Hot Tub Forum
Original => Hot Tub Forum => Topic started by: brnelson on February 27, 2007, 06:55:20 am
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As you might know I have been spa shopping lately. I don't plan on buying one but a guy at work had me talk to his friend who just bought a Gulf Coast Spa. This friend told me that he recently bought one of these brand new spas (Warwick, RI) for $4,000. He said if I was interested I could get a similar deal. I checked the Gulf Coast website and this particular spa has an $8,500 retail. Now I have done a little research on Gulf Coast and about half off retail doesn't seem all that unusual. Also not unusual (from what I could find on other forums, no first hand experience) is problems with the spa. I would imagine that what you are buying is a $4,000 spa and not an $8,500 one. I know that there have been other posts asking how much dealers make on various spas (without any real answers) but I would hope that the dealer cost on other spas isn't what the Gulf Coast appears to be. Any comments?
Bruce
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They're selling the spa for $4k AND making a profit. The suggested retail price is a fairy tale. You nailed it when you said that they are selling a $4K spa for $4K, not an $8.5K spa for $4K. The suggested retail has nothing to do with dealer cost.
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Some less then perfectly honest dealers will use the “huge sale 50% off limited time” sales approach when selling these spas. It is too bad that GC promotes this dishonest tactic as I think they are good spas for what they actually cost. I own a Hydro spa which I think is a step below Gulf Coast (friends own one and I wired it for them). The dealer I bought mine from now carries GC also. I would consider buying one, but not from a dealer who tried to sell it as half price. I also live in your area and can recommend a dealer who has been great to me. If nothing else you can buy your chemicals from him for very good prices.
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Suggested retail is not a "fairy tale" as you put it. It is the Manufacturers estimate of what the products value is in the fair market. It gives the buyer an idea of a particular items worth. I suppose when you go car shopping you ask to see the sticker fairy tale? Based on your comment a vehicles sticker price is just that, a fairy tale. All that said, Gulf Coast is just the most recent in the market place to be selling out of ware houses. They usually don't have a show room, delivery crew or service department. The later being the most important if they are talking about warranty.
They're selling the spa for $4k AND making a profit. The suggested retail price is a fairy tale. You nailed it when you said that they are selling a $4K spa for $4K, not an $8.5K spa for $4K. The suggested retail has nothing to do with dealer cost.
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Well that's different. Here in northern NV and back in IN, Gulf Coast dealers are nothing more than roll up door ware houses sold by back alley appointment only.
Some less then perfectly honest dealers will use the “huge sale 50% off limited time” sales approach when selling these spas. It is too bad that GC promotes this dishonest tactic as I think they are good spas for what they actually cost. I own a Hydro spa which I think is a step below Gulf Coast (friends own one and I wired it for them). The dealer I bought mine from now carries GC also. I would consider buying one, but not from a dealer who tried to sell it as half price. I also live in your area and can recommend a dealer who has been great to me. If nothing else you can buy your chemicals from him for very good prices.
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I'm standing by my claim that suggested retail is a fairy tale. I don't think I've seen very many items, even when regularly priced- not "on sale" ever sell for suggested retail. So in my opinion, and it's only my opionion, the figure is relatively useless.
What does it tell us when something, a spa in this case, has a "suggested retail" of $8,500, and routinely sells for less than half that? It tells me exactly what I said before- that suggested retail is meaningless.
I just bought a guitar about a month ago. Suggested retail was somewhere around $1800. Price on the street? Closer to $1100. And it wasn't "on sale". That was the going price at EVERY online and retail vendor I visited. They were all selling for well under suggested retail. And remarkably, all for the EXACT same price.
Same for the amp. Hundreds under suggested retail, but not on sale.
I've seen this time and again with jewelery, tools, lots of items.
So to me, the suggested retail price was 100% meaningless/useless. A fairy tale.
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What I find interesting is after talking to some of these "dealers" all across the midwest, they don't offer service after the sale, no water care help, nothing. I was actually in the "warehouse" speaking with one dealer while his wife was on the phone shouting at a customer that after they sold the tub that they didn't want to hear from that person again. What is interesting about this is that even with this sales approach they still sell tubs.
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By quoting a ridiculously high suggested retail, it makes the consumer think these spas are in the same price and quality range as the big group of premium spas, which actually do sell in that price range.
The prospect of a bargain is what they focus on, and I doubt the sales people bring up issues like warranty coverage or after sale support.
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Suggested retail is not a "fairy tale" as you put it. It is the Manufacturers estimate of what the products value is in the fair market. It gives the buyer an idea of a particular items worth. I suppose when you go car shopping you ask to see the sticker fairy tale? Based on your comment a vehicles sticker price is just that, a fairy tale. All that said, Gulf Coast is just the most recent in the market place to be selling out of ware houses. They usually don't have a show room, delivery crew or service department. The later being the most important if they are talking about warranty.
You pay sticker for new cars? ;)
The sticker price in the auto industry has value only to the point that other manufactuers also have a "Sticker" price , and consumers can compare sticker prices from one manufactuer to another an compare on a relative level between them. Additionaly, most folks look at the sticker, understand that the selling price is usually 20% under that .
Of course This is all based on the fact that auto sticker actually having some basis in reality based upon costs, discounts and est profit margins. Not "preceived value". In the auto industry it's a fairy tale, but it's a consistent fairy tale based on information.
In the hot tub industry, that's not the case. It;s a fairly tale if the sticker is 8 and out the door it's 4.
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Well that's different. Here in northern NV and back in IN, Gulf Coast dealers are nothing more than roll up door ware houses sold by back alley appointment only.
Same here in NH.
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Unless it's a very unique situation, like a very high demand vehicle, few pay full sticker for a car.
It's almost automatic that they knock a few thou off the price, and that's before any serious dickering starts.
Like Drew said, at least a cars sticker price has some semblance to the truth. But Don't tell me I'm saving 50% when I'm not. If nobody routinely sells merchandise for suggested retail, but claims when you purchase for lower you're saving money, you're being fed a line of BS.
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I'm standing by my claim that suggested retail is a fairy tale.
Many use MSRP to try to give the customer a vantage point (self serving or not) but it's the degree of reality that differs here IMO. GC isn't the only spa maker with a spa that has an MSRP around $8500. The difference is when you look at what the spa REALLY sells for most spas with an MSRP of around $8500 probably sell the spa for around $7000 (just making a point, I don't mean to be exact). GC is the only one I know of that regularly sells for HALF of that MSRP. Those adds claiming an $8500 spa for $4k seem soooo shameful IMO.
MSRP may be somewhat of a fairy tale but some really are a whale of a tale!!!!!
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They are taking a spa worth $2000, marking it up to $8k and then discounting it to $4k charging people twice as much as it is worth....
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They are taking a spa worth $2000, marking it up to $8k and then discounting it to $4k charging people twice as much as it is worth....
I guess that would be ok if the cabinet was filled with foam. ;D
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I guess that would be ok if the cabinet was filled with foam. ;D
Then it would be worth $2200....
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I take customers right over to my computer at work log on to the jacuzzi dealer community into the x files area of the site, take them directly to the msrp page and pull it up from the Jacuzzi dealer site. An actual MSRP set by the manufacturer. It's a couple thousand higher than what I sell the spas for and includes nothing but the spa and cover. It is a very helpfull sales tool.
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[I'm standing by my claim that suggested retail is a fairy tale.
Brewman,
I have to respectfully of course disagree with you on this one. It certainly depends on the item but I work for a company that will remain nameless but sells in excess of 2 Billion dollars per year of items for the Industrial Market and the bulk of this is at MSRP or List price. While I agree it does seem somewhat dishonest :( to mark a spa down 50%, always remember what PT Barnum said. There's a SUCKER born every minute. Also most people in business will sell at Market price in there area. What is Market price you ask? What ever the market will bear! ;D
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Then your company actually uses a realistic list price.
From my personal experience, that is not a common practice. And I'm only speaking from my personal experience and observatons.
Again- what is the purpose of a reference price if the majority of the merchandise is sold for significantly less? That number means nothing to me.
I have no doubt that it can be an effective marketing tool- it give the appearance that the consumer is getting a "deal" when in fact they're not. That's my problem with the concept. I'm looking at this thru my consumer eyes, not the eyes of the mfg. or seller. My guitar in the example I quoted earlier- I "saved" 30% according to the seller. No I didn't. That guitar sold for exactly the same price everywhere I looked. They should have doubled the suggested retail. I'd have saved even more.
Another example. We used to have a discount tool store around here with their own mystery brand of tools, Buffalo I think. Cheap low quality crap- you could see how bad this stuff was a mile away. Their put a $100 suggested retail price on a socket set and sold it for somewhere around $15, IIRC. Those tools were in no way worth close to the $100 list price. They were barely worth the $15.
I've seen that practice a lot, and I personally don't care for it.
And I also don't like retailers putting some fake "retail" price on something, crossing it out, and writing in a so called sale price next to it. Fake sale.
Merchandise never sold anywhere for that higher price.
Two companies got nailed for operating this way in the not too distant past. One was Wilson Leather, the other was Best Buy. They were asked to prove that the offered the goods at the high price and couldn't. Both were fined heavily for the practice.
Not the same as a "suggest retail" price, but in my opinion, not too far off either.
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Wish I'd found this prior to my last post. There is an article in today's local paper about some discount Pharmacies in this area. This is an section of that article:
Witt started taking on the drug companies about four years ago and received national attention in 2005 when he was featured on the "CBS Evening News." He became famous for refusing to charge the amount recommended by drug companies.
Tramadol, a generic version of the pain reliever Ultram made by Ortho McNeil, had a suggested retail price of $89.50, but Witt charged $6.77 at Borg Drug for 60 tablets. His reimbursement from insurance companies was only about $2, the same as his wholesale cost. Making matters worse, Witt was paid $5 to $7 less than his wholesale cost on many brand-name drugs.
Suggested retail of $89.50 when the wholesale cost to the seller was $2?
Really useful suggested retail.
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Tramadol, a generic version of the pain reliever Ultram made by Ortho McNeil, had a suggested retail price of $89.50, but Witt charged $6.77 at Borg Drug for 60 tablets. His reimbursement from insurance companies was only about $2, the same as his wholesale cost. Making matters worse, Witt was paid $5 to $7 less than his wholesale cost on many brand-name drugs.
Suggested retail of $89.50 when the wholesale cost to the seller was $2?
Really useful suggested retail.
I'm not sure how accurate this information is. We sell Tramadol, and could not sell it for $6.77 for 60 tabs. It would cost us more than that to purchase it. I doubt that our wholesale costs are that different than the human market.
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It was a quote from the local newspaper who was interviewing a pharmacist.
Here's the entire story.
http://www.startribune.com/1229/story/1028795.html
Don't know why the person being interviewed would a- not know his costs, and b- intentionall mis-state them. But I can only go by what they print.
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And God knows, the print media ALWAYS tells the truth!
But I can only go by what they print.
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Well, two companies I know of who seem to put out a MSRP which is realistic -
Apple
HotSpring
And here in paradise it is not unusual to see a car with a sticker price of $40K and then "Additional Dealer Markup" of another couple of thou - that's right, if a car is popular and the dealer is selling them, they will often mark up higher than MSRP. You may or may NOT be able to grind them down, but you're not going to get it less than sticker either way.
I have never paid that - I tend to wait to buy a car during a slow economy, the off season, or after new models come out I'll buy a 'leftover' from the previous year.
8-)
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And God knows, the print media ALWAYS tells the truth!
In this case they were printing an interview. And quoting the pharmacist- he's the one claiming what his wholesale costs were- so either the pharmacist was lying, or the paper is, I guess.. ::)
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Another example. We used to have a discount tool store around here with their own mystery brand of tools, Buffalo I think. Cheap low quality crap- you could see how bad this stuff was a mile away. Their put a $100 suggested retail price on a socket set and sold it for somewhere around $15, IIRC. Those tools were in no way worth close to the $100 list price. They were barely worth the $15.
I had thier screwdriver set (remember those with the cheap red wood handles and black tangs? I bought mine from a guy who was a proffesional "Flea market seller" I paid 3.99 On the box was printed SUGESTED RETAIL $69.99! He had shelves and shelves of crap all with "Suggested retail" preprinted on the box.
If all the manufactuers have a responable and consitent MSRP, it can be helpful when comparing across manufactuers (like in the auto industry) but a few dealers who do the outragous MSRP (Thermal and Master come quickly to mind). It just reeks of BS it makes them look bad. But then again, it must work, as they are selling product.
:P
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In this case they were printing an interview. And quoting the pharmacist- he's the one claiming what his wholesale costs were- so either the pharmacist was lying, or the paper is, I guess.. ::)
Or, perhaps they buy in such larger quantities than we do, so they get a discount. Either way, Tramadol is a very reasonably priced drug, and there is NO GOOD reason to charge $89 for 60 tabs except GREED.