The talking machine world (Jan-June 1927)

February 15, 1927 THE TALKING MACHINE WORLD 27 LOcLaiv i Records Frequent Turnover Measures Record Profits (Continued you would make $520 net profit, while as illustrated, in the second phase of the. example, if you consistently take two weeks to turn your stock you would make only $390 net profit. You would soon find at this rate, with an accumulating stock of slower moving numbers, that your investment in records would be increasing as you would be forced to take your profits each week to invest in your fastermoving stock. Of course, these examples are only hypothetical, but I believe that they illustrate the idea of turnover fairly well. More About Profit Now, by ordering frequently and in smaller quantities, you increase the profits of your department from other angles as follows: First, you keep the stock assets liquid. Second, you release money from record stock that can earn profits elsewhere. Third, you eliminate the loss that must come from dead, unmovable stock. So while volume is very important, remember that a clean stock and frequent turnover are equally important. Bear in mind that there is more profit in doing $1,000 worth of business each month on a record stock of $1,500, than there is in doing $1,500 worth of business "on a record stock of $5,000 or $6,000. If, we will say, with an average investment of $5,000 in records, you do a $30,000 record business a year and show a net profit of $3,000, then if you do the same amount of business on $2,500 worth of stock you have increased your turnover 100 per cent, and increased the percentage of profit on the investment 100 per cent also. But there will be additional profits due to more rapid turnover, for the other $2,500 can be used in many ways and can earn its own profit which might be equal to or greater than the $3,000 profit in the record department. Keeping Stock Down A very clear example of the advantage of keeping your stock down and operating on as small a stock as possible, is given below: Percent of Aver. Av. mo. Yearly Profit on In Stock Sales Turnover Profit vestment 1 $5,000 $2,500 6 times $1,500 30% 2 2,500 2,500 12 times 1,500 60% As above outlined, you will see that you double your percentage of profit on capital invested by doing the same amount of business on one-half as much stock. This may seem a little far-fetched to some people, but I assure you there are many stores that could do just f m H ermann Tho rens Ste. Croix, Switzerland Manufacturer of Europe's Most Celebrated Phonograph Motors Great selection, playing up to ten records. Superior quality at moderate prices Sole Distributors for the U. S. A. THORENS, Inc. 450 Fourth Ave., New York 4 J from page 26) as much business on half the record stock they are now carrying. The additional money that is tied up in a slow-moving record stock could be, as before outlined, put to much better use earning a profit elsewhere. As I have said before, volume is indeed the big goal to strive for, but in obtaining this volume be sure that you keep your stock down to a minimum so that your turnover will be frequent. Daily Inventory Plan One very good way to keep the reins in your band on the record stock situation is to draw up a form as below and keep it posted daily. First you obtain an actual inventory of record stock and each day you post up records sold and records received. Thus by adding records received to your inventory and subtracting records sold you have the figures of your daily inventory — and you can tell from day to day whether your inventory is going up or down. As an example: Increase Records Records Net In or Re Inven Rec'd Sold ventory duction Date tory To-day Total To-day To-day to date 1 $5,621.00 $126.00 $5,747.00 $138.25 $5,608.75 R-12.25 2 5,608.75 86.50 5,695.25 92.00 5,603.25 R-18.75 In spite of your first impression to the contrary— this daily inventory report is very easy and practically no trouble to keep and will positively not take more than five minutes of your time each day and such daily information will be of inestimable benefit in keeping your record stock down and increasing turnover. It will undoubtedly be much easier to keep this inventory record by figuring your inventory and daily purchases and sales on a retail price basis, due to the fact that the figures can then be taken from the cash register each day in a lump sum. The retail price is most practical due to the fact that various discounts are given on different series of records — and it would require too much time to segregate the sales each day and figure the cost of records in each series sold. By keeping such a record you always know exactly where you stand and you are given a definite goal and incentive for reducing your stock. When your record stock shows an upward trend you don't have to wait until the end of the month to find it out, you know it immediately and you can correct it at once by going to your numerical inventory and locating the numbers that are beginning to freeze. Without delay you can then immediately begin to push and sell those numbers. Listing Overstocked Records Of course, it goes without saying that every record department manager should keep a numerical stock list of records and keep it posted daily so that one can quickly see on what records they are overstocked. This list of overstock numbers should be posted in prominent places on the record racks so that the salespeople will have constantly in front of them what records to push. An overstock on a number does not always necessarily mean that that particular number is dead — in most cases it merely means that customers have quit asking for 'it. Many overstock records can be quickly sold if the record salespeople will just suggest and play these records for customers. Of course, the older an overstock record becomes the more difficult it is to dispose of it — hence the necessity of keeping a sharp eye on the numerical stock list so that the overstock numbers can be bulletined at least once a week to the salespeople so that they may in turn know just what numbers to push. One thing to bear in mind is this fact — that many large overstocks do not necessarily mean large quantities of a few numbers — but as a mle mean principally a few too many of a great many different numbers. The daily ordering and careful watching of a numerical inventory will circumvent this situation and aid materially in producing profits. A Complete List Distributors JAMES K. POLK, INC. 181 Whitehall St., Atlanta, Ga. CONSOLIDATED TALKING MACHINE COMPANY 227 W. Washington St., Chicago, 111. JUNIUS HART PIANO HOUSE, LTD. 123 Carondelet St., New Orleans, La. CONSOLIDATED TALKING MACHINE COMPANY 2957 Gratiot Ave., Detroit, Mich. CONSOLIDATED TALKING MACHINE COMPANY 1424 Washington Ave. So., Minneapolis, Minn. THE ARTOPHONE CORPORATION 1624 Pine St., St. Louis, Mo. IROQUOIS SALES CORPORATION 210 Franklin St., Buffalo, N. Y. OKEH PHONOGRAPH CORP., (New York Distributing Division) 15 W. 18th St., New York City STERLING ROLL AND RECORD COMPANY 137 W. 4th St., Cincinnati, Ohio IDEAL PHONO-PARTS CO. 1231 Superior Ave., Cleveland, Ohio L. D. HEATER 46914 Washington St., Portland, Ore. EVERYBODY'S TALKING MACHINE COMPANY 810 Arch St., Philadelphia, Pa. JAMES K. POLK, INC. 1315 Young St., Dallas, Texas JAMES K. POLK, INC. 811 West Broad St., Richmond, Va.