The talking machine world (July-Dec 1927)

Average Musical Merchandise Turnover in Phonograph Store Is Three Times Yearly Survey Completed by The Talking Machine World Shows Wide Range in Number of Times the Dealer Turns Over Stock — From One to Twelve Times Turnover This is the second of a series of articles dealing with various phases of the merchandising of band and orchestral instruments and small goods by talking machine dealers. The facts presented are the result ot a nationwide survey among the dealers just concluded by The Talking Machine World. — Editor. THE survey undertaken by The Talking Machine World to determine the extent of the handling of musical merchandise among dealers in this trade, and the profit possibility in this side line brought forth some surprising facts. In the last issue of The Talking Machine World the average investment of talking machine dealers in small musical instruments was given as six thousand dollars. This, of course is a very high average and shows that talking machine dealers throughout the country are fully aware of the opportunity to increase profits through merchandising these products. The survey also disclosed a very significant fact, namely, that approximately 90 per cent of the dealers operate departments with investments ranging from $225 to as high as $50,000. The relation of investment to profit is a matter which concerns the individual dealer only. He it is who must analyze the possibilities for marketing the product, and he places his investment according to the potential demand, and an analysis of the turnover possibilities. The survey showed that turnover in the musical merchandise department of talking machine stores ranges all the way from a one-time annual turnover to as high as a twelve-time turnover. The average turnover in the musical merchandise department is three times. The size of the investment, according to the reports of the dealers, has very little eflfect on turnover. For example, one dealer who has a $5,000 investment reported a seven-time turnover; another dealer whose investment was reported as $250 states that his turnover was twelve times. A dealer who has $15,000 invested in musical merchandise declared that during the past year he had a four-time turnover. On the other hand, a dealer whose investment reached the large figure of $35,000 turned his stock twice while another merchant with $50,000 invested turned his stock three times. There were many who reported turnover below the average. One dealer with a $12,000 investment had a onetime turnover; a dealer with a $20,000 investment had one-and-one-quarter-time turnover, while a number of merchants whose investments ranged from $100 to $500 reported a turnover of one and two times. The chief importance of these figures when they are taken into consideration with the other data on hand lies in their value as a means for analyzing the merchandising conditions. It is quite apparent from the replies to the questionnaire that many dealers have top-heavy investments in musical merchandise. In other words they have loaded up on certain items which they are unable to move rapidly enough to secure profitable turnover. What is needed more than anything else is an equitable distribution of investment. It is far better for the talking machine dealer who operates a musical merchandise department to handle a diversified line of instruments than to tie up all his money in one particular type of instrument that he thinks may sell. The dealer himself must analyze the possibilities in his particular community for the sale of the various instruments. After he has done this and modeled his buying accordingly he must get busy to move the goods. A one or two-time turnover certainly is insufficient, and it is impossible to make money on that basis. The dealer should turn his stock between five and eight times; if he doesn't something is wrong with his method of merchandising. That there is a tremendous demand for small musical instruments is evidenced by the fact that dealers report annual gross business of from $200 to more than $60,000, and plenty of them who operate comparatively small departments report an annual gross of between $10,000 and $30,000. These figures are impressive, especially in view of the fact that the departments in talking machine stores are seldom large. Also this is the best argument in the world why dealers who are contemplating adding a side-line should concentrate on small musical instruments. Not only is the investment required small, but the department is sure to result in a general stimulation of sales. Protectin Your Profit SELLING musical merchandise demands time and energy. The dealer must go out and create business. He invests many dollars in developing prospects. Are you getting a full and fair return on your selling effort? The King Exclusive Franchise dealer receives absolute protection. Every inquiry is referred to him. He knows that he will get full profit on every sale in his territory. complete protection of the King plan and the high quality of King instruments make a good combination. Sales are easier and profits more certain. Full information is yours for the asking. There are enough rich territories still open to make your immediate inquiry well worth while. Write for our booklet on "The Advantages of Becoming a 'King' Dealer." THE H. N. WHITE CO. 5215-94 Superior Avenue, Cleveland, Ohio ^Manufacturers of BAND INSTRUMENTS 115