Radio today (Jan-Dec 1938)

COLLECTING MONEY TODAY Keeping close contact with customers. Watching credits. * "THE servicemen who look like the greatest little go-getters often turn out to be the lousiest credit punks in the business," says a New York parts jobber who has the problem of collecting from servicemen. "The ones who put up the biggest front are apt to be mostly front," he declares, and adds that "the sleepier they look the better they manage their business, as a rule." To this jobber, the recession did not mean a tightening of credit terms among servicemen, but simply a policy of more personal contact. The buyers are not meeting their obligations as regularly and as promptly as they formerly did, and this moves the jobber to desert his formal credit procedures, and to concentrate on individual investigations. "In dull times, I give my servicemen every chance to pay, and if they show good faith, I go easy. But if they start to be cagey and hard to talk to, I nail 'em." New trends Further investigation among the parts distributors in Ohio, Connecticut, Washington, Massachusetts and New Hampshire reveals that servicers are generally further behind than usual, and that parts wholesalers are, as a rule, tightening their terms. However, the survey shows that the majority of them are not suffering from bad debts, the average being around 3 per cent and many of the jobbers reporting "negligible" or "very small." The idea of more personal contact as a solution to current problems is a popular one, and jobbers are likely to say, if asked about special collection methods used today, that "we just keep after them in a nice way." One of the main difficulties is described by a jobber in these words : "Most, servicers have approached the work through their interest in the technical aspects and not with an eye for business administration. They are not as a rule enthusiastic about business routine or bookkeeping and it naturally follows that their credit position, as a general thing, is apt to be precarious most of the time." This distributor points out that "periods of recession tend to benefit servicemen because their customers are holding back from getting new sets and are more willing to undertake repairs and replacements. Many servicemen report better business for the January-April period this year, than for the same months last year." Which accounts are OK? What they look for in selecting serviceman accounts can be summarized as past payment records, moral standing, ability to work, value of store and stock, trade references, potential profitable volume, and loyalty to one jobber. A New York parts jobber says sharply that "the collection problem is the reason that I'm not out today contacting my servicemen." "The good ones are taken care of, and the lousy ones will come to me. Collections in general are rotten today, and a jobber executive spends as much time on them as he does on selling." This jobber asks payments on the tenth of each month, and his accounts must make some kind of an effort at that time, or he starts to get tough. He finds that many servicemen try to play one jobber against another, and he often runs into cases where accounts are slow because they are on the books of several distributors and therefore can't keep up with any one of them. In such instances, jobbers phone each other for a friendly exchange of credit information. For this wholesaler, about 2 per cent of the total volume must be marked off as bad debts. He finds that on major service equipment, about half of the manufacturers handle the paper themselves. But this does not relieve the dealer of all effort ou the account, because he will lose his commission on the sales if the serviceman defaults. He never gets too tough on servicemen unless the girl at the 'phone tells him that the boss is "out," when he knows that such is not the case. A careful check What this jobber does is to keep a sharp eye on the shop activity of slow accounts. He watches for evidence that the dealer was able to buy merchandise from others and he maintains an acquaintance with the personnel so that he knows practically everything that happens. If the serviceman-dealer has some slow accounts himself, the jobber offers some appropriate and tactful advice on collection technique. 'Hard-boiled collection methods should be the last resort," declares radio jobber Yates Hoag of Utica, N. Y., who drew this picture. April, 1938 13