Discounts??

[Trenden]

This is my first post on this forum so I hope it’s well received and I’m not bringing up a taboo topic…  

Anyway, I'm just starting my search and trying to educate myself and went to the first hot tub dealer Friday which happened to be an Arctic dealer.  I was pretty impressed by their product and also pretty surprised by the list prices.  Maybe I’m just naive but I was expecting to be able to get a pretty good hot tub for $6k but the 8’ tubs at the Arctic dealer started at $8k (w/ only one pump) and went up really fast.  I didn’t really push pricing much because I’m only beginning my search but without me even asking he started slashing the prices… a thousand here, five hundred there, etc.  

The whole experience made me wonder what is normal in this industry.  Is there a “rule of thumb” regarding the discount one should expect?  For example, a 25% discount on an $8k tub would be $6k.  Should I expect something in that range?

I’ll certainly visit more dealers and wet test several before making a decision but I’d be very anxious to hear some of your experiences regarding negotiated discounts (i.e. the percent off of list you were able to achieve).  I just don’t know what I should expect.  

[Chad]

This is my first post on this forum so I hope it’s well received and I’m not bringing up a taboo topic…  

Anyway, I'm just starting my search and trying to educate myself and went to the first hot tub dealer Friday which happened to be an Arctic dealer.  I was pretty impressed by their product and also pretty surprised by the list prices.  Maybe I’m just naive but I was expecting to be able to get a pretty good hot tub for $6k but the 8’ tubs at the Arctic dealer started at $8k (w/ only one pump) and went up really fast.  I didn’t really push pricing much because I’m only beginning my search but without me even asking he started slashing the prices… a thousand here, five hundred there, etc.  

The whole experience made me wonder what is normal in this industry.  Is there a “rule of thumb” regarding the discount one should expect?  For example, a 25% discount on an $8k tub would be $6k.  Should I expect something in that range?

I’ll certainly visit more dealers and wet test several before making a decision but I’d be very anxious to hear some of your experiences regarding negotiated discounts (i.e. the percent off of list you were able to achieve).  I just don’t know what I should expect.  

Trenden,
Hi, welcome the the forum.
$8K is a pretty reasonable starting point for a 8' x 8' tub. I don't think you can expect to get a 25% discount on a tub, as that's quite a hefty markdown. I would think from my limited hot tub experiences that if you were able to get them down around 10% of the asking price you will have done a fantastic job of bargaining. Some dealers I ran into were pretty much unnegotiable so in this case I tried to see if they would through in some "extras".
If your set on spending $6K max you might want to start looking at 7' x 7' tubs. That was my budgets limit so I immediately crossed 8fters of the list. You can still get some amazing tubs at $6K, they just won't be as big. How many people will be using the tub primarily? Many people who buy the "full size" tubs come to realize down the road that only 1 or 2 people use it regularly so there really wasn't a need for such a large tub.
Hope this helps.

[Brewman]

Not a taboo topic as much as just getting educated.  
  Do you want to pay $8K for a spa that's worth $8K, or do you want to find a place that lists it for $10K and gives you a $2K discount?  
 I doubt that you'll get anywhere near a 25% discount from any legitimate dealer unless it's on a closeout or other unique circumstance.  
  The dealers around here don't inflate their prices to give discounts, they all pretty much sell for the real price.  Not to say there isn't a little wiggle room, but that depends on the dealer, and how bad they want to or need to make a sale.  
 But you're talking about maybe a few hundred dollars, not several thousand.
  You can also negotiate for some freebies- steps, extra filters, stuff like that.

[Chas]

I don't do the price slashing that many dealers seem to do, and I know I lose a sale or two  now and then beacuse of it. But it drives me nuts to hear about shoppers having your kind of experience. Also, I am the type of shopper myself who likes to get a good deal, but likes to know that some other guy can't come in and be a real hard-case about it and grind off another two hundred bucks that I didn't get.

So I sell to others the way I would like it to be sold to me.

Having said that, I have to get rid of floor models every year, and for the past twenty years HotSpring has made those changes right at the beginning of the new year. They have changed that over the past two or three years - recent changes have been done as they come available throughout the year so sometimes I have a model or two which was changed before or after the rest, but by and large I have close to 30 floor models to move. Those get the price cuts of around $500. I have a Caldera that I have had from 2005 which is cut over $1000. This is rare. In fact, this is the first time I have had a non-discontinued model with that much of a discount on the price. If it doesn't move I may put it in my own yard - it's a very nice spa. And the discount is 'real.'

But my point is that I have tried to set prices at the beginning of the year and hold them all year long. If I run a promotion on a certain model I can afford to drop the price by a few hundred because I will hopefully sell a few extra spas during the promo and make it up on volume. But delivering a spa costs about the same even if I have five more to do - so I have to balance all of these things.

I would love it if more dealers could figure out what prices they need to get to stay in business long term and then stick with those. I think all the shoppers would benefit - but that is one man's opinion.

 8-)

[Trenden]

Thanks for the advice.  I agree it would be nice to just know the price.  When the salesman dropped the price $1,500 on any tub without me even asking for a discount I started wondering if that was the norm in this industry.  Perhaps it’s just typical of Arctic spas, or something the local dealer find’s necessary in this area.  

[Spatech_tuo]

Thanks for the advice.  I agree it would be nice to just know the price.  When the salesman dropped the price $1,500 on any tub without me even asking for a discount I started wondering if that was the norm in this industry.  Perhaps it’s just typical of Arctic spas, or something the local dealer find’s necessary in this area.  

There is no norm. Some dealers set a higher price to give a sense that you're getting a special deal when they magically drop it $1500 and that wokrs for some and annoys others. Then there are dealers that put a more realistic price on there to the point where sometimes there is little room to haggle which some people understand and appreciate while other customers feel that the dealer is being hard headed because they expect to haggle, even if it's a bogus price drop. They each appeal to a different mind set.  

[Chas]

Oh, and by the way -

I forgot to say, "Welcome to the forum."

If I can be of help, let me know. There are many others - dealers and spa owners alike - who are here to help as well.


 8-)

[Tom]

This is my first post on this forum so I hope it’s well received and I’m not bringing up a taboo topic…  Anyway, I'm just starting my search and trying to educate myself and went to the first hot tub dealer Friday which happened to be an Arctic dealer.  I was pretty impressed by their product and also pretty surprised by the list prices.    

Hello, and welcome.  Your topic seems to have been well-received with some good discussion and helpful advice.  

A MSRP needs to cover a wide range of geography and market conditions and represents a certain margin over cost.  I have seen MSRP lists for many industries with a note that "dealer may sell for less" and that seems to be true for many--though perhaps not all--spa brands.  

In the end, as Chas points out, an  individual dealer will determine his own pricing strategy (often based on what local competitors do) and set his own prices. This allows the dealer the freedom to adjust to local market conditions and balance his pricing against his cost of doing business.

[loosenupspas]

No harm in asking for a 25% price drop......you never know.  Here is my cash for that specific floor model and see what happens.  

[bwbski22]

my dealer lists the msrp on my j470 at over 13,000 and then list his price of 9,800.  since this is the second tub i bought from him in 5 years, and im good friends with his soon to be wife, he cut me a hugh discount.  i was out the door with ozone, cover lifter (which has hydrolic asist) and set up, and chems for under 9g.  buts thats a bother brother deal.  oh by the way that included a crain delivery.  lol.  which was 700.  lol.  ask for the discount the profit margin on these tubs over msrp is way over 60%.  no harm in asking.  oh and by the way, i made sure he was still making money on the tub, cause i would feel so bad if he wasnt.  and he told me he was still making enough.

[ndabunka]

This is my first post on this forum so I hope it’s well received and I’m not bringing up a taboo topic…  

Anyway, I'm just starting my search and trying to educate myself and went to the first hot tub dealer Friday which happened to be an Arctic dealer.  I was pretty impressed by their product and also pretty surprised by the list prices.  Maybe I’m just naive but I was expecting to be able to get a pretty good hot tub for $6k but the 8’ tubs at the Arctic dealer started at $8k (w/ only one pump) and went up really fast.  I didn’t really push pricing much because I’m only beginning my search but without me even asking he started slashing the prices… a thousand here, five hundred there, etc.  

The whole experience made me wonder what is normal in this industry.  Is there a “rule of thumb” regarding the discount one should expect?  For example, a 25% discount on an $8k tub would be $6k.  Should I expect something in that range?

I’ll certainly visit more dealers and wet test several before making a decision but I’d be very anxious to hear some of your experiences regarding negotiated discounts (i.e. the percent off of list you were able to achieve).  I just don’t know what I should expect.  

Welcome to the forum.  One thing I have heard (and I take it for truth) is that the MAJORITY of hot tubs sold are priced between $6K and $8K.  That's essentially the "Sweet spot" for most dealers.  However, as with any consumer product, therre are some dealers who will act like they are selling a "premium" item because this is, in fact a luxury item (nobody HAS to have a hot tub).  So, some stores will act like they are doing you a favor if they reduce the price or sell something in that price range.  Others simply want to ensure a VERY healthy profit and try to work you into a lower-end or smaller tub that would fit your price range.  Kinda like going to a Lexus dealer and asking for one of the newer LS 460's to be severly discounted to get your business.  Fact is, it they won't give away the LS460 but they will sned you to the Toyota dealer where you can buy a fully loaded Avalon for the price you are askign to pay.  Not exactly what you are seekign but you get the idea.  My advice is to shop and reseach to find a dealer in your area witht he product you want.  Use these forums to get a good idea of what you can get for the dollars you are looking to spend.  For example, since I have a Jacuzzi I might aim you at a local dealer willing to sell a name brand 91x91" high-end tub for $7,200 (Jacuzzi J-375).   Others may be able to point out that you can buy a Marquis in that size for under $8K.  Some on here have been able to buy Hot Springs Vangards for a similar $7K figure (not certain if it is that large though).  Bottom line is that each dealer works differently.  Learn everything you can on this forum and let the dealer know that you know that others (around the country) are able to buy X spa for X dollars and you would like to get a similar deal.  Always "cross-shop" brands and make CERTAIN to tell any one particular dealer that "you feel" another brand with a lower price point is comprable to theirs.  They will often try to then line the two up and show how theirs is better but you don't have to tell them ANYTHING about the other brand AT ALL.  Just use the info you get here and you will save yourself thousands.  Whatever you do, do NOT buy a Thermosap hot tub!