Radio broadcast .. (1922-30)

How Each Dealer Shares In the Total Radio Sales ANALYZING THE 1928-29 RADIO SURVEY By T. A. PHILLIPS Manager, Research. Division, Doubleday, Doran & Co., Inc. T. A. Phillips PERCENTAGE OF TOTAL BUSINESS DONE BY THE THIS is the second of a series of articles analyzing the quarterly radio surveys made by the Bureau of Foreign and Domestic Commerce with the assistance and coopera- tion of the National Electrical Manufac- turers Association. It is an old axiom that the rich get richer and the poor get poorer. To the casual observers it has seemed that the large radio dealer with his huge yearly volume is con- stantly increasing his sales and forcing his smaller competitor to the wall. There is good pre- cedent for this. Twelve per cent, of all furniture dealers do 70 per cent, of the furniture business; 14 per cent of all sporting goods stores do 50 per cent, of the total sporting goods business; 14 per cent, of all hardware stores do 65 per cent, of the hardware business. Department stores having a gross volume in excess of $1,000,000 a year do 95 per cent, of the department store business. A close study of the distribu- tion of business done by radio dealers, as reported by the Department of Commerce, should gladden the hearts of the average radio retailer whose gross sales do not ex- ceed $20,000 a year. It is very apparent that the narrowing of the margin of differences in merit and prices between the products of various radio manufacturers has made for a much more general distri- bution of sales among dealers of all sales volume classifications. The dealers selling more than $100,000 a year are still obtaining the larger share of total sales. However, the number TABLE I PERCENT op TOTAL NUMBER'OF DEALERS IN GROUPS ACCORDING TO LIMITS OF BUSINESS DONE Last Quarter -100 90 80 PERCENTAGE OF OUTLETS INDICATED IN VARIOUS FIELDS PERCENTAGE OF BUSINESS DONE FURNITURE SPORTING GOODS This chart shows how the retail radio business compares with retailing in other industries. In each case it indicates that a few large dealers handle more than fifty per cent, of the retail business. The department stores indicated are those having a gross volume in excess of $1,000,000 a year. Limits of Business Done Under $1.000 1.000 to 4.999 5.000 to 9.999 10,000 to 19,999 20,000 to 49,999 50.000 to 99,999 100,000 and up 100.00% 100.00% First Quarter 1929 46.31% 38.05 8.89 4.14 2.00 .43 .18 100.00% of dealers doing this volume is decreasing. What is more important is the fact that the smaller dealer in proportion to his sales volume is getting a greater share of the business. To illustrate with a hypothetical case: there are five dealers in a certain community each having a yearly sales volume of $100,000. One of them drops out, leaving $100,000 in sales for someone. If each of the other four dealers absorbed all the business of the dealer who dropped out, they would each increase their sales •325,000. What is actually happening is that the four large volume dealers are getting only part of the surplus business and that the remainder is be- ing distributed among all the dealers down the line who do not do a business of $100,000 a year. The lesson to be drawn from this condition of affairs is obvious: Mr. X who has de- cided to buy a radio set is not influenced nearly as greatly by the size of the radio store he will patronize as he is by the merchandising methods used to sell him. Good merchandising is not the offspring, but the father of the large volume dealer. An examination of the Tables I and II shows defin- itely the trend toward an in- creasing number of dealers in the smaller sales volume classifi- cations as well as a smaller per- centage of total sales done by the large volume dealers. Naturally the number of dealers doing $100,000 a year is greater than the number doing $100,000 for any particular quarter. In order to determine whether or .not sales have been distributed equally in proportion to a dealer's sales volume it becomes necessary to reduce the figures to a common base. We do so by determining the amount of business each individual TABLE II PERCENT or TOTAL VOLUME DONE BY DEALERS IN EACH GROUP 1928 per cent. DEPARTMENT STORES RADIO Limits of Business Done Under $1,000 1,000 to 4,999 5,000 to 9.999 10,000 to 19,999 20,000 to 49,999 50,000 to 99,999 100,000 and up .93% 9.90 10.26 11.90 20.95 13.13 32.93 100.00% 100.00% 100.00% 206 AUGUST 1929