Wow, Hot Spring Highlife selling at Costco.

[Zep]

re: "you may not get their ear to explain all the differences"

BINGO!

But maybe in some cases the greater exposure at Costco type places
will send customers that were not thinking of a spa to do more investigating which
in turn may cause people to arrive at dealerships that may not have in the past.

If tubs become more commonplace by the greater exposure at walmart/sams/costco
it would have to help dealers indirectly.....don't ya think?
Heck if for nothing else but repairs and warranty work.

[hymbaw]

This is at Costco.com ONLY. You have to looking for a tub on their site to find one, and then you'll find a dozen with only one being a HotSpring.

The traffic that these newly interested tub buyers will generate at the dealers, will be at dealers of all brands not just HS dealers. Remember ths isn't a HS tub

Why not take orders online and funnel the business through the dealer network instead of trying to bypass the dealer network? (Thank You for your order Mr. Doe, your local dealer will contact you to set up delivery.)

I used to work in the personal lines insurance industry and this smells familiar to me. When the Mfg.(or carrier) realizes that they don't need the dealers(agents) as much as they thought and the profits are through the roof(dealer/agent mark-up now stays in the Mfg./carrier pockets) you will soon see "service centers" and fewer and fewer dealers.    Think AAA in the insurance biz for a preview of what's likely to come.

[Zep]

Looks like they are referring tech questions directly to spa companies.

http://www.costco.com/Common/Search.aspx?whse=&topnav=&search=spa&N=0&Ntt=spa&cm_re=1-_-Top_Left_Nav-_-Top_search


http://www.costco.com/Browse/Product.aspx?Prodid=11115142&whse=&topnav=&browse=&s=1

[Chas]

Why not take orders online and funnel the business through the dealer network instead of trying to bypass the dealer network? (Thank You for your order Mr. Doe, your local dealer will contact you to set up delivery.)

Uh, bingo. That's exactly what's happening, except that the tub isn't part of the regular HotSpring line, and doesn't bear the HS logo.

[hymbaw]

Uh, bingo. That's exactly what's happening, except that the tub isn't part of the regular HotSpring line, and doesn't bear the HS logo.

Unless HS is sending you $3000 profit per tub, then that is not what's happening. I'm hoping for the sake of your business that you profit more than $700 per tub. I guess I wasn't clear in what I was trying to get across, my bad.

[hottubdan]

Unless HS is sending you $3000 profit per tub, then that is not what's happening. I'm hoping for the sake of your business that you profit more than $700 per tub. I guess I wasn't clear in what I was trying to get across, my bad.

Obviously, Watkins is not compensating us the same as what we make when we sell a spa.  However, we also haven't marketed or sold to that customer.

My understanding is that Costco takes a smaller margin than specialty retailers (up to 14%) and Watkins is also taking a smaller margin on the Costco spa (so they tell us).

Grat deal for Costco.  All they have to do is put it on their site.  Customer clicks and enters credit card #.  Costco passed info to Watkins, who pass it on to dealer.  Costco never touches product.  Watkins ships to dealer or customer.  Watkins invoices Costco.  Costco pays Watkins.  Watkins pays dealer.

Everyone is happy...we hope.

[Vinny]

This is a very smart marketing ploy by HS IMO. Sell a "HS" spa without the HS warranty, Costco gets some profit, the dealer gets some money, HS Sells a bazzillion of them and then [glb]BAM[/glb] you have tubs that need replacement parts and their not covered under a warranty situation.

If they have HS parts, they are HS tubs reguardless of the name. Some of us (me) got a great tub with a lesser warranty and paid less than the premium.

From a technical standpoint, these discontinued spas are no longer discontinued, they are now in production. If a dealer has a good business, this might not affect them, especially if there's no Costco around but a weak HS business will go out of business and in an urban area they may put most HS dealers out of business.

When you think of how many customers a dealer has and how many people are on these type of forums (very few IMO) and how many of the people on these forums write in about their big box store tub compared to the rest of us here - Watkins is going to make a killing. Then they'll make a killing in ___ (fill in the blank) years as the components fail and need replacement, unlike the other manufacturers of the big box store tub, Watkins will have the parts on hand to repair their tub. It's quite possible that Watkins may replace their "lower end" HS line to not compete with Costco, have their dealers sell the higher end HS line.

People are going to take "makers of HS" and equate it to HS.

[hottubdan]

Costco.com now has 1 model.

Delaers have 8-12 Hot Spring (depends how we classfy Classic series), 3 Tiger River, 3 Solanas and 4 Hot Spots.  This program should not put anyone.

I believe that with this product, most people still will want to touch and see the spa.  I predict Watkins will not put more than 3 spas on line and they will never be identical to what dealers sell.

[Zep]

re: If a dealer has a good business, this might not affect them, especially if there's no Costco around but a weak HS business will go out of business and in an urban area they may put most HS dealers out of business

Why would it matter if there was a Costco "in the area", aren't these being sold on Costco.com?

[J._McD]

This is at Costco.com ONLY. You have to looking for a tub on their site to find one, and then you'll find a dozen with only one being a HotSpring.

 The traffic that these newly interested tub buyers will generate at the dealers, will be at dealers of all brands not just HS dealers. Remember ths isn't a HS tub

Why not take orders online and funnel the business through the dealer network instead of trying to bypass the dealer network? (Thank You for your order Mr. Doe, your local dealer will contact you to set up delivery.)

Funnel the traffic.

Uh, bingo. That's exactly what's happening, except that the tub isn't part of the regular HotSpring line, and doesn't bear the HS logo.

NOT part of the HS line.   LOL  It just has all the same components, parts and pieces, comes from the same manufacturing address, made by the same people, using a retired model, and you are going to tell us it is NOT A HS SPA.    What have they done to your common sense?   Whatever did they put in that kool-aide now or was the room filled with smoke???

Obviously, Watkins is not compensating us the same as what we make when we sell a spa.  However, we also haven't marketed or sold to that customer.

My understanding is that Costco takes a smaller margin than specialty retailers (up to 14%) and Watkins is also taking a smaller margin on the Costco spa (so they tell us).
Grat deal for Costco.  All they have to do is put it on their site.  Customer clicks and enters credit card #.  Costco passed info to Watkins, who pass it on to dealer.  Costco never touches product.  Watkins ships to dealer or customer.  Watkins invoices Costco.  Costco pays Watkins.  Watkins pays dealer.  Everyone is happy...we hope.

THEN, The dealer sets up a site inspection $50, charges $150 + for placement, $50 to install the cover lifter, (cheaper version, i.e. opportunity to upgrade) charges the customer for ALL needs recommending Baqua, Di-chlor etc., upgrades to Ozone $595, charges a service fee for each trip $75 and has the opportunity to upgrade the purchase.  I can see where the dealer will easily pick up another $1,000 to 1,500 from the transaction and dosen’t have to advertise to attract, dosen’t have to sell it, “upgrade” parts after 1 year, and maybe they will even deliver one of the other 8 or 12 different models or even a Sovereign .

Costco.com now has 1 model.

Delaers have 8-12 Hot Spring (depends how we classfy Classic series), 3 Tiger River, 3 Solanas and 4 Hot Spots.  This program should not put anyone.

I believe that with this product, most people still will want to touch and see the spa.  I predict Watkins will not put more than 3 spas on line and they will never be identical to what dealers sell.

Just like all the Appliance dealers like Highland and Fretter did with “different model numbers” before they all crashed and burned fighting over price and competition.

I think this is a stroke of genius for all of us.

This is a very smart marketing ploy by HS IMO. Sell a "HS" spa without the HS warranty, Costco gets some profit, the dealer gets some money, HS Sells a bazzillion of them and then [glb]BAM[/glb] you have tubs that need replacement parts and their not covered under a warranty situation.

If they have HS parts, they are HS tubs reguardless of the name. Some of us (me) got a great tub with a lesser warranty and paid less than the premium.

As a matter of fact, Costco shoppers could even come in and wet test the Sovereign which is just like the Costco unit before they make their purchase decision.  

[Vinny]

My logic  (and it may be flawed) is that people who are familiar with Costco probably won't order one since they can't easily return it if they don't live close enough. Costco is supposed to have a great return policy ... I don't know since I don't shop Costco.

As far as dealers closing up - dealers do, even HS dealers. Having 50 tubs is great but not when people want the $20000 spa for $5000. The market is demanding it and the manufacturers are trying to sell it. The average uneducated (in hot tubs) consumer sees something and thinks all are equal. Tubs do sell at HD, Walmart and Costco because of the entry point price especially when a name brand is attached to it.

Will dealers close tommorrow - NO, will Watkins stop supporting dealers tommorrow -NO but I would imagine as their CPA's get involved, crunch numbers and realize how much money they make from Costco (if it flies and I think it will) - they'll be pushing their dealers for more. Now look at the parts chain, everything that breaks is billable - the dealer isn't selling, they're repairing. When I was shopping for a tub my local HS  dealer was adding more techs on because of their workload due to another dealer losing a dealership ... they're obviously not Maytags!

At what point do HS dealers become HS repair centers. People are going to buy their supplies at costco or HD or on-line so a dealer won't make money there either. Remember you're delivering no one is browsing your store AND the person thinks all tubs and chemicals are created equal. Mom and Pop stores are going by the wayside here in America due to greed and cost cutting.

[hottub.pool_boy]

we signed up to deliver and service in CT. I think it's a good thing!

[landscaper]

This has the potential to be good or real bad. Alot depends on how Watkins handles it. John Deere, Cub Cadet among others, have come to the realization that they are going to have to offer a lower priced product with their name association at the big box stores or lose huge sales. However, I would never purchase a mower, TV, hottub or any product that will require service from Lowes, Wal-mart, Costco or any big box store. I perfer to deal with a local dealer that not only sales a product that is of better quality but offers service and a better product selection, than just one or two price point products. I am also perared to pay a higher price for this value.
This will offer the customer, who is only driven only by price, the chance to purchase a product manufactured by a premium line such as HotSprings but is not their main line. Hopefully, it will lead them to consider upgrading and stoppong by yhe local dealer or become more familiar with hottubs in general.
Watkins must protect their dealers or both sides lose. The best way in my opinion is to let the dealer deliver the tubs and receive a percentage of the sales price. They would also service the product and hopefully, get the customers chemical and part sales.
The down side. Murray mowers sold more mowers each year at Wal-mart but ended up a bankrupt company.  

[Zep]

re: Murray mowers sold more mowers each year at Wal-mart but ended up a bankrupt company.

I have heard Walmart really really really beats their vendors down on price.

[Wisoki]

Muther fing DITTO DITTO DITTO! On all counts DITTO!

My logic  (and it may be flawed) is that people who are familiar with Costco probably won't order one since they can't easily return it if they don't live close enough. Costco is supposed to have a great return policy ... I don't know since I don't shop Costco.

As far as dealers closing up - dealers do, even HS dealers. Having 50 tubs is great but not when people want the $20000 spa for $5000. The market is demanding it and the manufacturers are trying to sell it. The average uneducated (in hot tubs) consumer sees something and thinks all are equal. Tubs do sell at HD, Walmart and Costco because of the entry point price especially when a name brand is attached to it.

Will dealers close tommorrow - NO, will Watkins stop supporting dealers tommorrow -NO but I would imagine as their CPA's get involved, crunch numbers and realize how much money they make from Costco (if it flies and I think it will) - they'll be pushing their dealers for more. Now look at the parts chain, everything that breaks is billable - the dealer isn't selling, they're repairing. When I was shopping for a tub my local HS  dealer was adding more techs on because of their workload due to another dealer losing a dealership ... they're obviously not Maytags!

At what point do HS dealers become HS repair centers. People are going to buy their supplies at costco or HD or on-line so a dealer won't make money there either. Remember you're delivering no one is browsing your store AND the person thinks all tubs and chemicals are created equal. Mom and Pop stores are going by the wayside here in America due to greed and cost cutting.