $100 of the deferred
Increase Size of Down Payment.
balance will in this case amount to $2.50 a month
and for 24 months the total charge will be $60. When
By W. LEE WHITE,
we reach this point we find that there are two dif-
Treasurer of the Bankers-Commercial Security Com- ferent methods now in use of incorporating this $60
carrying charge in the contract.
pany, Inc., New York.
MERITS OF THE
CARRYING CHARGE
THRONG SEES THE BLUE
RIBBON LINE OF PIANOS
Hobart M. Cable Display at the Convention
Last Week Was Big Attraction at the
Annual Convention at the Stevens.
One of the most frequently visited of the conven-
tion exhibits was that of The Hobart M. Cable Com-
pany. LaPorte, Ind., which had its entire new Blue
Ribbon line grouped in a most interesting and attrac-
tive setting on the ninth floor of the Stevens Hotel.
Blue Ribbon pianos are a new departure in piano
manufacturing.
Designed and finished like fine
furniture, they match the furnishings of every type
of home. Each Blue Ribbon model is an instrument
of striking individuality, summarized in the distinc-
tive name appearing on the fall board.
There is a rich beauty about the cases of these
pianos that it is impossible to describe or even to
portray in. pictures. The grain, particularly in the
walnut cases, is so unusually beautiful and so per-
fectly matched, that many were the expressions of
approval and delight heard from music dealers whose
long experience makes them well qualified to judge
piano values. These instruments are furnished in
the new high light, or two-tone blended finish, to
order. The tone of the instruments of this new Blue
Ribbon line is of the same exquisite quality that has
always been the hall-mark of Hobart M. Cable instru-
ments.
The Song Bird, 3 foot 8 inch upright—"the baby
piano with the full sized Hobart M. Cable tone"—
and The Patrician—the newly perfected 5 foot 2 inch
baby grand—claimed the lion's share of attention.
The other models composing the Blue Ribbon line
are The Conservatory, 4 foot 4 inch upright, and The
Aristocrat. 4 foot 4 inch interpreting player-piano.
All genuine Blue Ribbon instruments carry a 3-inch
replica of the original gold medal awarded Hobart M.
Cable pianos for superiority. The medal proper is in
bright gold finish and has attached to it ribbons in a
shade of rich royal blue.
Something out of the ordinary was the little player-
piano case, 3 feet 8 inches high, in walnut, which
was exhibited "in the white" to show the quality and
beautiful grain of the veneers used by The Hobart
M. Cable Company. This unique display was exam-
ined with much interest by the many visitors.
The Methods.
The first method, which is used by some of the
dealers in California and which is better adapted for
use in that state than in most other states because of
certain rather unique provisions of its laws, is to
divide the $500 deferred balance into 24 equal pay-
ments of $20.83 each and then provide in the contract
for the payment of $2.50 additional each month as an
accommodation or carrying charge. There are sev-
eral objections to this method, the first and most
important of which is that it probably conflicts with
the laws of a majority of the state. A second objec-
tion is that it gives the customer two amounts to
remember each month and also increases the work
of the bookkeeping and collection departments.
Collection managers operating under the carrying
charge system have found that the inducement of a
rebate to the customer on anticipated payments has
worked wonders with their collections. I want to
warn you, however, at this point that no mention of
any rebate of carrying charge should be made in the
contract. A customer may prove to be so conten-
tious with respect to collections or may cause your
service department so much extra work over unfair
complaints, or for other reasons the account may
prove to be so expensive to handle that you may not
care to give that particular customer a rebate even
though he may anticipate a payment or two. But
There are many other reasons why the carrying the principal reason why no mention of it should be
charge should be adopted by the music dealer. It made in the contract is that it would affect the value
creates customer's good will after the sale has been of the contract in the eyes of bankers, as it is impos-
consummated by elimination of the irritating and sible to set a value an any contract which provides
A HARDMAN, PECK & CO. CONTEST.
ever changing interest item on monthly bills. It for a rebate under certain contingencies, because no
saves office overhead by reducing the bookkeeping one can tell in advance whether the contingencies
Beginning Tuesday, June 15, from 7 to 8 p. m..
burden and in other ways. It is a wonderful aid to will or will not occur.
Eastern daylight saving time, Stephen Czukor of the
the dealer's collection department, as the rebate that
Except for uniformity of method in writing the piano division of Hardman, Peck & Co. inaugurated
is customarily given stimulates customers to antici- carrying charge into the contract, it is too much to through Station WRN'Y a Music Appreciation Con-
pate payments. It also encourages the customer to expect that retail installment contracts in use by test especiallj' for the children attending public
increase the amount of the cash down payment, and merchants in different states can be made wholly schools. A special prize will be given to every one
last and most important, it makes the dealer's install- uniform until we have uniform state laws with respect
who will give the correct names of 75 per cent of
ment accounts self-supporting, and if his situation is to conditional contracts of sale and/or chatel mort- the selections played or sung. In answering it will
such that he can use additional capital to advantage, gages. Some day the Uniform Conditional Sales be necessary to mention the number of the public
the carrying charge covers the cost of financing the Act, now the law in eight states, will be as uni- school the child attends, the class to which they be-
paper.
long and their names in full. The prizes are being
versally adopted as the Negotiable Instruments Law
The Other Side.
or the Bulk Sales Act is now, and then it will he offered by Hardman, Peck & Co., and letters should
There is but one argument that is advanced against possible to have uniform installment contracts in all be addressed Music Appreciation Contest. 433 Fifth
avenue, New York Citv, or Station WRNY.
(Continued on page 8.)
the carrying charge by music dealers, and every
dealer that I have heard advance it has also admitted
the foregoing advantages. This one objection is that
the carrying charge will create sales resistance. For
a good many years I have watched the workings of
the carrying charge in the automotive, washing ma-
chine, vacuum cleaner and other industries, and it is
a fact that it does not create resistance to the sale
of these classes of merchandise. From the end of
1923 to the end of 1925, sales of washing machines
In a recent sales com-
increased 16 per cent: vacuum cleaners, 11 per cent;
mechanical refrigerators, 450 per cent; all of which petition among Chickering
dealers, the J. L. Hudson
merchandise is customarily sold with a carrying Company,
of
Detroit,
charge. During this period sales of pianos showed
Mich., earned the most
no increase whatever.
points from sales of Chick-
To those who still insist that the carrying charge erings and the Ampico in
cannot be adopted by the music merchant without the Chickering, and were
seriously injuring his sales, I can only say that in the awarded a silver loving cup
last analysis it comes down to a question of sales- by Chickering & Sons for
manship. If the salesman has created a real desire on their showing. The photo-
the part of the customer for the merchandise in ques- graph above shows the
tion, neither competitors nor carrying charges are members of this progres-
going to upset the sale, but where the salesman has
sive sales organization.
sold "terms" instead of merchandise or has failed to Top row, left to right: L.
create a real desire on the part of the customer for
C. Huntoon. H. B. Wilkin-
the particular merchandise, any minor matter is. of son, R. F. Vaughn, C. M.
course, liable to disturb the negotiations.
Smith, C. V. Lyons, H. C.
Newlin. Seated, left to
The Hesitating Dealer.
right: S. J. Whitney, O.
To the dealer who would like to adopt the carrying A. Lovell, C. H. Kesler,
charge, but is still hesitant because of the sales Harry Mascracken, Joseph
resistance bugbear, I suggest that he make his retail Fisher.
contract more attractive to the customer by the in-
sertion of insurance protection in the contract. I
To those to whom the subject of the carrying
charge may be entirely new. it might be stated at the
beginning that the carrying charge is a sum of money
added to the cash retail price of the merchandise and
represents the theoretical cost to the dealer of ex-
tending to the customer the convenience of time pay-
ments. It has been adopted by practically every
industry selling at retail on the installment plan, ex-
cepting the music industry.
The very best reason for its adoption by the music
industry is its essential fairness to all parties con-
cerned in the transaction. It is fair to the installment
customer because it represents a reasonable charge
for the service and accommodation he is getting from
the dealer. It is fair to the cash customer because it
relieves him of the necessity of contributing, as he
has done in the past, to the cost of installment sell-
ing. It is fair to the dealer because the expense of
selling and collecting on the installment plan con-
stitutes a burden the cost of which is very much in
excess of the 6 per cent per annum that most dealers
are charging their time customers, and there is no
good reason why the dealer should contribute any
portion of his legitimate net profit to the cost of the
accommodation extended the installment purchaser.
In other words, the dealer is entitled to make the
same net profit on a sale to an installment customer
as he makes on a sale to a cash customer.
A WINNING SALES STAFF
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