Music Trade Review
Issue: 1927 Vol. 84 N. 3 - Page 3
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THE
REVIEW
VOL. LXXXIV. No. 3 Published Every Saturday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y., Jan. 15, 1927
81n
*£ # » g £ l°JF rentm
E. A. Kieselhorst
20 Per Cent
Warns of Abuse, Not Use
and
20 Months
I
T is the opinion of E. A. Kieselhorst, presi-
dent of the Kieselhorst Piano Co., St. Louis,
and recognized as one of the really live
piano merchants of the Middle West, that the
problem of the piano merchant in the matter
of meeting the instalment situation is not that
of worrying over the credit status of the coun-
try's buyers, but rather in putting his own
house in order by eliminating the inroads cre-
ated by the improper handling of the trade-in.
Mr. Kieselhorst holds that, regardless of the
type or value of instrument offered in part
payment for a new or used piano, the dealer
should demand and insist upon an initial pay-
ment in cash of 20 per cent of the price of
the new piano, and then 4 per cent of the net
difference as a monthly payment. This puts
the instalment account on a twenty-month basis
and enables the dealer to enjoy a more rapid
turnover and capital.
There is no question but that the trade-in
is one of the most prominent thorns in the
side of the piano retailer. This evil is not
peculiar to the music industry by any means
for we find merchants in other lines, among
them automobile dealers, who follow the prac-
tice of taking old merchandise as part payment
for new, complaining bitterly of their ex-
periences and of the meagerness of profits
when the year comes to a close.
There is no question about the financial pros-
perity of the country, of the per capita wealth
of its citizens or their earning ability. In short,
it is not a question of a limited market, but
that of perfecting the internal organization of
the music dealer's business in a way to get the
best results from the market.
In a letter to The Review Mr. Kieselhorst
makes some pointed comments upon troubles
that worry the average musical instrument mer-
chant, some of their causes and what he be-
lieves from experience to be worth-while
remedies. In his letter, which is well worth
careful study, Mr. Kieselhorst says:
"Editor Music Trade Review:
"During 1926, in the discussion of actual and
imaginary evils of instalment buying and sell-
ing, many found it at least timely and
In Analysis of Instalment Situation St. Louis Piano Mer-
chant Sees No Need of Worry Over Credit Status, but for
Eliminating Inroads From Improper Handling of Trade-ins
interesting, possibly instructive to a degree,
if not altogether true and thoroughly helpful.
"America, despite all indications otherwise,
is a nation of savers. This is shown by the
report of the American Bankers' Association
for the fiscal year ended June 30, 1926.
''During the year there was a gain of $1,500,-
000,000 in savings deposits and one of 3,000,000
in the number of saving depositors in all classes
of banks in the country.
"There were 46,762,240 savings depositors
ftf TF it is the question of terms that is
A. the chief consideration in purchasing
an instrument, then it stands to good busi-
ness reasoning that if the prospective cus-
tomers want low terms they should of neces-
sity purchase low-priced instruments, and
that is where the sale of trade-ins, exchanges
and repossessions would be speeded up. I
have never looked with any great favor on
making my warerooms and warehouse a mu-
seum for the display of used instruments.
We do not keep used instruments—we sell
them."
and $24,696,192,000 in savings deposits. This
was nearly $530 for each depositor and a per
capita saving for the nation of $211, a new
high record.
"Per capita savings of the population in the
thrifty New England States was $495. In the
Middle Atlantic States it was $368; ii. the East
Central States $182; in the Pacihc States $260;
in the West Central States $87, and in the
Southern States $59.
"I have given this subject of instalment buy-
ing and selling deep thought recently, and
based on my thirty-five years' association with
this house, I have about come to the conclusion
that one of the most practical rules retail piano
merchants could adopt for the guidance of tiieir
sales organizations during 1927, and thereafter,
would be to sell new, slightly used and second-
hand instruments on minimum terms of 20 per
cent initial or first payment, irrespective of
any trade-in or credit, and 4 per cent of the
net difference as a monthly payment. By so
doing, a maximum time would be established
on instalment accounts of twenty months, thus
making their instalment paper average ten
months.
"This would 'thaw out' the piano merchant's
frozen assets, consisting of 'trade-ins,' ex-
changes and repossessions. It would 'jazz up'
his dormant capital, increase the rapidity of
turnover, reduce selling cost per unit and selling
cost in general.
"It is not the use of the instalment plan of
selling and buying that causes the trouble; it
is the abuse. The general public will not, as
a rule, buy used instruments, when piano mer-
chants arc eagerly anxious to sell brand new
instruments on cheap terms. If it is a question
of terms that is the chief consideration in
purchasing an instrument, then it stands to
good business reasoning that if the prospective
customers want low terms they should of
necessity purchase low-priced instruments, and
that is where the sale of trade-ins, exchanges
and repossessions would be speeded up. I have
never looked with any great favor on making
my warerooms and warehouse a museum for the
display of used instruments. We do not 'keep'
used instruments; we sell them.
"Furthermore, when the retail musical instru-
ment industry at large wakes up to the fact
that during the past generation to a quarter
of a century their mark-up has decreased ap-
proximately one-third, and their overhead has
increased approximately one-half to two-thirds,
particularly in nationally known, nationally
priced, nationally advertised instruments, they
will individually and collectively take the bull
by the horns and rectify the errors they have
been making in trying to outbid 'the other
fellow' for an old trade-in. We tell our prospec-
tive customers very frankly that we are not in
business to pay excessive prices for old instru-
(Continued nn hnne 13)
THE
REVIEW
VOL. LXXXIV. No. 3 Published Every Saturday. Edward Lyman Bill, Inc., 383 Madison Ave., New York, N.Y., Jan. 15, 1927
81n
*£ # » g £ l°JF rentm
E. A. Kieselhorst
20 Per Cent
Warns of Abuse, Not Use
and
20 Months
I
T is the opinion of E. A. Kieselhorst, presi-
dent of the Kieselhorst Piano Co., St. Louis,
and recognized as one of the really live
piano merchants of the Middle West, that the
problem of the piano merchant in the matter
of meeting the instalment situation is not that
of worrying over the credit status of the coun-
try's buyers, but rather in putting his own
house in order by eliminating the inroads cre-
ated by the improper handling of the trade-in.
Mr. Kieselhorst holds that, regardless of the
type or value of instrument offered in part
payment for a new or used piano, the dealer
should demand and insist upon an initial pay-
ment in cash of 20 per cent of the price of
the new piano, and then 4 per cent of the net
difference as a monthly payment. This puts
the instalment account on a twenty-month basis
and enables the dealer to enjoy a more rapid
turnover and capital.
There is no question but that the trade-in
is one of the most prominent thorns in the
side of the piano retailer. This evil is not
peculiar to the music industry by any means
for we find merchants in other lines, among
them automobile dealers, who follow the prac-
tice of taking old merchandise as part payment
for new, complaining bitterly of their ex-
periences and of the meagerness of profits
when the year comes to a close.
There is no question about the financial pros-
perity of the country, of the per capita wealth
of its citizens or their earning ability. In short,
it is not a question of a limited market, but
that of perfecting the internal organization of
the music dealer's business in a way to get the
best results from the market.
In a letter to The Review Mr. Kieselhorst
makes some pointed comments upon troubles
that worry the average musical instrument mer-
chant, some of their causes and what he be-
lieves from experience to be worth-while
remedies. In his letter, which is well worth
careful study, Mr. Kieselhorst says:
"Editor Music Trade Review:
"During 1926, in the discussion of actual and
imaginary evils of instalment buying and sell-
ing, many found it at least timely and
In Analysis of Instalment Situation St. Louis Piano Mer-
chant Sees No Need of Worry Over Credit Status, but for
Eliminating Inroads From Improper Handling of Trade-ins
interesting, possibly instructive to a degree,
if not altogether true and thoroughly helpful.
"America, despite all indications otherwise,
is a nation of savers. This is shown by the
report of the American Bankers' Association
for the fiscal year ended June 30, 1926.
''During the year there was a gain of $1,500,-
000,000 in savings deposits and one of 3,000,000
in the number of saving depositors in all classes
of banks in the country.
"There were 46,762,240 savings depositors
ftf TF it is the question of terms that is
A. the chief consideration in purchasing
an instrument, then it stands to good busi-
ness reasoning that if the prospective cus-
tomers want low terms they should of neces-
sity purchase low-priced instruments, and
that is where the sale of trade-ins, exchanges
and repossessions would be speeded up. I
have never looked with any great favor on
making my warerooms and warehouse a mu-
seum for the display of used instruments.
We do not keep used instruments—we sell
them."
and $24,696,192,000 in savings deposits. This
was nearly $530 for each depositor and a per
capita saving for the nation of $211, a new
high record.
"Per capita savings of the population in the
thrifty New England States was $495. In the
Middle Atlantic States it was $368; ii. the East
Central States $182; in the Pacihc States $260;
in the West Central States $87, and in the
Southern States $59.
"I have given this subject of instalment buy-
ing and selling deep thought recently, and
based on my thirty-five years' association with
this house, I have about come to the conclusion
that one of the most practical rules retail piano
merchants could adopt for the guidance of tiieir
sales organizations during 1927, and thereafter,
would be to sell new, slightly used and second-
hand instruments on minimum terms of 20 per
cent initial or first payment, irrespective of
any trade-in or credit, and 4 per cent of the
net difference as a monthly payment. By so
doing, a maximum time would be established
on instalment accounts of twenty months, thus
making their instalment paper average ten
months.
"This would 'thaw out' the piano merchant's
frozen assets, consisting of 'trade-ins,' ex-
changes and repossessions. It would 'jazz up'
his dormant capital, increase the rapidity of
turnover, reduce selling cost per unit and selling
cost in general.
"It is not the use of the instalment plan of
selling and buying that causes the trouble; it
is the abuse. The general public will not, as
a rule, buy used instruments, when piano mer-
chants arc eagerly anxious to sell brand new
instruments on cheap terms. If it is a question
of terms that is the chief consideration in
purchasing an instrument, then it stands to
good business reasoning that if the prospective
customers want low terms they should of
necessity purchase low-priced instruments, and
that is where the sale of trade-ins, exchanges
and repossessions would be speeded up. I have
never looked with any great favor on making
my warerooms and warehouse a museum for the
display of used instruments. We do not 'keep'
used instruments; we sell them.
"Furthermore, when the retail musical instru-
ment industry at large wakes up to the fact
that during the past generation to a quarter
of a century their mark-up has decreased ap-
proximately one-third, and their overhead has
increased approximately one-half to two-thirds,
particularly in nationally known, nationally
priced, nationally advertised instruments, they
will individually and collectively take the bull
by the horns and rectify the errors they have
been making in trying to outbid 'the other
fellow' for an old trade-in. We tell our prospec-
tive customers very frankly that we are not in
business to pay excessive prices for old instru-
(Continued nn hnne 13)
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