Suppliers right or wrong?

[Earl Weiss]

Every once in a while I call an equipment supplier for a part only to find out later it's a readily available part and the car wash supplier charges double what the part is available for on the open market.

I understand that the supplier needs to make $ if they handle a part, but their are other suppliers who just say the part is xxx and jut get it from YYY.

So who's right?

 

[Washmee]

Caveat Emptor

 

[MEP001]

Caveat Emptor

Agreed.

I've been on both sides. I worked for a distributor who understood that if we sold a part that someone could just get from Grainger, we'd charge appropriately so they'd never feel gouged. I don't understand how someone can feel comfortable about taking a 50% markup on an expensive part just for taking/making a phone call.

 

[Earl Weiss]

Caveat Emptor

Understood, but is their no concern for leaving customers with a bad taste in their mouth?

 

[Buzzie8]

The amount of money my distributor has left on the table is astronomical. If he was even in the ballpark of what I could get parts from KR or other suppliers charge, I would use him all the time because of some of the other add value he supplies. Problem is that in many cases he is twice the price as many other suppliers and it is hard to support him with that pricing strategy.

 

[Washmee]

Understood, but is their no concern for leaving customers with a bad taste in their mouth?

See post #5. Fool me once, shame on you. Fool me twice, shame on me.

 

[Waxman]

I fired a supplier for gouging recently. They had been caught by me once, charging WAY too much for a vac hose, of all things. I warned them I would not tolerate that. Then they did it again; this time on a gallon of Vinyl Dressing.

Next time they came in I told them they were fired and not to come back. With the internet and companies like Kleen Rite Corp, distributors over-charge at their own peril.

 

[rph9168]

Sometimes it is all right to pay a little extra for convenience of getting the part right away but if you are dealing with a distributor that gouges you on parts usually means they are doing the same for everything else they sell.

 

[DiamondWash]

What about if the mfg is right across the street and I can get the same part from KR cheapier, that is what I have been trying to get changed for years just doesn't make sense.

 

[MudMoney]

I'm in a remote area by most standards,so I gain nothing by using a distributor who is 110 miles away.Except one time I was in the process of building wash # 3 and a distributer stopped by and I ordered 4 vacuums and how I wanted them set up,electronics,coin mechs.Nothing rocket science,he says no problem.I get the vacuums with the parts not installed,I call he says to bad in so many words.That was the end of using any distributor by me.I was able to get revenge in a roundabout way.

 

[I.B. Washincars]

Most likely, if K/R has it, it is not mfr'd. by your mfr. (Ryko I presume). They both probably buy it from the same mfr. and K/R most likely buys in much higher quantities and operates on a slimmer margin. That being said, the mfrs. do seem to operate on a very steep markup. 10 years ago, I had one of the eq. mfrs. (not one of the big 3) charge me $150 for a 511 Hydrominder only to learn later that K/R had the exact same thing for $55. Talk about getting bent over!

 

[Earl Weiss]

What about if the mfg is right across the street and I can get the same part from KR cheapier, that is what I have been trying to get changed for years just doesn't make sense.

Our industry has soe catching up to do. 5 years ago the Martial arts equipment suppliers and i am sure others as well figured it out. They needed distributors but double shipping was a pain. Schools didn't like to stock inventory but they wanted students to order thru them and some stuff was custom. The bis supplu\y houises figured it out. The end customers got a number that linked to their school or distributor. That way if a student or school ordered direct, it shipped direct and the school or distributor still got their cut. Of course their had to be some level of trust that the supplier gave a fair accounting to the school and distributor,

An industry example is Sonny's and TSS. Sonny's charged less than TSS direct. This was difficult because I ordered custom stuff. TSS made me go thu Sonny's, to get the Sonny's price, get a P.O. then they had to get the P.O stuff from Sonny's and then I could give them my specs.

This added several days to the order process.

Now I go direct to TSS give them my Sonny's customer # and it gets done.

 

[Earl Weiss]

Here's a couple examples. Like Mr. Berk and bought a bunch of his signs. Latrer I ordered more to match and I get a sign from TSS and I am charged $100.00 more than TSS charges. ($500 vs $400.00) I called him on it saying I did not mind giving him business but he can't overcharge me. He refunded the business.

I curently have 6 sets of a certain piece of equipment that uses a shock absorber (24 for the 6 sets) that need replacement about once a year. The mfgr charges $50.00. I found out the brand and model and was able to find it on line for about $18.50 incl shipping.

Now, in fairness I need to say there are suppliers in our industry the local shops can't touch. Etowah prices on Coinco validators and Sonny's prices on Parker motors are probably less or the same as what they pay. Same with Wanner pumps.

 

[pitzerwm]

Here is my take on this, as we all deal with this dilemma everyday one way or another. IMO, your job/responsibility is to provide a service/product at a price that is fair to the customer and to you. In other words make a profit. The manuf./distr. has the same responsibility. Until you see his books you can't be sure if he is ripping you off or not. His overhead/life style/etc might be too high. The bottom line is that if you find what you need at a lower price somewhere else that is not offset by convenience/friendship/time or something else then you buy it where you get the best deal.

I bought a Powerain automatic mainly because there were no distr. closer than 200 miles and 90% of their parts could be bought at a local Grainger. PR sold their parts for 200-300% more than I could get them at Grainger. I urged them to sell "us" the parts at Grainger's list and to be able to pick them up locally. IMO everyone won, they made money. we paid no extra and Grainger made money. It never happened, I guess they are still around, but I haven't heard of anyone buying a machine from them in a long time.

Another reality, a couple of my friends own and operate a Big O tire store. For years I bought my tires from them. The last time, I got a price from Costco and went over to them and they were $25 each tire more. I told them that I was sorry, but I wouldn't pay $25 more to give them the business. He told me that they had to pay more for the tire than Costco was selling them for. I suggested that they get out of the tire biz. A few months later after 10+ years, they gave the store back to corp.

I tell my clients that their reality means nothing, its the customer's perception that is the customer's reality. If their parts are propitiatory and/or they need to charge those prices, and the customer feels screwed it will kill them in the end.

 

[MEP001]

Another reality, a couple of my friends own and operate a Big O tire store. For years I bought my tires from them. The last time, I got a price from Costco and went over to them and they were $25 each tire more. I told them that I was sorry, but I wouldn't pay $25 more to give them the business. He told me that they had to pay more for the tire than Costco was selling them for. I suggested that they get out of the tire biz. A few months later after 10+ years, they gave the store back to corp.

I can tell you that's true of Kleen-Rite. We used to buy GoodYear Neptune hose from a company that bought factory direct from GoodYear. I worked for a month to try and get a better price, and the best they could get for me was (I don't recall the exact prices, but I'll give some comparative ones) 79 cents a foot. I made a deal with Kleen-Rite who said they'd sell it to us at 64 cents a foot if we ordered at least five spools at a time. When I showed that quote to the other company, they were ****ed because it was much lower than they could even get it for. Same with ArmorAll - the best deal I could get through them direct was $7 a case more than Kleen-Rite's end price. From what I was told, KR gets ArmorAll by the train car load.

 

[Earl Weiss]

>>1.IMO, your job/responsibility is to provide a service/product at a price that is fair to the customer and to you.<<
>>2. Until you see his books you can't be sure if he is ripping you off or not. His overhead/life style/etc might be too high. <<
>>3. I urged them to sell "us" the parts at Grainger's list and to be able to pick them up locally.

>>4. He told me that they had to pay more for the tire than Costco was selling them for.<<<

>>5.I tell my clients that their reality means nothing, .

1. I think "Fair" is in the eye of the beholder.

2. I think #5 above makes this irrelevant. Just substitute supplier for "client".

3. I have asked some local guys to match the price plus 10% for convenience since I would not have to pay shipping. Some do, some don't.

4. True enough. I had this coversation with Coke. Not so much what the grocery store paid, but the grocery retail was less than my wholseale cost. They told me that if i bought the same quantity they would give me the same cost. The fairness perspective shanges for a consumer buying at a "Convenience" location a mostly optional purchase versus an essential part for your business.

5. THIS IS GENIUS. True on many levels. As indicated above various words can be substituted for "clients". "Customers - Employees - Retailors - Kids (I don't think it would work for spouses

 

[Whale of a Wash]

When i was first in the business. I would buy everything by the pallet-shipping was cheap. Soap-Towels-just about everything direct. This business has transformed from alot of smaller local soap distributors and such to a few larger businesses. Only thing i get by the pallet are 100 or so cases of blue sham and the whites any more. Also last year bought a pallet from quick dry.
Still i have seen KR grow amazingly. They didn't carry much and took a while to get it- 20yrs ago. Now they are the only ones i get pallets from, and fairly quick on most everything, They are the walmart for carwash guys now- except no funny looking people.

 

[pitzerwm]

Another point that I stress to my "clients" is to know what their real cost are to provide a service or a product. When you don't know your REAL cost, you can't charge a "fair" price. You are either screwing yourself or the customer, neither is a good deal in the long run.

Bottom line is that if you want to be around for 100 years, you need to make a profit and your customers need to feel that you are "fair"

Earl, you are right "fair" is in the eye of the beholder.

 

[my2cents]

Sounds here like the internet has made the distributor a dinosaur.

 

[rph9168]

Many manufacturers are willing to deal direct. If you don't need local service and can wait for parts and supplies the Internet may be a viable option. If you do need someone to work on your equipment for you or want to have the ability to get parts when you need them you should maintain a relationship with a local distributor. Do not expect a break or deal when you use them very rarely or only in an emergency.