Hot Tub Forum
Original => Hot Tub Forum => Topic started by: Balsam41 on May 03, 2006, 06:14:42 pm
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First post to this forum ,but I have basically read all the 290 previous pages of posts. ;D
My question is this. Why is it that we all have to go around in circles trying to figure out if we got a decent deal on a spa. What I mean is this. The posters put out a price that there being given on a tub. They come here and ask if it sounds ok. The so called experts(I mean salesman) that frequent this forum chime in with there blessing. I want to know what the spa costs the dealer !!! I know that not all retailers get the same pricing but I wish I could have a general idea.That way I would add on what I think is fair and go from there. Sort of like buying a car. Anymore with sites like edmunds one can see what the car there interested in costs. I know you guys have the answers so please confess !I'm interest in a 2006 Hotsprings Vista. What am I looking at? The dealer wants $10885. for an 05
without ozone . I got a feeling that price is way out of hand. If not, then I better look at the Envoy or some other brand. My problem is that this area has limited choices (Gainesville Fl) .
Thanks for any input !!
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First post to this forum ,but I have basically read all the 290 previous pages of posts. ;D
Since you've read all the pages, you know the answer to your question!!!!
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Either I missed it , or this is the first post asking for the dealers costi. ;)
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1. What you think is fair, and what it costs the dealer to actually stay in business are probably 2 very different numbers.
2. Edmunds does NOT tell you what a vehicle REALLY costs the dealer. They only report the PUBLISHED invoice cost. Depending on volume, a dealer can actually pay FAR less than the published price.
Do you know the wholesale cost of the last tv, refrigerator, stove, couch, or heck, even the last apple you bought (you might be VERY surprised at the markup of apples by the way.............. I can just see making the grocer an "offer").
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Maybe I shouldn't acknowledge that I am an accountant (30years)so I know what it costs to run a business !!
I sort have figured that I would be stonewalled ,but had to ask anyway !! Who knows, maybe someone will come through.
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I am a consumer, not a dealer. My take on this question goes like this: The dealer cost for an item, any item from cars to spas to chickens is confidential. It is not ethical for a dealer to disclose true cost to any customer. A savy consumer knows that books like Edmunds are bogus, no let me say that again BOGUS, and we have no idea what the dealer cost is for any vehicle. It actually changes constantly as manufacturers offer spiffs, and volume incentives, and special package discounts, and so on. Any business disclosing costs is in the business of going out of business.
This man's question is not a reasonable request.
Regards,
Bill
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Maybe I shouldn't acknowledge that I am an accountant (30years)so I know what it costs to run a business Ê!!
I sort have figured that I would be stonewalled ,but had to ask anyway !! Who knows, maybe someone will come through.
So, in your opinion, if the invoice for a Superspa was $5000, what should the retale price be for:
spa
cover
ozone
lifter
step
chems
freight to dealer
delivery to backyard
Dan
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Whoa, holy backlash guys! I don't think Balsam was accusing you of being filthy cheating liars. ;) We know you're in business to make money, nothing wrong with that.
I made a similar post before, I was curious not necessarily about what the dealers pay but how to know how much is a "fair" price. I *think* that's all Balsam was asking, and I don't think that's an unreasonable question to ask, especially if he's in an area with few dealers. After all, we know you guys are great, but there are a lot of unscrupulous dealers out there that would just love to rake people over the coals if they are totally clueless about how much something "should" cost.
However, Balsam, what it's going to boil down to for you is what are your choices, since your dealer options *are* limited. I'd suggest visiting all the spa dealers in your area to get an idea on pricing across the board for many different models, then you have something to compare against. (After all, even if a dealer across the country sells it for $2k less, it doesn't do you any good.)
Edit: I just saw Chas recommended the same sort of thing at the very end of his post. And he forgot to mention the most important cost of all: hiring those skimpy bikini models!! ;D
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Thanks MattNY ! I feel like I'm getting my head bitten off !!
I just want to know what is a fair price , not put you guys out of business !!
Looks like I struck a nerve !
Now how about a FAIR price on an 06 Vista ?
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Who knows, maybe someone will come through.
I think the dealer cost of a Hot Spring Vista is somewhere around $12 (plus shipping). The Envoy is only $8 so it should be cheaper. ;D ;)
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After the government gets through with us, then all the insurance companies, you have no idea how hard it is to sit there and know that people are out there scheming to try to take that last stupid buck of profit away from you.
In this case, I don't feel like Balsom is trying to take anyone's profit away. In a nontransparent industry with negociating, some consumers are going to wonder if they paid too much, and dealers are going to wonder if they charged too little.
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I am going to come clean. I think what you want to know is reasonable and fair. I think most dealers pay about 20 to 40 dollars for their spas. Mine are special and cost me way way more than that but all the other guys pay between 20 and 40 ..... ::)
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Wow!!!!! :o The simple fact that not one dealer felt comfortable enough to step forward and respond to this post really blows me away. My business ( building materials ) has the same cost base + 100 as Chas pointed out and we work on about 10% overall markup. We do move a lot of product everyday, where a spa dealer may average selling....I don't know... 2 per week?
I would have to guess they work on a 40-60% mark up, based on how many they can move. Net net I would guess they realize 25% per sale. But they, like the rest of us, go to work to make money, they took a risk to open their shop, work long hours and put up with a lot of BS on a daily basis. I hope they all make a nice living ;) and I hope they are there to help us out when we need em.
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I don't know if this is any indication of 'dealer cost'.. but I just brought an 05 (never filled.. last one in the store) and paid better then 70% less then 'suggested retail' (normal asking price'.. and that was with stairs, cover, lifter, start up chemicals, delivery, ozonator and 60 amp box and breaker (GFIC).... Perhaps I "STOLE" it (according to the dealers here'.. but TRUST ME.. this guy DID NOT LOSS MONEY selling it to me at the price he did. Yes, he wanted to 'get rid of the tub (05), Yes, it was the last one in the store.. BUT HEY.. he CHOOSE to sell it to me at the price he did (the whole time 'complaining' that "I could get more money for this when my new tubs come in"... I'm simply saying that MOST LIKELY... the mark up is AT LEAST 75-100%... Bottom line: THIS DEALER DID NOT LOSS MONEY BY SELLING IT TO ME AT 70% less then 'the usual price"...
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Balsam41, I will side with Chas on this issue, but I would like to point out that he did forget to mention the 15% fuel surcharge that we pay on freight. Being an accountant, you can readily recognize what that would amount to on a truckload of spas with a freight bill of $2,800, which is the way we buy them. That's right, an extra $420 on top of the freight charges. On top of the freight, the dealer either puts a lot of cash up front for the goods or a uses a good credit line that we all pay for as well.
Now Chas is in a different part of the country than I am, and my freight is probably 5 times greater than his freight, but our utilities are cheaper, so it is needless to say, he and I have different cost of overhead in running our business's as we wait for you, or any other consumer to come in.
We very much do want you to buy. so we must be price competitive with other sellers in our area. We do not want you to leave with out buying from us because you might not come back. So, if you believe that dealer gave you a price that was out of range, tell him you came to this web forum, and "searched" the last 25 posts regarding Vistas and 1 of them had a price of $9,185.
Keep in mind, you have not indicated to us what was included in his price, but never the less, I am sure he will discuss with you WHAT HE considers to be a fair price and you can make your decision. It might help your cause if you have your check book on the table at the time of discussion.
Now then, on the other hand, this issue of a fair price is a very good point and I would like you to answer hottubdan's question below, WHAT DO YOU CONSIDER TO BE A FAIR PRICE in this scenario? ???
So, in your opinion, if the invoice for a Superspa was $5000, what should the retale price be for:
spa
cover
ozone
lifter
step
chems
freight to dealer
delivery to backyard
Dan
Let's include the other cost items later for the purpose of this question. What is a FAIR price? Is it $5,000 with a 20% margin of $1,250, 30% margin of $2,142, 40% margin of $3,333, 50% margin of $5,000, or do you really think we get a 100%? Then, deduct the cost of the "extras" that you want included.
I am very interested in your response, as I would be interested in my own accountant's response. BTW, I know my account charges more profitable business's more than he does marginal business's, which is were we all seem to be.
When you think about it, we do not make a lot of money in our line of business and we need every dime we can get to do everything consumers expect of us.
Now then, a Vista at $10885 vs. a Vista at $9185 in Arkansas gives you a $1,690 spread, are you getting something different, is there a cost difference in overhead, whats included, is one just a low ball, and then what do you expect of your dealer?
From one business man to another, please answer my question. What do you consider A Fair Price? ???
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You have received the answer to your question!!! :o
I kind of figured this would open up a can o' worms! ;D
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Balsam: My dealer's price for a Vista (06) is $9,800. It comes with the following:
deluxe cover
50 amp GFCI Box
Delivery & installation
1 month chemicals and consulation at start up
Durastep
1 year of free financing
1 year monthly service (this was a special which is probably not available now)
It does not include the opener
The tub is being delivered Friday. - ron
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I don't know if this is any indication of 'dealer cost'.. but I just brought an 05 (never filled.. last one in the store) and paid better then 70% less then 'suggested retail' (normal asking price'.. and that was with stairs, cover, lifter, start up chemicals, delivery, ozonator and 60 amp box and breaker (GFIC).... Perhaps I "STOLE" it (according to the dealers here'.. but TRUST ME.. this guy DID NOT LOSS MONEY selling it to me at the price he did. Yes, he wanted to 'get rid of the tub (05), Yes, it was the last one in the store.. BUT HEY.. he CHOOSE to sell it to me at the price he did (the whole time 'complaining' that "I could get more money for this when my new tubs come in"... I'm simply saying that MOST LIKELY... the mark up is AT LEAST 75-100%... Bottom line: THIS DEALER DID NOT LOSS MONEY BY SELLING IT TO ME AT 70% less then 'the usual price"...
Joshua45, I think you are a little off base here. You said the J315 "usually" sells for $4,860 and your dealer took "better than 70% off", you would pay $1,458. However you said you paid $2,600 for something you are not really happy with. That is more like 45%, and what you are suggesting is that your "dealer" who is in some other business and hasn't been any help to you, made a profit on the $2,600 you paid. I see from your posts, you seem to look to everybody else to help you out, instead of relying on your dealer, who made a profit on you.
The bottom line here is your math is way off and so is your thinking. You must really think we are all making a killing in this cut throat business that we struggle to survive in. Why do you suppose dealers come in and go out of business if they are making such profits? ???
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You mean you guys don't soak at home in a hot tub filled with champagne? ;)
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The spa dealers here don't make enough on a sale of a spa to make a good living. Now the profit on an inground pool, that my friend is were the money is made. 8)
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HotSpring dealers only mark their spas up $10 over wholesale, but they sell A LOT of spas.
Terminator
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You mean you guys don't soak at home in a hot tub filled with champagne? ;)
I do, but that's because my wife has a drinking problem. ;D
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I make SO much money selling spas that I invested in a hologram. Very high tech and interactive. While I perpetualy lie on a beach in Puerto Villarta, it does all the selling. When a customer asks a question it cannot answer it instantly pages me and I program in the answer. Then slather on another layer of spf 4000 and call out for a bucket of Modelo with lime. What a business!
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When a customer asks a question it cannot answer it instantly pages me and I program in the answer.
Why would you need to program in an answer? I thought all spa salesmen own a "random answer" generator (I've seen a few use them when a customer has an unexpected question).
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That's what I get for buying the Watkins model.
Why would you need to program in an answer? I thought all spa salesmen own a "random answer" generator (I've seen a few use them when a customer has an unexpected question).
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If it helps, we sell the Vista for $10,600 in East Texas. That includes 1 accessory of your choice (cover lift, step, rubber duck, aromatherapy). Ozonator is standard equipment on 2006 models. 50 amp subpanel is included as is delivery and start up chems. SpAudio is $1800.
Good luck and enjoy shopping. Make it fun! :)
Terminator
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Well what's the point anyway? Do you really think I would sell a tub at one price to hundreds of folks, and give it away to you simply because you walk in and say, "I know what you pay for these things."
You just called me unethical if that is what you are suggesting. You're not going to get a whole lot of help with that here, or anywhere. Even folks who are not dealers still have to go buy supplies...
As an accountant, would you do my taxes for the $6 worth of paper it cost you? Come on, my accountant charges me $295 per hour. Should I go in and tell him that at the Government's minimum recommended allowance of vitamins and minerals he only 'costs' himself $4 an hour to exist? So now that I 'know what it costs' to do my taxes...
???
$295 an hour for an accountant seems unreasonable unless you have an complex business situation.
I certainly think it's reasonable for a consumer to try to develop a basis for determining a "fair price" of an item while researching a product. I've seen some quotes from dealers that reak of inflated margins and have found some dealers offering their products at reasonable prices. Nobody wants to get taken to the cleaners if they can avoid it, whether you're buying tomatoes or hot tubs.
As an accountant, I often advice clients to explore the relationship between margin and volume to determine if it will work in their business. It seems to me that creating extra volume would exponentially benefit a spa business with referrals, sale of services, supplies, and accessories.
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I want to know what the spa costs the dealer !!! I know that not all retailers get the same pricing but I wish I could have a general idea. That way I would add on what I think is fair and go from there.
I'm interest in a 2006 Hotsprings Vista. What am I looking at? The dealer wants $10885. for an 05 without ozone . I got a feeling that price is way out of hand.
Why do you think that price is out of hand? I'll tell you why you think that; it's because you've probably seen what others pay for it, NOT because you know what the dealer paid. How would knowing the dealer cost tell you if it was too high? You don't know what it takes for him to make a decent profit and keep his business afloat and I don't think he needs to have you audit his business so you can determine fair profit margin. Why not just keep interest in what it seems others pay for that product and leave it at that. Go ahead and grind away to get the best deal you can if you want to (all tehy can do is say yes or no) but don't start claiming entitlement to the dealer's costs.
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Dealers, bah!
I'm interested in knowing what the manufacturer cost is. That's where I start. Of course, I then have to build the darn thing myself.
Who knew a fiberglass extruder was so big?
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Dealers, bah!
I'm interested in knowing what the manufacturer cost is. That's where I start.
Open a spa store.
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Fear of the unknown and NOT wanting to pay more than others is the basis of this issue, but knowing what the dealer pays has NO bearing on what it COST him to deliver the goods and services that the consumer expects.
Being an accountant, I would think of anyone out there, they would be the first to understand the difference between the cost of the manufactured product and the cost all of the other related and unrelated cost issues that make up overhead and a price.
Neither Balsam, nor Curious give any indication of what is a reasonable or fair margin of profit. OF course, that is subject to interpretation as well, whether it is Gross Profit, Adjusted Gross Profit, or even net profit.
Please give us some indication of what YOU might feel is FAIR AND REASONABLE.
I might assume they are unable to answer that question because they are unable to determine overhead expenses necessary to support the business, selling expenses related to the sale or the cost of ALL goods delivered in addition to the Hot Tub that they want to know the COST of.
Now, we are back to the price of steak, cost from the butcher, $5 to $6, cost at the table $28.50 plus 15% gratuity. What makes this fair and reasonable and why are they (restaurants) able to charge such outrageous profit margins? ???
I guess I will just take the butchers word for it. ;D
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As an accountant, I often advice clients to explore the relationship between margin and volume to determine if it will work in their business. It seems to me that creating extra volume would exponentially benefit a spa business with referrals, sale of services, supplies, and accessories.
I think this points to one of the single biggest misconceptions about this indusrty.....IT IS A SMALL INDUSTRY ....Referalls are great and they sound really nice but its not like telling someone about a great restaurant or a shoe store or a place to save on milk .....People who are not in the market for a spa typically will not run out and buy because you told someone about this great place to get it.....I am all for being fair, I think it is a responsibility we have to anyone who puts their trust in us and allows to earn their business and I think we do as much for our customers as any dealer you will find but knowing cost and trying to compare this to the auto industry is not fair or reasonable and it is a poor comparison at best. Autos are regulated in many ways has anyone taken notice that if your car is built in Detroit the destination or delivery fee is the same in Detriot or California or Washington or Maine .....It is because of the regulations that apply to autos the law states all dealers must pay the same and all autos must have the same MSRP any place in the country( a dealer can sell them for what ever they wish). I hope you find the spa that fits you best and at a deal that is reasonable and is fair to both you and your dealer...
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Just in case anyone cares to know or perhaps doubts that all auto dealers pay the same for the same car. They all do... how they get around this... is lets say you are a larger dealer... a manufacture may say for every 1/2 ton pick-up you sell this month we are going to give you the dealer a special rebate of a $1000.00 for 5 thur 10 and 11-20 $1500.00 and it continually goes up.. it is a stair step program obviously this is a much bigger benefit to the higher volume dealers than the smaller ones and also your allotment of cars increases with volume meaning you get more of all the autos and this really helps when you have a hot selling model like say last years new Mustang.
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I'm in between meetings so I can't do my usual "War and Peace" sized response today, but here's my 2 cents...
I completely agree that dealer cost for hot tubs has little value to a consumer, though I must admit I'm curious ;). Why? Because even if you knew what it was, that information will not get you anywhere in your negotiations.
Like many dealers pointed out, this is not a pervasive market like the car industry where prices are competitively leveled across the entire country. This is a relatively small-scale retail market where prices are only moderated by two factors: demand and competition from other dealers.
The best information a shopper should hope to obtain is what people paid on average in a specific city or county. I found plenty of posts from other shoppers on this website that gave me a pretty good idea of what to expect. It was that number which I used to identify a target price to negotiate for. The people who take time to do this research will be much better prepared to talk turkey with their dealer.
In the end I was happy with my final cost even though people in other states reported prices as much as $500 less. Why? Because I am certain my final cost was significantly less then average for my area. My county is full of people with too much bloody money (how I wish I were one of them ::)). Consequently, toys in my area tend to cost more due to demand. If I expected a dealer in the Washington DC area to give me the same price as a low-demand rural area in PA, I would be going home without a hot tub. However, I don't mind sharing that having that information did help my negotiations a wee bit.
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In addition, there are other ways in which the automakers can put money into the hands of the dealers: advertising co-op money, national ad campaigns which save the dealer money doing it locally, speacial "dealer cars" and other programs whereby a large dealer can get cars at little or no cost as part of a promotional program, etc. etc.
These don't happen in the spa realm.
;D
Yes Chas you are right the example I gave is just one of several ways auto makers have more flexibility than the spa industry and as we all point out that the cost of doing business does vary a great deal all across the country and it is also unfair to think that a dealer in say Wisconsin has the same over head as one in Palm Beach Florida ....so that is why the auto manufactures came up with ways to off set the regulated pricing structure of their industry ...if not the dealer network would have collapsed .....In the end most things balance out in our free market economy ......but if we just really knew what gas cost... ;)...hey I have a question ....if it is as rumored that gas dealers only make a few pennies per gallon than why in the same city do gas prices vary so much .....I mean it would seem to me that someone should go fill up their tanker at the guys place around the corner who is 20 cents cheaper.....for the same brand.... ;)
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Gas prices fluctuate in the same city by the same comapnaies due to "zoninng". It's a scam and CT is at least trying to out law it.
As far as car pricing goes, even the "invoice" price is not the dealers true cost. The dealer has holdbacks and special finaning deals through the manufactuer, and even if you pay invoice price, the dealer has still made a decent profit.
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I know there are tons of taxes and fees on each gallon of gas. Just in State taxes alone we pay $.265 plus local sales tax - 7.25% here, per gallon.
I heard a guy on the radio the other day who claimed that almost half the price of a gallon of gast goes to the Government.
Don't know - anyone have some websites we can go to and ask the cost of a gallon of gas?
State Gas Taxes
http://www.gaspricewatch.com/usgastaxes.asp
Federal Gas Tax is 18 cents
http://www.taxfoundation.org/news/show/1054.html
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Don't know - anyone have some websites we can go to and ask the cost of a gallon of gas?
lol...why do think you could get it cheaper....?
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HotSpring dealers only mark their spas up $10 over wholesale, but they sell A LOT of spas.
Terminator
Sounds as though volume is a factor in the industry.
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Sounds as though volume is a factor in the industry.
Yes sir! When you sell your spas at only a $10 markup, you have got to be selling like crazy.
We sell about 400 spas/year X $10 = a $4000 dollar profit last year. I'm taking my family to Disney World if we do the same next year!
Terminator
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Yes sir! When you sell your spas at only a $10 markup, you have got to be selling like crazy.
We sell about 400 spas/year X $10 = a $4000 dollar profit last year. I'm taking my family to Disney World if we do the same next year!
Terminator
ooooh. you'll be able to afford the "large" bottle of water.
Balsam, ok. I'll break the silence. You're buying an 05 Hot Spring Vista? DEaler cost from the Factory was $7409.45
Ok?
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Yes sir! When you sell your spas at only a $10 markup, you have got to be selling like crazy.
We sell about 400 spas/year X $10 = a $4000 dollar profit last year. I'm taking my family to Disney World if we do the same next year!
Terminator
Congrats on your many successes? Hey, didn't I see you at Wal-Mart?
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Congrats on your many successes? Hey, didn't I see you at Wal-Mart?
Thank you! Quite possibly, when? My wife went yesterday but it's my turn today.
Terminator
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Thank you! Quite possibly, when? My wife went yesterday but it's my turn today.
Terminator
I see on your website your offering the Envoy at $1000 off normal price. That could really cut into your entertainment budget.
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I see on your website your offering the Envoy at $1000 off normal price. That could really cut into your entertainment budget.
>GULP< I didn't know that. And neither did the two guys that bought Envoys yesterday.
Well, the $10,000 shipping and handling fee we charge should cover the discrepancy.
Terminator
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I see on your website your offering the Envoy at $1000 off normal price. That could really cut into your entertainment budget.
Now there you go, terminator is selling below cost again just to get his numbers up for those factory kickbacks.
Curious or Balsam, What is a "fair" or "reasonable" margin. As accountants, I would expect some sort of an answer, but yet there is none.
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Now there you go, terminator is selling below cost again just to get his numbers up for those factory kickbacks.
Curious or Balsam, What is a "fair" or "reasonable" margin. As accountants, I would expect some sort of an answer, but yet there is none.
Which margin are you referring to?
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Maybe I shouldn't acknowledge that I am an accountant (30years)so I know what it costs to run a business !!
And what is that cost? Is the cost for Chas to run his business the same as Wisoki?
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HA! Chas is on the left coast where all those limosine liberals pay the fat dollar for real estate and hot tubs. Out here in the mid west our numbers are a little more conservative. ;)
And what is that cost? Is the cost for Chas to run his business the same as Wisoki?
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What we've learned so far:
Terminator marks up his spas $10.
And therefore can afford the "large" bottle of water when he takes his family to Disneyland with the windfall.
Chas lives in limousine liberal land, and therefore needs maybe $13 as a markup. Plus, he'd be stuck with the medium bottle of water, since it's probably more expensive at Disney CA then FL.
Wisoki, living in the midwest, therefore, must mark his spas up about $11.50.
And he can afford the Large Soda, since he can go to The Cedar Point Park in Sandusky instead of Disney, and can get more for his midwestern dollar.
Dont' forget:
Needsaspa still has an offer on the table for a 2004 Sundance Optima or Cameo, because he was determined to find out the dealer cost of the spas, too, because knowing that somehow is the key to getting a good deal. And by god, he's gonna get that spa for that price, as soon as someone trades one in on a 2007 or 2008. But it'll be worth it, since saving money and getting the upper hand in any transaction is way more important than relaxing in a silly cheap box o pumps and hot water.
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That about sums it up Brewman. AND, Three Dog Night is going to be the headliner at the Alley Fest on June 3rd! Joy to da World!
Terminator
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Thanks MattNY ! I feel like I'm getting my head bitten off !!
I just want to know what is a fair price , not put you guys out of business !!
Looks like I struck a nerve !
Now how about a FAIR price on an 06 Vista ?
Hey, I'm not a dealer but was considering becoming one a couple of years back (and still may yet do so in the near future) but let's try to answer your question this way... Your an accountant, right? What would you thin would be a fair markup for this industry? You can start your research by figuring out exactly what the inventory turnover rates are for a typical dealer (pretty common stuff for an accountant). And then take a look at projected advertising cost. And then consider floorspace and and type of floorplanning that may nee dto be done to equip a typical showroom. As an accountatn, all you have to do is add up all the operational cost a "typical" dealer would incure. Once you have that let us know and we will give you the "minor" component of the cost of a specific tub or two...See you in about 6 months... Oh, by the way. I need EVERY last variable listed on a general ledger so that I can check it against my initial projections. Once I've reviewed your information, I'll share my (dealer startup) information with you. If what you provide is not suffient, I'll simply keep asking you to provide additional details until everything is there... BTW - The cost of trying to put all of this together will probably be significantly more than the profit a dealer makes on the sale of any 5 tubs but if you REALLY , REALLY want the details, I am giving you a way to get them...
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Sounds as though volume is a factor in the industry.
It is a factor, but volume is only a small factor. The pimary fucntion of volume dictates if the dealer will be able to stay in business. Dealers typically make from $1,000 to $3K on a typical spa sale between $5K and $8K. If they only sell 12 units a year (don't laugh) and only make $1K on each, their gross income is $12K and there net income for that same period would be something like NEGATIVE $55K. But if that same dealer can sell 10 and month, their Gross revenue would be $120K and they may have made $60K for all their hard efforts. A typical dealer in a high volume town who can sell 20 tubs a month can generate $200K in GROSS revenues but their net may not even be $100K (as additional volume aslo increases costs). Now you see why I'm not falling head over heels to get into the business. A measly $100K yearly income for busting my butt and having the IRS watching my every move and dealing with employees who may (or may not) decide to come in any particular day as well as not being able to take a vacation for three years whilie the business is gettign started not to mention that the weekends would all be shot since that is when people shop for these things. There goes my golf and tennis games.... These dealers deserve the recognition (and every friggin penny) they can get out of the public. As long as they offer quality service and pback their product, they (and not you) get to control their own profit margins.
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Just out of curiosity, have any of you dealers ever figured out, after all is said and done, how much you make per hour? I know when I had my business, after figuring out my expenses and how many hours I put in, I was making less than 8.00 per hour.
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It is a factor, but volume is only a small factor. The pimary fucntion of volume dictates if the dealer will be able to stay in business. Dealers typically make from $1,000 to $3K on a typical spa sale between $5K and $8K. If they only sell 12 units a year (don't laugh) and only make $1K on each, their gross income is $12K and there net income for that same period would be something like NEGATIVE $55K. But if that same dealer can sell 10 and month, their Gross revenue would be $120K and they may have made $60K for all their hard efforts. A typical dealer in a high volume town who can sell 20 tubs a month can generate $200K in GROSS revenues but their net may not even be $100K (as additional volume aslo increases costs). Now you see why I'm not falling head over heels to get into the business. A measly $100K yearly income for busting my butt and having the IRS watching my every move and dealing with employees who may (or may not) decide to come in any particular day as well as not being able to take a vacation for three years whilie the business is gettign started not to mention that the weekends would all be shot since that is when people shop for these things. There goes my golf and tennis games.... These dealers deserve the recognition (and every friggin penny) they can get out of the public. As long as they offer quality service and pback their product, they (and not you) get to control their own profit margins.
AMEN Bunka! ;)
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I should probably just stay out of this, BUT...I'm not...I just have to throw in my 2 cents worth. I feel that expecting the dealers here to tell us how much the spas cost them is an unfair expectation. My husband owns a small business...glass, garage doors, flooring...I don't feel we owe it to any consumer to tell them how much we paid for any of those above mentioned items that they may be buying from us. Their only concern should be whether or not the retail price we are asking is "fair" in comparison to what other businesses in our area are charging for the same item. Balsam, IMO, you just need to shop around some dealers, compare prices, go for the best deal with what you feel is the best dealer, service and all considered, and get your butt in hot water. Once you do, you will just wonder why you waited so long to do it. If you have read all the posts on this board, there are enough post where people have listed what they paid for their spa, including me, that you should be able to determine if what you are being offered is a "fair" price or not. A spa is a luxury item...I don't think you will be sorry with your purchase.
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My 2 cents -
First of all, if you don't want to answer the question then just respond with "that is something that I'd rather not discuss". That is exactly the answer that I would give someone if they asked me how much I made, how I price my products or services.
In defense of the dealers, they not only sell tubs, they provide a service. The services that they give you after the sale are also part of the price you are paying for that tub. A good dealer will let you know that you should feel free to call them with any questions that you have. What you are paying for isn't just a hot tub.
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I couldn't get through all 5 pages so I apologize if this has been said...
If anyone is getting rich off of selling spas, they deserve to. It means they are doing EVERYTHING right and there are many aspects to running a retail environment that can put you in the poor house very quickly.
In short, if you want to know net pricing, open your own store. I think this question is ludicrous and pretentious and suggests that the consumer should be given the right to set pricing based on their own “concept” of what constitutes fair pricing. The reality is (as Chas tried so very well to point out) is that the consumer in general (which includes you also Balsam) have very limited knowledge in running a retail store. Chances are you have NO IDEA.
If you want to have an issue with mark-up, go bang on the jewelry industries door.
I'll give you a very accurate snapshot for retail sales from my perspective. If ANY retail company is making less than 30 points, they are going to go out of business. Hope that helps...
Steve
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Let me try to expaln to all of you what made me put this post out in the first place. In Gainesville there are 2 spa dealerships. BOTH owned by the same person. One sales hotsprings , the other sells leisure bay. Jacksonville is about an hour and forty five minutes from here. There I'm sure I can find Sundance, dimenson one and others.I live 3 miles from the hotsprings dealership ,so naturally that's where I truly want to make my purchase .
They have a vista spa on display which is an 05. Price $10885. I'm truly not sold on the spa , but once again the 3 miles thing keeps coming back. Maybe I'm lazy !
Anyway ,I'm not the type of person who likes to haggle and yet I know from this forum and the pool and spa forum that the spa business is one where you negotiate. I started to wonder what these things cost to see how much wiggle room is available. I mean I didn't want to offer say $8900 hundred when the spa costs the guy $9000.
Let me also say that I have owned 2 sundance cameo spas in the past.One in 1983 and one in 1998. I had no problems with them. I just wish that there was a sundance dealership nearby.
For those of you I may have offended with my post I apologize.
Maybe I should start a new one asking how the spa industry became one where you price dicker.
Steve
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It's an interesting question about "bickering" for price. IMO, anytime you lower the price, the value drops equally.
I've never suggested to my dealers that inflate their price to allow for negotiating. It's bad business in my opinion. It also makes us lazy and requires little effort to show value. There are 2 ways to show "value". Added items or inflating the cost and dropping price. Some dealers do both.
I always recommend a firm price ladder. An MSRP that NO ONE sells at, a discounted price for day to day sales which gives the dealer the profit margin they require to stay in business, and then an Event price.
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I think you mean dicker, but bicker may at times be a more appropriate term. None the less, I'll address the question. Price negotiating comes from customers. <---- see that, it's a period. Everyone comes in and listens to a presentation, where we as sales persons extoll the virtues of the product we sell. When the customer has sufficiently been inundated with our propaganda and we ask, Is this the model you want? All that information about quality and service flys right out the other ear, and the first resonse is something like well um I'm not sure. To which we reply it has all the features you said you like, and it's the size you came in looking for, so is this not the color you want? Well no, says the custoomer, the color doesn't really matter (to some). OK, so maybe you would like to look at this one....(smaller, less jets and less expensive). Customer says, oh no, that is too small, but the price is right. AAAAH HA So, now we know how much you want to spend, so how about if I give you $XXXX off of this model here, would that be to your liking? To which the most comon response is well...what if I gave you $XXXXX for that unit? And we say, hmm, I don't know...let me go check. At which point we go back for a cup of coffee and a smoke then come back and say well, it's a little low, but if you give me half down, you've got a deal. Or something like that any how.
Maybe I should start a new one asking how the spa industry became one where you price bicker.
Steve
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Not going to read all the replies and everything, but there are several things that are taken into account.
1) How far from the manufacturer did that hot tub come?
2) When it came, was it a full truck? (Freight)
3) What kind of volume does the dealership do?
4) What is the actual VALUE of the items being purchased?
If you live in New Jersey you can't expect the Dimension One or Hot Spring spa you purchase to cost just as little as the one you'd buy in Temecula, CA. It's almost too much of a debate to bother asking the question. That's why all in all #4 is the most important thing.
People put such a high value on something so simple as a $100 retail set of steps that it can make or break the deal in their minds.
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I cannot, not post on this one.
It is taboo. Don't ask for the cost. It's rude. Period.....
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We sell lots of Vistas, so we get a good deal on them. But we have to charge you $10,000 for them because we have children to feed and the wife has a drinking problem, she says I have, but thats not a problem. I also have to pay a mortgage to keep a roof over my kids heads, own 2 cars, (I hate walking to work) The state requires that I also clothe my family, and I am also helping my local day care facility owner to enjoy a trip to hawaii. It's the American way, pay for it and shut up.
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LMAO Guzz! ;D
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Let me try to expaln to all of you what made me put this post out in the first place…..I'm not the type of person who likes to haggle and yet I know from this forum and the pool and spa forum that the spa business is one where you negotiate. I started to wonder what these things cost to see how much wiggle room is available……Maybe I should start a new one asking how the spa industry became one where you price dicker[/u].
Steve
That is a d#mn good question. As a dealer of 22 years, I have always asked myself that question. I have tried to negotiate in restaurants and other places, albeit in a humorous way, but it does not work.
I can not begin to tell you how many sales have walked out our door because we would not “dicker” or “budge” on our price. The one thing I have always hated about being in business (any business) is that you have to “lie” to advertise. 70% off, Sale Ends Today, Wholesale to the Public, $5,000 Cash Rebate, Spa Show 16 Brands. This of course is only intended to “bring them in”.
While we do not advertise like this, we have watched others who do and they literally draw a lot of interested unknowing people in to sell over inflated lower end goods at very high margins with high pressure and outlandish claims and then POOF their gone and open in another city.
This leaves us with the shopper who comes in and tells us, he can buy it down the street cheaper, or he is getting the very same brand with the very same stuff for less $$$. While we all want the shopper to buy from us, we must compete with other sellers who in the not too distant future will go out of business after taking their money.
It is for this reason, we try to understand what it takes to get the consumers business. We do not want to “negotiate” the consumer does when they play coy and tease you with their business. When you state an honest and fair price, they insult you expecting to buy it for an unreasonable lower price. If I could sell it at that price, I would have told you that price. And, If I tell you a price I would sell it for and then change it, then I lied to you to begin with.
Believe me, we would all like 10% of our “be backs” to come back and buy, we would lower our prices for the profits we would reap.
Fear of the unknown and NOT wanting to pay more than others is the basis of this issue, but knowing what the dealer pays has NO bearing on what it COST him to deliver the goods and services that the consumer expects.
On top of this, we MUST support 10 or more families with income, benefits, insurance job security and all of the other things listed so we can stay open to compete for your business while we pay taxes, overhead, and all of our other bills.
I suppose it would help if the consumer came in and said, I would like to buy that one, How much is it and when can you deliver it? It is not going to happen.