Music Trade Review

THE
VOL. LXXVn. No. 14. P.bli.hed Every Satllrday. Edward Lyman Bill, Inc., at 383 Madison Ave., New York, N.Y. Oct. 6, 1923
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What the New Dealer Faces With Conditions To-day
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HEN the old National _\ssociation of Piano Dealers changed its name to read "Music :Merchants"
there was some facetious comment in certain sections of the trade regarding the move and the
efforts of the piano and music retailers to adopt a title that reflected dignity on their calling. :--Jatu­
rally most of the comments consisted of good-natured raillery, but there were some few who seemed
to resent the idea of the piano dealer taking himself so seriously.
However, there has been ample evidence during the last few years that the retail piano business as such
has developed tremendously in importance and has far outgrovm the "shoestring" stage. In fact, the progress
of the trade since the war has alone served to make it something to be considered seriously as an enterprise
requiring generous capital and business ability.
The change in the situation has meant that the retail piano field cannot be entered properly with a capital
of $4,000 or $5,000 as was the case a decade or so ago. It may, perhaps, be possible for a tuner or sales­
man to sell an instrument now and then from his own home or to act as local representative for a manufac­
turer, but to open warerooms, install a representative stock of instruments, handle instalment paper and carry
on the business as it should be carried on requires a capital investment that would be considered most respect­
able in a number of fields more profitable.
In pre-war days it was quite possible for one ambitious to enter the piano field to get a sizable store
at moderate rental ami place therein a representative stock of a dozen instruments, including uprights, players
and small grands at a cash cost of approximately $2,500 or even less. This meant that on the manufac­
turer's terms that prevailed at that time the investment could be carried over a period of from four to twelve
months or more, and thus permit of sales to offset the capital investment. In short, the maximum stock cost
could be held within the $2,500 limit.
At to-day's prices and under to-day's conditions, a similarly representative stock of instruments will
represent an investment of between $10,000 and $12,000, assuming, of course, that the retailer is keeping
abreast of the times and is featuring the reproducing piano, and particularly the reproducing grand, as he should.
Three reproducing grands alone will require an initial capital investment very nearly twice the value of the
dealer's entire stock in pre-war days. At the same time the change of business conditions has brought with it
a general reduction in terms.
The situation indicates primarily that the merchant who enters the retail piano field properly must have,
or be able to command, sufficient capital not only to cover stock investment, but to arrange and operate a suit­
able establishment and carry a substantial proportion of his leases.
The indiyidual who lacks adequate capital should either content himself with working for , or in part­
nership with, another dealer, or arrange to represent a manufacturer with the latter carrying the investment
in stock. It may sound harsh and discouraging, but the fact remains that many individuals have embarked in
the trade poorly equipped with money and have remained with their noses to the grindstone for years .
Only recently a report was recei ved of an Eastern dealer who had started business with a capital of
about $5,000 some three years ago, and, although he had worked hard and apparently successfully in making
sales, he fOl1nd himself this year with some $15,000 worth of paper on hand and no cash capital with which to
buy new stock and carry his business on, and no means even to secure the assistance of recog-nized finance com­
panies in discounting the paper.
The piano business still offers great opportunities for those equipped financially and in other ways to
enter the field properly, but it has reached the point ,,,,here the individual who operates on a shoestring stands
an excellent chance of continuing on that basis without adequate returns or at best selling himself out of
resources.
W
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