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Buying local, for more money?

Discussion in 'Business Fundamentals' started by Bossman 92, Jul 11, 2009.

  1. Bossman 92

    Bossman 92 PlowSite.com Addict
    Messages: 1,771

    Well I am hung up on weither or not I should continue to buy local (for more money) for save some money and go somewhere else.

    For the last few years I have bought our salt from a local supplier, and I have built a relationship with the owner of the company. I spoke with him earlier in the week and prices will be about the same this year as last. Well I have been looking around and have found I can save a considerable amount of money buying from someone else.

    Also, I am looking to buy a new salt spreader. I have been pricing around and found I save more than $1000 buy buying from another supplier. Exact same unit, not installed. I work on all my own equipment, so dealer support isn't a huge deal.

    I know it would be a slap in the face to each of these guys, but I would be saving close to 5K if I went somewhere else.

    What would do guys do?

    Thanks, Bossman
     
  2. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

    Have you talked to these people to see if they can compete? I know if my customer can buy a unit for 20% less (guessing based on the cost of new equipment and the size units you are already running) I'd want to know, either I am paying to much money for it wholesale or my profit margins are way to high:)nono:) or the first dealer might be running a pricing game. If I could I would try to work with the customer. I would want to see proof (and the right to buy it at that price*) of the competing price. Perhaps if you discussed it with your local guy they could offer you a price that would benefit you both and perhaps ensure their continued survival. Remember they and their employees are the people who need your services the guy 100 miles away will never hire you to mulch his flower beds, or cut his lawn.

    So if you go to your local dealer you may be able to work out a price. It's just like buying a car, do your homework know what the fair market value is, then make your decision from there. I rarely go to the home depot. I have a corp. discount though my local hardware store that means I not only get knowledgeable service, travel less distance, good personal customer service but a price that's often lower then the box stores. example I wanted a Rubbermaid storage shed to keep garbage cans in, the depot, Lowe's, excerta had them between $269/289. I went to my favorite local Hardware store and asked if they could get one, Their list was $259 and I get a discount.payup Had to wait for their next delivery because they don't stock it but I bought local AND saved.


    *If not people can get a "price" from a competitor that is totally unrealistic and expect you to match it. If you reserve the right to buy the object from your competitor then He takes the loss because you can just buy it from him and pass it on at break even. he won't sell at that price, or mention it does not include a chute, top screen, strap kit, tarp, battery, inverted V, vibrator and freight. You'll find most "we'll match any price" ads include this qualifier.
     
  3. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    I agree with Basher. Give your local guys a chance. And for the salt, what about trucking expenses?
     
  4. Bossman 92

    Bossman 92 PlowSite.com Addict
    Messages: 1,771

    Thanks Basher.

    I talked with the owners son at the plow shop yesterday and he seemed like their wasn't any room to budge on the spreaders, though I am planning on going back to speak with the owner. The problem with my salt supplier is they are buying from the same company I got my prices from earlier this week.

    Hopefully I can work out somthing with these 2 suppliers. I don't expect them to break even on the deal, but if they would be willing to meet me half way I would consider staying local.

    Bossman
     
  5. Bossman 92

    Bossman 92 PlowSite.com Addict
    Messages: 1,771

    2COR, My price on salt is $30 a ton different. Both prices are trucked to our site.
     
  6. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    That's a big difference. What's the low price on the salt - just curious. And how many tons?
     
  7. cet

    cet PlowSite Fanatic
    Messages: 7,202

    There is no way the other guy is buying his salters for $1,000 less. Some people expect to make huge margins and in the good times people don't shop around because they either have the money or can afford the payments. I ran into this problem with a local hydraulics guy here. I had bought a few plows from him and got him a connection in the States to buy salters cheaper. I wanted a hydraulic system installed on my truck for a salter and he wanted $9200 including the salter and told me it would take all week to do. I phoned another guy 30 miles away and he wanted $7200 and could do it in a day. When the local guy found out he said he could match the price. My problem with matching prices means you were going to screw me if I didn't know better. If the cheaper guy is willing to give you his best price in the beginning then he should get the work/sale not someone who matches prices just because you do your homework.
     
  8. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

    That is a very reasonable attitude.:nod:

    Back to scenario 2 above. have to wonder about there being quanity stipulations or some other unseen requirements or in the spreader's case additional equipment. When prices have that great a difference it makes you wonder.
     
  9. Bossman 92

    Bossman 92 PlowSite.com Addict
    Messages: 1,771

    The price is $76 a ton delivered. I was quoted 125 tons and want to take delivery all at once.

    I like the local guy, he has always taken care of me. Over the last few years I paid a little more through him, but since it was minimal I didn't mind. I don't want to upest this guy, but where do you draw the line?

    As far as the spreader goes, the "new" shop does alot more volume than the local guy. I asked the local shop if they would be running any pre-season sales and they said they don't do that sort of thing. (BTW the $1000 less price is their everyday price)


    Bossman
     
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    For me the short story is, I'm in business to make money for me. As much as I try to buy local I still need to look out for myself.
     
  11. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992


    I agree, I like to buy local, and will pay a premium to use certain suppliers because they bring the extra value to the table, but I won't pay excessively either.
     
  12. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    Regarding the salt, that's 40% more! That's not even the ballpark. I could see paying 10 or even 15% if the guy has always been there for you, bailed you out of a jam, lives across the street, or something like that. But 40%, no way, especially where you can take it all at once. Since the little guy buys from the big guy, you know it's the same product.

    As for the sander, a grand is nothing to sneeze at. If it's a model that you are familiar with, don't need special service or parts, that's tough to swallow too. But I would be tempted to give the sander guy a chance to meet in the middle, especially if you buy parts from him.
     
  13. Bossman 92

    Bossman 92 PlowSite.com Addict
    Messages: 1,771

    Yea, I am not going to be a "richard" about the spreader, if he will work with me on the price I will buy from him. As far as salt goes, I will explain to him what I can get, but that is all I can do. Like you said 40%..... is 40%

    :drinkup: Snow is on the way... Bossman
     
  14. IMAGE

    IMAGE Sponsor
    Messages: 1,741

    If you dont tell the local guy that you bought a spreader out of town and saved a grand, he will never know. Why even tell him? I dont go to the car dealer and tell them I bought somewhere else. Just dont even tell him and save that grand for retirement.
     
  15. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    I like what CET said. Even in the first guy can match the price, he was going to screw you the first time. I have 3 local suppliers and 2 big box stores to choose from. I buy certian things from certian stores. I don't buy from a local guy on some items because he is twice as much. He can't help it. But I buy my trees from him because the big box stores don't have the selection.

    Look out for #1. If buying out of area is going to effect you in the long run, then maybe don't do it. But like someone said, I don't go back to the other dealer to tell them I bought from someone else.
     
  16. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    We buy both ways. Our plow parts we try to order (CPW) & keep in stock wear items (hoses, etc), if we NEED somthing I go to the dealer but it is 3x CPW's price. We are fortunate the Protec (1/2 hr away) & Smith Salter (1 hr away) facorties are local, so we utilize this. However we are looking into Artic's pusher, but have run into similiar issues as most, I taked to them at length at the SIMA show & they said they are working on it. I need assuances I'll be able to get parts in a storm if necessary. It does me no good if the parts are in another state & they don't answer there phone to take an order.
     
  17. BigDave12768

    BigDave12768 PlowSite.com Addict
    Messages: 1,446

    Is it the same salter/snader? Model# and size? The guy who is not local who is selling 1000 cheaper may have last years model and is just clearing them out. One other thing people dont conisder when it comes to pricing is how peope buy they stuff. Maybe your dealer has them on credit and can only sell for a certain amount. And the guy down street has a building that is a dump that he own outright and pays cash and buys bulk to sell them fast.

    But business is business and 5k isnt a small amount of change. Plus the other thing you have to consider is Low ball Larry is going to buy off the cheap guy and cut prices and you will have trouble competing.