Hot Tub Forum
Original => Hot Tub Forum => Topic started by: buymybook on September 02, 2010, 03:08:45 pm
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I'm just thinking that the economy has to be killing this industry, and I'm wondering 2 things--
1--Are any of the companies in danger of going under--and then the warranty stuff becomes useless
2--Because I imagine everyone's hurting, shouldnt there be great deals to be had?
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I'm just thinking that the economy has to be killing this industry, and I'm wondering 2 things--
1--Are any of the companies in danger of going under--and then the warranty stuff becomes useless
2--Because I imagine everyone's hurting, shouldnt there be great deals to be had?
A fair question. Some dealers here may be offended by #2, but again a fair questions. As far as #1, from a local standpoint, I've seen some local dealers in trouble and as a result we have lost some brands in my local area. The two biggest dealers in my area sell 6 major brands between them and while those are still available, I've seen both businesses working on greatly reduced staffs and I've seen a significant cutback in advertising.
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I could be wrong, but I doubt that any of the major manufacturers is hurting enough to shut down operations. Local dealers may close, but you wouldn't be without warranty support unless the manufacturer closed. You'd just have to deal directly through the manufacturer until another local dealer popped up.
There are definitely better deals than normal to be had, and at least my local Atlanta HotSpring dealer isn't having problems moving inventory... albeit at reduced prices ;D According to the manager, I was one of over 20+ new sales that they've made since the Labor Day sale was announced less than a month ago, so I'm guessing they're making up for the lower margins in total volume. Low volume dealers must be struggling though! They can probably make up some ground with dealer credit and extras, but it's a tough market out there for anyone trying to sell luxury items to fickle buyers.
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I'm just thinking that the economy has to be killing this industry, and I'm wondering 2 things--
1--Are any of the companies in danger of going under--and then the warranty stuff becomes useless
2--Because I imagine everyone's hurting, shouldnt there be great deals to be had?
1) A few of the smaller companies went out of business and there was some minor consolidation but the companies that are left cut where needed and sales seem to have leveled off from indications I've seen. The manufacturers aren't going to see the sales they had in 2005 but at the same time they're not expecting that and are no longer staffed for that. They're probably back to where they were in 2000 as far as sales units go but they're set up now for that pace so its not like I'd expect them to be teetering and personally I doubt we'll see anyone noticeable going away.
2) Where you've seen changes is in the number of dealers. There are fewer than there used to be but the ones left are generally the good/strong ones. For instance, a friend of mine commented on the fact that half his competition is gone in his area so while there are far fewer spa shoppers there are fewer dealers as well so he's doing fairly well overall though everyone wants to make a sale so feel free to bargain. Use the theory that the dealer wants to do business with you when negotiating but don't kid yourself into thinking that every dealer is desperate and will drop their shorts to make a sale; it depends on the dealer, case by case. Just be firm and polite when negotiating and keep asking for a better deal until they tell you that their offer can not drop any more.
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One thing to keep in mind...
It takes a set number of $$ to keep a store open. If there's fewer sales, and the dealer drops their profit on their spas, how long do you think they'll remain in business?
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One thing to keep in mind...
It takes a set number of $$ to keep a store open. If there's fewer sales, and the dealer drops their profit on their spas, how long do you think they'll remain in business?
Exactly and any successful dealer knows what their bottom line price is for each spa. You just have to negotiate until you get as close to that as you can and the only way to know is when they tell you "sorry, but thats as low as we can go".
You can push further and even try to dictate terms by countering with "your best offer" but if they were serious that they won't go lower a good dealer who knows what margins he has to make to stay in business will just say "sorry but like I said, $XXXX is really the best we can do" but it doesn't hurt to try as long as you do it respectfully.
I've seen customers who negotiate well, those who don't try at all and even the occasional person who thinks they should be able to dictate their own price as if they know what the dealer costs are and what the bottom line price should be. For most it’s a combination of wanting to spend less but also wanting to feel good that they were treated fairly; who doesn't! Just be firm yet polite, it's a business transaction.
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Unfortunately, Barack and Nancy didn't bail out hot tub dealers so we closed our doors last Dec. We were only in the biz for 2 1/2 years, but things went from good to bad really fast. Most of the dealers and stores I know, aren't doing very well.
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Spiderman, sorry to hear that you were one of the casualties of the economy! It's absolutly crazy the number of small businesses that are going under right now... What brand did you carry and are you thinking about giving it another go once things turn around?