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jlmran 07-13-2011 08:46 PM

Tool pricing
 
Bostich F28WW Nailer

$199 at big box store. $289 and $299 at two local suppliers. Which of the following could be true?

1. Big box store is taking a loss;
2. Local retailers have a HUGE markup;
Or
3. There are 2 versions or variations of the same model.

Any thoughts on the price variation?

oh'mike 07-13-2011 09:01 PM

The same reason a little store has to charge more for a box of Kleenex than Wal-mart.

Depot buys thousands of nail guns---the local lumber yard might order two or three--who do you think gets them at a lower cost?

jlmran 07-13-2011 09:05 PM

It has been somewhat well established that Wally will lose money on various items simply to hit the lowest price category. Wonder if the same is true for home centers?

oh'mike 07-13-2011 09:16 PM

They pay their stock holders a nice dividend each year---I doubt if they give much away.

jlmran 07-13-2011 09:18 PM

So in theory, a purchase from a local supplier generates a larger margin for the manufacturer (Bostich).

oh'mike 07-13-2011 09:23 PM

Sad but true----It's hell being a small retailer these days. Often the 'wholesale' price to a small shop is higher than the retail price at a giant store.

Been there and lost.---Mike---

Mr Chips 07-13-2011 10:06 PM

i have sold products to big box stores, if you think they are taking a loss on anything you are seriously mistaken. Even when stuff was but on clearance, we had to give them "markdown money" to make up the difference

Mr Chips 07-13-2011 10:08 PM

Quote:

Originally Posted by jlmran (Post 685706)
Bostich F28WW Nailer

$199 at big box store. $289 and $299 at two local suppliers. Which of the following could be true?

1. Big box store is taking a loss;
2. Local retailers have a HUGE markup;
Or
3. There are 2 versions or variations of the same model.

Any thoughts on the price variation?

you forgot option #4. Manufacturer charges Bix Box Store 30% less for the item to begin with

jlmran 07-13-2011 10:13 PM

Quote:

Originally Posted by Mr Chips

you forgot option #4. Manufacturer charges Bix Box Store 30% less for the item to begin with

Oh'Mike beat you on that point in post #2.

jlmran 07-13-2011 10:19 PM

Quote:

Originally Posted by Mr Chips
i have sold products to big box stores, if you think they are taking a loss on anything you are seriously mistaken. Even when stuff was but on clearance, we had to give them "markdown money" to make up the difference

Let's use the nailer as an example. If a box store were to realize a 5% loss on the nailer, but could realize a 50% gain on the nails needed to feed the nailer, then that's a pretty good scenario. Kind of like the Wal-Mart model.

Are you saying this could never happen at Lowes or Home Depot?

Mr Chips 07-13-2011 10:20 PM

Quote:

Originally Posted by jlmran (Post 685798)
Oh'Mike beat you on that point in post #2.

I usually don't read a word that guy says, half of it is lies, and the other half is untrue. Me on the otherhand: I am almost perfect, most of the time :laughing:

oh'mike 07-14-2011 06:44 AM

Quote:

Originally Posted by Mr Chips (Post 685804)
I usually don't read a word that guy says, half of it is lies, and the other half is untrue. Me on the otherhand: I am almost perfect, most of the time :laughing:


Never forget that I can secretly edit your posts:whistling2:

Leah Frances 07-14-2011 07:37 AM

Quote:

Originally Posted by oh'mike

Never forget that I can secretly edit your posts:whistling2:

You do not.... Argh ... I mean, Mike for President.

oh'mike 07-14-2011 07:40 AM

Quote:

Originally Posted by Leah Frances (Post 685962)
You do not.... Argh ... I mean, Mike for President.


I do not want that job----:laughing:---Not now or ever.

Mr Chips 07-14-2011 08:24 AM

Quote:

Originally Posted by jlmran (Post 685803)
Let's use the nailer as an example. If a box store were to realize a 5% loss on the nailer, but could realize a 50% gain on the nails needed to feed the nailer, then that's a pretty good scenario. Kind of like the Wal-Mart model.

Are you saying this could never happen at Lowes or Home Depot?

That's EXACTLY what I am saying.

HD or Lowes WILL be willing to make LESS PROFIT on the tool with the understanding that they will make more on the consumables ( the nail in this example), but there is simply no reason for them to give up prime realestate to purposely take a loss on any item, especially when they can just pressure the manufacturer to lower their cost or be replaced by a competitor. They look at every item SKU by SKU. If an item doesn't have enough turns, and generate enough profit, they get rid of it. there are certain deparments where they will accept less profit ( power tools is one of them for sure).

The manufacturers and mom and pop stores might tell you that these guys take a loss on certain items, but I can tell you from first hand experiance that it simply doesn't happen.

clearance is the only expection, and even then they will often get money back from the vendor, and most seasonal type items have "markdown money" written right into the sales contract


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