Music Trade Review
Issue: 1921 Vol. 73 N. 12 - Page 3
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
MUJICTRADEI^^ WA 1 /
^fH*. I I
VOL. LXXIII. No. 12
•
I
p
Ml • •
1/1/
WW
Published Every Saturday by Edward Lyman BUI, Inc., at 373 4th Aye., New York. Sept. 17, 1921
Single Copies 10 Cents
$2.00 Per Year
Giving Excessive Allowances
A
the competition for business among piano merchants generally becomes keener there are a number
of so-called trade evils that are again rearing their heads and demanding attention. The situation
is not unexpected, for the members of the trade who have looked ahead for the past couple of years
* have realized that when selling returned to a pre-war status there would be found an excuse in
many quarters to return to the practices that have been part and parcel of the piano merchandising system from
time immemorial.
When the demand for pianos was considerably larger than the available supply the trade was prac-
tically free from practices that, although they could not be condemned as misleading in most instances, were
nevertheless considered bad business. There was no reason to make excessive allowances to swing sales, nor
to resort to "certificates" or sensational price-cutting. But things have changed, and unfortunately it must
be admitted mostly for the worse.
What seems to be creating a good deal of trouble in certain sections is the granting of undue allow-
ances on instruments taken in trade, and from certain reports that have reached The Review there are dealers
who have apparently lost all sense of proportion in placing valuations on used instruments.
It is to be remembered that even though the wholesale prices of pianos have not dropped as much as
many retailers would like to have them, the value of the used piano has decreased materially during the past
year or two. In 1919, for instance, second-hand pianos were welcomed because they gave to the dealer some-
thing to sell at a profitable figure, and they served to make up for a scarcity of new pianos. Conditions have
changed since that time, and with plenty of new stock the used piano has returned to what may be termed its
pre-war status.
As has been pointed out on innumerable occasions, the thing to be considered in making an allowance
on a used instrument is, first and foremost, what the piano may be expected to sell for when reconditioned
and put on the wareroom floor. This price must include the cost of repairs, the proper percentage of adver-
tising and sales expense, and a fair profit. The amount that is left after all these factors have been deducted
from the determined selling price represents the sum that can in justice be allowed to the customer for the
instrument when taken in exchange.
A number of dealers have been, and are, blinded by the possibility of selling a new instrument and
inclined to make an excessive allowance on the old piano in the belief that if they break even, or maybe worse,
on the resale of the old instrument the profit on the sale of the new instrument is sufficient to warrant the loss.
What is lost sight of is the fact that it costs just as much to sell a used piano as it does to sell a new one, and
that the proportionate overhead is also just as heavy.
As one retailer points out, the only basis for figuring an allowance on a used piano is its replacement
value. The fact that the instrument was bought in 1914, and that the particular type has jumped in price 100
per cent since that time, does not mean that the used piano has increased in value proportionately, nor does the
fact that the instrument was purchased a couple of years ago at the higher price mean that the allowance made
on it is to be based on that higher price. The sole determining question is: how much can the used piano be
sold for now?
The New York Piano Merchants' Association some time ago framed a schedule of allowances that
not only worked successfully in this city, but was adopted in some other cities with excellent results. It set
a standard that was elastic enough to meet all general requirements, but, unfortunately, its use did not become
universal.
Perhaps a careful study of that New York schedule might give some retailers new light on the matter of
proper allowances.
MUJICTRADEI^^ WA 1 /
^fH*. I I
VOL. LXXIII. No. 12
•
I
p
Ml • •
1/1/
WW
Published Every Saturday by Edward Lyman BUI, Inc., at 373 4th Aye., New York. Sept. 17, 1921
Single Copies 10 Cents
$2.00 Per Year
Giving Excessive Allowances
A
the competition for business among piano merchants generally becomes keener there are a number
of so-called trade evils that are again rearing their heads and demanding attention. The situation
is not unexpected, for the members of the trade who have looked ahead for the past couple of years
* have realized that when selling returned to a pre-war status there would be found an excuse in
many quarters to return to the practices that have been part and parcel of the piano merchandising system from
time immemorial.
When the demand for pianos was considerably larger than the available supply the trade was prac-
tically free from practices that, although they could not be condemned as misleading in most instances, were
nevertheless considered bad business. There was no reason to make excessive allowances to swing sales, nor
to resort to "certificates" or sensational price-cutting. But things have changed, and unfortunately it must
be admitted mostly for the worse.
What seems to be creating a good deal of trouble in certain sections is the granting of undue allow-
ances on instruments taken in trade, and from certain reports that have reached The Review there are dealers
who have apparently lost all sense of proportion in placing valuations on used instruments.
It is to be remembered that even though the wholesale prices of pianos have not dropped as much as
many retailers would like to have them, the value of the used piano has decreased materially during the past
year or two. In 1919, for instance, second-hand pianos were welcomed because they gave to the dealer some-
thing to sell at a profitable figure, and they served to make up for a scarcity of new pianos. Conditions have
changed since that time, and with plenty of new stock the used piano has returned to what may be termed its
pre-war status.
As has been pointed out on innumerable occasions, the thing to be considered in making an allowance
on a used instrument is, first and foremost, what the piano may be expected to sell for when reconditioned
and put on the wareroom floor. This price must include the cost of repairs, the proper percentage of adver-
tising and sales expense, and a fair profit. The amount that is left after all these factors have been deducted
from the determined selling price represents the sum that can in justice be allowed to the customer for the
instrument when taken in exchange.
A number of dealers have been, and are, blinded by the possibility of selling a new instrument and
inclined to make an excessive allowance on the old piano in the belief that if they break even, or maybe worse,
on the resale of the old instrument the profit on the sale of the new instrument is sufficient to warrant the loss.
What is lost sight of is the fact that it costs just as much to sell a used piano as it does to sell a new one, and
that the proportionate overhead is also just as heavy.
As one retailer points out, the only basis for figuring an allowance on a used piano is its replacement
value. The fact that the instrument was bought in 1914, and that the particular type has jumped in price 100
per cent since that time, does not mean that the used piano has increased in value proportionately, nor does the
fact that the instrument was purchased a couple of years ago at the higher price mean that the allowance made
on it is to be based on that higher price. The sole determining question is: how much can the used piano be
sold for now?
The New York Piano Merchants' Association some time ago framed a schedule of allowances that
not only worked successfully in this city, but was adopted in some other cities with excellent results. It set
a standard that was elastic enough to meet all general requirements, but, unfortunately, its use did not become
universal.
Perhaps a careful study of that New York schedule might give some retailers new light on the matter of
proper allowances.
Future scanning projects are planned by the International Arcade Museum Library (IAML).