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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.
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.
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.)
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.
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.
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.
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.