Can A Legit "Trick" survive the competition?
11-30-2007, 07:56 AM
#21
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There probably isn't an industry that this hasn't been tried in. In the end, virtually everyone gets hurt. The manufacturers get margins cut. The competition loses sales. The discounter ends up with a zero-net-margin business that fails and while some people got some deals, they got no service or support so who's the big winner here? Nobody.
The problem is discounters lower the value of the product.....which creates less and less margin....
When the margin is all gone it becomes a race to see who has enough money or the least amount of brains to struggle to keep a location open.....First one to run out of money looses....
11-30-2007, 07:57 AM
#22
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This was an e-mail Fred sent,,, I was talking with Kirk about some CMI's for my 496 and Fred tried to swoop in and take away his sale... Aparently this was his business model...
Don't expect the prices to remain low with this little price war. I'm actually going to raise my listed prices [probably tonight] and let the new guys loose their asses with their newly advertised prices. I sell multiple lines of products so I can switch my selling emphasis to more profitable items while the dust settles. I operate with my own money and can afford for the product to slow down and sell fewer sets at more profit. My European sales of headers are strong and I supply several dealers over there. That won't change.
The "other guys" have a single product and are spending outside investors money. I know what they pay for headers as a new distributor and it's more than myself and Bob Teague pay. With investors looking for a return, they won't be able to hang in there with no ROI for any length of time.
At this point even CMI realizes they made a mistake by granting them a distributorship and is contemplating forcing minimum advertised pricing.
Fred
Don't expect the prices to remain low with this little price war. I'm actually going to raise my listed prices [probably tonight] and let the new guys loose their asses with their newly advertised prices. I sell multiple lines of products so I can switch my selling emphasis to more profitable items while the dust settles. I operate with my own money and can afford for the product to slow down and sell fewer sets at more profit. My European sales of headers are strong and I supply several dealers over there. That won't change.
The "other guys" have a single product and are spending outside investors money. I know what they pay for headers as a new distributor and it's more than myself and Bob Teague pay. With investors looking for a return, they won't be able to hang in there with no ROI for any length of time.
At this point even CMI realizes they made a mistake by granting them a distributorship and is contemplating forcing minimum advertised pricing.
Fred
11-30-2007, 08:05 AM
#23
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Originally Posted by Fred
Don't expect the prices to remain low with this little price war. I'm actually going to raise my listed prices [probably tonight] and let the new guys loose their asses with their newly advertised prices. I sell multiple lines of products so I can switch my selling emphasis to more profitable items while the dust settles. I operate with my own money and can afford for the product to slow down and sell fewer sets at more profit. My European sales of headers are strong and I supply several dealers over there. That won't change.
The "other guys" have a single product and are spending outside investors money. I know what they pay for headers as a new distributor and it's more than myself and Bob Teague pay. With investors looking for a return, they won't be able to hang in there with no ROI for any length of time.
At this point even CMI realizes they made a mistake by granting them a distributorship and is contemplating forcing minimum advertised pricing.
Fred
The "other guys" have a single product and are spending outside investors money. I know what they pay for headers as a new distributor and it's more than myself and Bob Teague pay. With investors looking for a return, they won't be able to hang in there with no ROI for any length of time.
At this point even CMI realizes they made a mistake by granting them a distributorship and is contemplating forcing minimum advertised pricing.
Fred
That isn't a business model....that's a short-term, cash pumping scheme. Pump and dump.
11-30-2007, 08:07 AM
#24
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In today's market, there appears to be plenty of of established players. I've had dealings with a few of them that advertise here (Rex, Teague, BAM, etc.) and have found their service to be excellent and their prices reasonable. Not sure we need a "Wal-Mart" type marine parts business.
11-30-2007, 08:13 AM
#25
Charter Member #232
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I have customers ask me why I charge so much all the time. I think it is funny when people living in a 20 million dollar home are asking me for a discount!! I have always stuck to my guns and ussually get the jobs. I did loose a pre wire for next week as the guy was 10 grand less then me (30%) with more wire installed. The owner asked me to come to the house after this guy is done and let him know how the cheap guy did. I know the cheap guy and can't waite to see the work 
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11-30-2007, 08:27 AM
#26
VIP Member
[QUOTE=RumRunner;2353708][QUOTE=Jupiter Sunsation;2353703]
Now I don't know all of the facts with what happened, but businesses have insurance, and legal ramifications to take care of debt, hopefully at least all of the individuals get taken care of.
As a manufacture you can take certain policies, and take certain precautions. Where I worked before we would have the actual owners sign "personal" guarantees that items would be paid for if the business went broke.
Ive seen business's here were the owner had to sign personally for the biz's debt. Usually its if the biz which is incorp hasn't been in biz long enough.Have a buddy that was in the body shop biz that fill bankruptcy two time in 2 business's. When he open the second one they made him liable for the dept, he sill went under later and file bankruptcy 7.
I haven't heard of a insurance policy thats on a business to guarantee there det.
Being that I do my own financing I have sold a policy that would pay their dept if they got behind, but it was almost as much as the Furniture payment.
Now I don't know all of the facts with what happened, but businesses have insurance, and legal ramifications to take care of debt, hopefully at least all of the individuals get taken care of.
As a manufacture you can take certain policies, and take certain precautions. Where I worked before we would have the actual owners sign "personal" guarantees that items would be paid for if the business went broke.
I haven't heard of a insurance policy thats on a business to guarantee there det.
Being that I do my own financing I have sold a policy that would pay their dept if they got behind, but it was almost as much as the Furniture payment.
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11-30-2007, 08:55 AM
#27
Registered User
[QUOTE=Strip Poker 388;2353963][QUOTE=RumRunner;2353708]
You can get a performance bond or a bank letter of credit. Both only work if you HAVE the money and just don't want to send it. Insurance to guarantee a debt would require a premium in the amount of the debt. You can also sell your receivables to a factor. They charge a percentage and assume your risk. You can also purchase your goods on a floorplan- like a business revolving credit account that's item-specific. Pay the interest and only pay for the item when it moves.
There are lots of options but they only work for legitimate businesses with resources.
IIRC, Trick and Fred individually were on that CMI lawsuit- maybe they did get a personal guarantee. There's no absolute protection though- even if you get a judgment, you still have to collect.
There are lots of options but they only work for legitimate businesses with resources.
IIRC, Trick and Fred individually were on that CMI lawsuit- maybe they did get a personal guarantee. There's no absolute protection though- even if you get a judgment, you still have to collect.
11-30-2007, 09:07 AM
#28
Registered
The only way it could is if there was some BS stuff that you could pull a huge profit on. Like Best Buy does when they sell you a TV near cost, then a bunch of Monster cables at a 10x markup
11-30-2007, 09:16 AM
#30
Charter Member #1171
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