Music Trade Review
Issue: 1920 Vol. 70 N. 23 - Page 3
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE
MUJIC TFADE
VOL.
LXX. No. 23
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
June 5, 1920
Single Copies 10 Cents
$2.00 Per Year
Why Present Prices Must Prevail
T
HE general shaving of retail prices to the extent of twenty or twenty-five per cent by large and small
concerns throughout the country, particularly department stores, has naturally had an effect upon the
minds, if not upon the business policies, of members of the music trade. The average piano dealer is
quite anxious to know whether or not this wave of price shaving is to be accepted as an indication of a
general toppling of high prices and as heralding the process of deflation concerning which so much has been said
and written.
The manner in which the daily papers have handled the stories of the price reductions made by the big
department stores has naturally been calculated to disturb the more timid members of the trade, some of whom
profess to see sudden disaster facing them. A careful study of the situation, however, proves that these price
reductions have in a large measure been confined to what may be termed seasonable products, goods that must
be carried over for several months if not sold at the present time, with just enough of the more standard articles
included to make the event a little more impressive.
Of one thing the piano merchant can rest assured—piano prices, so far as the manufacturer is concerned,
are not going to come tumbling down with any degree of suddenness. They simply can't do it so long as mate-
rials and labor remain at the present level. Cost of production is a fixed quantity and although some manufac-
turer, with an inclination to shave his profits to the bone, or in ignorance of his business costs, might cut prices
a trifle, the cut would not be sufficiently noticeable to permit of any semi-sensational retail offerings.
As a member of one of the leading piano manufacturing concerns of the country remarked this week,
there would have to be a fifty per cent drop in the present price of lumber alone, to say nothing of reductions
in other materials and in labor, to warrant any appreciable reduction in wholesale piano prices, and the lumber
dealers are not making any moves toward price reduction. This statement may not prove very reassuring to
some worried retailers, but it is based upon fact, nevertheless, and it is upon facts that the retailer must gauge
his business moves.
The only danger which can possibly threaten the industry at present lies in the possibility of some panicky
members, both in the manufacturing and retailing fields, going back to the profitless, long-term sort of selling
for the purpose of keeping stock moving.
It is quite true that a successful business depends not alone upon the profit made upon a single transac-
tion, but largely upon the number'of times capital can be turned over in the course of a year. The business
man cannot forget, however, that if the individual transaction results in a loss rapid turnover simply augments
that loss, and long terms in the face of existing conditions simply swallow up any vestige of profit that might
remain even with prices shaved somewhat.
In certain lines, clothing among them, the attitude of many manufacturers and dealers has been to get all
that traffic would bear, with the result that prices have been jacked up to a point where the public has rebelled
and lack of demand has forced prices to drop. In such lines, however, the retailer has been working on such a
large margin that substantial price reductions could be made and still leave him a very comfortable profit.
By far the majority of piano manufacturers and retailers have made price advances only when absolutely
necessary to afford proper business protection. The manufacturers and distributors may have been the victims
of profiteers, but it is certain that as a whole they themselves have not profiteered. The result is that there is
no speculator's margin to shave off in piano prices to meet any general wave of price reduction, whether it is
temporary or permanent.
In some-localities, and under certain conditions, piano merchants will have to stand the test, and upon
their courage and coolness depends whether they maintain their reputations and their businesses.
THE
MUJIC TFADE
VOL.
LXX. No. 23
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
June 5, 1920
Single Copies 10 Cents
$2.00 Per Year
Why Present Prices Must Prevail
T
HE general shaving of retail prices to the extent of twenty or twenty-five per cent by large and small
concerns throughout the country, particularly department stores, has naturally had an effect upon the
minds, if not upon the business policies, of members of the music trade. The average piano dealer is
quite anxious to know whether or not this wave of price shaving is to be accepted as an indication of a
general toppling of high prices and as heralding the process of deflation concerning which so much has been said
and written.
The manner in which the daily papers have handled the stories of the price reductions made by the big
department stores has naturally been calculated to disturb the more timid members of the trade, some of whom
profess to see sudden disaster facing them. A careful study of the situation, however, proves that these price
reductions have in a large measure been confined to what may be termed seasonable products, goods that must
be carried over for several months if not sold at the present time, with just enough of the more standard articles
included to make the event a little more impressive.
Of one thing the piano merchant can rest assured—piano prices, so far as the manufacturer is concerned,
are not going to come tumbling down with any degree of suddenness. They simply can't do it so long as mate-
rials and labor remain at the present level. Cost of production is a fixed quantity and although some manufac-
turer, with an inclination to shave his profits to the bone, or in ignorance of his business costs, might cut prices
a trifle, the cut would not be sufficiently noticeable to permit of any semi-sensational retail offerings.
As a member of one of the leading piano manufacturing concerns of the country remarked this week,
there would have to be a fifty per cent drop in the present price of lumber alone, to say nothing of reductions
in other materials and in labor, to warrant any appreciable reduction in wholesale piano prices, and the lumber
dealers are not making any moves toward price reduction. This statement may not prove very reassuring to
some worried retailers, but it is based upon fact, nevertheless, and it is upon facts that the retailer must gauge
his business moves.
The only danger which can possibly threaten the industry at present lies in the possibility of some panicky
members, both in the manufacturing and retailing fields, going back to the profitless, long-term sort of selling
for the purpose of keeping stock moving.
It is quite true that a successful business depends not alone upon the profit made upon a single transac-
tion, but largely upon the number'of times capital can be turned over in the course of a year. The business
man cannot forget, however, that if the individual transaction results in a loss rapid turnover simply augments
that loss, and long terms in the face of existing conditions simply swallow up any vestige of profit that might
remain even with prices shaved somewhat.
In certain lines, clothing among them, the attitude of many manufacturers and dealers has been to get all
that traffic would bear, with the result that prices have been jacked up to a point where the public has rebelled
and lack of demand has forced prices to drop. In such lines, however, the retailer has been working on such a
large margin that substantial price reductions could be made and still leave him a very comfortable profit.
By far the majority of piano manufacturers and retailers have made price advances only when absolutely
necessary to afford proper business protection. The manufacturers and distributors may have been the victims
of profiteers, but it is certain that as a whole they themselves have not profiteered. The result is that there is
no speculator's margin to shave off in piano prices to meet any general wave of price reduction, whether it is
temporary or permanent.
In some-localities, and under certain conditions, piano merchants will have to stand the test, and upon
their courage and coolness depends whether they maintain their reputations and their businesses.
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