Big houses shallow pockets

[Whitespider]

I refuse to deal with shysters...

Hmmmmmmm......... Perhaps you should look up the definition of 'shyster'.

When a person offers you something less than your asking price (ever wondered why it's called "asking"?), even your "firm asking", he ain't doing anything unscrupulous, underhanded, sneaky, dishonorable, unethical, scandalous, dastardly, seedy, devious, unprincipled, deceitful, immoral, disreputable or illegal. He simply made you an honest, sincere, upfront, face-to-face offer that you can refuse if you choose... just send the ball back into his court.

Why all the abhorrence and resentment for someone using a totally ethical and universally accepted method (called the haggle) to simply try and work the best deal he can ??
Really... I'm baffled by it... I just don't "get it"... really, I don't.

 

[kodiak]

kodiak,
Have you ever heard the term "keystone pricing"??
Keystone pricing is the doubling of cost, or 100% markup, or 50% profit margin at the retail level. For a small business retailers, keystone pricing is generally considered to be the minimum if you want to be in business a year from now. Some "speciality" type retailers work on profit margins many times higher than that, some lower... but the common profit margin is 50% (100% markup) for small business. The thing is, most things are not purchased from small business these days... most things are purchased at big box/ chain/franchize/fleet type retailers. Those types of retailers use the power of volume buying and shear sales volume to undercut small business retailers, yet maintain enough "profit" to stay in business. Typically they work on a 40% profit margin (67% markup) for most items... clothing, jewelry, and such is a bit different. Every Christmas our local K-Mart runs a 75% off sale on gold jewelry... and people think car dealers are crooks High end mens clothing stores commonly run a "buy one suit - get one free" sale... and people think car dealers are crooks You don't really believe they're selling at 75% off or 2-for-1 without making a profit do you?? What's that tell you about the everyday "low" price... hmmmm??

You want the "source"?? Well it's me... I've worked "retail" several times in my life, in small business, in "big box" business, in speciality, door-to-door, auto, clothing... and part of what I do now is "retail" electronics.
Prove my 40% wrong!!

I never hid the "back end" money the dealer makes... that ain't my way, I don't manipulate facts to prove my points. Go back and read post #36, which is the very first post I mentioned car dealers in this thread... here I'll quote myself for ya'...
" "New" car dealers make their money on warranty work, service work, parts and the trade-in (if there was one). "

And the only reason I started talking about car dealers in the first place is because of the post by sb47 when he posted this..
" Like buying a new car. They price the thing extremely high and then make it sound like your getting a good deal when you get a discount. "
Which beyond false... it's ignorance of the truth. The "sticker" price on a "new" car typically is something less than a 10% profit margin for the dealer. And the dealer don't even get to set the price... he ain't allowed to by law... the damn car comes to him with the "price" sticker already on it, and law forbids him from removing or altering it!!

But for some reason the "car dealer" is seen as some sort of crook while most everything else you buy carries a much higher markup... even your favorite "big box" store hammers you harder than the car dealer does. It's a stigma attached to car dealers stemming from the WWII days of rationing, and a few years after... a well deserved stigma at the time, which hasn't applied since the early 60's.

Apparently Walmart's gross profit average is around 24.5% (http://www.walmartstores.com/sites/annual-report/2012/WalMart_Financials.pdf). Although this is not specified, I'm willing to bet that the majority of the items they sell (commodity items) are well below that mark. You can talk all day about profitability of speciality items but the fact is, most purchases are not speciality items. As you said, most purchases are through the big box stores. That along with my link pretty much show the fallacy of your earlier statement which was "... The standard profit margin on most things is 40%...". That's not so hard to understand, now is it?

BTW - None of your defenses of the retail car industry has done much to explain the need for all of the "hocus pocus" in pricing. Interesting you had no response to my earlier reference to the four square, didn't think you would. http://consumerist.com/2007/03/30/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/

Well I'm done with this and will leave you the opportunity to provide any closing arguments. Good luck with that.

 

[srb08]

Hmmmmmmm......... Perhaps you should look up the definition of 'shyster'.

When a person offers you something less than your asking price (ever wondered why it's called "asking"?), even your "firm asking", he ain't doing anything unscrupulous, underhanded, sneaky, dishonorable, unethical, scandalous, dastardly, seedy, devious, unprincipled, deceitful, immoral, disreputable or illegal. He simply made you an honest, sincere, upfront, face-to-face offer that you can refuse if you choose... just send the ball back into his court.

Why all the abhorrence and resentment for someone using a totally ethical and universally accepted method (called the haggle) to simply try and work the best deal he can ??
Really... I'm baffled by it... I just don't "get it"... really, I don't.

Understood, I need to clarify my statements.
My price is not my asking price, it' s my price. I explain to buyers that my price is firm.
If a person offers me less, I don't have a problem, I tell them no.
I have a problem when, after being told my price is non negotiable, they proceed to argue and get mad because I won't negotiate. What really torques me is when, after arguing and trying to beat me down, they agree to pay what I want. On more than one occasion, I've refused to sell to a person who has pissed me off.
I don't have a problem with someone trying to get a better deal. I have a problem when they get obnoxious during the process.

 

[JeffHK454]

I like what you are saying but if I write the word firm after my price then that's it?

Yep... Ether you except negotiations on price or you don't . Unless what your saying is that when pull onto a customers property you do a mental assessment of their net worth and then base your prices on how much they "could" pay?

If the later is true then your business model is messed up and your judgmental view up people you perceive as being better off than you is sad. Most people of means got their because they're educated,aggressive and a little lucky. Sure some are spoiled , pretentious jackasses spending some else's money but not all.

 

[Whitespider]

kodiak,
That financial statement is for Walmart and Sam's Club, and it represents the overall profit margin for both subdivisions together.

Are you a Sam's Club member?? Are you a Sam's Club Business Member?? Well I am a Sam's Club Business Member!!
Sam's Club is a unique marketing strategy... they deal in a lot of bulk items and cater to small business. You can't walk in and buy an 8 ounce bottle of catsup, you buy a case of 8 ounce bottles, or a 2-pack of 3 pound cans. Also, Sam's Club does not "bag" your purchase, offer to take it to your car, provide sales assistance... they don't even have a stockroom, the sales floor is the stockroom! If, for example, you're buying a computer there ain't anyone you can ask questions... you are on your own. All of the computers are sitting there in a stack, you grab a box off the stack... if the stack (or bin) is empty, there ain't any more in the "back room", 'cause there ain't a "back room".

What this allows Sam's Club to do is sell at a greatly reduced profit margin because expenses and overhead are greatly reduced... Sam's club ain't a "retailer" proper, Sam's Club is more of a "wholesaler"... but you have to be a member, purchase the membership each year. My wife runs a Catering business out of our home... she buys all of her supplies (everything... foodstuffs, roaster pans, paper products, plates and other table/serving/cooking items) at Sam's because the savings is from 30% to 60% less than the grocery stores (and that's after we negotiated a discount price at the local grocery stores). When we go to Sam's, we remove the rear seats from her van and fill that sucker up with "bulk" items and the savings is huge!! As a Business Member we get further "special" pricing and discounts putting prices just a couple points above "wholesale" on many things. What Sam's does, is pass-on their purchasing power to their small business customers. The true "retail" level is when my wife makes the sale.

The majority of members are Business Members... but there is a "regular" membership also. This is where the Sam's Club marketing strategy becomes radically unique... they use Sam's club to move, or sell, overstock and discontinued items from the Walmart division. About 5 years ago I purchased a 55 inch HDTV at Sam's... we had been several places looking, and I'd picked one out I liked "on sale, $100 off" at Walmart, but we decided to think about it for a couple days and come back. The last stop of the day in the "big town" was Sam's (across the street) so the wife could re-stock. When we walked in I just had'ta smile, because there was the same exact HDTV I was lookin' at in Walmart... for $300.oo less than the sale price at Walmart across the street!! I came home with a new HDTV that day afterall.

Because Sam's sells at 5%-15% profit margin on the "bulk" items (bulk items that most regular households couldn't use, or want - do you buy your catsup by the case, or in 3 pound tin cans??), and the majority of members are Business Members that get even more discounts, what does that tell you about the profit margin at Walmart?? Did you notice on the financial statement that Walmart's sales increase for 2012 was only o.3%, Sam's was 8.4%?? If you could remove all the "Sam's Club" numbers from that statement and isolate the Walmart numbers... what do you suppose the profit margin would show?? Hmmmmm??


Although I've seen the "4-squares" thing, I don't know of a single "new" car dealer that can use it... your link is mostly hype and BS. The "4-squares" thing only works if the dealer does in-house financing (i.e., takes direct payments from the buyer). Because the bank actually holds the title for the cars on the lot, especially the "new" cars... they won't let the dealer do in-house financing on them (besides, it would be against the law). Yeah, many dealers have a finance department that can/will aid a customer in finding financing... the actual financing is done through a bank or institution such as GM Credit, Ford Credit, etc. So really, the salesperson can't talk about the down or monthly payments... he simply reaches a "bottom line" with the customer, once the price is agreed it is considered "pending financing". The customer can chose to use the dealership's finance department to seek that out and the dealership may get a "finders fee" (of sorts) from whatever institution the customer goes with (such as Ford Credit)... or the customer can choose to find their financing independently. Usually, if the customer doesn't have the best credit rating, he will actually get the best deal by using the dealership service because the "finance" person does this daily and knows where the best rates are for individual situations. The "finance" person sits down with the customer and accesses what is in the best interest for the customer and locates the best financing that comes closest to those needs. Afterall, it's in the best interest for the dealership to find agreeable, workable financing for the customer... if they don't, they lose the sale.

There are a few unscrupulous "hole-in-the-wall" used car lots that will incorporate some sort of trickery, just as there is in any business (buyer-beware). But even those are becoming very far-and-few-between because there just ain't many $300 used cars anymore... even the used car dealer don't have the operating cash to "own" most of the cars on his lot. Like I said... a stigma that hasn't applied for some number of decades now.

 

[jrider]

Yep... Ether you except negotiations on price or you don't . Unless what your saying is that when pull onto a customers property you do a mental assessment of their net worth and then base your prices on how much they "could" pay?

If the later is true then your business model is messed up and your judgmental view up people you perceive as being better off than you is sad. Most people of means got their because they're educated,aggressive and a little lucky. Sure some are spoiled , pretentious jackasses spending some else's money but not all.

You misunderstood what I wrote and after reading what I wrote I can easily see how. What I meant by that was if I don't have the term "firm" then people can haggle? And if I do have the word "firm" in my ad then they can't haggle? My price is my price and that's it. It's not an asking price- it's if you want the product, this is what you pay.

 

[farmer steve]

My price is my price and that's it. It's not an asking price- it's if you want the product, this is what you pay.

same here. they pull in and ask the price on my roadside bins it's $55.00 i figure they stopped 'cause they need some F/W.there's not a lot of roadside F/W sellers around here so i know their not shopping around for the best price. they ask if 2 bins are cheaper than 1 and i tell them each bin takes the same amount of work for each bin.if they drive off it's because they are going home to get the truck.

 

[Whitespider]

Oh crap… I forgot to mention my most important point about that Walmart financial statement…

Talk about hocus-pocus… If you look at the bottom of that Walmart/Sam’s Club statement you’ll see that something well over half their stores are located outside US borders (3868 US stores, but a whopping 5651 international stores). Now certainly some of those are in Canada and Mexico… but you can bet most of them are located in countries where operating expenses are far below what it costs here in the US… notably taxes and labor, but there’s more (any bets on how many are in China or countries like it??). The “keystone” profit margin can be as low as 25%, 20%, even less… meaning if Walmart wants to undercut the small business it operates at a 15%, maybe 10% profit margin. But that’s OK, they can work at a low profit margin in those countries because expenses are so low… it ain’t about gross profit, it’s about net profit… it’s about what’s left after all taxes and expenses are paid.

See… that “average” gross profit percentage includes overseas operations… Walmart has stores in 27 countries, it in no way represents what’s happening in the US.