Music Trade Review

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MUSIC TRADE REVIEW
Helpful Experiences From Activities of Dealers
Repossession a Costly Factor in the Piano Trade and Why—Laxity in Collections Often Responsible—Getting
the Piano Into the Modern House—Figuring Interest on Instalments—One Concern's Experience
With a Prize Piano Scheme—The Proper Handling of Collections.
"I never quite realized what costly things re-
possessions were until I started to look into them
a couple of weeks ago," was the observation of a
piano dealer conversing with a couple of acquaint-
ances in the smoker of a railway coach. "Well,
you are in your instrument and all the customer
paid on it," suggested one of the group, "and out
a great deal more. If we got half the price down
and the rest within a year we could be ahead of
the game on repossessions, but that is not the kind
of sales that come back. The people who get be-
hind are the ones who have only paid a fraction of
the value of the instruments, and they don't care
what they do with them either." "Then why are
the pianos sold on such terms?" asked the dry-
goods traveler. "Ah! why, indeed;" said the piano
man with a sigh as he turned to light a cigar. "The
matter of repossessions is a serious element in the
trade, and will continue to be as long as the ridicu-
lously low terms that characterize so many sales
are given. Repossessions may be attributed to a
variety of causes. They may be the result of sell-
ing to a customer a higher priced instrument than
his or her means warrant, so that a little inquiry
as to the customer's financial condition is neces-
sary. They may be the result of some competitor
trying to upset a sale. They may be the resi'lt of
laxity in collections, and this is the most likely
source. Music dealers are not as stiff on the mat-
ter of payments as they might be, or as they are
justified in being. One dealer who seldom has a
repossession says it is a most extraordinary cir-
cumstance that will let him miss the first payment
and he seldom has trouble after that." "If the
buyer is made to realize," explained the dealer in
question, "that the contract is entered into in all
seriousness he will have much greater respect for
the dealer's insistance and realize that the contract
is not merely a matter of form. Some people
imagine that piano men's profits are -o immensely
great that they can afford to wait indefinitely for
their money. There is no definite plan for the
entire elimination of repossessions, but every
dealer has this matter to a great extent in his own
hands."
Beyond the Piano Man.
A grievance in the piano trade, but one that
seems to be out of the piano man's means of
remedying, is the planning of homes so that it is
impossible to get pianos into them. Some time ago
while putting a piano into a city house one of the
movers was killed. The coroner's jury attached
no blame to anybody, but it was easy to under-
stand the difficulties, to say nothing of the danger
of taking the piano up the stairs, as was being
done in this case. To use a block and tackle to
elevate a piano to an upper floor is no uncommon
occurrence, because of a stairway being so nar-
row or the landing at the top so small as to make
it impossible to get the piano up that way. Be-
sides the narrow halls and small landings, there
are the rooms inside of such meager dimensions
that pianos in them look like monstrosities. From
the standpoint of the householder, as well as of
the piano man, there is room for much educating
of the architectural fraternity which sometimes
lose sight of the proportions of ordinary bedroom
furniture when planning houses. The small piano
is, of .course, the result of these scant rooms and
narrow halls.
Interest on Piano Instalment Sales.
Actual experiences are always useful, hence the
importance of the following explanatory table,
which has been compiled by the head of an im-
portant piano house in Winnipeg. This will serve
as a ready reckoner in ascertaining the amount of
interest on a piano sold on the instalment plan.
Provision has been made by assuming the cus-
tomer pays $10 as a cash payment (which, unfortu-
nately, is too often the case in the piano business)
on sales from $250 to $450 by deducting the $10
from the sales value, payable on terms of $8 and
$10 a month at 7 per cent, interest. If a ^piano is
sold at $350, with a $25 cash payment, of course
the net amount is taken into consideration in cal-
culating the interest.
Provided the interest is calculated at G per cent,
deduct one-seventh and if 8 per cent, add one-
seventh.
Rule—Interest on amount of sale, less cash pay-
ment, for full term, plus one month and divide by
two.
Example—Total interest on $570, payable $15
monthly, with interest at 6 per cent., should be
actually $55,575 = full term thirty-eight months,
plus one month = thirty-nine months' interest on
$570 at 6 per cent. = $111.15 divided by two =
$55,575. Taken in even cents for each payment, a
half cent being calculated as one, the total would
be $55.72. If 2y 3 cents is charged as 5 cents, the
total interest payable would be $56.05. The actual
amount due monthly decreases by 71/2C a month
from $2.85 to 7 V2C. on final payment.
Net
At $8
INTEREST TABLE.
Net
At $10
amount. a month. a month.
$17.50
$240 at 7<7 , $21.70
250 •
23.50
18.95
265 '
26.30
21.65
275 '
28.35
22.85
2!)0 '
31.60
25.40
300 '
33.65
27.10
315 '
37.10
29.90
325 '
39.45
31.75
340 '
43.15
34.75
350
45.70
36.75
At $8
At $10
amount. a month. a month
$39.90
$365 at 7% $49.65
375 '
52.35
42.10
390 '
56.50
45.50
400
59.50
46.65
415
64.00
51.45
425 '
(57.10
53.90
440 '
71.85
57.75
450 '
75.15
60.40
475 '
83.65
67.20
500
92.60
74.35
" Subject to Cancellation" Scheme.
Piano selling experiences in the past have in-
cluded schemes applied by "all sorts and conditions
of men." Here is one that a furniture retailer re-
lated to me: "Some months ago I was called by
a sleek, slick individual who badly wanted to place
a piano in the store window at a ridiculously low
figure, to be competed for by the citizens in gen-
eral, and by our customers in particular. The
method of advertising was not a new one, and a
casual glance through the literature pertaining to
the deal and the conditions regulating same seemed
to be favorable. At the time we were very busy
and I was repeatedly called away during our con-
versation to attend to matters more immediately
urgent.
Your readers will be acquainted with the plan
where the dealer buys the pianos and issues
coupons to all those who make a purchase at the
store; the contest lasting six months, ends with
the piano being given to the contestant securing
the highest number of coupons. Before me were
laid testimonials (more or less genuine) of grate-
ful dealers all over the continent, testifying to the
efficiency of this method of advertising and more
particularly of this particular form. As I have
said, the idea appealed to me, but I was by no
means prepared to close the deal right there.
Nothing was to be lost by delay In this case, and
I craved time to think over the matter. But my
lean friend from the Sunny South urged immedi-
ate action, as he was leaving on the 13th on the
4 p. m. train for distant parts not to return. Then
I will send you word if you leave yonr address.
That was all right, but not quite good enough. By
this time the form of contract was duly spread over
us and he played his last card by the statement
that he would draw up the contract "subject to
cancellation by the 20th inst." (ten days ahead).
This seemed safe enough, and requesting him to
write this legend across the face of the order
duly signed, the writer affixed his signature. Two
days' reflection on my part was sufficient to decide
definitely against the scheme, and written instruc-
tions were accordingly mailed to the given address;
with outside instructions to the postmaster at
S
to return in ten days to sender.
"Five days later several heavy parcels were
dragged to the front by the expressman, and his
book presented for signature regarding said par-
cels. Investigation soon proved these to be the
advance guard of the aforementioned piano. Ac-
ceptance, of course, was refused with explanations,
and finally the goods were returned by the local
express office, where they laid for some weeks.
"Now for the sequel. Mail advices soon fol-
lowed stating that the piano had been shipped on
such a date, that success was certain, that initia-
tive like mine had but one result, win, prosperity
and advancement. We wrote refusing to accept
the piano, pointing out that agreement was can-
celled as arranged, drawing attention to copy of
order in our possession plainly marked to this
effect, etc., etc.
"Some months or so passed and a letter came
from a legal firm calling attention to our liability
for certain sums of money for piano. We wrote
disclaiming liability and repudiating any indebted-
ness. As the months passed intermittent efforts,
but more pronounced were made by various for-
eign legal firms to obtain 'settlement.' It was in
vain we pointed out our 'non-liability' not to speak
of the minor fact that no piano had ever been
received.
"After a lapse of more weeks we were cited as
plaintiffs by a local firm of lawyers, acting for
others, in a suit for debt. Thus gayly we had a
rest for a while, until another local firm wrote us
that action would follow at once if payment was
not immediate. It now began to get comical, and
we felt it was time to laugh at the importunity of
our friend the enemy. At this time we are wait-
ing for the next communication, as there are sev-
eral local legal firms which have not yet been peti-
tioned to secure our goods and chattels. The
moral of the incident is look out for any canvas-
sing agent who wants your signature to a 'subject
to cancellation' scheme and be careful. The pro-
viso was inserted on the copy left with us, but not
on that sent to his headquarters.
The Management of Collections.
The handling of collections is always a live
issue in the piano trade, and is not second in im-
portance to the actual making of sales. The man-
ager of a firm, whose success has been more the
result of the quality rather than the quantity of
business, thus emphasizes the necessity of effi-
ciently making collections:
"There is no part of any business that requires
more care and thought on the part of the operator
than collections. It is the end that one never can
afford to let become dormant. A vigorous push-
ing during the fall and early winter months alone,
when money is most abundant, especially among
farmers, is not sufficient. If the outstanding ac-
counts are to be kept inside of a reasonable limit
they are an all-year problem. Constant effort must
be put forth at all times to prevent delinquencies
from accumulating.
"When making a sale the first thing to con-
sider is how to collect for it. If all deals were'
cash and all customers above suspicion matters
wouM be simple, but it is in making time sales to
strangers and people of questionable or slow
credit that matters become complicated. The
stranger must be studied, and the only way to
form an opinion of him is to draw him into con-
versation and have him tell all he will about him-
self and his affairs. From this you base your opin-
ion as to the amount, if any, of the credit he is
worthy of having extended to him. One needs to
be firm and explicit and impress on him that such
favors are not dealt out to everybody with a gen-
erous hand, consequently it is your privilege to
ask a few questions regarding how and when he is
to make settlement. If securities are deemed-
necessary, make the proper arrangement for them.
{Continued on page 10.)
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