Asking price and negotiating the purchase.

[Steve]

This is something that we all need to look at when purchasing anything. Some industries are worse than others when it comes to negotiating "the sale", unfortunately the spa industry is horrible for the most part.

We often get compared to the used car industry and that saddens me a great deal. What can dealers do to the make the purchase easier for the consumer? Do we play the "negotiating game"? Let's see how close they can get to our bottom line! hehehehe.
It's mickey mouse people and I suggest as a consumer, you demand better.

The last car I purchased was my best experience in car shopping. I knew the car and the options I wanted and faxed every dealer in our province my specs. I clearly stated that I was giving every dealer one shot at earning my business and that I was not going to counter offer anyone. I ended up with a very good deal and the purchase was quick and easy.

Now comes the difficulty here. A Mustang is a Mustang no matter where I buy it from. Hot tubs vary greatly in design, quality, function, insulation, and the individual dealer. This poses a problem. So what can we do as consumers to simplify this purchase you ask? Go in knowledgeable!!!! Research the product and get quotes from as many dealers in and out of your area. Make sure you are comparing apples to apples.

If I'm going to purchase a big ticket item, I will refuse to do business with a company that's willing to drop their price dramatically and quickly. If it's a "one only" or discontinued item, I could see this but I'm talking the "norm" here.

If a spa is selling for $8000.00 and they suggest you could purchase it today for $4995.00, walk out! Or at least ask them to see an invoice showing this spa sold at that asking price. We all know they won't be able to and are relying strictly on "perceived value" to earn your business. It's the lazy way out instead of attempting to show true value in their product. In these stores, you will notice the attention is taken away from the product itself and focused more so on the price and again, "perceived value".

We all think that if we pass up on this HUGE SAVINGS, it will never be seen again. Don't fall for it!

Ask for customers of theirs and if it would be ok to contact them. Go with a couple recent purchases and a few 2 or 3 years old. Ask them what they paid. They may or may not tell you but I'm sure you'll find that if they thought they got great value, they would be willing to share their experience with you.

Some companies like ours, don't negotiate at all. Sometimes I even question if what we're doing is the right way, but all of our customers pay the same price and appreciate our way of doing business. It's not the best negotiator wins!
We do have promotions throughout the year that add value to the consumer, but pricing is fixed and non negotiable. We lose very little business to other dealers of dramatic price dropping and consumers I think are far more intelligent than most give them credit for.

Suggest to your dealer up front that you don't plan on negotiating and cut the BS before it starts. If you've done your homework, you'll find a much more pleasant buying environment.

Your thoughts?

Steve - Beachcomber Hot Tubs

I have much more on this but you'll be glossing over by now I'm sure!!  

[Spa_Tech]

I think many dealers do as you do- utilizing the 'Saturn' sales concept.

The reason why this seems to work so well is that the dealer isnt placed in the position of explaining why two customers pay two different retail prices on the same product. (Say- if the customers happen to know each other and chat about their 'deals'- kinda a big problem in small territories.)

This is also good for the customer in my opinion, because its far more credible of a dealer to say-- "Price as marked" rather than "$8,995.00 -- but for you...I can deliver for $7695.00- Let me check with my sales manager and see if thats the best we can do. (Salesman returns adjusting his plaid sportcoat) Ah, Joe-Bob says we have a similar model, but its not the color your looking for at $5,595.00. Ive got another couple looking at it...If you want to leave a deposit, its yours." [GAGS] What is the truth there? 'Fear of loss' is too easily abused under these circumstances.

This scenario also illustrates the importance of a dealer to have an inventory that hits a broad spectrum of price points--rather than a continous retreat on price on the same model. This gives the customer a simplfied selection to choose from rather than being asked to peruse a vast array of variable options, add-ons, and negotiation points.

I'd say its less confusing for both parties to skip negotiation. Im in agreement with you Steve.

[lookin to buy]

you know, as the consumer, and one that's looking to shell out quite a few bills for a new spa, it'd be a great deal easier to accept your 'priced as marked' pitch if we knew you weren't jabbing us with a beefy markup on these babies.  which one of you dealers wants to chime in and enlighten us buyers on just what percentage markup you guys off?  i have absolutely no problem paying a fair price.......something tells me, though, that your 'sticker' has more than a little wiggle room worked in for negotiation.........am i wrong?  

[Wisoki]

It's going to varry from dealer to dealer based on their overhead. My business can survive on a smaller mark up than my competitors because I have a stand alone store (not in a strip mall) slightly off the beaten path. I display the MSRP and display the price I will sell the spa for if you want it special ordered (your colors your options) I also have a price for those who take models off my floor, which I do not display. If the customer is interested in negotiating the price, that is the only option they have. Take the floor model at a slightly better price, or pay the higher price and have one made to order.

[Bill]

I guess no dealers are willing to tell what their mark ups are?  35%?  45%?  55%?  Even higher?  My guess would be that the mark ups on spas in the $5,000 - $9,000 range are much higher then other items that you would purchase in the same price range.

[Kathleen]

I guess the reason for my not answering it, is that it serves no purpose in help for the consumer in the long run.  Knowing our cost for the spa doesn't alert you to other costs associated with your purchase.  I can tell you that spa pricing can be very complicated and is almost impossible to accurately tag every spa on the floor with a straight price.  Spas are in ranges, so I guess there we probably seem evasive in that regard.

Spa companies aren't some "secret mafia" group of people that are sneaking in very high markups.  I personally feel that spa markups are one of the lowest markups in Retail.  Not as low as the computer industry I presume, but pretty low.  The "free" service that dealers perform for their customers for upwards of 20 years after the sale is not something you see in other industries either.

If you really want knowledge in negotiating a spa purchase, come equipped with this knowledge.  

Ask for your drop dead lowest price only when you are ready, because spa dealers really, for the most part are going to oblige.  You are ready when you have your tub choice narrowed down to no more than two and the only deciding is which one has the best price.  Do not try to fit into a spa to suit a deal.  If a deal is being offered as a special, it is usual for the dealer to work similar percentages on differing models.

When you are asking though, remember to tell them all of the accessories that you want and willing to pay for as there is more markup on some of those things and this gives them the big picture to work a package price.  It's helpful, but risky telling them what you are willing to spend.

Mention what you are willing to do to get the lowest price.  Examples of this would include:

"Listen, I will have a football team worth of strong men to help on the delivery.   Your guy just needs to eat the pizza we bought and watch us move the spa"  
This is very effective...........by the way

"Hey, I don't care what color it is.  It's hot water and jets.  I'll give you time to call around to your manufacturer and warehouses for something they want to move!  Don't waste my time though, because I am not wasting yours!  (and mean it)"

"Got any demos?  What about that one running?" (Be sure you are okay with this as demo spas are well demo'd)

Method of Payments are sometimes used to negotiate, but really only save about 2.5% and only sometimes.  Some dealers like paid in full offers - some don't care either way.  Taking timely delivery and paying is very important.  If you can buy an unsold spa and accept delivery as soon as it's ready....hoorah!!  Also, if you give them some time to think without you putting the pressure on.......that's always appreciated.  That way we can look at our manufacturers stock list and ask for blemishes and work up some pricing.

You can offer yourself out as an open door reference.  This means your information can be given out as a reference willing to show.  We normally do this for gazebos as it is impossible for us to show all of our offerings in our tiny 8000 square foot showroom.  This may give some leverage if you are buying an unusual offering.

I will mention again, because why not..the message is already too long.  That it is uncomfortable for both you and the sales person to shop price right off of the bat.  We know it's important, but it is most important to narrow your choices.  This means relax a little and really find out what you like.  You should ask cost of certain options you like to gauge it's value to you.....and take notes.
Hope this helps

[lionluv]

What is the proper "etiquette" in requesting to see the invoice for a particular spa - just the spa, no options, once you have narrowed down your choices to a few?

This would eleviate much tension from the consumer, once they knew that they were not being "taken".  I don't mind paying a "fair" price either - spa dealers have to make a living too - BUT . . . .

  "There's a sucker born every minute"
                                                             P.T. Barnum
                                 

[Kathleen]

There is no proper etiquette for requesting the cost with any item in any retail establishment, with the exception of cars.  If you really believe the invoice is their cost, well then I guess there is a sucker born every minute.....

What profit does a spa company deserve until you feel "taken"?  What percentage is the work worth 5%, 10%, 15%   ?

[Doug]

Steve,

How much can I buy a Beachcomber 720 for, with the protec option, surround sound, ozonator (isn't this standard at other companies?), Hush Pump (is this standard elsewhere?), Relax Foot Massage (Boy you have a lot of options that I've seen standard elsewhere), EnviroSkirt, EcoCover 2lb. 4in.

I would also like to have two of the 1hp motor upgrades, as I've heard yours don't come with much power.

I look forward to seeing you price!

Doug

[Wisoki]

Well, I'm sure I'll come off sounding like an a-hole here, but I don't realy care. Do you ask your grocer to see the invoice of the tomatos, cereal, steaks, chicken, milk, eggs, blah blah blah. Did you see the invoice on the house you live in. Did you see the invoice on the bicycle you bought for your kid for his birth day. Did you see the invoice for the electricity you used last month. Did you see the invoice for the water you used too? Sheesh, if you like a spa and the dealer, and are good with the price, WHAT DIFFERENCE does seeing the invoice make? If you found a spa you like and the dealer was a great person, but then you saw his invoice and found out he had a 60% mark on his tubs, what, are you all of a sudden going to assume he's trying to screw you. But wait, lets see, after rent, utilities, wages, advertizing (costs of doing business) the dealer is clearing 10%. With that he/she has to figure out how to take some money home to his/her spouse and offspring, now the business is down to clearing 2%. So again, what difference does seeing the invoice make?

[Bill]

The difference is that if I can compare the price and quality of the apples, oranges, chickens or what have you with 4 other stores within about 2 miles of my house.  Tyson chicken doesn't just sell their chicken to one store in a 30 or 50 mile radius.  It is easy for the consumer to know if they are paying more then need be and I truly can copmare "apples to apples".

No, I didn't see the invoice for my house, but I can compare that house with all the other houses in the neighborhood and see if the asking price is in line.  I can compare the components of the house to verify the quality.  Independent reports exist that compare roofing material, strutural components, appliances, heating and cooling units, windows and hardware etc.

I don't see the invoice for my new bike, but I did call  around or shop around the different stores in my area that carry the exact same bike to verify the price.  Probably you did the same thing when you bought your car??  Probably when you bought your car you found one of the many resources that gave you a great idea of how much the dealer paid for that car.  It doesn't tell you the profit the dealer is making, but you can compare his price with the dealer in the next town.

I agree, if you found a dealer that you like and a spa that you like and you have no problem with the asking prices, buy the spa.  But just as the dealer needs to take money home to his family, I have a responsibility to my family to keep as much of my money with my family.

[Kathleen]

Although seemingly well intentioned, your logic does not work in this case.  The only thing you will be able to determine with an actual invoice is how much the unit cost - not quality and nothing to compare apples to apples.

The only way to compare apples to apples is to actually take time and shop and learn.  Just like with your heating appliances, dishwashers and the like.  The invoice won't tell you the difference between a Maytag and a Kitchen Aid's quality just cost.

If I bought the cheapest Tyson chicken from the lowest cost grocer in town (which I never buy), it doesn't tell me that it's the freshest and highest quality chicken, just the cheapest.  It may just mean that the grocer buys right before it dies.  Buying that chicken isn't always the best value as it needs to be consumed immediately which doesn't allow for budget shopping.

or worse yet.....

The grocer's refrigeration system could be old or the staff poor in training due to high turnover because of the low margins they keep.  

I have found many shoppers go against all reason when shopping for spas and wasting a lot of time and effort taking the short cuts.  It's amusing to say the least, because out of all the undervalued assets we own, our time is the most valuable to us and our families.

Keep that in mind and enjoy the shopping experience........spas are not cars, they are a lifestyle.

[Bill]

"...because out of all the undervalued assets we own, our time is the most valuable to us and our families."

That is a great statement and I agree 100%.  I think that is the focal point of my frustration.  I have spent so much time researching this that I have grown tired of it.  In the end, I'm sure that there are a number of great tubs out there that I would be happy with that are all reliable and for the most part, of the same quality.  I have made my decision and my tub will be delivered next Friday.  I anguished over this decision even though my friend has the exact same tub and I have relaxed in it many times.  

When it comes to spending $8,000 you want to be 100% sure in your decision, and that is all but impossible.

[Wisoki]

Well congratulations! What ever tub you bought, I am absolutly positive you will enjoy it! Regarding the spending money issue, if I've said this once, I've said it a thousand times (particularly to my wife) "If you like it, and you want it, B U Y  I T! I don't see the sense in agonizing over ANY purchase.

[lionluv]

Very entertaining!  And, an absolute re-affirmation of the point that "Bill" and I were trying to prove.  The dealers are very, very defensive about their mark-up.  And no wonder - I would bet it is considerable.  I would guess at LEAST 30%, as I have in the distant past worked in retail.

The dealers that did respond to this thread have helped "Steve" and Beachcomber more than they know. He must be smiling  Steve is the only one who responded with a claim that Beachcomber has a "set" price, like Saturn.  If this is indeed true, it must give Beachcomber customers some measure of comfort.

As I have said in my other thread, a spa is a big-ticket, non-essential luxury item.  It is similar to a nice piece of jewelry, or a recreational vehicle.  The customer has already sold themselves on the idea, and the "lifestyle" so to speak.  

We as consumers are being told to become well informed, and to recognize quality. That is a point well taken, because there is alot of junk out there, and I believe that some spa shoppers can be prone to impulse purchasing.

But, after you have spent months doing this research, as Bill and I have done, it is frustrating and deflating to know that no matter how much time you have put into your search, that you end it with apprehension.

I am certain that all of the spa dealers here who have responded are themselves shrewd shoppers.  I am sure you are all quite aggressive in your purchases of big ticket items.  So, please do not be so condescending as to compare a spa with chicken, or apples, or bicycles.  So what if I spend a little too much on one of these items!  What would I lose - ten cents, or ten dollars, not thousands.  I negotiated a very good price on my last 2 vehicle purchases.  How do I KNOW this?  Because I had information obtained on-line, and from consumer advocacy groups to arm myself with, regarding the cost of the vehicle to the dealer.  Was I absolutely certain that I got a "great deal".  No, but I got what I know to be a good, fair price on the vehicle that I had already sold myself on.

The bottom line for us consumers is, if we want a spa, we want one!  And the dealer knows this!  It is only a matter then of who can persuade us that their brand is better, (i.e. "quality") and of how much we can afford.  So the consumer must decide how much they think a spa is gonna be worth to them, how much pleasure and "reward" they will reap from ownership. Because there is NO independent research organization and no consumer advocacy groups for spa purchase, the consumer will never know the cost of the spa - only the "perceived value" as I believe Steve put it.

And, oh by the way, since I did in the past put 12 years in retail, I am well aware that you don't get to see the invoice on consumer goods with the exception of cars.  And their are a miriad of methods to disguise the true invoice price on vehicles.  But as Bill pointed out, there is much more competition and many other ways to shop around for most other consumer goods.