OK, let’s parse this out, Andrew. Mercedes makes a service part, let’s say it’s a rear hatch seal. They want to sell it to dealers for $150 to cover their manufacturing costs and include a nice profit. So they have a couple of options as to how to establish that price for the dealer:
1.) Dealer cost is $150. Sell it for whatever you darned well please. 2.) Mercedes MSRP is $200. Dealer cost is 75% off ($150.) Now, let’s put some wrenches in the gears. Some dealers sell a heck of a lot more stuff than others. I want to reflect that back to them in the form of reduced costs. So, do I: 1.) Create a completely new price list for “special dealers”?, or; 2.) Give them a larger discount off MSRP, say their cost is 65% off MSRP? Most manufacturers establish a MSRP for their products in situations like this, and use that as the point of reference for discounting to establish costs for their direct customers. MSRP also gives everyone a level playing field to work from, that is, they can show their customer that the price they’re charging isn’t an arbitrary number but something the manufacturer has established. That being said, dealers aren’t bound by any sort of agreement to sell at MSRP. By law Mercedes couldn’t mandate that they do or it would be price fixing. So, a dealer can charge more or less than MSRP. If they choose to do so, they have to deal with the results. That is, if I charge 25% over MSRP and my market will bear it, I make a heck of a lot more money, but I do so at the risk of pissing off savvy customers who might go elsewhere for their parts. Mercedes might not like this, but legally there’s nothing they can do. Of course, they will keep this in mind when they’re renewing the distributor or dealer agreement, however. If I want to garner more customers and potentially make money based on higher volume to offset a lower profit, I charge less than MSRP. If I have a parts business that’s not brick and mortar this is a lot easier to do, as I don’t have the overhead involved with such expenses. You have experienced both sides of this now. The dealer who sells below list because they’re running an online presence and not a brick and mortar business. The dealer or Classic Center who has significant overhead costs they have to cover to be profitable. A lot of dealers use this to suggest they’re giving the customer a “deal” - these are the dealers who quote well over list price, then give you an “MBCA discount” of 10%, for example. They quote you a price 20% over list, give you 10% off, and still make 10% over list price. You think you got a deal. When you’re involved in a manufacturing environment that sells through a distribution system this is a pretty common way of doing things. For each “tier” of customers you have a different discount. A distributor might get 55% off MSRP, a dealer (below the distributor in the chain) might get 25% off MSRP. Different parts might have different discounts, depending on what they are, too. Dan > On May 12, 2016, at 1:26 PM, Andrew Strasfogel <astrasfo...@gmail.com> wrote: > > Another update: Local dealers are selling the same part for $275 and $325, > less 10 percent MB Club discount! > > On Thu, May 12, 2016 at 1:21 PM, Andrew Strasfogel <astrasfo...@gmail.com > <mailto:astrasfo...@gmail.com>> wrote: > Update: MB Classic Center's best price for hatch seal is $191, probably not > including shipping. How can they charge $20 more than a dealer? > _______________________________________ http://www.okiebenz.com To search list archives http://www.okiebenz.com/archive/ To Unsubscribe or change delivery options go to: http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
