How do you value a dealer & what is a fair price?

[J._McD]

I am relatively new to the open forum and have followed several threads over the past month or so before logging in.  I have found them to be very interesting and insightful, even humorous and upsetting.  I have been enlightened by shoppers, owners, dealers and technicians, and have been impressed by everyone’s willingness to share information to help others.  

I read about the buyer who got a really “great deal” only to find out where they were shipping it to wouldn’t service it, and then finds out the price at the store is $2,200 cheaper.  I have read comments about how people want a lower price like, someone says they paid and I read about the buyers who pays too little, gets the short end of the stick and complains about the industry and the people in it.

I know this is an ambiguous question, but what is a fair profit margin to support a hot tub business that just sells hot tubs and provides everything to take care of his customers and their service needs?  With the price of gas as it is today, should he charge for service or for a trip charge to get there or should everything be included in the price you pay for the hot tub?  Should service be free when gas is not?

I know furniture sells at 200% to 400% mark ups, jewelry is far greater than 100% mark up and who knows the cost of a diamond when that industry “sets” the price and not much is really “solid gold”.  While we don’t really need these items, sellers do not necessarily negotiate the price on them.  Obviously, there is no service issue here.

We don’t negotiate for needs and necessities, i.e. gas, groceries, cigarettes, department store goods, professional services, the cost of mechanical repairs or replacements, insurance or stock investments, prescriptions, or the price of a meal at a restaurant, yet even there, we tip 15% to 20% for service.  

Why do people negotiate prices on hot tubs, buy from the cheapest bidder and then complain about their problems.  So many hot tubers either don’t have dealers, don’t like dealers or their dealer went out of business so they come here for advice.  

The real question is how do you value a dealer and what is a fair profit to pay and still get what you expect without being short changed?  Are you negotiating the price of the hot tub or what looms in the future?  Should you get the lowest price and then expect free service too?

Just your thourghts on this subject would be helpful.

[zzaphod42]

I think this is one of the most well thought out posts I have seen in over a year since I started following this board.

[wmccall]

I think this is one of the most well thought out posts I have seen in over a year since I started following this board.

Yes, a very interesting, well written post. However it is sort of a "what is the meaning of life" post.  I would add, about the sale process.  Why should a consumer pay more than the next consumer in the same store the same day just because they are a better negotiator?

[Mendocino101]

Yes, a very interesting, well written post. However it is sort of a "what is the meaning of life" post.  I would add, about the sale process.  Why should a consumer pay more than the next consumer in the same store the same day just because they are a better negotiator?

Bill,
This points to the question of marking your spas and holding firm to that price providing of course that your  price marketed represents a fair price...The problem for the retailer who does this...Is that so very few shoppers who actually come into buy really understand what a fair price for the spa is that they are looking at is...So when you try as a retailer to mark things at a very fair price...most shoppers still want and more than just want but fully expect some discount so it makes it tough to do...At our store we are extremely fair on our prices ....but only very well researched shopper/buyer (not many around) will know or appreciate that ....

[Vinny]

The value of the dealer is an individual thing. To me the value is that the dealer I bought from will take care of me as best they can when I need them.

For pricing - I did not negotiate for a tub. I simply walked into the store, looked at the tubs and asked what the selling price was. If I felt it was too much, I walked out the store.

But while at the stores, I would see how I like the atmosphere and how I was treated. The dealer that I bought from was able to make the price and atmosphere come together and I liked the way everything clicked.

Was it the least expensive tub - NO
Did both of us come away happy - YES
Would I recommend them - YES

I think dealer value is a 2 way street. In my mind I got a good deal, maybe just maybe I could have negotiated and gotten an extra $200 off the tub, But I'm dealing with a family business and hopefully if I call and they remember me (they did remember me) maybe they'll put me on top of the list if I need help SINCE I didn't try to get a "better deal".

[Chris_H]

It was way to long of a post.

[Brewman]

The fairest price for anything is the price you agree to pay that the dealer will accept.
How can anything be fairer?
Dealers have a business to run, consumers have a budget (or credit card limits in some cases) to manage.
Brewman

[Chas]

My usual response, when asked what kind of mark-up is "fair," is to reply, "one that pays for the mortgage on the building, all repairs and maintenance on same, the power bill, the phone bill, the gas bill, the water bill, the trash bill, the advertising costs which keep us in business, the yellow pages for the same reason, the cost of owning, insuring, licensing and operating our little fleet of trucks and trailers, insurance for the whole package, tools my employees lose and/or break, payroll for sales, service and support people, commissions for managers and salespeople, cost of goods sold, spoilage and loss of all types, shipping/freight, rent for the warehouse, care and feeding of the forklift, alarm monitoring fees, banking fees, window washer, and the all important 'time value of money.'

Other than that, it's all just greed.

[J._McD]

Good answer and all of that comes from the ones that support your efforts to provide what they expect,  Quality, Value (Price) & Service.  Usually, you only get two, but if you pay the price you get all three.  But then, we have to mark that up for the tire kickers, bargain hunters and OH yes, the negotiators who dangle their decision out of reach and don't buy because they got a "better deal" elsewhere, but it is not the same and they think it is.