Music Trade Review
Issue: 1925 Vol. 80 N. 17 - Page 3
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REVIEW
THE
VOL. LXXX. No. 17 Published Every SaUrday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N. Y., Apr. 25, 1925
Slo
% $
The Trade-in and Its Effect on the
Net Profit of Piano Dealers
The First of a Series of Articles Based on an Exhaustive Survey Recently Concluded by The Music Trade
Review of the Part Which the Trade-in Plays on the Net Profit of the Retail Piano Merchant
Together With a Study of the Methods Which Will Remedy Its Evil Effects
H
OW many piano merchants are there profit at the end of their fiscal years. These with methods of selling the second-hand instru-
who at the end of the year show a profit merchants were once more chosen so that the ment, usually upon a co-operative basis through
on their trade-ins? How many are composite balance sheet which resulted from the formation of selling exchanges by which a
there who succeed in breaking even on these these investigations would essentially represent certain group of dealers in a given territory
instruments? How many are there who even- a typical condition of the medium class mer- will dispose of their accumulated trade-ins. This
tually show a loss, which ap-
plan, attractive as it may be upon
pears more often for the
first
—^—•—
^ ^ ^ ^ — " ^ first sight, has but very little
time in their yearly balance than
connection with the causes
it does in the current informa-
HE Music Trade. Review, through the media of a gen-
which work the greatest evil in
tion given by their books?
the entire problem.
eral questionnaire sent out to the piano trade and of in-
Unquestionably at the present
For, in any detailed study of
vestigation by its field representatives, has concluded an
time the trade-in is one of the
the trade-in problem, it must
outstanding problems of retail
exhaustive survey of the trade-in problem, one of the most vital
first of all be directly recog-
piano merchandising. In itself
nized
that it is essentially a
which confronts the retail .merchandiser of pianos. The results of
it is something which will con-
question of buying and not of
tinue to exist just so long as
this work have been embodied in a series of articles, the first of
selling. When a dealer makes
pianos themselves are sold, for,
an allowance upon a second-
which
appears
on
this
page.
It
is
expected
that
this
series
will
be
unfortunately, the replacement
hand instrument, he buys that
one of the most valuable that The Review has ever published, for
sales which give rise to the
instrument, just as if he placed
trade-in are entirely too large
it is perhaps the first detailed analysis of a problem which has
an order with the manufacturer
a proportion of the general
for a new one. Where trade-
suffered in the past from too much discussion and too little inves-
sales of the trade to be done
ins show an eventual loss over
away with. The question, there-
tigation. The scope of the series is given in detail in the article
any given period, that is an un-
fore, takes in its solution an
erring indication that the mer-
which
appears
on
this
page.—EDITOR.
ameliorative form—what must
chant is buying his merchan-
be discovered are ways and
^^^^^^^"™
dise too high. In other words,
means to make the trade-in it-
^™"™™^^^ m
he is buying at prices which do
self a creator of profit instead
of a loss as is only too often the case nowadays. chant, one who conducts his business upon an not permit him to cover the cost of putting the
efficient plane and who makes a medium volume instrument into salable condition, of adding
The Review Investigation
his regular overhead and of obtaining an ulti-
It was with this aim in view that The Music of sales each year.
The results of this investigation, which are mate selling price which will either permit him
Trade Review has recently completed an in-
vestigation of the trade-in situation as it exists embodied in a series of articles of which this to break even on the entire transaction or to
in the retail trade to-day. Questionnaires were is the first, constitute what is perhaps the first obtain the average margin of net profit which
sent to approximately 1,000 retail piano mer- detailed analysis of the trade-in problem and he receives upon the sale of a new instrument.
chants in all parts of the country, a represen- provide a basis from which to move toward So, in the investigation conducted by The Re-
tative list which included the large merchant its eventual solution which has heretofore been view, the main stress has been placed upon
as well as the small one, the merchant whose entirely lacking. For, it is unquestionable that this buying problem in an endeavor to locate
clientele is primarily urban, as well as the one the trade-in problem has a solution and that that the forces which steadily act to increase the
whose trade is confined almost entirely to rural solution exists not in plans that depart largely first investment and to find, if possible, the
remedies thereto.
districts. Their replies constitute a typical from the traditional methods of the trade but in
It is commonplace to attribute the existence
cross section of the retail piano trade and re- the development of typical individual methods
flect every type of opinion from that of the of efficiency which many dealers have already of the trade-in problem to allowances that are
merchant who has arrived practically at a solu- succeeded in working out upon their own indi- too high, but very little work has been done in
investigating why these allowances are too
tion of his trade-in problem to the merchant vidual basis.
Getting at the Root
high, or in endeavoring to discover the play of
who to-day proceeds haphazardly in dealing
The trade during the past ten years has seen competitive forces which in their ultimacy lead
with this question and who rarely is sure
whether or not he is losing or making money any number of plans put forward which had as to a condition of concealed price cutting that
their aim an eventual solution of this problem. presents a steady attack on net profit.
in his handling of it.
It has been shown in The Review's survey
In addition to this ten merchants in various Too many of these, however, have dealt not
sections of the country opened their books to with the root of the evil, but with methods and that merchants who have approached their
field representatives of The Review and per- means that would ameliorate the bad effects trade-in problem from this angle and have en-
mitted them to see exactly in dollars and cents which follow directly from an evil cause. Too deavored to reform their methods with this
(Continued on page 31)
how the trade-in affected their ultimate net many of these have been directly concerned
T
REVIEW
THE
VOL. LXXX. No. 17 Published Every SaUrday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N. Y., Apr. 25, 1925
Slo
% $
The Trade-in and Its Effect on the
Net Profit of Piano Dealers
The First of a Series of Articles Based on an Exhaustive Survey Recently Concluded by The Music Trade
Review of the Part Which the Trade-in Plays on the Net Profit of the Retail Piano Merchant
Together With a Study of the Methods Which Will Remedy Its Evil Effects
H
OW many piano merchants are there profit at the end of their fiscal years. These with methods of selling the second-hand instru-
who at the end of the year show a profit merchants were once more chosen so that the ment, usually upon a co-operative basis through
on their trade-ins? How many are composite balance sheet which resulted from the formation of selling exchanges by which a
there who succeed in breaking even on these these investigations would essentially represent certain group of dealers in a given territory
instruments? How many are there who even- a typical condition of the medium class mer- will dispose of their accumulated trade-ins. This
tually show a loss, which ap-
plan, attractive as it may be upon
pears more often for the
first
—^—•—
^ ^ ^ ^ — " ^ first sight, has but very little
time in their yearly balance than
connection with the causes
it does in the current informa-
HE Music Trade. Review, through the media of a gen-
which work the greatest evil in
tion given by their books?
the entire problem.
eral questionnaire sent out to the piano trade and of in-
Unquestionably at the present
For, in any detailed study of
vestigation by its field representatives, has concluded an
time the trade-in is one of the
the trade-in problem, it must
outstanding problems of retail
exhaustive survey of the trade-in problem, one of the most vital
first of all be directly recog-
piano merchandising. In itself
nized
that it is essentially a
which confronts the retail .merchandiser of pianos. The results of
it is something which will con-
question of buying and not of
tinue to exist just so long as
this work have been embodied in a series of articles, the first of
selling. When a dealer makes
pianos themselves are sold, for,
an allowance upon a second-
which
appears
on
this
page.
It
is
expected
that
this
series
will
be
unfortunately, the replacement
hand instrument, he buys that
one of the most valuable that The Review has ever published, for
sales which give rise to the
instrument, just as if he placed
trade-in are entirely too large
it is perhaps the first detailed analysis of a problem which has
an order with the manufacturer
a proportion of the general
for a new one. Where trade-
suffered in the past from too much discussion and too little inves-
sales of the trade to be done
ins show an eventual loss over
away with. The question, there-
tigation. The scope of the series is given in detail in the article
any given period, that is an un-
fore, takes in its solution an
erring indication that the mer-
which
appears
on
this
page.—EDITOR.
ameliorative form—what must
chant is buying his merchan-
be discovered are ways and
^^^^^^^"™
dise too high. In other words,
means to make the trade-in it-
^™"™™^^^ m
he is buying at prices which do
self a creator of profit instead
of a loss as is only too often the case nowadays. chant, one who conducts his business upon an not permit him to cover the cost of putting the
efficient plane and who makes a medium volume instrument into salable condition, of adding
The Review Investigation
his regular overhead and of obtaining an ulti-
It was with this aim in view that The Music of sales each year.
The results of this investigation, which are mate selling price which will either permit him
Trade Review has recently completed an in-
vestigation of the trade-in situation as it exists embodied in a series of articles of which this to break even on the entire transaction or to
in the retail trade to-day. Questionnaires were is the first, constitute what is perhaps the first obtain the average margin of net profit which
sent to approximately 1,000 retail piano mer- detailed analysis of the trade-in problem and he receives upon the sale of a new instrument.
chants in all parts of the country, a represen- provide a basis from which to move toward So, in the investigation conducted by The Re-
tative list which included the large merchant its eventual solution which has heretofore been view, the main stress has been placed upon
as well as the small one, the merchant whose entirely lacking. For, it is unquestionable that this buying problem in an endeavor to locate
clientele is primarily urban, as well as the one the trade-in problem has a solution and that that the forces which steadily act to increase the
whose trade is confined almost entirely to rural solution exists not in plans that depart largely first investment and to find, if possible, the
remedies thereto.
districts. Their replies constitute a typical from the traditional methods of the trade but in
It is commonplace to attribute the existence
cross section of the retail piano trade and re- the development of typical individual methods
flect every type of opinion from that of the of efficiency which many dealers have already of the trade-in problem to allowances that are
merchant who has arrived practically at a solu- succeeded in working out upon their own indi- too high, but very little work has been done in
investigating why these allowances are too
tion of his trade-in problem to the merchant vidual basis.
Getting at the Root
high, or in endeavoring to discover the play of
who to-day proceeds haphazardly in dealing
The trade during the past ten years has seen competitive forces which in their ultimacy lead
with this question and who rarely is sure
whether or not he is losing or making money any number of plans put forward which had as to a condition of concealed price cutting that
their aim an eventual solution of this problem. presents a steady attack on net profit.
in his handling of it.
It has been shown in The Review's survey
In addition to this ten merchants in various Too many of these, however, have dealt not
sections of the country opened their books to with the root of the evil, but with methods and that merchants who have approached their
field representatives of The Review and per- means that would ameliorate the bad effects trade-in problem from this angle and have en-
mitted them to see exactly in dollars and cents which follow directly from an evil cause. Too deavored to reform their methods with this
(Continued on page 31)
how the trade-in affected their ultimate net many of these have been directly concerned
T
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