First off, that's not a valid part number. If you mean 997-116-013-10, then that is a SACHS disc that we sell for $258.25. Porsche list price on this disc is currently $294.10 for a Genuine Porsche product.

Secondly, it's really very simple. I buy parts from suppliers, I mark them up, and I sell them online. Amazon.com does the same thing as does about 100 of my direct competitors. I'm headed to Borders right now to buy the fixtures in the store (for our new warehouse) because they are closing the store out. Borders would not adapt to the new model that exists - they constantly priced their books at the back cover list price with no exceptions. That means that my book would be $34.95 in Borders. At Amazon (and Pelican, because I have to match Amazon's pricing), it's $23 or so. Amazon's cost on the book is about $14 - for a markup of about 50-60%. Borders had a 300% markup, and they are now out of business. People were probably willing to pay a modest markup for books in an actual bookstore, but not 300% markup.

This is of course, just my opinion based upon my observations over the past few years. Again, I am sympathetic to the plight of the independent shops, and I have several friends who own their own shops. They've had to change the way they do business these days in order to adapt to the new way of doing business. I share pricing info, tips, and customer trends in order to help them navigate the ever-changing business climate. One thing is certain - the "old school" ways of doing things are fading away.

-Wayne

 

Technically you are correct in that there is a use tax "on the books" but CA does not usually enforce it, so in effect, many things are "tax free". Purchasing from Amazon is a perfect example. You can apply the same reasoning to shops. They can handle the acquisition of the out of state kit or part ("tax free"), collect sales tax from the customer, and evade paying the state. Not exactly sure what you are getting at here? I was describing a real world situation.

 

You bring up an interesting point. For example, my local German specialist indy is also a Tire Rack recommended installer. One can source tires, wheels, brakes, suspension, etc. from Tire Rack, pay them for the parts, have them drop-shipped to the installer, who handles the install and charges the applicable labor rates to do so.

Why would a shop allow such a travesty to occur? While not clairvoyant, my hunch is that the additional volume realized by being in Tire Rack's network of recommended installers helps normalize cash flow from operations, and is worthwhile supplemental business for the indy.

If an indy has every lift and every tech fully booked and occupied throughout their workweek, along with a comfortable backlog of future work to perform, perhaps they can afford to be rigid in their business model... and why not? It certainly is working, in that hypothetical scenario. However, if a shop has lifts and techs available at points throughout the day, it would be in the shop's best interest to look for supplemental business to fill those openings. Even if it means taking a loss on that discrete job, it could still be relatively beneficial to the shop, as long as it's less of a loss as compared to their capital equipment and employees sitting idle during that period. Many fail to grasp that concept, at their own peril. FWIW.

 

Wayne,

Thanks for your insights; I agree with your observations.

Not just in automotive, but overall, the "information-age" has equipped and empowered consumers with easily-accessible data from which to make their purchasing decisions. Not always, but 9 times out of 10, when costs and charges aren't being fully disclosed... the customer's getting screwed worse than if they were.

 

Let me see if I have this straight. There is a Suggested retail of $34.95 on your own book? Printed on the back cover? And you undermine the suggested retail of your own product? You then criticize the book retailer for trying to maintain the price level you set. WOW, that should be very revealing to all.

And you disavow any culpability for having established the 300% gouge by which you surely profited for what ever period before the discounting became common. Fascinating. Where were your "reasonable margins and reasonable prices" while you were raping to the tune of 300%, by your own admission?

TTDude,
Shops purchase tax free for the purposes of resale, not avoiding tax (and this is perfectly legal and common place). Sales of any product, regardless of the source/location are subject to sales tax and that sales tax is paid in the state where the sale was made. My point is, that in addition to ridiculous price gouging by online wholesalers, the consumer has become accustomed to thinking that sales tax is somehow optional, further squeezing the indy into an unreasonable position of having to price match not only the heavily slashed part price, but also manage the customer's false expectations with regard to sales tax liability. The indy can not "choose" not charge the state sales tax as the online wholesaler's can and are thereby put at an even further disadvantage.


c32AMG-DTM
Thank you. Nail on the head. Yes, being a "Recommended Installer" does drive business and the opportunity for upsell and generally overcomes the burden of discount. However, this was principally true at the onset of the "Recommended Installer" program. For several years, now, Tire Rack's wholesale department has been unwilling to add quality, volume installers, in favor of maintaining "Choice" long standing regional "favorites". So, what you are getting on their site is not a true and fair sampling of the the options in that area, but instead a listing of their longest standing, highest volume favorites within a territory. Its a pile of crap, favoring a few, long established.

 

I write books - Pelican does not publish them directly. My publisher, Motorbooks International, publishes them and sets the pricing according to their own business models. I have no say over the final retail price of the book, nor the distribution to any of the stores.

I sent you a PM offering to call you and share some pricing information and other tips on how you might be able to lower your parts costs, but instead you have chosen to ignore that and write increasingly negative posts here, diminishing the value of what was indeed becoming an intelligent discussion of the state of market and it's future. It's clear that you have a very large chip on your shoulder, and any reasonable discussion of the marketplace is beyond reproach because you appear to be very emotionally involved. Rightly so - I don't blame you - the marketplace is changing on a daily basis, and those businesses that do not adapt will suffer. Pelican has confronted these types of issues many times in our 14-year history, and change is never fun nor painless, but at times it's absolutely necessary to survive.

-Wayne

 

My apologies, the board did not post up a "You have received a new message" popup, nor did it send me a notification email stating that I had a new message. My board does both of these by default.

My offer of assistance was predicated on the assumption that you were a shop owner. It's clear that you are not, which I find a bit odd, considering the emotional content of your responses. I thought I could add some unique perspective to this discussion, which I did, but I'm going to bow out before this thread goes further south.

-Wayne

 

FWIW, guys like Pilican, Parts.com, Suncoast etc...offer us consumers options. Wayne has a good point, the times are changing and with that the market and how things are done. I'm sure all businesses will work around these new happenings and processes - take for example ebay, it's impact on the auction business as a whole is substatial, however traditional houses such as Christie's, R&M, and others have learned to live with it, adapt, differentiate themselves, and still offer buyers value. Same will have to happen for all other industries that are "touched" by todays resources directly feeding the more intellegent and informed present day consumer.

 

I think PM's should be, well PM's. Posting them in the forum is bad form all around.

 

I agree...farfinator, please don't post your private messages in public...you appear to have an agenda even if you claim that you don't...there is nothing altruistic about your posts...if you have a problem with another member or a vendor you may address it with them man to man off of this board....please drop it and let this thread get back on topic

 

Are you talking price fixing? "Suggested Retail" is just that and a reseller has the right to sell an item at whatever they so choose unless they are under contractual restraint. Hell, selling things at a loss is a common practice as a "loss leader" in some industries. And where does the manufacturer come into play on this? How is it that a volume dealer can purchase and resell at a lower cost than some small indie can even buy a product for at wholesale? It is not companies like Pelican that cause the perceived problem, if there is one. It's the producer of the product that establishes the price starting point and offers volume discounts. From there on it's buyer beware.

If you ever shop at Costco or Walmart you are contributing to the indie's demise just as well.

I like to take my parts to my indie as it's very important to have the brand specific items I want. But I am sensitive to their profit margins and overhead so I always offer to pay a corkage fee and I always tell him to work the project on his schedule with no time demands from me. I don't care if it's a three hour job and the car is there for three days. It's whatever works best for his schedule and he knows doing the best job is most important and a quick turn around is secondary.

 

I said I was going to bow out of this discussion, but it's like a bag of potato chips now - hard to put them down.

Your statement above made me think of another point that is often glossed over in this argument. The cost of a part to the shop includes *delivery* to the shop. Here in Southern California, where there are a lot of European cars, there are suppliers that will deliver to a shop sometimes up to eleven times a day! That's basically instant access to parts from a very large warehouse - on demand. Maintaining and offering 1-2 hour delivery service for these parts is very expensive, and it's built into the price of the part.

Pelican has worked furiously over the past many years to cut costs and reduce waste in our distribution system. About five years ago, we incorporated a hybrid system that warehouses hard-to-get and long lead time parts, while integrating drop-shipping from our suppliers (warehouses ship direct to our customers). Amazon has almost the same exact model - it works very well. But, we don't guarantee delivery to someone's doorstep within a few short hours. To get that service, you need to pay the costs of supporting the expensive distribution model. Most shop owners I speak with have no concept of the costs involved with these frequent deliveries and take them for granted when they are comparing pricing to online shops like Pelican.

-Wayne