West Marine Pricing

[Freebird]

I pointed out West Marine's price matching policy in a previous thread where someone asked about best prices on electronics. I found out today that has changed.

They are no longer matching internet prices according to the store manager I spoke with. He said that went into effect last week. Too bad, for them. Looks like I'll net my next big electronics purchase.

 

[Pascal]

they're about 20% higher on West System resin... I brought boatfix prices (web page print outs) 3 weeks ago and they matched.

 

[Pete]

Probably just a personality defect I suffer from, but I refuse to do the price matching game with West Marine. The guy who puts his best price up the first time, gets my business.

Pete

 

[Freebird]

As a business owner, I respect you for that. I make sure I am competitive in my pricing, but I price match when I am confronted. Just something you have to do to keep the customer happy and the boat fueled.

 

[SeaEric]

Probably just a personality defect I suffer from, but I refuse to do the price matching game with West Marine. The guy who puts his best price up the first time, gets my business.

Pete

Yepper! It's only fair.

 

[Genesis]

Ditto.

You want my business, don't try to rip me off, and only give me a decent price if I challenge you! That says to me that you're more than willing to rob me.

Now why would I want to do business with someone who's announced their intentions in that fashion?

 

[Boss Lady]

We live in a free market economy. That means that the guy who is willing to sell for the least amount of profit and can obtain the best wholesale price can offer the best street price. Many companies have a tiered pricing scheme where if you sell X amount of product you can graduate to MASTER distributor pricing, which will give you a competive edge over other retailers. I have a retail store and regularly see some dealers sell products at, or below my costs. This means one of two things, he is either losing money or he gets better prices than I do. Most products have an MSRP price scheme with distributor and retail markups figured in. Some products like furniture have HUGE markups, while other products have very thin margins. I offer products with an average profit of 25% over cost and greatly below the MSRP. We set low prices to offer better value and establish longterm customers and plan to make a profit through repeat customers. If I have a customer walk in my store and challenge my price, I have two options, I can stick to the price and maybe lose the sale or I can try to meet the price to try and keep a customer. There is a limit to how far down one can go and then you are working for free or worse lose money. Most retail outfits try to obtain MSRP and only go below that price when they have a clearance sale. A ripoff (just my opion) is what happens at your local Harley Davidson dealer when they mark the price above the MSRP because the demand is there and they are litterally selling to the highest bidder (however, this is not a real ripoff, just the law of supply and demand at work). West Marine is a retail chain that offers products at a markup which allows them stay in business and make a profit. It pays to shop, and customers vote with their feet. If there is sufficient competition the prices come down, or if there is a lack of sales, prices will come down to move inventory. Just look at car prices, slow sales=lower prices. When you buy a car, you start at MSRP and argue until either you buy the car or you leave. A real ripoff is when someone sells you something worthless or otherwise defrauds you. Everyone in business is out to make a profit, the same way if you work for a living you are out to make as much for your time as you can.

Karl, I think you were a little harsh about someone professing to rip you off.

 

[Genesis]

Not in the least.

MSRP is not some "bible", you know. Its an entirely fictitious number that someone has set to give the "power of legitimacy" to what they'd like to receive. It is also a uniquely western concept - you won't see "MSRPs" on goods in most other nations. Indeed, in many of them you won't see any price posted at all!

As for cars only a fool starts at the window sticker. The wise man gets the invoice and negotiates from that.

I understand negotiating and retail sales quite well, having done it for a long time and making my money selling goods and services at retail.

I consider "price match" policies to be a declaration of intent to rob. These days it is trivial for any company with any sort of reasonable resources to determine what their competitors are selling the same goods for, and to make a pricing decision on that basis.

The concept of "price matching" presumes that I like a vendor enough to go beat him over the head - after I've done my research. Why? Doing so is directly contrary to my interest, because it encourages price creep upwards.

Look at what West has done. They used to be fairly competitive on many items. They're becoming less and less so, and not only at retail - their "Port Supply" discounts have been radically cut on many items at the same time their "retail" prices have gone up.

Allowing someone to price match gives them your business and encourages them to RAISE their posted price. If you instead walk they get NO business and now are encouraged to price REASONABLY right up front instead - that is, LOWER their price.

If you allow a merchant to price-match, you're a fool - you're acting directly against your own interest. Instead, give the business to the lower priced merchant. That encourages HIM to maintain HIS low prices (since you bought from him) and punishes the guy who sets HIS posted price higher.

 

[Freebird]

Chris seems to have a pretty good grasp on reality. As a business owner, you can either take your lumps and price match, or lose a sale and make nothing. Sometimes businesses are faced with competiton who attempts to take over a particular market by offering items at extremely low prices in hopes of eliminating the competition. This is a great thing for a consumer, for a while. If they succeed in that effort and corner the market, they can increase their margins and make up for previous losses. Then the consumer ultimately loses.

Take it from a couple of guys who have been there, done that. Operating a business is not as simple as it may seem. In my business, MSRP is a somewhat ficticious price which is, as described, the price the manufacturer sets which makes us all feel better when we get a deal of 10-20% off that figure. The norm is a 40% differential on an average retail mark-up. Like Chris, if I could make 40%, I'd be asleep on a megayacht in the Bahamas instead of talking to you guys. It's always a matter of simple economics. Play the game, or lose it.

Yeah, it's late and it's been a long day. Talk to ya'll later.

 

[Pascal]

that was the first and only time i played the price match dirty game... i can't stand it... but i needed another $200 worth of suplies for the dink that same day and didn't have time to order them.. price difference was about $40 ...

 

[jim rosenthal]

Not long ago I needed a new head for my boat; the old one had quit with very little warning, and we were due to leave for Virginia in a day or two. I decided to just replace the head, since the old one had lasted 15 yrs with routine maintenance.

There is no discount marine outlet in Annapolis, although there are plenty of "discount" places like WM. I looked up the price on Defender's web site, printed the page, and brought it to WM, who matched the price. I didn't have time to wait for the item to be delivered from CT, where Defender is. (ironically the price dropped even further a day later, because of Defender's boat show deals, but I had already saved seventy dollars, which I thought wasn't bad)

But I don't do this often; only when I can't wait for something, and I wasn't setting off on a 130 nautical mile trip with only a bucket for a head. I agree with Karl; I don't like the idea of going cap-in-hand to WM and saying "please, sir, Oliver would like the toilet a little cheaper". I think Defender et al should be rewarded for their competitive pricing by getting the business. I'd rather wait a day or two. Between the fact that they are cheaper, than there isn't tax on an out of state sale, UPS doesn't charge a lot, and their large inventory, they or their colleagues get most of my business. If there are installation issues, I'll hire a local company to help me with the work, if I can't do it myself. I don't mind spending money for local expertise in wiring , etc, etc; I know these guys and they have knowledge I don't, and families to support.

For every person who asks WM to match a price, hundreds DON'T. So, most of the time, they get to do exactly as they choose- sell at the higher price. I don't like to reward this kind of behavior.

For all their trumpeting about local involvement, etc, WM is not a local merchant. They are a large national company from CA who have swallowed up at least two other retailers with whom I used to like to do business, and they are pretty damn ruthless about their pricing policies. They also have a habit of coming out with products that are disturbingly similar to items made on copyright or patent by small companies, and then dropping the original item that the small company made. (Ultra pump switches, BSS battery cases) I don't care for this kind of behavior. What they've done is set up a sort of cat-and-mouse game with the marine retail business, essentially based on the fact that they've expanded too fast and are experiencing sluggish sales.

Defender et al are doing fine selling the same products at much lower prices. They don't have as fancy a catalog as WM, but they stock what they sell, they are fairly knowledgeable, and they are reliable. I have similar impressions of CME and their competition. The "discounts" for the trade through Port Supply have pretty much disappeared as someone mentioned up above. WM's slogan seems to be "get all that the traffic will bear". OK, fine, I will vote with my feet and my wallet. They get my business when I absolutely have to have it NOW, and can't wait. Otherwise, forget about it.

 

[Boss Lady]

Karl, I agree somewhat with with what you said. I also remember a time when you PAID full retail at almost all local marine supply stores. Then companies like West Marine came along with better prices and we were all very happy. But Just like Randy said, they now have less competition because the independents have left the market, so now they feel like they can raise their prices. It aggravates me to give someone my business when they start out and then have them forget who helped them get where they are, West Marine will learn that lesson also. They used to have fair prices, but now they don't. If someone gives me good service and fair prices I reward them with my continued business. West made it easy to shop because you could count on great prices everytime you went in the store, but now you had better shop before going there or you will spend more. If West does not return to their old business model, they may go the way of the independents they beatup in the market. I grew up the old school way, I tell anybody I do business with that I will help them make a boat payment, but I am not buying the damn boat for them. Meaning I realize they need to make a profit to stay in business, if they want a long term relationship with me they need to show me with their pricing.

You are correct also on buying a new car prices. The MSRP for a new car contains the full dealer profit (24%) another 3% bonus if the dealer meets sales quota, this means that a dealer could get 27% profit per car if he sells for full retail and gets his 3% hold back too. The manufacturer has raw material cost and labor, warranty repairs, advertising, and about 30% fluff built in so they can move cars by providing cash back incentives, or 0% financing, or recently employee pricing. So in reality a car is marked up 150% over costs. The ficticious "dealer invoice" is nothing more than a marketing tool. Traditionally this price is about $2,000 below MSRP, where in reality the true dealer invoice may be $6000 or $7000 or more below MSRP on an average car. I have a friend that owns a dealership and he is always crying the blues lately because he only nets about $1000 to $2000 per car right now. Well he is selling about 140 cars a month, so I would guess he is netting over $2 million a year just on sales. But I see his point in that his return on investment is much lower, but he is still making a fine living. So I tell him to go tell a poor working stiff that his sob story and see what they think. To me the glass is half full, to him it is half empty.

 

[Freebird]

I'll make one more comment, then I'll put this one to rest for my part.

Businesses have to make a profit to stay in business. If they are not competitive, they won't be around very long. It's dog eat dog out there, and unless you are the biggest dog, you eat last, if at all.

I had a situation a few years ago when a competitor tried to eat my lunch. He came on strong with low-ball pricing, worked out of his basement with no overhead, and went head to head with me as to advertising in the same publications I had been in for over 20 years. I learned a long time ago, if you don't bend, you'll be broke.

I was making $50 on a $2,000 safe. I was in a high stake poker game when I found myself confronted with a price matcher. Unfortunately, I don't have the luxury of loyal repeat customers as my stuff doesn't ever wear out! So $50 is better than nothing. Did I change my printed pricing to match the new threat? No way, nobody can survive on those margins, and it became a matter of who went broke first. I ultimately won that war in the end. The guy lasted about 9 months. I played the game of price match with that guy, and I do it today.

I'm sure West has taken the same approach. They will make as much profit as the market will allow. But I have to disagree with their choice to discontinue their price match policy. These low-ball guys will put a hurting on their high ticket item sales.

 

[Trojan]

I was under the impression that if you were a large chain store. That because you were so large that you could buy in bulk and get the material at a lower price so you could offer the product to your customers at a reduced price. We have a chain store here that requires you to have a store card in order to receive a discount. I think, what do I need a card for. Just reduce the darn price and throw the card away. I agree with Karl. I think there ripping me off. To many fat cats running the place. WM does have a separate jobber pricing ,but Joe blow can't get it. WM is my last choice.


BILL

 

[yachtsmanbill]

WM is my absolute last choice for anything. Not only are they demographically located, overpriced, and have lousy hours, but I hate having to explain to some pizza faced kid that thinks he is an EXPERT because he gets to sail on his daddy's McGregor what a gallon of TRI LUX is.
I do go to the store here with a Jamestown Distributor catalogue in hand to buy Interlux products and stainless screws by the hundred. They match the JD prices but store policy mandates that they charge shipping. What a buch of
JCS's ws

 

[Boatsb]

How about the local stores refusal to sell "wholesale" to resellers. They will not honor my resale certificate but lewis marine, Bether marine electronics, Amazon hose ..... do. They know they dont have to since I will either but it at their over priced markup or someone less experianced will. For some reason the manager at the local store will not even help me get the port supply account so I know they are just being pigs.

FYI they have a similar structure as Best buy and Circuit city.

They get volume so the price corporate pays is 20-30% below smaller retailers.

The sell it to their own stores at "store cost which is usually above the cost I get things wholesale.

They mark it up as much as possible to see what they can get from you.


Just to be fair price should not be the consideration we look at. Balace price, knowledge and service.

I bought some things form Sams after calling for a special item that I could have then gotten elsewhere after they told me what I needed if I were a lowlife. I appreciated their knowledge and they did give me a bit of a break as a professional courtesy. I will be back as a customer.

Lets put it in simple terms

Give me good service and have a knowledgable staff and I will gladly pay a fair price. Remember the fair price.

 

[(Nobody You Know)]

Fellas, seems all respondents have had considerable retail bus. experience. Great. But you know, I can assure you that WM's pricing is entirely contingent on other competition which, unfortunately at this time, is lacking. But water seeks it's own level. If there was more money in retail boating supplies there would be another "Boat US" or "E & G Boatgear" (remember them?). You (we) are all businessmen. If there's money in it more would be competing for it.

In the world of commercial equipment I have found that the key to pricing your goods to a prospect depends to a great exstent on LISTENING. Some clients prefer absolutely no BS and are insulted if you try to come back with a better deal. Others play the game. It really is an art. I personally fall into the first category when I myself am buying. Play games with me and you are screwed!

I sincerely hope that in time we can all enjoy more competitive sources for boating items.

Capt'n Bill

Runs no Michilins, stays at no Motel Six's, drinks no French wines, and burns no damn Citgo gas.

 

[Boss Lady]

I also find myself looking for the "made in the USA" label too!

 

[thoward]

Well.....Some chains will sell certain items below cost just to get you in. Wal Mart did this with baby formula. If you came in to get formula you are sure to pick up other baby items with a greater markup. When it comes to WM the price is a convinence factor for me. On big ticket items that are no hurry I will shop around but if I need something now WM it is. Also, when it comes to stores we want clean, organized, fufu stores and that is expensive.

 

[Jaxfishgyd]

I tried the matching prices at W.M. for oil pads.
W.M. wants $1.39 each, I found them online for 34 cents each. Manager just shrugged the shoulders and said "buy them online".
So I did. Ordered 200.
With shipping, it came to 38 cents each. (Have to buy by 100, but the others on my dock had NO PROBLEM buying up the ones I didn't need)