Music Trade Review

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
Musical Merchandise
Published by The Music Trade Review, 383 Madison Avenue, New York
STOCK CARD
DESCRIPTION
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Save the Rush of the
Annual Inventory
Some of the Advantages of the
Perpetual Inventory Based on
the Stock Card Herewith for
the Musical Merchandise Dealer
—The Three Purposes of This
System
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% EDGAR A. WALLACE
OW is the time for all good musical
merchandise men to take inventory. No
doubt a great many will be too busy
to read this article, for the first part of January
will find them in the throes of the job of taking
stock. Yet they are the very ones to whom
we direct these thoughts.
It is not at all certain that every music
merchant needs to leave this all-important
analysis of assets to one particular week out
of fifty-two. Good dealers keep a permanent
or perpetual inventory, in order to know at all
times just what the state of their business is.
Three Purposes
What is the purpose of the inventory? It
should serve three purposes. It should show
a record of sales. It should serve as a key
to proper buying. It should render valuable
assistance in financing the sale of merchandise.
As a sales record it is, of course, of great
value, but it should be more than a mere
transcript of the individual sales. It should
be an analysis, not only of sales, but of sales
possibilities. From the record of past sales
the dealer, in a measure, should be able to
chart the future sales trend or possibilities. It
will show what instrument sales are falling
off and possibly throw light on the reasons
for the falling off. It should reveal the instru-
ments inWhich there is an upward sales trend.
This naturally means that the buying de-
partment can use it in making its market
judgments and commitments. We have called
it a key to proper buying, because it is a check
on over-purchasing and a guide to correct re-
stocking of instruments that are moving and
seem likely to move more rapidly than replace-
ments come in.
N
In Financing
As an assistance in financing a musical mer-
chandise department the perpetual inventory is
of great value. Good business in musical mer-
chandise means getting the proper turnover of
slock with the minimum amount required to
do maximum business. There is no need to tie
up capital in overstocking merchandise that the
inventory shows to be slow moving. Why carry
five costly basses when the books show that
you only move- two a year and two are all
that your sales division needs to show and
make sales?
Inventory Methods
There arc several ways of inventorying stock
and no general method seems to prevail in the
musical instrument trade. There is the old-
fashioned way of keeping it in the head, letting
the condition of the cash box .tell the story.
There is the once-a-year inventory, usually
taken in January, which is extremely popular
in the music trade. There is the once-a-month
inventory or stock taking. And there is the
daily inventory, which prevails in the chain
grocery and cigar type of store. And, finally,
there is the permanent or perpetual inventory.
The knell has been sounded on the first of
these methods. The idea of carrying the in-
ventory in the head is all right for the man
who "keeps store" for fun, but it will not go
for the modern music merchanl, who is actuated
by a desire for a certain amount of profit.
Enough said.
Once-a-Y ear
The once-a-year inventory seems to satisfy
most music merchants, judging by the fact that
they make use of this system. They declare
that it gives them the desired information at
a time when they most need it and that the
after-Christmas let-down in business gives them
the opportunity to take the inventory without
loss of time and expense.
Tlie daily inventory seems unnecessary be-
cause of the peculiarities of the business, the
fact of larger sales at less frequent intervals.
Many dealers are able to combine the annual
and the daily inventories successfully, using
the daily inventory every morning on the ac-
cessories and smaller stuff and getting the low-
down on the condition of the stock as a whole
in January.
Perpetual Inventory
The chief objection to the perpetual inventory
method seems to be the mere fact {hat most
dealers do not know of it. Those who use it
claim that it takes no time at all because the
sales record serves as the individual inventory
item. When a sale is made the salesman notes
it on the stock card. At the end of the year
the dealer checks up his cards and carries out
the totals, showing total stock on hand and the
sales of each item.
In carrying on a musical merchandise de-
partment successfully the stock must be com-
plete and balanced according to demand. This
presents the problem of keeping the stock
complete, which can only be accomplished by
knowing at all times just how the stock is
balanced and which instruments are in greatest
demand. This in turn necessitates an accurate
record of all sales and this record can be so-
cured-.by keeping a permanent inventory and
sales analysis. This not only gives the details
required, but also serves as a check on the
accounting department, thereby insuring the
dealer against loss.
Stock Cards
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There are several ways of keeping a per-
manent inventory, but the stock-card method
is verv efficient and exceedingly well adapted
(Continued on page 22)