Date:         Fri, 23 Apr 2004 21:11:24 -0700
Reply-To:     Norm - RoweBoat <norm@ROWEBOAT.COM>
Sender:       Vanagon Mailing List <vanagon@gerry.vanagon.com>
From:         Norm - RoweBoat <norm@ROWEBOAT.COM>
Subject:      Re: 2.1 hose price deal NVC
Content-Type: text/plain; charset="us-ascii"

I used to work in the Parts Dept. at an Olds/Cadillac, GMC Truck dealership.
Our prices were across the board 60% cost, 40% markup.  So even if we sold
to someone at a 35% discount, we still had a %5 margin.  Not much, but most
grocery stores operate on a 5% average profit margin.

Norm

-----Original Message-----
Date:    Fri, 23 Apr 2004 12:01:19 -0700
From:    Mark Tuovinen <mst@AK.NET>
Subject: Re: 2.1 hose price deal NVC)

George,

Is that 35% off of the manufacturers suggested retail price, or the dealers
retail, after he has recalculated with a new pricing matrix? I have spent
the last 21 years in the automotive industry, most of them in dealership
parts selling to wholesale accounts and none of them get 35% off of the
manufacturers retail, even those that spend $140,000.00 a year. No dealer
can operate at that discount level, they couldn't pay their bills. For your
dealer, favorite list vendor, or local parts store to provide you with
quality parts, service, and trained professional staff, they have to make a
reasonable profit, you can't do that at 35% off. Many places do use a
pricing matrix that recalculates the retail price, usually it is factored
from cost, with lower cost items being marked up more then higher priced
ones. This is why things like body clips, screws, etc, can cost so much more
at the dealer, if they did not mark up the price they would lose money on
every sale. One dealership I worked for once calculated that it cost $2.50
for every parts invoice generated. Your local dealer may like you enough to
give you special pricing, but that would be an exception, as a rule they
can't do it for everyone. Check with your local clothing, grocery, hardware,
etc, stores, I guarantee that they can't operate on a margin as thin as that
left after your local dealer gives you 35% off.


Mark in AK