Coin Machine Journal

May-June,
15
T H E C OI N M A C H I N E J O U R N A L
1933
cAre You Tutting Out (^Machines
Or BUILDING a BUSINESS?
I t ’s the M achin e on L ocation,
N o t in W ork S h o p , T hat Pays
• “You may be selling the goods, but
are you building a market?” was the
question a well known manufacturer
put to a new comer in another field
recently.
This straight from the shoulder
challenge was issued during a discus­
Sion at a luncheon to which the new
comer had been invited preparatory
to his joining the club, which was
made up of manufacturers and jobbers
in that field.
.
The prospective new member had
let it be known that he proposed to
produce and sell his product at prices
that would break the market. He
boldly asserted he was going to get
all the business.
Launching into a general discussion
of conditions and factors favorable or
unfavorable to the business at that
time some sound merchandising sense
was developed which softened the at­
titude of the neophyte in regard to
cornering that market
“Granting that the trade at large
enjoyed too large a profit, and you
propose to shave that margin and
build up a big volume, what provisions
have you made for stabilizing your
earnings in the event of a drop in
sales?” was one of the questions pro­
pounded. “Will your small margin
enable you to continue to go along in
the face of a depressed market and
render the same service indefinitely as
the present factors have been able
to do?
“Isn’t it true that those of us who
have survived and established our­
selves in this industry have done so
only because our margin of profit was
sufficient to insure a perpetuation of
service and accommodation to our
buyers over a period of time?”
And, still more vital a question:
“After you have garnered all this busi­
ness as you propose to do will you
have built a market for your product
that will look to you as a source of
supply indefinitely; or will this mar­
ket built on price alone forsake you
on the hope that a still lower priced
product will be available now that you
have demonstrated that the prevailing
price is too high?”
Commenting on this discussion a
coin machine man applied this line of
reasoning to the coin machine indus­
try and here is how the picture fits
this industry.
Of all the concerns who entered the
promising field two years ago only a
few have survived and these, to be
sure, have had the foresight to keep
their selling price on a basis that
would permit a reasonable profit and
enable them to give service over a
long time.
One game in particular, introduced
by a veteran manufacturer at the out­
set of the game craze, commanded a
price considerably above the average
game today. This game had quality
and endurance built into it. The man­
ufacturer is still in business and giving
service on these machines, while many
of his chiseling competitors have
Enhanced Scans © The International Arcade Museum
folded up and gone their way. These
same games may be seen on location
today producing good profits, as good
comparatively as the first profits when
the games \yere new.
One operator in describing condi­
tions on the West Coast reported that
these particular games were getting
big play and had influenced a resur­
rection in activities since the larger,
better games were again being pro­
duced on the coast in large numbers
and taking locations away from in­
ferior machines.
New games being introduced are,
for the most part, larger, better built
and reflect quality. The manufac­
turers have been successful in showing
operators that the first cost is practi­
cally the last cost, that their machines
are free from trouble, insuring unin­
terrupted play which in the long run
puts money into the operator’s pocket
where cheaper machines often cause
delays, dissatisfaction and costly re­
pairs.
Thus in building their machines up
to a standard in quality, getting a fair
price, maintaining service, the pro­
ducers were building a market, a mar­
ket that is stable and profitable to both
manufacturer and operator, which
after all is the sensible procedure.
A few years ago a manufacturer of
merchandise machines sought to flood
the trade with a very low priced line.
He actually sold thousands of his ma­
chines. But operators who are de­
pendent on this type machine for their
living are inconvenienced and embar­
rassed by not being able to secure
repair parts, even globes that will fit
the machines, as the manufacturer has
long since passed out of the picture.
While the operators who bought the
machines saved a few dollars because
of the low price their repair bills have
been unusually high because parts had
to be made by hand or other costly
adjustments made to keep them going.
One of the best examples of this is
http://cmj.arcade-museum.com/