Scan 2
Musical Courier 1927-08-15: Vol 95 Iss 4, 1927
27 lines. Read by computer on 27 September 2026. No printed page number was found. See the scan on archive.org.
1MUSICAL COURIER EXTRA
2The MUSIC TRADE MAGAZINE
4EXPRESSIONS
6The Costs of Distribution of the Manufacturer and the Dealer—One of the Tasks Before Hermann Irion, President of the Music Industries Chamber of Commerce—Will He Receive Proper Support?
8The problem of overhead is one that all men in business have to contend with. Some arrive at a solution of this keynote to profits one way, others in different ways. The piano dealer must solve his own affairs in this direction by direct application of figures, map out his own policies, and then watch that what he believes is the best way to sell his merchandise, for pianos are merchandise, to the end that each dollar of expense shall earn its own keep and a little more, which resolves in profit above the capital invested. His own compensation is as much an overhead as is that of a salesman, while the difference as between the cost of the goods and the selling prices must balance to the end that what is sold provides the covering of the overhead and what profit that must accrue to the capital shall be in evidence to the extent of showing an earning power of the business to the best possible percentage.
10When one studies the selling of pianos at retail, casts up his ways and means of arriving at profit, there presents a rather startling difference from that of other merchandising—that is, different in the space that appears between the buying prices and the selling figures. The manufacturer has to do the same thing, yet the dealer always must bear in mind that what the manufacturer adds to his overhead in the way of selling costs to the production costs, the dealer has a part in the outlay of the manufacturer that is in direct bearing to the overhead in his own business.
12The Importance of Name Value
14Factory costs are practically fixed as far as production within the factory walls are concerned, but there comes the manner in which the manufacturer conducts his distribution that must attract the attention of the dealer in the arriving at the overhead of his own business.
16Name value is the one thing the dealer must accept as part of his own overhead, for the wholesale prices of the products he sells has to do with this question of name value. In this the maker and the seller at retail must get together on and arrive at a mutual responsibility as to the cost of creating name value. Whatever is spent by the manufacturer in selling costs is as much of interest to the dealer as to the manufacturer, and it is part of the duty of the dealer to lend a hand in this overhead as it is the duty of the manufacturer to arrive at assistance in the keeping the selling costs of the dealer to a minimum. It is evident that there is not that co-operation in this respect as there should be.
18If the dealer should suggest to the manufacturer that he is spending too much money in advertising, the manufacturer will resent this, just as will the dealer resent the same attitude on the part of the manufacturer. Yet, and here is the rub, the cost of selling, of distribution, on the part of both is one of the stupendous problems that both manufacturer and dealer should work together in the keeping down to the lowest percentage in the arriving at a solution of the overhead problem.
20Name Value as Overhead
22Few piano men have any set way to arrive at a safe percentage in the question of name value costs—which means the advertising of the name of the piano and the name of the dealer as a builder to gaining the confidence of the public, yet this name value expense is one of the most important items that goes into the work of selling pianos. The manufacturer can set a percentage per unit of the pianos he produces and sells, and the dealer can do the same, but seldom does one find that this combined cost is taken into consideration as something the dealer must eventually absorb and pay for and who passes it on to the ultimate consumer.
24This point will be disputed by many, and especially by the manufacturer, who will contend that the dealer has no right to meddle with what the maker of pianos does in the way of creating name value, yet the dealer should be just as interested in this as the one who has in the end to include in his cost of pianos this item, and then add to this what he himself is doing in the way of publicity, with this distinction, each owns in his own right what is obtained in the way of name value. The piano with its name, the dealer with his own name.
26All this has a direct bearing on the overhead, which shows up on two sets of books as between the manufac-
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