Lots of Vendor Talk, here's my Jerry McGuire

[NewGenWheels]

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.