Music Trade Review
Issue: 1925 Vol. 81 N. 12 - Page 11
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
SEPTEMBER 19, 1925
THE
MUSIC TRADE
REVIEW
11
Sees Standardized Prices as Solution
of the Carrying Charge
William R. Graul Gives the Results of the Ohio Music Merchants' Investigation of This Important De-
velopment — Carrying Charge, Successfully Applied, He Finds Depends on Standardiza-
tion of Retail Prices—Some of the Methods Which His Firm Is Using
HE carrying charge seems to be the most
important subject in which the music mer-
chants are interested, especially when you
consider the various other merchants who have
much
stolen our system ot selling,
harder and no special inducement to purchase
on deferred payments as in former years. Every
household article to-day is sold on terms and
other merchants have perfected a system which
makes it easy to finance and to conduct their
business which is similar to the music mer-
chants', but more satisfactory. One of the
principal reasons for their success, generally
speaking, is that the article they sell has a
standard price and until we can get our prod-
uct, especially pianos and player-pianos, on this
basis, in my opinion, we will never be able to
perfect a carrying charge.. The phonograph is
a different proposition, as the prices on the lead-
ing makes are standardized and it is no trouble
to add an extra charge for time accounts.
I have given this subject a good deal of
thought since our last meeting, and as chairman
of a committee to report on this matter I must
confess I have made little or no progress. There
are so many angles to our methods of business
that until we get our "house in order" we can
never hope to get anywhere with a plan.
The principal trouble lies with ourselves. We
cannot agree upon a plan after it is made. For
example, you may make a proposition to a
customer to carry him on an equitable basis
including a carrying charge, when along
comes your competitor with a proposition to
sell him just as good an instrument at $75 less
in price and no carrying charge. That knocks
your plan sky high and in order to save the
sale you consent to the same agreement.
I mention this as an extreme case, for the
reason some years ago an agreement was
reached in our city to allow only $25 on square
pianos. One of the first violators of this agree-
ment was one of our most prominent houses,
and as a result the agreement became a "scrap
of paper" thirty days after it was written.
Until you standardize your product you can
never hope to bring this plan about to a satis-
factory basis. The standard price must come
from the manufacturer, and then you will get
somewhere. The manufacturers who are trying
to create a standard price by national advertis-
ing are taking the right step in the right direc-
tion. I can sec where an instrument advertised
in the leading magazines giving prices of the
different styles will help the plan under discus-
sion more than anything I can think of. When
a customer talks terms it will be an easy matter
to suggest the carrying charge as he has had
some experience with the automobile, washing
machine, automatic heater, etc., and rather ex-
pects to p.,,, f or t n e extra time he takes to pay
the account.
One of the leading dealers nV.the ronntr-^'
selling his reproducing instruments on this plan
and reports he is having no trouble whatsoever.
This, no doubt, is true because when the cus-
tomer walks into his establishment he knows
the price of the instrument he contemplates pur-
T
Attract the
Most Critical
Customers
chasing before the salesman opens his mouth.
He is buying quality and credit is a secondary
consideration. Too many dealers to-day are
selling terms and not pianos. This is another
"evil" that. wjll_have to be abolished before we
can hope to get any^ncit*r*7r > !7^ 1 :: ) ! r ' I iBrs us back
to the original thought that we must get oin
"house in order" before we can accomplish any
reforms.
In the meantime our house has been experi-
menting along lines in somewhat different direc-
tions. For instance, a customer who has fallen
eight or ten months behind on his account is
requested to pay an extra 10 per cent on all
of his past due over his allotted time. In some
cases we have been successful in getting this
added amount. However, in nearly every case
where the demand is made there is an awful
"kick," but you would be surprised to know how
it has speeded up collections and reduced past
due percentage.
Another method we have adopted is in the re-
newal of an account. We add 10 per cent (plus
extra charges for filing, etc.) for the extra time
and we have had no trouble in getting it as the
customer feels grateful for the renewal, espe-
cially if he has paid a goodly amount of his
account.
The greatest danger in our credit system to-
day is not what can you get, but what will you
get on the risk. In my thirty-five years' expe-
rience in this business I have never seen such a
lack of interest in the account after the cus-
tomer becomes delinquent. In former years if
a customer had $75 to $100 paid on his account
his interest seemed too great to lose and his
pride made him move "heaven and earth" to
save the instrument. To-day it seems that the
average delinquent cares so little as to the out-
come, especially if he has lost interest, due to
other pleasures, which he thinks he must have,
that we are now in the position of saving sales
rather than in getting any reforms at the pres-
ent time.
In view of these facts my suggestion would
be to place a carrying charge on all accounts
running over a period of thirty months or less,
according to the respective dealer's agreed time
of payments. If the customer is obliged to
overrun his account our agreement must stip-
ulate an extra charge of 10 per cent for six
moTA ns or more on the amount running over
the thirty-'A\onth period. This agreement could
be incorporated iu Z'lX mortgage contract, mak-
ing it legal in every respect.
This, to my mind, will help reduce t 1 ?^ P a s t
due and if we are obliged to give extraordinaiy.
extended credit we will not be losing money as
we have in the past. An account that runs
twenty-four to thirty months can be figured in
the original contract, but our trouble has been
that 75 per cent of the accounts we never know
when they will pay out. This will put our paper
on a solid basis and make it more attractive to
the investor who has been criticizing it more or
less. I submit this paper for your considera-
tion and will be glad to hear some discussions
and suggestions before arriving at any definite
conclusion.
Remodel Chillicothe Store
CHILLICOTHE, O., September 14.—The interior of
the Chillicothe Music Store has been remodeled
recently to obtain larger display space for the
piano, phonograph and radio stock. One of the
chief changes was the removal of the demon-
stration booths from the front of the store to
the rear. The walls of the store have also been
redecorated.
Incorporation papers have been filed recently
by the Okulski Bros. Piano Co., Passaic, N. J.,
which will operate a retail piano business with
an authorized capital of $50,000. The proprietors
of the concern are Chester J., Alfred J. and
Benjamin J. Okulski, of Passaic, and Fabian P.
Okulski, of Clifton.
A COMPLETE LINE
Grands, Uprights, Player Pianos
Reproducing
Factories—-Nezo York and
RADBUftP)
Leominster
Divisions — Bradbury Pianos
Webster Piano Co
AMCO BENCHES
415 W. Superior Street
Chicago
Give the
Best
Satisfaction
SEPTEMBER 19, 1925
THE
MUSIC TRADE
REVIEW
11
Sees Standardized Prices as Solution
of the Carrying Charge
William R. Graul Gives the Results of the Ohio Music Merchants' Investigation of This Important De-
velopment — Carrying Charge, Successfully Applied, He Finds Depends on Standardiza-
tion of Retail Prices—Some of the Methods Which His Firm Is Using
HE carrying charge seems to be the most
important subject in which the music mer-
chants are interested, especially when you
consider the various other merchants who have
much
stolen our system ot selling,
harder and no special inducement to purchase
on deferred payments as in former years. Every
household article to-day is sold on terms and
other merchants have perfected a system which
makes it easy to finance and to conduct their
business which is similar to the music mer-
chants', but more satisfactory. One of the
principal reasons for their success, generally
speaking, is that the article they sell has a
standard price and until we can get our prod-
uct, especially pianos and player-pianos, on this
basis, in my opinion, we will never be able to
perfect a carrying charge.. The phonograph is
a different proposition, as the prices on the lead-
ing makes are standardized and it is no trouble
to add an extra charge for time accounts.
I have given this subject a good deal of
thought since our last meeting, and as chairman
of a committee to report on this matter I must
confess I have made little or no progress. There
are so many angles to our methods of business
that until we get our "house in order" we can
never hope to get anywhere with a plan.
The principal trouble lies with ourselves. We
cannot agree upon a plan after it is made. For
example, you may make a proposition to a
customer to carry him on an equitable basis
including a carrying charge, when along
comes your competitor with a proposition to
sell him just as good an instrument at $75 less
in price and no carrying charge. That knocks
your plan sky high and in order to save the
sale you consent to the same agreement.
I mention this as an extreme case, for the
reason some years ago an agreement was
reached in our city to allow only $25 on square
pianos. One of the first violators of this agree-
ment was one of our most prominent houses,
and as a result the agreement became a "scrap
of paper" thirty days after it was written.
Until you standardize your product you can
never hope to bring this plan about to a satis-
factory basis. The standard price must come
from the manufacturer, and then you will get
somewhere. The manufacturers who are trying
to create a standard price by national advertis-
ing are taking the right step in the right direc-
tion. I can sec where an instrument advertised
in the leading magazines giving prices of the
different styles will help the plan under discus-
sion more than anything I can think of. When
a customer talks terms it will be an easy matter
to suggest the carrying charge as he has had
some experience with the automobile, washing
machine, automatic heater, etc., and rather ex-
pects to p.,,, f or t n e extra time he takes to pay
the account.
One of the leading dealers nV.the ronntr-^'
selling his reproducing instruments on this plan
and reports he is having no trouble whatsoever.
This, no doubt, is true because when the cus-
tomer walks into his establishment he knows
the price of the instrument he contemplates pur-
T
Attract the
Most Critical
Customers
chasing before the salesman opens his mouth.
He is buying quality and credit is a secondary
consideration. Too many dealers to-day are
selling terms and not pianos. This is another
"evil" that. wjll_have to be abolished before we
can hope to get any^ncit*r*7r > !7^ 1 :: ) ! r ' I iBrs us back
to the original thought that we must get oin
"house in order" before we can accomplish any
reforms.
In the meantime our house has been experi-
menting along lines in somewhat different direc-
tions. For instance, a customer who has fallen
eight or ten months behind on his account is
requested to pay an extra 10 per cent on all
of his past due over his allotted time. In some
cases we have been successful in getting this
added amount. However, in nearly every case
where the demand is made there is an awful
"kick," but you would be surprised to know how
it has speeded up collections and reduced past
due percentage.
Another method we have adopted is in the re-
newal of an account. We add 10 per cent (plus
extra charges for filing, etc.) for the extra time
and we have had no trouble in getting it as the
customer feels grateful for the renewal, espe-
cially if he has paid a goodly amount of his
account.
The greatest danger in our credit system to-
day is not what can you get, but what will you
get on the risk. In my thirty-five years' expe-
rience in this business I have never seen such a
lack of interest in the account after the cus-
tomer becomes delinquent. In former years if
a customer had $75 to $100 paid on his account
his interest seemed too great to lose and his
pride made him move "heaven and earth" to
save the instrument. To-day it seems that the
average delinquent cares so little as to the out-
come, especially if he has lost interest, due to
other pleasures, which he thinks he must have,
that we are now in the position of saving sales
rather than in getting any reforms at the pres-
ent time.
In view of these facts my suggestion would
be to place a carrying charge on all accounts
running over a period of thirty months or less,
according to the respective dealer's agreed time
of payments. If the customer is obliged to
overrun his account our agreement must stip-
ulate an extra charge of 10 per cent for six
moTA ns or more on the amount running over
the thirty-'A\onth period. This agreement could
be incorporated iu Z'lX mortgage contract, mak-
ing it legal in every respect.
This, to my mind, will help reduce t 1 ?^ P a s t
due and if we are obliged to give extraordinaiy.
extended credit we will not be losing money as
we have in the past. An account that runs
twenty-four to thirty months can be figured in
the original contract, but our trouble has been
that 75 per cent of the accounts we never know
when they will pay out. This will put our paper
on a solid basis and make it more attractive to
the investor who has been criticizing it more or
less. I submit this paper for your considera-
tion and will be glad to hear some discussions
and suggestions before arriving at any definite
conclusion.
Remodel Chillicothe Store
CHILLICOTHE, O., September 14.—The interior of
the Chillicothe Music Store has been remodeled
recently to obtain larger display space for the
piano, phonograph and radio stock. One of the
chief changes was the removal of the demon-
stration booths from the front of the store to
the rear. The walls of the store have also been
redecorated.
Incorporation papers have been filed recently
by the Okulski Bros. Piano Co., Passaic, N. J.,
which will operate a retail piano business with
an authorized capital of $50,000. The proprietors
of the concern are Chester J., Alfred J. and
Benjamin J. Okulski, of Passaic, and Fabian P.
Okulski, of Clifton.
A COMPLETE LINE
Grands, Uprights, Player Pianos
Reproducing
Factories—-Nezo York and
RADBUftP)
Leominster
Divisions — Bradbury Pianos
Webster Piano Co
AMCO BENCHES
415 W. Superior Street
Chicago
Give the
Best
Satisfaction
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