Chris Sunkin

A big chunk of what Best Buy sells is at list. They have some "leaders" here & there but on most stuff, you can save a bundle buying from legitimate online sellers. Items like CD's are given away at cost to generate traffic.

The Best Buy analogy opens up an interesting facet of this discussion.

Let's for a second consider what would have happened has Trick survived. From all accounts, they've taken big bites out of their competition. Some have other business centers that they can rely on. Like Jacky Martin posted- they just stopped selling products Trick was soaking all the margin out of. Others had nowhere else to go- parts was their only business. So, consider the inevitability. Someone will surrender or die first. That makes the remaining players stronger but we're back to the same model- someone else is going to be next. At some point, you'll find an impasse- equally powerful, equally capable players. Just like the trench warfare of WW I. No movement but no profit with no end in sight. So what do they do? Prices start inching up. Of course there's still that skirmish back & forth with the weekly loss-leaders but after a while, prices overall will normalize at escalated levels.

Best Buy did just that. When they and Circuit City first became, you could buy their lines of products at deeply discounted prices. They killed all the mom & pops and the regional guys. Then they sought equilibrium in the market. Ironically the people who survived were the specialty stores. High-end video, car audio, etc. These attention and service oriented businesses benefitted greatly by what the big-box marketers did. Their existence was validated purely by what these mega stores could not provide. Consultative sales and service on a complicated product.

Had Fred been a bit better financed, a bit less arrogant in his approach and a bit more technically competent to deliver the product succesfully (instead of a rash of exhausts that didn't fit) he probably could have pulled this off. But, in the end, you'd be back to paying list.

Lofty

Yes, we changed our focus from parts to rigging, custom paint and fiberglass, service, etc. We ended up dropping multiple products becuase Trick would sell them at and sometimes bellow cost just to get the sale away from you. All in the hopes of customer retension. This obviously failed because of bad service and poor product knowledge.

The loosers are in the near term suppliers because they loose their marketing base and end up with a single distributor (Trick)

Long term loosers are the consumer. You just won't see many re-sellers jumping in line to pick up products from suppliers who didn't stand behind them in the past. Good example; where is KPM?


Well as most suppliers have known for some time Tricks motto "Lower Overhead..." translates to you not getting paid for your product. It's a great concept if your business model is smash and grab.

StillHaulin@63

Can A Legit "Trick" survive the competition?

I doubt it very much.
Think about it ... buying from Trick Marine was popular because he was cheap.
Because he was cheap, there were not enough profits to survive the business.
Now everyone's pissed because he couldn't survive.
Sounds like a great business plan to me

Chris Sunkin

To put this in another perspective, if Trick's distribution model were viable, every one of their suppier companies would put up websites and just take orders. If every one immediately were to do that, the next day, a full-service marine parts distributor would pop up to fill the void.

Retail exists for reasons, Buyers need support for installation, troubleshooting, warranty or just application guidance. Second, someone has to get just one, put it in a box, ship it to the correct place and generate the billing and paperwork. All this requires competent employees. This costs $$ and adds to the product's gross cost.

Panther

That's what we call a loss-leader in my line of business.

Panther

This whole thing reminds me a little bit of what happened with the Mercury Dealerships and the re-sellers more then 10 years ago now...

The dealerships could get business based on being a dealer and word of mouth.... The re-sellers, who at the time weren't merc certified, would buy complete mercury packages (engine/drives), then part them up and sell separately.... The re-sellers were able to sell engines and drives cheaper than the dealers could sell themselves because they were held to Mercury pricing guidelines and couldn't afford to buy packages unless they had an engine and a drive already sold.

This infuriated the dealers....they felt that Merc. was selling packages to known re-sellers and that they shouldn't be allowed to do that... In the first 5 years the dealerships put up quite a fight..... In the meantime the resellers were gettting bigger and bigger, making a name for themselves and servicing customers... The market grew so much that even Mercury caved in and allowed the re-sellers to buy, install and support their products...

Now, I realize this isn't the same but for some reason it reminds me of that when I see a "Trick" come into town and undercut the competition. Bottom line, money talks....

Audiofn

If you want to operate at low margine you have to move a LOT of boxes. You have to move those boxes so effeciently that NO mistakes are made. You can not send out the wrong product then be stuck over nighting a piece as you not only loose your profit from that one sale but you loose profit on a lot of others for just that one 50 buck mistake. It can be done but only by certain people that are well funded

plumbers crack

You know i could handle a thread like that,hell Im tricked out already!ENOUGH!!

Chris Sunkin

So many ways to make a good buck in this country- who would want to go through the hassle to make these thin margins? Especially in a market that's so recession-vulnerable.

whatabout1

Just wait until Summit and Jegs get into the biz !!!

Oh wait, Summit is showing more and more marine parts every week.