Lots of Vendor Talk, here's my Jerry McGuire
 

You know, I think it’s about time I get some things off my chest for my friends here on Lateral-G. Things that have been on my mind for over a year now, things that I think that just need to be out in the open for everyone to think about and take into consideration, what with all the “vendor talk” this past two weeks.

I guess you can say I have a unique perspective since owning Driverz Inc, and in many a case experienced all sorts of “interesting” transactions pertaining to the fore mentioned.

First of all, things have gotten BAD. You’ve got vendors discounting products so deeply that profits margins are down to 5% in some cases. Let me put that into perspective. At that rate, on a 7000 dollar subframe, the profit margin is $350 bucks. You tack on vendors offering “free shipping” or “no tax” and you quickly go in the hole on that sale. I think the only reason a vendor would still make that sale is because they needed the cash flow… which is why you see vendors selling product and not placing orders with manufacturers for weeks, sometimes months. Business 101 tells you that a discounted business model such as this is only successful when selling high volume and no vendor is selling enough 7000 dollar subframes to make a living making 350 bucks a pop. At Driverz, I’d have to sell 10 subframes just to pay my rent at the shop, light bill, insurance, phones and internet. Yeah…right.

And why aren’t the manufactures enforcing dealers to sell at retail? Well, they are probably just stocked to get another order. When you have big name manufacturers, all of who out of the blue, start selling other manufactures product, you know that things are not like how they use to be. For example, all of sudden, Hotchkis sells Baer brakes… huh?

Back in the day, you had to have a brick and mortar location to become a dealer for some manufacturers. Now, you can buy Ridetech from a dude sitting at a laptop in his boxers in the comfort of his own living room just cuz he has a website. Hell, I’ve even caught manufactures selling product direct for less then what dealer cost is?? WTF is that about? That just isn’t ethical to me.

And there has been a lot of talk about *******. I’ve personally been battling him as a competitor for 6 years, so I have a unique take on it all. I’ll tell you this, you can’t pimp yourself as the Walmart of parts, sell product for as deep as a discount as he does, and expect to come out ahead. Something has got to give. Nor can you continue to do it, and facilitate a high level of customer service to each and every one of those orders. I know I got caught up in competing with him because we sell to the same crowd, in the same arena, and frankly, I wouldn’t have made a single sale if we didn’t at least match some of the discounting. That’s why we had to sell Forgeline for 10-15% back all the time… because he does. In retrospect, I can tell you we felt like we had no choice, hell, we had to feed ourselves too, but who really won from doing that? No one did. Now every customer expects to pay that for Forgeline, and who’s ever going to pay retail for them again? I don’t only blame *******, but I blame the manufacturers for allowing it to happen. And I could only complain about it for so long before you either price match, or lose, so I eventually was forced to do the same. If you can’t beat em, join em, and trust me, I complained about it until I was blue in the face. My question is this, how can you advertise yourself as giving away 14K dollars worth of Forgeline wheels last year, and then be in debt to customers for what seems like WAY more than that? Ethically, when does it stop? How can you move into a new building, and pay for all that comes along with that, when you’ve got these guys beating down your door for refunds from over a year ago? I’m just calling it like how I see it. I can’t believe nobody else has come out and just said it. And tell me this, why do you all keep buying from him regardless? Do I need to quote Webster’s definition of “insanity”??? For example, I got a call from a customer just yesterday asking for a quote on a Wilwood disc brake package. I quoted him what Summit sells that same kit for, and he said ******* was beating that by 200 bucks. I said that was ridiculous, and I told him to go right ahead and order it from him, and good luck on getting it anytime soon. He then proceeded to tell me he’s had parts on order from ******* from July of last year, and that he doesn’t think he’s ever going to get them… so I asked the golden question, WHY ARE YOU GOING TO ORDER MORE PARTS FROM HIM THEN? I said, you’re ready to just go ahead and spend another 1700 bucks with him then? I understand if you don’t want to order it from a dealer because of your experience, but then by all means order it from Summit, or direct with Wilwood, but come on, lets think about what we’re doing, and who we’re spending our money with people.

Now I’m not going to stand up on a box and pretend we didn’t get behind when I owned Driverz Inc. Bills got higher, profit margins shrank for all the reasons above, and when we tried to raise pricing, buyers went away. But, I’ll tell you this… I took loans out on my cars, I sold hot rods, and took out lines of credit from my bank to make up for it. I didn’t let it get so out of hand that we couldn’t bounce back from it. And finally, when I re-visited my business model at the end of the year, realized that it couldn’t be done the way I was doing it and continue to feed my family, so I sold the business to a guy who is changing the model so it works. And I am now taking the things I’ve learned, applying it to the new venture, and building a business from the manufacturer’s seat.

You know, I had a customer call Driverz last week for a Speedtech subframe. I quoted him the retail price on our website, which is less retail by only 50 bucks and he asked about shipping. I told him there was a crating fee, which is clearly outlined on Speedtech’s website. He said, well Matt’s was going to ship it for free, and that there was no tax. I said no tax? They are in CA and so am I so there has to be tax. He said, “Oh, I’m sorry, it was that uh, that uh, Ironworks”. I said, Roger is in Bakersfield dude, he’s gotta charge you tax too!”. He said, oh, maybe I was mistaken, and that they were mis quoting me. I told him, I think you were just trying to get me to give you free shipping with no tax and that Matt’s and Ironworks said the same thing and you’re just trying to get us to compete with each other. I haven’t heard back from him, but judging by one of Roger’s other posts this week, I’m guessing he called him pulling the same BS.


I’d love to vent about another deeply disturbing situation. Don’t call a vendor, milk him for several hours’ worth of tech advice, then at the very end of it all, after the weeks, or months of working with him, make him price match summit, or *******, or whoever else is whoring it out that week. That is the biggest bull **** move of all time. I can’t tell you how many customers have pulled that. I know everyone wants to save a buck, but at some point, when does it end? Everyone talks about how they got screwed by the vendors, when do vendors start standing up and talking about how they got screwed? The poor sap who spent hours on the phone with you figuring out what works with your given situation just got screwed, and you have no remorse, or even later have the audacity to come on here and post about how its all about the bottom line, he didn’t give me the price I wanted? But you didn’t hesitate to waste hours of his time, did you? We had a customer earlier this year buy a set of wheels from us, that we customer serviced to death. He called and called and called and talked Justin’s ears off for months about what rear end to buy, what brakes to run, what transmission to run, what suspension to buy and when he finally got his wheels bitched, moaned and complained about how we could have gone wider, and bashed us like we screwed him and sold him a wheel set that didn’t “fit” when the wheels fit without rubbing, and that he could even run a wider tire. Yeah, that’s some BS right there. I know you all know what I’m talking about. All I’m saying here is it’s about time customers start taking some responsibility. If you start a relationship with a certain vendor, and they are truly bending over backwards to service you, give you all the tech advice they can, and are working HARD FOR YOU, then don’t give them grief when they are 50-100 or hell, even 200 bucks more in price. That guy, whose ear you’ve just chatted off for the last hour for free tech advice has a family, and kids too, and deserves the extra bit of money just for knowing what he knows, and willingly giving it to you in hopes you’ll spend your money with him. You know, I’ve even started having to tell customers, that I can’t give away backspace for a certain vehicle until we start writing up an order? You think I like having to say that? Definitely not. But at some point, something’s got to give. I’ve even contemplated charging for tech advice. Could you imagine that? You want to call in for backspace information cuz you saw a chevelle we fitted with 19s and 20s and you want the same look, sure, but unless you order from us, it’ll be 150 bucks up front for that info.

Have things come to that? I don’t think anyone here wants that.

part ii
 

Another thing, there’s a lot of talk about “It’s only the rich guys that say that”. Like in a post I read earlier tonite regarding you get the customer service you pay for. Dear customer: I’d propose this to you, do you think maybe you’re playing outside your means? Yeah, I said it… maybe it had to be said. If you can’t afford a subframe, don’t buy one. If you can’t afford expensive 3 piece wheels, don’t buy them either. Rethink your game plan, and if you can’t wait, and save up the extra duckets to afford it in a few more paychecks, well, then you can’t afford it (period). Don’t hunt and fish for the poor vendor who is willing to discount the product so severely that he practically lost money on the sale, because I’ll tell you this, you may have saved a few bucks, but you’re going to end up one of those guys on the forum bitching about his parts being late or how the finish on the wheel was inferior.
I learned a LONG time ago, there is always going to be another guy out there with more money than you, building a nicer car. So what? Let it go. Build the car you can, within the means that are available to you and have fun with it. Stop coming on the message board and pointing out the rich, like it’s a problem they buy expensive parts. They’ve earned their money somehow, and can afford to buy nice products, at retail, probably direct from the manufacturer. And you know what, good for them. They probably will get their parts sooner too. But if you bought at a deep discount, and are left waiting at the door a little longer for UPS to drop off your parts, don’t complain about it. You should have expected that. You saved 200 bucks though, woohoo!

When you shop, take into account this VERY important rule. There are three things everyone wants out of any transaction:

1: Price

2; Customer Service

3: Time Frame

Pick two of the three, that’s all you’ll ever get.


You want to know what I think? I think everyone should start selling at retail. Level the playing field. I think Frank, Matt’s Classic Bowties, Ironworks, DriverzInc, Muscle Rodz, and all the other vendors should start selling at retail, period. Then let the chips fall where they may. You want to talk about customer service? They’d be forced to out do each other with customer service and knowledge. And you know what, they could then afford to do it! If not, then maybe they'd be forced to do something new. Then everyone can start buying from who they like, and price wouldn’t be a factor. the last guy standing would be the one who knew the most, and customer serviced the best. I also think that everyone of these vendors should start talking to each other. Hell yeah, why not? You guys could share stories about that customer that just called you and tried to beat you down on price, and tried to play one vendor against the other. Hell, at least that would stop that nonsense from going around. No more, “Well I called (?) and they said free shipping, or they said they could do it for (x)”.

I think manufacturers should start forcing retail. Yeah, I said it. I’ll say it again. Margins are what they are for a reason. It allows enough profit in there for a vendor to maintain a living, and a legitimate business. And, it keeps the retail value of your product where it’s supposed to be. And if people stop buying your product, re-think your manufacturing, and find away to make your product cheaper so you can lower retail across the board.

Makes sense, don’t it?

Now I’m pretty sure I just stirred the pot, and I’m sure many of you may want to rebut. I’ll leave you with this final thought, until you’ve walked a mile in my shoes, you’ll never know what it takes to successfully run an aftermarket parts business, so don’t pretend to know. If you’ve done it, and are still doing it, then good, you have reason to post. If you haven’t, stop and just think about what you just read, and take away from it what you will. That is the real reason why I feel like posting this… hopefully you learned something. If you’re “that guy’ who thinks they could do it better then the vendors here, I beg you to try, and I’ll talk to you in 5 years about it, until then, don’t pretend you know, just read the post over again and take into consideration that I once, was just like you, and thought parts businesses made a killing, and that it would be “easy”. Uh, no, its not. Especially in this economy, and especially dealing with customers in today’s market who expect instant gratification.

Moral of the story? THINK about who you are spending your money with. And know that you are supporting them buy spending money with them, and if they are a little more in price… oh well, you put dinner on that dude’s table that night, or helped him buy his daughter that cheer-leading outfit they couldn’t afford, or helped pay for a portion of his mortgage that month when he thought for sure he was about to lose his house. And, finally, maybe, just maybe, you get what you pay for. And if you are ‘that guy” who shopped every vendor against each other for the little better deal, then don’t get all huffy when your order is treated the same way….you now know why.

I enjoyed reading most of that...

seeing that 5% margine sucks big time
Hell I bitch n moan if my (face value) margine goes below 70% (restaurant)

Don't know you, but I totally agree...

I always want to be treated fairly...I always want a good deal..

But I will be damned if i will nickel and dime the guy who is selling me my parts or doing my work..

Yes, I paid retail....Yes I bought Rushforths. Yes I paid the shop fees to have it built..

I went to them, they did not come to me....And I got everything I wanted on time and the right stuff...

I did ask for a discount.....Was told no....Do you want the wheels ? Then buy them... No weirdness, just fact...This is the price, do you want them..

Yes I did...They arrived perfect and on time, as all the other parts did.. So i did get two out of three...But you don't get the cheap price on custom wheels..

I have run business before, and you have to let the bottom feeders go, but they cannot and will not survive feeding the bottom and cutting prices too low...And they don't..

So as a customer, what you say makes total sense to me...

If I wanted something cheap, it sure would not be pro touring stuff... I would buy a Camry...:cheers: :lateralG

Well said Jon.

I worked in parts for some time, I know I wouldn't touch something that was less than a 75% gross profit. Ive often wondered how you guys manage to stay in business without manufacturing your own parts to supplement your income. At the cost of running a retail establishment I just don't see how you can keep going unless you're making $80 profit on a $140 alternator. Large volumes and just barely scraping by every month is the only way I see brick and mortar vendors even surviving.

Jon,:thumbsup: :thumbsup:

Preach on Brother!
 

I am with you on this Jon. I could give reasons you are spot on and examples in my life but there is really no need. You hit the nail on the head.

Amen!

AMEN to that!

Although if you pick price as your "two out of three", then I think you should have to forfeit your second pick.......:wow:

I'm sure every vendor has the exact same problems and hurdles, I spent days educating a customer (in person) about choices and parts to run, developed a project plan, and then got screwed when he started ordering his own parts and took the labour end of it to his "buddy" because he was only charging him 25 bucks an hour. And it wasn't someone who couldnt afford to pay....

I probably come accross as grumpy to some of our customers, but in the end its only because I can't afford to chat them up for hours and hours and they really havent spent much anyways. People are always amazed when they find out that the guy who just spent 250k is a "better" customer that their 569 dollar wiring harness purchase, because every customer is important right??

You have got to look out for yourself, because although all of our customers are coming to us in pursuit of their HOBBY, and have the misconception that that is all we are doing it for, when in reality we have got to feed our kids and pay our bills with it! And it is ALWAYS a shame to lose a sale to summit or jegs because it was 25 bucks cheaper, yet you were quoting your customer a shipped price........

For those of you who are Manitobans on this forum....... ITS NOT CHEAPER TO SHIP IT TO THE BORDER and pick it up yourself PERIOD. even if you get free continental US shipping, lets add it up:

-On ONE box, it is $5 US per box to pick it up at a parcel depot
-It is now $10.75 US service fee to cross the border only to pick up a parcel
-You still have to pay tax on the item you are bringing back, as you have not been across long enough for your personal exemption
-Gas money..... most of you are from Winnipeg, which is around 60 miles away each way. average 20 MPG for your vehicle choice, and that is 6 gal or 27.24 L (canadian) at 1.15/L so 31.25 in GAS
-TIME....our time is worth something, is yours? Did you take off work early? lose pay? waste your weekend? It takes MINIMUM 2.5 hours without lineups at the border.

That equals around 48 bucks CAD without the tax for the item on ONE box. That box could only contain a 100 dollar part. Was my price really that bad? You be the judge. Also, when I recieve my items, I check the box and the item to see if it is right or damaged or missing. If it is wrong, I deal with it. You have to ship it back or buy another one.

Also for any of our suppliers, this is why we DONT like to ship to a US address. Add in our time and it is cheaper for us to broker and ship direct.

To sum up, Jon has many valid points, as do alot of the posters in these last couple threads. We have to try and work together as vendors as best as possible as well. And a solid working relationship, either business to business or consumer, is worth WAY more that the little bit of a discount you might get shopping around any day. There are many times that I pay a little more just to deal with someone that I have a good working relationship with, and sometimes there are headaches that come along with it but in the end it is a way better experience to be able to have some repor with that person!

And Jon, I hear our wheels turned out amazing.... I cannot wait! NewGen wheels rock!

Simply.... well said. I agree with a lot you have to say.

You will be thoroughly disappointed if we all start lowering our costs to manufacter so that the parts are cheaper.

I think it's hard to sell the value of a quality vendor to the new crowd. It's no different than shopping for a TV or a loaf of bread in their mind. It goes back to my post about the internet and what modern times have done to business. It's let every Tom, Dick, and Harry compete and that means stupid low prices. It's forced businesses to run leaner. It's not going to change anytimje soon. People with money today are smarter. I hope Travis has figured out a way to have less overhead.

You mentioned raising your prices and losing customers. What customers did you lose? The customers you didn't make any money on in the first place? I've found with my business that my BEST customers are as loyal as the day is long. They refer to people just like them. I always tell the kid that works for me, "Pick your battles". If he's a grinder or not loyal, find a better customer.

Just think about all the vendors on all the forums that you've never read ANY post, EVER, about late shipping or hassles getting a refund.... There's way more of them than there are the ones you've read over and over about.

Everyone in business faces the same challenges. Price. Service. Competitors.

Just look to the left of this page and see all those banner ads... and ask yourself how many of them you've read bad stuff about. What are they doing differently? Are they competing? Are they on the Internet? Are they in a different economy? :unibrow:

I haven't started a build yet. I have owned a high end wakeboard or a ski boat most of my adult life. There are many online suppliers of boating toys and equipment. Instead of saving a few bucks ordering from one of these guys, I've always gone to my local dealer and bought from the pro shop.

Sure a wakeboard setup from them is a bit higher, but it keeps the local guy in business. If everyone did that, I wouldn't hear so much grumbling about marine service departments in other areas of the country. My dealer can hire the best service techs because he has a large, loyal customer base in all 3 aspects of his business: pro shop, service dept, and boat sales

Very well said and very true Jon :thumbsup:

Jon I feel for and understand what you are saying BUT.... in ANY business that has margin, people pile on and you get price erosion. It has always happened and always will.

I feel it with my apartments, haven't raised rents in almost ten years but my costs continue to go up. I feel it when I sell a load of topsoil. My father made more profit selling dirt in the 70's than I can today. EVERYONE has a truck, EVERYONE has machines...EVERYONE chops balls.

Price erosion.....it sucks.

De Beers ...now there is a business model! Are diamonds rare? My wife thinks so and that's all that matters....along with setting prices....lol

I can't say it any better than what everyone here before me has already said...and it is the internet's fault like Todd is saying.

Among the admirable vendors on the left side of the screen is DSE. I can draw so many parallels to Apple I won't waste my time, but they built a brand, focus on their products, prove it in the field, and stay off forums. Their price is their price...and although I don't own a single DSE product, it's a brand I aspire to buy "because it just works."

Being in the service business almost 30 years, Quality Service, parts, and follow up are key.

I understand the mark up on parts....I did it....Always the good customers come back, over and over again..

Why when I go find a Killer shop to work on my car, would I try to barter down to near his wholesale price ? Sure to save money, but I will make it somewhere else and Pay the man for the parts and the Labor..

Sure i see what I can get them for, so as not to get ripped off, but to say to him, " I know you get it at cost, so what is my price ? " , to me is getting spit in my food....Get my drift ? I would not want to work on my Car...

Instead, I have a loyal relationship with a great Builder, and My job is to go make My money so I can pay him what he needs ..

It was always just under what I would pay retail so no biggie..

In my Trade, We are charging 1.2 times on parts, so a 50 dollar part is 110... I understand how it is.

Paragraph 1
As a manufacturer we (all manufacturers) try and reduce the cost or our parts, it is the only way to increase margin,(other than raising the price) but when we do lower the cost. don't expect to see a lower retail price. We are in business to MAKE MONEY. if you want cheep parts call CHINA, and no sorry i don't have the number.

Paragraph 3
You purchased the cheapest forged wheels you could. from the lowest price vendor.
They took twice as long to get as expected.
and didn't fit.
anything else.

i will go back to Jon's story about the Speedtech sub frame, this customer actually called Every dealer on the west coast, we ended up talking to all of them and quoting and figuring out the shipping to 6 different locations. and the guy still hasn't placed an order not the best way to LOWER YOUR COSTS.10 guys dealers &manufacturer) quoting on 1 sub frame to make 300 bucks???? (that is how low the price was driven not the normal margin BTW)

I would love it if all the dealers stuck to the price sheet. We were having this talk just yesterday, We just finished redoing our pricelist and spent weeks working out cost, dealer cost, retail and margins and comparing competators offerings and we price our product to sell at full retail. We could mark it way up and give everyone a discount build in huge margins for the dealers and have them discount the parts all day long, but that is not the approach we took.
Speedtech is the same as DSE in that we do not discount the pricing of the product so as not to compete with the dealers, lets hope some of them are also reading this.
The most important thing in business is to make MONEY, you all get up everymorning and go to work to MAKE MONEY how many of you would do it "Just For the love of it" not many I'm betting.
We strive to provide high quality parts, great Service and good availability, all while making a profit. and you know what sometimes the stars don't all line up. We do try tho.

[FONT= " Courier New"]Back in the day, you had to have a brick and mortar location to become a dealer for some manufacturers. Now, you can buy Ridetech from a dude sitting at a laptop in his boxers in the comfort of his own living room just cuz he has a website. Hell, I’ve even caught manufactures selling product direct for less then what dealer cost is?? WTF is that about? That just isn’t ethical to me." [/FONT]

Jon...just trying to clarify...are you saying that you have seen RideTech sell product direct at less than retail price? Or are you saying that Some RideTech dealers may be mostly internet based?...or are you saying both?

OK, I edited the original post. I don't want to lock the thread. The frustrations and info regarding this industry, vendors, and customers is great. But let's keep individual company names out of it. Everyone still gets the point and most know who the edited name is anyway. This way hopefully the thread stays constructive instead of turning into a cluster that has to be locked.

Truth of the matter....it is dog eat dog out there right now. I talk to fellow contractors every once in awhile when picking up materials and it's the same old story everywhere...there's always someone out there to do it for less. I personally stick to my guns with my prices. Quality and customer service has allowed me to have repeat clientel and get referrals. I've learned that If I allow myself to take a job for no or low profit the product I deliver suffers. Is this what I want when someone walks in to this prior customers home and asks who did the work? Of course not. Lesson learned!!

My motto, honesty and hard work will get you moving forward. Listen to your gut and God willing, you'll pay your bills, feed your family, and with todays economy, if your lucky be able to make a little extra. The only thing being in business for yourself can promise you today is the freedom to do it your way.

We all make mistakes one time or another but lesson's learned from prior experiences should allow you to forsee and choose how to maneuver forward with your new business and next customer. Stick to your guns, provide quality service in a timely manner, and thats all you can do.

I personally wish the best for you in your new venture. Good Luck!! :thumbsup:

Just wondering how many folks here pay full MSRP when they buy a new car...

Don

No Bret, its just to get the POINT across. I will however say that some dealers are mainly internet based, you and I both know that is true though.

And to be clear: I said I've even caught "manufactures" selling for less then dealer cost not you specifically. How did I do it? I called them and pretended to be a retail customer, and they priced me out at 15% back from what retail is on their website.

And how did I price match my competitors? I did the same thing. I called them, or had Justin call them from his cell phone, and pretend to be a retail customer, and got 15% off brand X without even trying.

To everyone reading my midnight thoughts, read it as this: Look for the underlying theme, and think about what the point is, and take something away from it that is constructive. Maybe the next time you go to buy a part you'll think about who your spending your money with, and what you are going to get in return from that transaction. And please, PLEASE, have some integrity and some loyalty to the guy working his arse off for you. If you spent countless hours working with him on backspace for your wheels, don't turn around and call wheels for less .com to buy them for 50 bucks cheaper. (As an example, and you can apply it as you see fit).

Todd, I did, and still do have very loyal customers. The business that was lost was to new guys, who found us on the web, or met us at a show, and then called in to price match us. We lost those bidding wars, but they didn't hesitate to take all the free tech info Justin and I could dish out until we were blue in the face.

Thanks for letting me speak my mind Lat-G. I plan to take more of the DSE route myself from here on in as NewGen.

:lateral: :cheers:

As someone that has a number of close relationships with companies on this forum, I'm slightly removed from this, since parts aren't paying my bills. However, I do know what is going on, and I hope that if I say it, maybe a few business owners won't have to, because this isn't exactly pretty, or nice, and I'm sure they would rather not have to say it themselves.

First, I'm glad you got a good deal. I remember the first time I purchased expensive 3 piece wheels. It was from Jon at Driverz about four years ago. I bought them because he was running a sale, and he was semi-local to me so that I could pick them up. That was important to me. Had Jon not been around, I probably would have purchased from Frank, which would have been $200ish cheaper. Glad I didn't and not because I would be worried about Frank's business practices. I'm glad I bought from Jon because he has been willing to stay late at the shop waiting for me, mount and balance countless tires, some of which I didn't even buy from him, oh yeah, and he put me up at his house for a night so that we could trailer my car up to SEMA, leaving at 3am, using his truck and trailer. I almost hate to think that is all because I spent $200 more on my first order. Hell, that almost seems like I've taken advantage of him in a criminal way. For that level of service I should have paid retail plus (a lot).

Ratman You probably don't realize it, so please don't construe this as me calling you out for doing something wrong, because you haven't really done anything wrong, but this exact scenario is what is killing dealers like Jon, or any of the others on this site. DSE doesn't offer a big profit margin to dealers who sell at retail. AT RETAIL. DSE supports their vendors, not by refusing to undercut them, but rather by attempting to keep prices even, no matter if you're buying directly from DSE or through their dealer network. That is something I hated about DSE at first, but have come to respect immensely. I can't believe Matt's took 15 percent off for you. You might have gotten a great deal, and the pricing cut probably won't affect you. However, that pricing cut directly affects the vendors mentioned in this thread. As Jon said earlier, it sets this precedent that everyone now needs to sell for 10-15 percent off with free shipping, etc. This is the real life example of the dealer making $350 on the $7000 subframe. Not only that, it affects all of the shops like Ironworks, or HPI or Best of Show, just to name a few - the shops who build cars, but who have also established dealer status with manufacturers. These shops are small outfits that are dealers primarily because they have built well made cars, and often manufactures make them dealers because they know the manufacturer's product inside and out, and represent it well in magazines, or at shows like Good Guys, or SEMA. These small shops never set out to make a living selling parts, they set out to make a living building cars. They can't compete on pricing because it isn't worth their while. In many cases, they don't even care if you buy parts from them anymore because the profit margin is too small. When they factor in the cost of their time, it just isn't worth it. That might not seem like it will affect the end customer, but it does. Hell it also affects the manufacturer. For example, if a customer is having a car built at a shop, and they are dealers for DSE, and have installed plenty of DSE subframes, but the customer decides to install a Morrison subframe because it was cheaper. Well, by the time that Morrison subframe goes into the car with the engine and headers, etc, it might end up costing more because of the time the shop spent figuring out how to install it. That is just an example of how cross shopping or finding the "best" deal, isn't always the cheapest in the end. In the same scenario, if the customer buys a DSE frame from someone other than the installer, then what is the point of the installer being a dealer for DSE. In the future they might not sell as much DSE product, and when it comes time for a customer to have the latest and greatest DSE product installed, it will take more hours for the shop to install it because they aren't familiar with it. You better bet that cost gets passed on to the customer. As for how that affects the manufacturer... Earlier I wrote that a lot of shops attained dealer status because a manufacturer wanted them to be. If the shops have no incentive to run the manufacturers products, then it hurts the manufacturer.

Matt

great post jon!!!
Non of us are perfect, however with that said beating prices further and further down doesn't help anyone but the end consumer, and thats ONLY when he gets his parts on time.
Nothing better then a customer who wants to do business with you, doesn't care about discount(not that he is going to overpay, but knows going prices) and just expects on time delivery and support.
great thoughts!!

I work for an aerospace company as a test engineer but we are very versed in lean manufacturing. There are always ways to continuously improve and remove waste from any process, sometimes it means buying new equipment sometimes it means moving around less and co-locating certain operations. There are always wasy to make things take less time therefore less cost and less parts and materials on the shelf. Which will help overhead and cashflow.

Jon, GREAT post!

Jon the part I quoted is probably the best thought out, most articulate thing you've written in this thread. Although there is a certain amount of cost/benefit discussion that will take place with any customer, NO ONE should milk a vendor for free tech and turn around and take the business elsewhere.

Conversely, no customer wants to hear vendors complain about the deal that didn't go their way. It sucks for sure, but is also a part of our world today. Vendors need to have a unique value propostion that will attract and retain customers. I know Jon has brand loyalty with many. The challenge is to create that realtionship with all even though it is next to impossible. :cheers:

If I were a vendor or a dealer I would be very upset at Dealers that hold others money to pay for parts ordered before. THAT is the real problem.

Think about it, if the bad dealer is selling parts at cost then the other dealers are not selling at all because of this ploy. Bad dealer doesnt need a profit because he is using this current money minus his cut to pay for the previous orders. That is what is killing the ethical dealers. Profit on the order is NOT the way BAD dealer makes money.

ding ding ding... exactly.

To be clear: RideTech DOES NOT molest the retail price. Ever. Not for any person, Not for any reason. And we never have. And I don't intend to.

By federal law we cannot dictate the price that anyone else sells at. I wish we could. We can only influence that scenario by maintaining the integrity of the retail / dealer / distributor price levels.

I totally agree that discounting is a fatal race to the bottom. It is a disease that will eventually consume the discounter.

How does a manufacturer police this? I don't know. I wish I did.

Internet based dealers are another problem. Some are good...some are not. Before the internet we had these same comments about mail order companies...with the same results.

When asked about the best place to buy, my recommendation is ALWAYS:

"Buy from whomever gives you accurate, reliable and relevant information about your impending purchase and overall project."

:yes: :yes:

Ok, so reading this I feel yea your right about keeping cost as they should be but what about the difference between buying a 18x10 wheel and an 18x12? Some Manufacturers up the price by $400 a wheel just because of the size of the hoop. Is 2" of aluminum that much more expensive or is it more difficult to make? Also some companies sell control arm sets for under $800 and others for about $1,300. Is there a real difference in the building or quality of parts?

I do agree that everyone should know there budget and keep to it but would like more options in the way of those that are more budget minded.

Lets chalk that up to you probably don't know what it takes to make an 18x12 two piece.

First, you can't buy an 18x12 outer hoop. They only come up to 10". So the process is as follows. We have to take two, 18x10s, half them, weld them togther to create one 18x12. It takes a special fixture, and a welder to do this so that the two halves mate, and still run true, which means no more than .0030 out of round. Then, that now 18x12 needs to be ground down, and polished to perfection. Then, you can install your center. So essentially, twice the work, twice the material, and that equates to the up charge of 4-500 bucks per wheel to do it. Did you know, that after cost analysis, that is actually COST for the manufacturer to do it?? Yeah, all that work and he didn't make anything but the customer happy.

Still think it doesn't make sense? ;)

I can tell you last time I walked on to the lot manufacturers are advertising a "no hassle" sale price.

And besides, I'm talking about aftermarket parts, not cars dude. Profit margin on parts is a totally different game. Your that guy that thinks that parts stores are making a killing, aren't you? You obviously didn't learn anything from the OP.

Lets compare apples to apples shall we?

wow...great input and laying all the cards on the table!

Blake is right- I was one of the dealers that got caught in the "price war" on a subframe. I learned my lesson- STICK TO THE PRICE SHEET. After a little investigation (we are an installing dealer, not an online parts sales department) The guy was doing a Pontiac engine and trans. Simple question, "What are you doing for headers? I have these really expensive headers I "think" will work with the rack. Probably not, and when they don't who is he going to rant about? Me...Matt's... Speedtech- who knows. but he chose price over service and taught me a lesson- stick to the price sheet.

We do a little general automotive and the parts mark-up is 1.65 and up. If I was in this for the $$ I would blow out all the PT customers and do brakes and service all day long. Trying to make $$ on hot rod parts is hard. Just jump in your car and run down to your local speed shop...oh there isn't one.


The reason I do hot rods is because I love the build, It pays my bills, and like Mr. Weld says. The people are really cool. - Chris:lateral: