As most of you know, I am shopping for wheel/tire combo. It will take me years to make enough to afford one LOL but thats another story.
I picked up SuperStreet magazine, called maybe 5 tire places, plus Whallen tire, Discounttiredirect, Tirerack, etc.

I asked for a quote on the cheapest 17" wheel/tire combo. All 8 places quoted me within 30 bucks from each other, and sales ppl acted like kings and I am the peasant. They didn't give a sh** if other place sells for 10 bucks less, but only 10 bucks does not provide me with enough incentive to buy here, do you follow my logic? The answer: I dont care then you can go and buy from them!". I wonder if there're any anti-trust violations here, if any regulations at all would apply here. This is pure price gougin (misspelled I know)and evidence is as clear as a day! Seems like vendors have agreed on what to charge the customers for the same product! What do you guys think??

 

I understand how you came to that conclusion, but I do not see it that way. How much money do you think these companies make on their opening price point [cheap] merchandise? As you mention, it is very competitive at the low-end, and they are not making much profit on those goods to begin with. They get beat to death, call after call, for a better price on goods that do not produce significant profit. You can't get blood from a turnip... Thus, the "take it or leave it" attitude.

Their attitude would be much different if you were buying goods at the high-end. They make *much* more margin on their premium-quality goods. Therefore, they have room to negotiate with you more on their high-end goods. And they will. Good luck.

 

The margins on rims are horrible, most small shops make a $50 profit if they are lucky. I know the margins on rims, and I've spoken to guys that runs shops. They stil need to make a buck too, and if someone else is selling rims for $10 less, good for them. If you can't even turn a profit, what's the point of price matching.

 

And besides all that, why the hell would you argue over $10 anyway? Hell, after you're spending $600-3000 on a set of rims and tires, $10 is nothing to complain about.
If you want cheap parts, you bought the wrong car. go buy yourself a civic or an accord where parts are half the price of Max parts.

 

No anti-trust. It's just that those are the rock bottom prices. There is no more room to move on that price. The reason they're all the same is that they all compete against each other and hear it all the time from customers like you "well I can get it cheaper from so and so". That's why their prices are all the same. The prices on everything in the aftermarket have dropped due to new vendors popping up all the time and selling product for like 2% over cost. And customers like yourself have begun to expect pricing like this when it's not the way it's supposed to be. I know of a lot of people who got their accounts closed down with the manufacturer because they were selling too low. But because of them, customers expect prices like that all the time. If you knew what most of this stuff cost us, then you'd understand better how it works.

 

I would not expect a better answer from someone who is seling the sh**. Although you're being mad at me and "customers like me" for wanting a better price, I will not attack you personally, nor greedy sales people that want to make profit w/o value-added service. Whenever salesman says "rock-bottom price" it means BS. That is true, I do not know for sure if 2% is all they make, but I do know that each wheel passes at least 2-3 intermediaries between factory and the customer. My point is not to critisize ppl who just want to make a living, but to gain more understanding on this industry.

I have noticed that many wheels duplicate designs, sort of generic names. The difference in price is only 50 bucks or so, however. Also, I doubt 2% markup is a real story- you gotta be selling multivolumes to stay in business. I think that there is a wrong kind of competition here, and this would be an excellent case for a law school student..

 

No, of course 2% markup won't let you stay in business. But there are those that tried, they're no longer in business. And yes, most products do pass between a few people before reaching you, but that's just the way business works. Most individual shops cannot support enough volume to buy directly from the factory, etc.

And if you knew how I did business, you'd know that personally, my prices are very fair and when I say rock bottom, I mean it. All the generic designs are because most of these wheel brands buy from the same factories overseas and just relabel them. Anybody can get into the wheel business, just make a big enough buy in and they'll slap your label on the wheel.

Everybody wants a piece of the pie, so more and more companies are competing on price alone since they have no other ways to compete w/ the products being essentially the same. This isn't just in wheels, it's that way in other aftermarket products too.

Don't accuse me of making up this stuff when you have absolutely no idea what it's like on the other side of things. I know both sides, I'm a consumer of this stuff too. But I know the supply side, and I know how things work. I'm a manufacturer and distributor as well as being a consumer. So I know the different pricing levels this whole industry works on. Of course you want the lowest price as the customer, I do too. But there is a limit to how low things can go.

 

Shadow, this post is not about your business, but I appreciate the info.

If wheel guys weren't turning enough profit on low-end stuff then they would not stock any of that 1000 dollar "low-end", as simple as that.

Re: manufacturers monitoring sales prices. It is costly and why would companies do that? Why would a sales guy with his own store would want some wheel get into his peace of the pie? If things did not look that much inattractive, market would not have existed. If you are in business, you would only sell only what you make money on, right? There is much more than that...

 

Merchants do not make the same margin percent on everything they sell, and in fact, they may routinely sell some items below cost. Loss leaders, as they are called, help to create a good price image.

They make a TON of profit on some goods, too. They MUST make gobs of profit dollars on some items to offset the losses they take on their loss leaders. If all they sell is the low-margin stuff, they're gone.

Most merchants these days use market-driven retail prices, not the old-style cost-plus method. The idea is to manage margins with the sales mix, to maintain an average margin that yields an acceptable net profit.

So, combine a great product assortment with competitive prices, good communication skills, terrific telephone etiquette, speedy service, convenient business hours, etc., and you'll grow a nice company that throws cash into your retirement account. Then sell it for big $$$ and move to Aspen.

 

While this is very true, when talking specifically about wheels, the margins on rims are very small.

 

ok how about this...
right now unemployment is high and a lot of people are out of jobs. (if you're curently employed) do you expect your salary/pay to go down because of that fact? hey joe blow just got hired and he's making $200 less than you doing the same thing as you (he's desparate and needed a job)...so do u want to take home $200 less just because joe blow is? i'm sure u don't want to take home a penny less right? same theory w/ your wheel situation. so the shop down the street is selling it for $10 bucks less...do u expect this particular shop you called to go down that price? like everyone else said..profit is already so low. the guy has to pay his rent and his overhead. so the guy down the block have a really poor display and he's running his business out of his garage..but the guy you called has a shop and etc...i know this doesn't mean a damn thing to you..but my point is don't expect people to beg u to buy something. if you can get it elsewhere cheaper why would u even bother wasting your time asking this guy to go to your "claimed" price? he's not going to lower his profit because joe blow down the block can go down $10 cheaper the same reason u don't want your pay to be lowered.
modding cars is a expensive hobby...if you can't afford then don't start.

 

no need to get personal here, I do whatever I can. All I did is called a few places. In case you did not know, there are not many things in this world you can not negotiate. You would probably be amazed to see how much $$ you could have saved if you negotiated. Of course I wanna save me a few dolla and nothing wrong with that.

You can't assume that ALL wheel manufacturers have the same retail strategy. Vendors are different, too. Some vendors get their merchandise directly from the factory, and some buy from wholesalers. There are no 2 vendors that are the same, they have a different level of overhead, and profit margin. You see, when you solve two equations with different variables but get the same result it is nothing but cheating.

To the rest of you, please have respect for my opinion, and stop bashing me for trying to do what I do.

 

There is nothing wrong with negotiating, that's your right as the customer in certain situations.

Don't take the rest of this personally, it's just my opinion of things.

Nobody is trying to bash you, but you started all this by accusing vendors of being shady and price fixing. If you had simply asked for another way of negotiating, or why the vendors wouldn't budge on pricing, that's fine. But you called a few companies, they refused to negotiate, and you accused the shops of price gouging "clear as day" when you don't know exactly how things work on the other side.

As a vendor, that's insulting. And most of the guys coming down on you have friends who run shops. We know what the margins are like, what the market is like, etc. You don't have the same info we do, yet you came in here making wild/insulting/slanderous accusations against shops. All because you felt like you werent' treated with enough respect and the sales people didn't give you the price you wanted.

Go to Wal-Mart, try buying a $300 lawnmower for $290 by telling them that K-Mart has it for that much. What is the sales guy going to say? "Buy it from them then." By your logic, that's price fixing, when clearly it is not.

And yes, manufacturers do closely monitor the price of their products. It keeps their brand identity/image and keeps their dealers happy. If nobody can make money on selling their product, who will sell it. It's getting more and more strict now too. I'm not making this up. There are companies where if you violate their pricing terms just once, your dealer status is pulled and you are no longer allowed to sell.

And not every product a company sells is profitable. Like Bullseye said, there are loss leader products for most shops. Some items I lose money on, but in the end, it still works out because they draw customers in who will also buy high profit items. On the items I lose money on, I absolutely will not budge on the price, but on the higher markup items, there is room to move.

 

so what? You are right, they have to make money, but they have to be competitive or this is in violation. It is naive to think that a vendor will stock non-selling merchandise just for 2% (20 bux out 1000) profit. The demand should be strong enough for them to stock even one set of these. Obviously, you're covering vendors, and I can't blame you for it. Even if you are in business yourself, you can't speak for those whom I called, you have not seen their balance sheet. Those are pretty established businesses, not a little guy who is selling a few sets a week.

Well, so far so good. It'd be great to hear from someone like a law student or a lawyer here, what do regulations say on this?

btw, I bet that at least 85-90 of the time I could get a discount on my lawnmower from Wal-Mart. That thing is bulky and takes up space. Especially if it has been on the floor for a while, likely they'd let it go for 10-20% less.

 

Do you know that the typical markup for retail is 40% over cost? That used to be the norm. Online sales ruined that. The margins are much smaller now, and I'm surprised how business can survive on that.

 

I do know that. That's why traditional businesses are forced to be more careful in managing their inventories in order to compete. We have you old-style shops with warehouses move on the internet to compete with some reseller guys who operate out of their kitchen and make money directly by matching orders.

 

I don't know about rims or tires, but for other car parts things are ridicously expensive.

Something like a rear sway bar which is essentially a bent rod of metal. Why does it cost $100+???

 

Really, I think you hit-it. How much margin is there with the Internet? It's like 3 gas stations at a busy intersection, coincidence that all 3 charge the same for regular, plus, and super? Having them all close in price means that's as good as it gets. How do we know how much a BBS RS II should sell for unless we compare? Anti-trust wha'? How do you get treated when you spend tens of thousands and buy Dell computers for a business? Not particularly well, but I wouldn't read into it and say the people at the other end think they are kings and we are peasants. It's just a poor customer service organization. But if margins are razor thin, not only is there not alot of coyne allocated to improve it but there's no reason to anyway.

It's like simple common business sense. If you have a restaurant where you got people waiting all the time to get in, you ARE doing something wrong. Your price is too low. You have to raise it until only some people are waiting, as it's less realistic that you can expand and raise supply. You want to run at full capacity but if you can not meet your demand you need to maximize profits. BMW sure has learned this over the years and the current E46 is simply a cash cow. Car's been out 3 years and people still willing to wait to take delivery. Unlike Maxima where the guy frowns because he can't find the particular car which has the equipment you want, all 80 of them on the lot look alike.

 

but ALL of the businesses can not have the same low margins! This can't be true! Some manage their costs better than others, because they do things different way. Then how come even at the low end, they price the same?

The same with the molded piece of metal called RSB. No two sellers have the same overhead, but they price their sh** the same.

 

but ALL of the businesses can not have the same low margins! This can't be true! Some manage their costs better than others, because they do things different way. Then how come even at the low end, they price the same?

The same with the molded piece of metal called RSB. No two sellers have the same overhead, but they price their sh** the same. [/B][/QUOTE]

I'd make it my business to know what my competitors are selling their price-sensitive products at. I may even call them, posing as a customer, to see if they will accept a lower price. Once I find out where their rock-bottom price is, I have some choices to make. (And it really doesn't matter what cost I paid for the same goods.) Do I sell at a lower cost, risking a price war? Do I sell at a higher price, risking lost business? Or do I price my goods the same, hoping to make at least a little money, optimize sales, and avoid a price war?

You make the call...

 

I just wasted my time reading this one person argument. Can you say doOOfy?

Man.. I think its time to go to Wal-Mart and pick up some model cars to work on. At least those tamiya rims only cost about ten bucks.

 

I'm a law student, but I didn't see any direct question about regulations.

The lawn mower that takes up space that you could get a discount on, you have said it yourself, it'd go on sale if it sat there for a while, like 3-5 months. Obviously the wheels you want are popular, since you can get them at 5-6 vendors. If everyone wanted KrispyKreme, why would they have to budge on their price? Even if it wasn't rock bottom? They have the right to sell it at certain prices, and moving from it is their perogative.

I don't see where you're getting this price-fixing thing at all. If anything, its fixed by the manufacturer, and theres nothing they can really do about it. If demand is high, which it seems to be, in this case, why should they even listen to you?

To apply your "price-fixing" .. companies like TireRack would never have sales on stuff, because theyre too busy fixin the price. (Or theyd have the same item on sale) However TireRack and WhalenTire have sales all the time. (On different wheels) They barely even have the same brands, I dont know how you can even mention them as price-fixing. How? What is there to fix between them? TireRack has more "highend" wheels. I'd love to see TireRack pricefix SSR's with whalentire.. but that isnt happening cuz Whalen doesnt carry SSR's.. in fact, almost no one does. TireRack is pretty much the main importer of SSR rims, yet SSR's *STILL* go on sale. WHY?? Price-Fixing?

 

my point is you're complaining about a $10 difference in price on a set of rims...why..all this for $10?
so there are not many things you can neg on...ok so when you go get gas do u offer the guy $1.15 for premimum gas while the sign says $1.39 and work your way up? when you go food shopping do u offer the check out girl/guy 10% from the total? when you get your electric bill do u call the utility company and tell them you'll pay them 10% less and try to strike up a deal?
keep in mind rims are not a necessity. it's not needed for you to live. "luxury" items are that..luxury items. you think the guy who's going to buy a BMW M5 will try to talk the dealer down? the dealer will tell u to take a hike because it's a luxury item. if you can't afford to pay their price then someone will. same thing w/ the rims..if you can't afford it (showing example) then the other guy who calls will buy at their price. unless they are sitting on 10000000 rims and they haven't sold one rim in the last 3 years...yeah then maybe they can strike up a deal w/ you....(lost leader).
don't u think the retailer who are getting the rims would want to get them at the lowest price they can so they can make a slightly better profit from them? most factory will only sell in huge lots...(IE 100 set of rims). your local retailer will not have the space for 100 set of rims. the distributor have a big empty warehouse where they can store it. so retailers buy from distributor.
again take my example for your pay to decrease.
let me ask you this...if YOU were to run a rim/tire shop how would YOU like it to run? what items would u stock? how many would u want to stock? what's your markup? what's your overhead cost? walk a mile in someone's shoes and you'll know.