Radio today (Sept 1935-Dec 1936)

DISTRIBUTING "SOUND" EQUIPMENT — quality products at adequate prices needed — trade-discount situation has been in chaos • CONTINUING the discussion on sound-equipment sales and discounts, which appeared in Radio Today for September (page 28), further constructive comments have been received from John J. Lawler of Reincke-EUis-Younggreen & Finn, who is merchandising counsel for Webster Electric Company of Racine, Wis. Sound equipment as we know it and understand it, comments Mr. Lawler, has been in existence a little over ten years. But manufacturers have not known just what to do with it, for in addition to selling problems, there existed all the complexities which arise from the patent situation surrounding sound equipment. During the pioneer period, many manufacturers were conscious of the future market for "sound," but hesitated to do very much because they knew there would be patent difficulties. Responsible firms were, therefore, very conservative in their policies, from both the engineering and sales viewpoints. On the other hand, manufacturers with no character or policy proceeded to manufacture sound equipment re gardless of future responsibilities. As a result, these people turned out a lot of inferior merchandise. The normal reaction to this situation, observes Mr. Lawler, was that many manufacturers sold direct by mail or any other way. As a consequence, the service man felt that he could buy at any price he wanted, and so dictated the price at which the manufacturer should sell. In addition, many service men were anxious to tie up with manufacturers whose policy was sound and whose merchandise was right. They in turn were interested only in information they could secure and parts they could buy so that they in turn could compete against the manufacturer whose line they represented. This was bound to produce confusion — it has led to a chaotic condition. Good jobber wants Within the last year, reputable jobbers in both the electrical field and the radio field have become conscious of the fact that "sound" is taking an important part in our social and commercial life and that the field holds a great potential for volume. These Beautiful example of modern all-purpose sound units. This instrument by Operadio reproduces records, radio or mike, through from 10 to 60 speakers. jobbers, conscious of the situation which existed, then sought from the manufacturer merchandise that was somewhat competitive with the merchandise produced by the "policy-less" manufacturers and which, because of the specialty selling required, demanded excess discounts. We have found the better type of wholesaler wants merchandise of superior quality and at a higher price, so that he can definitely lift himself out of the class of merchandise into which he has been forced. W/ill manufacturers agree? Radio Sales Manager R. Ferda of the Webster Electric Company confirms the point of view that "there is a lot of dissatisfaction and lack of coordination as regards trade discounts." "Some manufacturers do not discriminate," he adds. "Mail-order houses offer discounts equivalent to 40 or 50 and 5, even to the user. All of these conditions tend to maintain a disturbed condition. "By having the major manufacturers agree on a method of defining the status of distributing channels, and appropriate discounts in relation to service rendered," Mr. Ferda thinks that much benefit will result. Mr. Lawler, however, expresses a contrasting view. "In the first place, I don't think we will ever get the manufacturers to agree," he says. "In the second place, I do not believe the status of distributing channels needs any defining. There always has been and always will be good, legitimate jobbers who conduct their businesses on a sound basis and who are conscious of their responsibilities as far as service to their customers is concerned." TCA through jobbers only The recent announcement of the Transformer Corporation of America, manufacturers of the Clarion line of amplifiers and public-address systems, to the effect that distribution of their lines will be made only through franchised jobbers in each territory, has created much interest among servicemen and sound engineers. This policy on the part of the manufacturer is the first step in a campaign to protect sound men against the practice of selling direct to the consumer. Under the TCA plan, it will not be possible for the public to purchase equipment direct from the manufacturer, and in this way, the dealer has the assurance of list price maintenance, according to F. H. Skrotzki, sales manager, New York. 32 Radio Today