Shop owner surprised by vendor's retail selling price

The subject of pricing between a shop and a supplier is roughly equivalent to a married couple talking about money. It can be damaging to a relationship if both parties do not feel like they are on equal ground.

I have had a couple of recent experiences that left me in a rather uncomfortable position. I will tell you about one. I wrote an estimate for a set of shocks for a new customer. Nice guy, the ticket was significantly bigger than the shocks, but those dampers nearly put a damper on our budding new customer/shop relationship.

I told him all about these great shocks that would make his pickup ride just like new and while they cost about $5 more than the next model down, I recommended them.

He agreed and asked me to email him my estimate. It was closing time so I sent it off and went home. The next morning I got a call from the same guy before we opened.

“Donny I need to talk to you about my estimate,” he said. “I think there is a mistake.”

I asked what the mistake was and he told me that the shocks I quoted were twice the price that he was quoted by the very store I buy them from.

I thought he was pulling my chain to get a better price but then he said, “I went by on my way home from work to see the physical difference between the shocks you mentioned and the counter guy at the parts store offered to sell them to me for half of what you quoted so I thought maybe you had entered the price for two. Look I know you guys need to make a margin on the parts but that seemed like too much.”

I looked up the part numbers again and confirmed that the pricing was right and that indeed my supplier was selling over the counter to retail customers at my super duper special “I write a $10,000 a month check to you” price. I was a little upset.

I understand that the competition for the retail dollar is tight but I was not informed that it was so tight that loyalty and volume are meaningless. I decided that a call to my sales person was in order. I explained to him that not only was my price the same as a one time walk-in customer but that my list price was not the list price published by the manufacturer. Believe me it was no small chore finding the list price sheet either.

Now I am not totally naïve. I know that walk-in customers get deals better than list but I would like to know what that deal is when I am shopping a parts list so that if I have a customer who is not as understanding and business savvy as this guy, I don’t lose them before I approve my first repair.

This is where the marriage is stretched. It feels like a betrayal when I make a single vendor my go-to supplier and don’t get the best price or even a better price than some guy who walks in with an alternator from the place up the street asking for a warranty because he can’t even remember where he bought it.

My advice is to tell us what our true margin is against what you will sell to the rest of the world for. Display that price in your system so we are informed. The truth of the matter is that there are many shops that don’t understand or care about your competitive situation, but they are not likely to be very loyal customers and they probably don’t have very many loyal customers of their own. If your long-term goal is to have a loyal customer like me then explain it to me because marriages are built on trust.

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