The paying full price for a car
 

has to do with the long standing business model of the industry. I think Jon or someone else metioned it earlier, higher price with discounts.

I could counter that with when is the last time you called to haggle the price of your electric bill or did the same thing at the grocery store?

Lately I think I'm realizing that for any service type company, the vast majority of them in a given industry are pretty much completely terrible as far as customer service goes.

When even my brother was in the parts/cars business, I got pretty much the same service level from him as around half of the vendors of lat-g I've bought from, which is to say far less than ideal.

It's the same with pretty much every other industry I interact with, a common one even cited here is contractors, but I've so far this year had similar poor experiences with real estate agents, bankers etc.

As Greg noted, there are a lot of vendors that you never hear bad things about and that's usually a good sign. I think a number of those vendors have also shown (as have leaders in other industries) that you don't need cut throat pricing, and that people will pay for quality products and service.

Very well said. I think a lot of customers are more than willing to pay extra for great customer service and products. I think SC&C, Kore3, and HPI are great examples of this.

No I'm not that guy. And I'm also not that guy who calls up vendors for free tech. I do my own research without bothering vendors with questions I can usually find answers to on this website or others. If not I'll post up a question on the forum and usually get great answers from fellow members. Most I ever do is call up a manufacturer when a spec is not clear.

The only vendor I ever talked with extensively was Mark Savitske and that was because he couldn't stop talking. :lol: And he did get an order...

Don

Well I do shop for groceries where the prices are low and I also chose an electicity provider with a low rate.

I never haggle with parts vendors over the price of their parts. I simply check their website. If it's not listed I take a minute of their time to call and ask. No haggling involved...

Anyway, I put that question out there for the folks who think that I should be blindly paying MSRP. Sorry, I'm just not programmed that way. Sure, sometimes I do pay it if it makes sense but no way do I do it every time just because someone thinks it is the right thing to do.

Flame suit on,
Don

It's not just the car business..... The Walmart effect is everywhere.... Even in veterinary medicine. More and more "low cost" clinics are popping up. The "bread and butter" stuff like spays, vaccines, flea products etc that used to decent profit generators are all going to low cost clinic, the Internet, Costco or Walmart. Those profit centers allowed me to keep my other services reasonably priced. Now my other services have to dramatically up to offset those lost income source

The low cost places do surgeries at prices I wouldn't even brake even on let alone make a profit. How do they do it? By keeping their overhead as low as possible.... Lowest paid labor, cheapest faculty, cheapest supplies... They cut corners.... It's the only way

Saw one 2 weeks ago.... That $100 dog neuter ended up costing you $500 after I had to fix the crappy job they did

So I either stick to my principles and know I will lose clients that focus solely on price.... Which is fine since I wouldn't make any profit anyway.... Or I sink to the low cost client level

The fact is that the top 20% of you customers generate 80% of your income... Focus on those 20% and offer them stellar service. So you can deal with 3 customers that make you $100 profit on each or one customer that makes you a $300 profit... You decide which is the business you want to run

How many of you buy your pets medication online now or at Costco? Do you know how many prescription I write so the owner can buy the medication somewhere else?

These are excellent point. I made a similar comment in another thread here.

Every company listed on the left needs to figure out who their customers are. There are plenty of ways to make money at the top and at the bottom. Every individual has their own perception of value and it means different things to different people. Some people value price above all else, others value shocks and wheels that look like jewelry, at any price.

Every company on the left also needs to consider that this industry, overall, is shrinking. When you combine a shrinking market, with a slow economy, you have business conditions that are very tough. The only way to stay competitive is through the development of new, innovative products and services. It is the only way to keep your products from being commoditised. When you are the only company, selling a product, that satisfies the needs of your customers, price will no longer be a big factor.

Andrew

Some vendors can do all three :thumbsup: :thumbsup: Cmon Jon your wheels are priced good, Your customer service is good (I did call you 1000000000 times sorry), and Im sure you can make your wheels on time. So there you got all 3

I can tell you how we made CUSTOMERS and held PRICES -- we actually made the dealers carry inventory. Lots of it - or they weren't dealers. When you own the inventory - you can DELIVER - and you have a dealer with integrity and financial wherewithal.

Obviously that isn't possible in some of the lines we're talking about... nobody could carry all the wheels with all the variables... But that's how I did it when I ran a multimillion dollar (like 100 million in sales per year) business... No inventory investment - no dealer.

I've bought stuff from Frank -- got it within days (back when) NFW I'd buy anything now. Not taking that chance. We're friends. But that stops at the wallet.

I've bought stuff from DSE -- Got my stuff within DAYS

I've bought stuff from Muscle Rodz -- Ditto

I've bought stuff from Morrison -- Ditto

I've bought stuff from The Shop LLC -- Ditto

I've bought stuff from Ring Brothers -- Ditto

If I've read ONE THREAD about non delivery -- chalk that up to a bad "something" -- If I've read repeatedly over and over about some vendor regardless of the excuse laden posts I'm not buying anything from that guy period no way, no how, ever... I remember the old "caveat emptor" -- let the buyer beware.

Exactly, Summit and Jegs already carry Fesler and Ring Brother stuff. They stock there shelves with it. As soon as THEY start carrying subframes and more pro-touring type stuff. I wouldn't even try to compete. You can get stuff in 2 days with them.

Jon - I know this has already been said but, "WELL SAID"

Had you not already earned my respect two year ago when I bought 2 Nitto NT05's from you, you certainly did with your post(s). I wish you well in your new wheel manufacturing venture - you have moved your business to the top of a very short list of vendors I would even consider buying from when the time comes for new wheels.

THANK YOU!!

With some of the stuff from summit and jegs the parts get shipped from the actual company... I was looking at some fesler stuff on summit and the ship date was a week later.... Bought it straight from fesler and it shipped in 36 hours. I've had that with ARP stuff too... So Summit doesnt stock everything they sell... Sometimes they are just the middle man

But most of my summit stuff shows up in 24-36 hours... Can't beat that

Jegs does carry Subframes and Torque arms, and headers. but don't think they are giving it away. it is priced at retail, they have the price list and they stick to it. why is that?
Why would the guy who is the biggest, has THE MOST SALES sell it for the most money??? isn't that opposite of what we are talking about here. do you think they make money on the products they sell.
Do people buy from them? and PAY MORE, WHAT???
oh but don't expect to call up and get TECH advise. Price Quality Service Pick 2
Who woud benifet if everyone did that? Everyone would.
just sayin.

I know, I know....:D

You have a rock solid reputation for delivering on time and you make so much money that you could care less if you sell another part.:unibrow:

???? is this to me ??? maybe i'm missing something

I can directly relate to Jon's frustrations, I've got competitors selling at a loss in order to get their foot in the door on long-term contracts. Pick any industry you want...this is just business in today's world. I can service my customers until I'm blue in the face and, at the end of the day, they procure through a vendor-neutral process based on cost and ability to meet requirements. In some cases, they don't even know who the vendor is because of the internal process they are required to follow. But the winning combination is still client service/relationships and the ability to repeatedly deliver on-time and with quality at a competitive price point via whatever mechanism the client desires. The days of an easy, non-competitive sale at huge margins are over. There's a time and a place to sell at little or no margin if it makes sense stategically, but at this stage you're swimming with the sharks so you better be prepared to swim.

Talking about Jegs. They have enough business where they don't need to discount.

Got it .
But don't you think it is interesting that if they don't discount, they make the most margin, , have the parts in stock (most of the time) and have the most customers then become the biggest.

i just searched summit. 1969 camaro subframe.
All I got was a factory replacement AMD subframe $899 retail its $999
Ships today!

How can the AMD dealers compete with that? I don't think you can unless you stock inventory.

On thing that strikes me when this type of topic comes up...we are all alittle hypocritical.....

We ALL buy stuff online....ebay, amazon, craigslist
We ALL shop at the big box stores like Target, Walmart, Home Depot, Lowes
We ALL eat at the chain restaurants like Applebees, Olive Garden, Pizza Hut
We all buy stuff from Summit and Jegs, Tire Rack, Enco, Grainger etc etc....

We dont go to the local "mom and pop" hardware store (when they used to exist) even when the service was way way better...but the prices were alittle higher...

We dont go to the local owned restaurant even when the food and service are better...

We go to Dominos or Little Ceasar's pizza since they have 2 for 1 deals...even when the pizza sucks compared to the local "no name" pizza joint...

We go to Taco Bell to get 99 cent tacos rather than to the local mexican restaurant

We go to the cheapest gas stations even though the place is a dump, the pumps suck and the bathrooms should be condemned

We are ALL guilty of eroding the sense of looking for the value in an item or service rather than just the price....we are all guilty of locking in on the price as the most important in 9 out of 10 situations

Its not until it affects our profession or has a direct impact on our own ability to make a living that we get pissed off.... me included

JEGS: Lowest Prices Guaranteed!! I've bought alot of items from Jegs and they will definetly match a lower price. :D

Good post Ned. And I agree .. all except the chain food stuff. I don't eat that crap. It's gross and unhealthy and I eat good local food. Have you not seen the Fast Food Nation movie or book? :lol:

But you're right. Since when do we as consumers owe it to certain companies or vendors their profit to feed their family? I've run a small business for 7 years now... and I don't EXPECT anyone to put food on my table to buy my car parts. That sense of entitlement don't sit well with me. I either compete in my marketplace and make the sales and get repeat business, or I find new customers to backfill old ones, or I don't... and I shut it down and do something else.

Entrepreneurs are not guaranteed profits. They put up risk capital to potentially make more than the guy who has a "secure" job working for some other entrepreneur or company.

Business landscapes and marketplaces constantly are changing.... new technologies.... new competitors.... Al Gore's internet.... many things have small and large impacts. That's not new. The people who make it and push forward don't sit around and complain about it. They GET IT DONE!

Good points

I work part time at the last REAL hardware store in san diego.
I only buy good pizza
I only drink micro brew

But I still look for the best price on most things.

Another example. McMasterCarr has excellent inventory, great tech, and are usually the most expensive. But they have a one stop shop so one doesnt need to spend 10 hours searching the net.

Exactly. No one gets upset when CVS sells milk as a loss leader to get you in the store to buy other stuff. So, if a vendor's model is to sell wheels on low margin and then provide service to sell you everything else you need to finish the car, then good for him.

Speak for your self:lol:

I think you're correct for the majority of America. For me personally, I only do three of the nine examples you gave. Then again, I'm a weirdo. :lol:

Ned great obsevation! Being in small buisness my wife and I go out of our way to frequent all the small buisness we can. I will say this you will never see a Walmart item in my house!!I would'nt give a sh^t if they were giving there crap away!!!!!Oh and never to the franchise pizza either or the Mexican food:D

There are always exceptions to the rule, but i think for the majority of the "average households" the observations hold true...and ALL of us at least do some of the examples

I do think that the guy that owns and runs his own business (or at least has a vested interest inthe company)has a different mind set. They think of things differently...its like a business karma. When they do business somewhere, they actually think of WHO is getting their business and who it really benefits...and the true value of who you do business with. They dont focus soleley on the price of the item that they walk out the door with

Most people dont think that way....and the majority wins and sets the landscape of business.

I've played both sides of the fence... I've shopped extensively to get the obsolute best price on an item and couldnt care less on who it came from....and I've done business with people that I trust and like and can count on and paid more for something I could have gotten for less

Customer service before and after the sale are great...and for some items they are paramount...but for others they play no role at all..... if i can buy a case of Mobil 1 oil at Walmart for $10 cheaper than at Autozone, why wouldnt I do that?

If I'm getting Lasik eye surgery, I'm sure as hell not picking the guy with the coupon in the penny saver :)

The general focus on bottomline price isnt going anywhere....its the big reason why the USA hardly actually makes anything anymore....adapt to the landscape or perish......

Focus on getting the customer the best value...... DSE is a great example...offer a good product and excellent support and exposure in the market....do it at firm non-negotiable higher prices but back up every penny the customer spends with you.

You cant offer dirt cheap prices on everything and great customer support and stay in business unless you are really big and have other profit centers ....and conversely you cant sell top of the line stuff and huge prices and do a ****ty job supporting your customer.

Im always looking for a great deal too. I could have saved a few hundreds over the thousands of dollars ive spent at firewheel classics by buying from a online site. Thing is they were close and i could just go pick it up. Im willing to pay extra for quality. All in all most of the price shopping i have done well everyone has been around the same price. I end up going with who i feel the most comfortable with. Might not be the cheapest or the most expensive.

O and find me someone who has in stock ready to ship marquez billet tail lights for a 67 camaro rs ready to go. Post on here and when i get back from my date with my wife ill send you the money

Marquez has them in stock on their website...


Back on topic, I enjoyed reading the OP. :thumbsup:

So let me be clear you never ask for a discount on any thing you buy? You never go look at something in local store and then buy it online for less? If you give quality service and fair pricing you will have my business. I am looking at a complete ridetech front suspension and rear 4 bar in the near future and while price will be a issue the most important one is customer service.

My MO when buying parts is to decide on what part I want, take that part number and search for the lowest price. I try to avoid paying full list price whenever I can. Call me crazy, I'm just funny that way. I try to find answers on-line and will only contact a vendor to clearify specific information as needed.

I understand profit margins for vendors and manufacturers but there is one aspect of this discussion that can be controlled and which I have not seen mentioned which is sponsorship. Free parts cost vendors and manufacturers money in exchange for generally very limited press exposure. As a paying customer, I know the price of my parts has the added cost of those free parts added in. I am particularly offended when I see cars built by so called celeberties who have more money to burn than I could ever dream of and yet are too cheap to buy their parts and actually support vendors and manufacturers. These builds usually make a big deal about using the latest and greatest parts that are provided at no or little cost in exchage for worthless endorsements. Why don't you vendors and manufacturers simply cut out these sponsorships which in turn would reduce your overhead costs. Then maybe you could sell parts to us little guys a little cheaper and still make a decent profit margin.

My take on it,

I have been in business for 22 years, Business is not for all people, there is a reason 80% of all small business go broke in the fist 2 years. As has been said before, it's not just related to one type of business, My belief is you have to be really good at what you do and focus on your own plan, not everybody else, I hope all goes well with your new venture John, But wingeing about what other people do, will not help your position. Keep your head down, bum up and spend your energy on things you can control.

It's human nature for people to try to get the best deal, and that will never change.


Greg

1. Jon, points well spoken.

2. The vendors were not held at gun point. Hell, I have called for a quote and had dealers drop their pants by telling me what the other guy is going to sell it to me for. Then offer me that price Without ever asking! I JUST WANTED TO BUY THE PART! I have dealt with some business men in "this industry" that are the worst I have ever seen. They are even worse salesmen. Nobody ever sells the value of themselves while selling their parts.

Before you attack know that I run a $20m business for Honeywell in a very very competitive market of competitors droping their pants. I tell dealers to pound sand all the time when the want my help and then want to negotiate. Want to ask my advise, buy my parts. No ticky, no taco! I have suffered for it in years past but many of my competitors have now been sold off because they weren't profitable.

3. Taking money and purposely not shipping is fraud. Fortunately this almost but didn't happen to me. Trying to keep this on task and focused but ******* should do time. So should all the other people who take an order and money but do not have or place the order for the parts. I cannot believe a DA hasn't gotten ahold of one of these guys yet.

4. Because of number 3... I now only buy direct or from major companies. All of the manufacturers have tech lines and I use them. God help you if you need to ask a Summit or Jegs sales person for a part number much less for advise. If I'm ordering it is because I have the money and know what I want. Not too long ago I needed a Chicane kit and guess what, I got exactly what I wanted for the price Speedtech asked. Could I have gotten it cheaper through a dealer...maybe. I don't know.

If I want to haggle I'll buy used $hit at a swap meet. I can't afford a new high tech subframe. I can't afford forgeline wheels. So again to Jons point, I don't order them.

So...if YOU CAN'T AFFORD TO SELL THE WHEELS OR FRAMES STOP OFFERING THEM. You can rob Peter to pay Paul only for so long.

trying to understand the profit margin here, whats the mark up in general on auto parts. i used to work in the surf industry and there is a huge profit and mark up in the surf industry, for instance on a pair of board shorts the mark up is about 800%, give or take a few %....

General Automotive is anywhere between 65-100%. Hot rod parts are lucky to make 20%. 25-30 is a real good day, but rare.

Good word Greg!

i see, but on custom stuff i.e. sub frames, wheels, the mark up is very little

Reply to OP
 

I see this exact thing all the time in car stereo. Guys will call or come in, take tons of your time and when you quote them a price on parts, "onlinecarstuff.com has it for $xxx" and it drives me absolutely insane.

Yes, you can buy your parts online or elsewhere for less, but you will NOT receive the level of customer service you will eventually need because there is also no warranty on anything you'll buy online. Also, most of those places will not have the knowledge base required, especially if it is in a custom application.

That's why I never really search too hard to find a lower price. Instead I look for a business model and level of service that I like and go with that company/business/parts. I often talk to the salesman about my project and a couple have been kind enough to send me a small discount or some other cool free stuff like memorabilia. in return, I will remember to tell everyone who will listen about my experience.

A perfect example is my tuner, Motor Machine Super Shop in Carmichael, CA. Don and Bob worked their butts off for nearly 3 weeks on my truck, chasing gremlins and problems that were caused by an incompetent shop. Eventually, they got everything squared away and I couldn't be happier. They spent ALOT of time on that truck but knew I flip burgers for a living so they we were able to work something out and I can't begin to thank them enough. The shop's logo is now a welcome addition to my back window and they are the only place I will ever tell people to go.


Service, reputation, and value for the $ will overcome most any hardship. At least I think so.