Music Trade Review
Issue: 1917 Vol. 65 N. 16 - Page 3
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
MUSIC T^ADE
VOL. LXV. No. 16
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
Oct. 20, 1917
Single Copies 10 Cents
$2.00 Per Year
Retail Prices Must Be Increased
W
HILE a great many members of the trade, manufacturers and dealers alike, are still at sea
regarding the actual scope of the War Revenue Act, as it applies to the music trade, there is one
thing they should not be in doubt about, and that is that any taxes which may be assessed against
musical instruments or parts of any sort must be passed on to the consumer, the ultimate purchaser,
or, in broad terms, the public.
Although manufacturers in various divisions of the trade have increased prices to a certain degree, they
have, on the other hand, in many instances managed to absorb increased production costs without passing a
full share on to the dealer, and finally to the purchaser, by developing increased efficiency in manufacturing
processes and by other means.
The time has come, however, when this practice cannot be continued with safety. If a man smokes he pays
more for his tobacco and cigars. He also pays more for his collars, and likewise a considerable advance in the
price of his automobile and his clothes. Practically everything he uses has increased in cost. Therefore, why
should the piano trade hesitate about placing the increased war cost on musical instruments straight, up to the
consumer?' The talking machine companies are doing it. One company, for instance, has made a direct increase
of 5 per cent, in the retail price of its machines to cover the war tax and a portion of higher manufacturing-
costs, the entire 5 per cent, increase reverting direct to the company. Other talking machine makers have
adopted other means to the same end.
A goodly proportion of the piano men are likewise dealers in talking machines, and under their agreements
with talking machine manufacturers they must change increased prices for their products when the higher prices
are fixed by the manufacturers.
If they are getting more for their talking machines why hesitate to ask more for pianos, player-pianos, and
music rolls? It is true that not all of these are subject to a war tax, but they are all subject to increased
production costs, and it is much easier to make a general advance right along the line than it is to single out
certain articles for increase.
Then, too, the piano merchant must bear in mind that there are various other taxes which must be borne
by his business, directly or indirectly, and which he will have to pay out of his profits. If he is not doing business
at a profit, or if he hesitates to ask from the customer what is due him, and simply slides along on a narrow margin
while hoping for better times, then this increased overhead, exclusive of the wholesale cost of his goods, is going
to spell disaster.
The retail piano trade is not a business of large profits. It should be unnecessary to call attention to this
fact in a paper read by retail piano men, but nevertheless there are a great many members of the trade who still
persist in figuring profits on a dollars and cents basis, instead of by percentages, and who neglect to figure selling
costs accurately. A $400 selling price for a piano that costs, for instance, $250 wholesale does not mean 66 2/3
per cent, profit. It means that there is $150 over the cost price from which to deduct freight, rent, commissions,
light, cartage, advertising, bad accounts, interest on outstanding capital, necessary repairs, tuning, and a hundred
and one items that enter into piano selling. The result is that the net profit is more likely to be only $50, or 20
per cent, of the wholesale cost, rather than in excess of that amount. In actual business the proportion of net
profit is frequently smaller.
In view of all this the piano merchant should be prepared to protect his own interests, and incidentally the
manufacturer's interests, by asking a price for his instruments consistent with the present cost of manufacturing
and selling. The public has been trained to expect higher prices for everything it buys, both necessities and
(Continued on page 5)
THE
MUSIC T^ADE
VOL. LXV. No. 16
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
Oct. 20, 1917
Single Copies 10 Cents
$2.00 Per Year
Retail Prices Must Be Increased
W
HILE a great many members of the trade, manufacturers and dealers alike, are still at sea
regarding the actual scope of the War Revenue Act, as it applies to the music trade, there is one
thing they should not be in doubt about, and that is that any taxes which may be assessed against
musical instruments or parts of any sort must be passed on to the consumer, the ultimate purchaser,
or, in broad terms, the public.
Although manufacturers in various divisions of the trade have increased prices to a certain degree, they
have, on the other hand, in many instances managed to absorb increased production costs without passing a
full share on to the dealer, and finally to the purchaser, by developing increased efficiency in manufacturing
processes and by other means.
The time has come, however, when this practice cannot be continued with safety. If a man smokes he pays
more for his tobacco and cigars. He also pays more for his collars, and likewise a considerable advance in the
price of his automobile and his clothes. Practically everything he uses has increased in cost. Therefore, why
should the piano trade hesitate about placing the increased war cost on musical instruments straight, up to the
consumer?' The talking machine companies are doing it. One company, for instance, has made a direct increase
of 5 per cent, in the retail price of its machines to cover the war tax and a portion of higher manufacturing-
costs, the entire 5 per cent, increase reverting direct to the company. Other talking machine makers have
adopted other means to the same end.
A goodly proportion of the piano men are likewise dealers in talking machines, and under their agreements
with talking machine manufacturers they must change increased prices for their products when the higher prices
are fixed by the manufacturers.
If they are getting more for their talking machines why hesitate to ask more for pianos, player-pianos, and
music rolls? It is true that not all of these are subject to a war tax, but they are all subject to increased
production costs, and it is much easier to make a general advance right along the line than it is to single out
certain articles for increase.
Then, too, the piano merchant must bear in mind that there are various other taxes which must be borne
by his business, directly or indirectly, and which he will have to pay out of his profits. If he is not doing business
at a profit, or if he hesitates to ask from the customer what is due him, and simply slides along on a narrow margin
while hoping for better times, then this increased overhead, exclusive of the wholesale cost of his goods, is going
to spell disaster.
The retail piano trade is not a business of large profits. It should be unnecessary to call attention to this
fact in a paper read by retail piano men, but nevertheless there are a great many members of the trade who still
persist in figuring profits on a dollars and cents basis, instead of by percentages, and who neglect to figure selling
costs accurately. A $400 selling price for a piano that costs, for instance, $250 wholesale does not mean 66 2/3
per cent, profit. It means that there is $150 over the cost price from which to deduct freight, rent, commissions,
light, cartage, advertising, bad accounts, interest on outstanding capital, necessary repairs, tuning, and a hundred
and one items that enter into piano selling. The result is that the net profit is more likely to be only $50, or 20
per cent, of the wholesale cost, rather than in excess of that amount. In actual business the proportion of net
profit is frequently smaller.
In view of all this the piano merchant should be prepared to protect his own interests, and incidentally the
manufacturer's interests, by asking a price for his instruments consistent with the present cost of manufacturing
and selling. The public has been trained to expect higher prices for everything it buys, both necessities and
(Continued on page 5)
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