Radio today (Sept 1935-Dec 1936)

BRAND NEW CREDIT PLANS — finance companies go to work on radio sales — collection and checking all done for dealers * TERRIFIC number of radio prospects are privately fretting throughout sales presentations, about whether they can conveniently make payment for the new receiver. They may decline to admit it, and they may give another reason for their reluctance to buy, but all the time they are inwardly concerned about the question of payment. Many a buyer has stomped out of a radio store muttering about "looking around," not because he was not pleased with the merchandise, but because he hadn't the ready cash to make the buy. CCC steps in This may happen even after the dealer's ads and his window placards have screamed out generalities about attractive time payment plans. Point is that the patron never quite knows how the scheme will work out in respect to the set of his choice, as to down payments and periodic installments. Obviously the best cue for the dealer is to have a sound, simple credit offer to make any prospect who may be worrying about such matters. Commercial Credit Co., Baltimore, actively supporting its statement that "the most important radio market is the time payment market, because the great majority of radio receivers are sold on time" has presented a plan whereby dealers may work out formal and convenient credit schedules. To hook up with Commercial Credit, dealers supply their distributor with a financial statement, and sign an agreement. When these are OK'd by the Baltimore concern, dealers may then receive financing service from the 156 branch offices of the firm. Collection simplified Maximum number of months in which CCC interests itself is 12, and the minimum amount financed is a home set selling for $49.95. The service also requires a minimum down payment of 10 per cent. Commercial Credit buys only paper which it considers, after it investigates, a good risk, but where the purchaser livesy-ithin telephone range of one of the CCC offices, decisions can be made within a few hours. Once CCC takes over an account, the dealer must clear out of the col lection business. Finance company sends a payment coupon book to the purchaser and takes over the whole ihing. Suppose a dealer sells a console to Mr. Smith for $100. Smith forks over a down payment of $10, so that the unpaid cash balance is $90. Dealer takes a look at the CCC rate chart and finds that the amount of the contract must then be, under the charge schedule for 12-month periods, $100.20. Thus Mr. Smith agrees to pay $8.35 monthly for that period. All this provided Commercial Credit finds Mr. Smith to be a reasonable risk. If Mr. Smith happened not to be easily accessible to CCC, the dealer could hurry up things by having some local credit bureau make a report on the Smith status in advance. This report could be attached to the retail contract when sent to Commercial, who in most cases would be satisfied with just that. C. /. T. confidence Another healthy step-up in financing service offered to the radio dealer is seen in the doings of the Commercial Investment Trust, Inc., headquarters at New York, Chicago, San Francisco. Here's the story, with its newsy climax: four years ago CIT had an 8 per cent plan, two years ago it was a 7 per cent plan, and now its bummer business Finance Plan To stimulate sales this summer, Philco with CCC has developed a floorstock plan for dealers by which the dealer pays 10 per cent down and interest at rate of one-half per cent per month. The balance of the price of his stock comes due in September, but the dealer can then get 30-day renewal by paying 10 per cent of balance due. This plan can be entered into during June and July with payments as low as $50. a 6 per cent plan, with certain fixed minimum charges for lower balances and for shorter maturities. CIT's radio project has just become effective. As a result, qualified radio dealers the nation over have plastered in their windows and on their walls, the company's flashy but attractive announcement to the effect that "the new 6 per cent budget plan reduces time payment costs." The organization has highly localized aspects, with branch offices in 145 cities. It is easy for the dealer to connect with the outfit, and to get accounts checked. The much-discussed 6 per cent plan is available only to those dealers who can establish their standing with CIT, and can convince the company that their credit paper is decent and bona fide. Many radio men have already used % the service on household mechanical appliances handled elsewhere in the store. Among the dealers whose credit procedures are substantial, though, CIT will offer financing service on any acceptable household radio; provisions are revealed on a rate card which is fixed, definite and easy to get at. What the company means by "6 per cent plan" will be clear when these rates are noted; a fixed minimum charge is substituted in the chart in specific cases of low unpaid balances or short maturities. Radio's terms Specifically, this company will finance unpaid balances on household radios up to $75 for 12 months, balances from $76 to $125 for 14 months, $126 to $175 for 16 months, and over $175 for 18 months — all this via the 6 per cent plan. However, CIT requires a down payment of $10 or of 10 per cent of the delivery price, whichever is higher. For instance, suppose a dealer sells a RCA console on time for $80. If he has established himself with CIT, and wishes to interest the company in the case, he must ask a down payment of $10. The unpaid cash balance is then $70, which CIT will finance for 12 months, and the rate chart reveals that the total amount of the contract will be $78. Thus the dealer's customer signs a contract to pay $78 in 12 equal monthly payments of $6.50 each. Besides the localized service which the company maintains direct to radio dealers, CIT has important hook-ups with many of the leading radio concerns, including RCA, Atwater Kent, Stromberg-Carlson, Stewart-Warner, Grunow, Crosley, Sparton, Graybar, Emerson and Arvin. 12 Radio Today