Institutions — Negotiating — School Bids — School Loan Program

The Definitive Guide to
Buying New, Used,
and Restored Pianos

SPRING 2012 — page 94

Your institutional purchase may benefit the dealer or manufacturer in ways other than the profit from the sale. Therefore, when discussing your possible purchase, don't hesitate to mention:

How prominently positioned the instruments will be in your institution or in the community
How many students or audience members will come in contact with the instruments on a regular basis
How often you or your institution is asked for purchase recommendations
How musically influential your institution is in the surrounding community

LOAN PROGRAMS:
An Alternative to Purchasing

Often, institutions find themselves needing to acquire a number of pianos at one time. Perhaps the institution needs to replace a large number of aging instruments or to furnish a newly expanded facility or program — or a school may want to acquire a number of new instruments each year to demonstrate to prospective students that it has a music program of high quality. Such situations can pose a budgetary dilemma — the simultaneous purchase of even a few pianos can cause fiscal stress. Fortunately, relief is sometimes available in the form of a school loan program.

On the surface, a school loan program may seem too good to be true: free pianos, loaned for an academic year. At the end of the year, the pianos are sold. More free pianos the next year.

In truth, a school loan program can work only when it makes sense for both the school and the local dealer. (Although the manufacturer may be a participant in the program, the contract is normally with the local dealer.) Both sides of the agreement have obligations to the other.

For example, a school may receive any of the following, depending on the structure of the program:

Free or very-low-cost use of a significant number of pianos
Free delivery
Free tuning and maintenance
Name association with a prestigious manufacturer

A school may also have any of these obligations:

Liability for damage
Delivery charges
Tuning and maintenance costs
Requirement to purchase a certain percentage of the instruments
Requirement to supply an alumni mailing list to the dealer for advertising purposes
Requirement to provide space for an end-of-year piano sale

When evaluating a loan program, it's generally a good idea to consider:

The quality of the dealership that stands behind the program
The appropriateness of the mix of pianos offered
The school's vulnerability if the program were to be discontinued by the dealership after the current year

That last point is a key issue. What happens if you replace your inventory of old pianos with loaned instruments and the loan program becomes unavailable the next year? Suddenly and unexpectedly, you are faced with having to buy replacement instruments.

Generally speaking, it is a good idea to include with your loan program a purchase component so that you are building your inventory of quality instruments over the course of the loan.

The bottom line is this: You won't know what the final price will be until an official representative of your institution actually sits down with the dealer principal or until bids are awarded. Before you reach that point, however, and for planning purposes, you can make discreet inquiries and put together some estimates. As a rule of thumb, and only for the purposes of budgeting, if you subtract 10% to 15% from the dealer's "sale" price, you will likely come close to the institutional price.

If you represent a school that's required to send purchase requests out to bid, you may not have much of a role to play in negotiating a price. However, the way in which you word your bid will have a lot to do with the bids that you receive and the instruments that the bidding rules will compel you to purchase.

For example, if you really want Brand X with features A, B, and C, be sure to write your bid description so that it describes — within acceptable guidelines — the instrument that you wish to purchase, and rules out instruments that don't fit your needs. If your bid description is loosely written, you may receive low bids for instruments that don't meet your requirements.

Because pianos can last a very long time, any piano-buying decisions you make today for your institution can have consequences for a generation or more. Therefore, it pays to take the time to think carefully about your institution's present and future needs, to budget sufficient funds for purchase and maintenance, and to consult with individuals both within and outside your institution who may have special expertise or be affected by your decision. If you take the time to do this properly, then your constituents — be they students, faculty, worshippers, or concert-goers — will enjoy the fruits of your work for years to come.