Lots of Vendor Talk, here's my Jerry McGuire

[Greg from Aus]

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

[TT302Z28]

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.

[nvawgn]

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 %....

[youthpastor]

Originally Posted by nvawgn

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.

[youthpastor]

Originally Posted by tonner

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

Good word Greg!

[nvawgn]

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

[MattO]

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.

[LILBuzzy]

Very informative and telling blog here. It is insane for small business to have to compete with corporations. I think Jon from New Gen (plug because we bought from him) expounding in all directions at vendors, customers and manufacturers is very telling of the current business trends in our country. Just an opinion/observation with respect to some companies (not all), but I think it is due to tight resources coupled with lean manufacturing on a JIT type schedule. So many customers do without parts while vendors hold the cash as long as possible due to the wait time on manufacturing. I mean do people pay for a 300,000 dollar car, house etc without it being built yet? Up front? OK yes, that's how the government operates, but that's not what we are talking about. All the while the manufacturer is waiting on the order and the cash from the vendor to start production. Likely the manufacturer is waiting so they don't have to put their cash into materials and at a minimum have a solid commitment from the vendor. That is because current models tell manufacturers/vendors it ain't cool to tie up your money in stock for your vendors/customers when you can do all these other wonderful things with it. Looks as if it is truly a **** rolls down hill process. This wait and hold game eliminates the risk of spending precious capital for all involved, except the end user (us) who is footing the bill from the get go. It's like a parasite, and whether it is the consumer, vendor or the manufacturer to blame, it eventually kills the host(us) and thus the business goes away. What most likely got this started is the old drop ship from the manufacturer. Once upon a time some guy had the notion of contacting the parent company just to see if they would sell direct. This thought has most certainly passed through the visual cortex onto the dentate gyrus in the hippocampus in all of us. So from the manufacturing standpoint, units sold equals market share, and in this day and age, market share wins. Doesn't really matter if you cannibalize your supply chain or your end users resources to get there.

[NOPANTS68]

I've been mulling this thread around in my head for a couple days. Here's my Bob Sugar to your Jerry McGwire, Jon.

The line that sticks out is the call for buyers to take responsibility. It's absurd. If you are taking an adversarial stance to the manner consumers buy your products or shop your company, then you either need to do a better job taking the buyer's temperature or close your business. If the guy's wasting your time, identify if his purchase is a reality and invest your time accordingly. Great sales people can sum up a customer in 30 seconds and pull out the necessary tools to adapt. I teach this to my teams constantly.

It's insane to ask a potential group of buyers to all behave a certain manner and take in to account the personal lives of those selling a product. You know where my responsibility ends as a buyer? It's when I fork over an obscene amount of money for a set of wheels, subframe, lug nuts, sandwich, lap dance, etc etc. Everyone struggles. Everyone has things that go to hell during the day. Why are the personal issues of a company the concern of the buyer?

You should take into account the sweat it took for the buyer to generate the cash to buy those wheels or subframe. Then take into account the frustration when that buyer is told time after time product will be ready, yet doesn't materialize.

Take the time to reflect on these things within your own company and you'll find the key to customer service. It is a vicious marketplace out there, but you're focused on the behavior of a customer base rather than reinventing your behavior as a seller. SERVICE WILL ALWAYS BUILD A FASTER BASE THAN PRICE.

Having said that, and turning to a personal note. Know that I like you Jon. I think people like you are an asset to the movement we all love and enjoy. I think your knowledge is your biggest asset and you have the talent to make NewGen thrive. I however, won't be continuing our business relationship. My expectation as a buyer from NewGen didn't meet the customer service standard that you provided and you turned me off. Call me a nightmare customer, but I don't feel I was asking for much during the process. Dont take it personally, it's just business. People have been saying "......pick two". Think about which two you gave the customer in my transaction.

I have finally recieved my wheels from you and they FAR exceeded my expectations with regards to quality and finish. They are no doubt on par with a Forgeline or HRE wheel. I love them, but more importantly my customer- my wife- loves them. I wouldn't hesitate to tell someone where I got them should they inquire. They will be the crown jewels of my build but the process took what is normally a ceremonial night of box opening into a long sigh of relief. People who read this and have waited for wheels know exactly what I mean.

It may be hard not to, but don't take my post as a flame NewGen thing. It's simply my response to your OP and it couldn't have been more timely. I know that you'd agree for sure. Take it as an oppoutunity to develop and reflect. I take my team's CSI scores more seriously than their sales. It's our bloodline. I want to see you succeed as well as all of the other guys accross the country who are scratching and fighting to make their spot in this tiny market. I wish you the best of luck and wouldn't hesitate to buy you a beer at Del Mar.

Dave

[GregWeld]

When my partner and I ran a large wholesale business his favorite saying was...

"we'd have a really nice business if it wasn't for all these damn customers!"