Mark-up On Equipment

MARK W.

MARK W.

Member
Well guys, I got my first lesson as to how much of a mark-up there is on power washing equipment. I ordered some equipment from a company on- line and received my order directly from the wholesaler (who included a catalog).I noticed that on the things I had bought on-line the mark-up was more than double. I was sick to my stomach.I called the person that I bought it from and told them that the company sent a catalog along with the shipment. He was not happy but said he would give me the things at wholesale price. I learned my lesson about not researching the equipment in this field.I'm sure I'm not the only one that this has happened to who is just starting out. I'll do my home work from now on!! Mark W.
 
I can only say that he did work out a deal with me to give me the wholesale price after I talked to him about it.This is not a site that you would go to buy equip, I'm sure.I bought it on a whim and I learned my lesson.
 
Mark, how about a name? That's the reason these boards are here. If somebody screws any of us or attempts to screw any of us, which is exactly what this guy did to you, we tell each other about it here. The lowest common denominator of a equipment distributor in this industry is somebody who takes a new pressure washer and their limited start-up capital and screws 'em to the wall just to take advantage of their inexperience. Yes, he made a deal with you but it was after the fact that he was caught. I can think of no better use of these boards than to aggressively punish distributors like this by shining some light on them for the rest of the new guys.

Any time something like this comes up and I'm deciding whether or not somebody is a slime ball, I just remind myself that a true measure of a man's character is how you behave when nobody is watching. I'm all for making money but not like that.
 
Mark,

You might also give some details as to what type of equipment it was, or a dollar value. I might look at this differently if it were a small $15 dollar order, than if you are talking about a $6,000. investment in a new washer.

Being in sales myself, I know that sometimes a guy has to make that kind of markup on a small order to justify doing the paperwork to take the order. They may also have a minimum charge policy.

I just think a dollar amount would give a better understanding of how badly you were hurt by this company. There may be no need to post (and trash) the company in this thread.
 
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You guys are way out of line! It's none of our business how much mark up a distr makes. You don't know his costs involved in making that sale. How would you like it if a client found out you were making $125 an hour off of a $15.00 per hour employee? You guys are hypocritical! You accepted the price the distr was selling it for and only got pissed off when you found out how much he paid for it. Would you feel better if you paid the same amount and the distr only made 10 bucks?

I think it was very magnaimous of the distr to offer the wholesale price, as he was under no obligation to do so. The buyer bought it at an agreed upon price, and is only pissed because he doesn't want the distr to make any money. How sad!

You guys should spend more time working on your businesses and leave distributors alone. If you want something to pick on, how about your chemicals, which are 90% water? Let's next pick up the prescription meds because a $.30 pill costs $8.95 each. Oh yea, let's forget about the 4.5 billion it took the company to develop the meds, let's just look at the cost per pill!

Grow up, wise up!

Just my 2 cents.
 
I have toagree with Zippo. IF you were happy with the price when you agreed to purchase the machine, then you should be happy with the price when it is delivered. Most distributors do have a 100% markup. That is just the way they do business. In my neck of hte woods, one of the largest distributors has a 400% markup on a lot of parts. So do I buy from him? No, not unless I am desperate for the part. They decide what they need to make and charge it. If you don't want to pay it, go somewhere else.

Just like the goal from most of the operators here is to make as much moneyy off of each of their customers as possible, his goal is the same. Personally, if it had been my distributorship, I would have said, in a politically correct way of course, tough luck. YOu agreed to the price, I have a purchase agreement that is a valid contract, That is the price.

Scott Stone
 
I'm out of line? Maybe you guys need to remember what site you are on right now. Correct me if I'm wrong but he said he was a new guy and I specifically pointed out that I didn't agree with a distributor taking advantage of a new guy. Which is why I suggested posting his info here so the other new people could see the distributors name and not go there first before looking at others. My equipment guy has a 20% markup and it's been the same since he cut me a deal when I started my company. Not 100%, not 400%, simply 20%.

As for it not being my business what a distributor's markup is, we obviously went to different business schools. It's my business to know every aspect of everything that affects my business including the markups of the suppliers we are purchasing from. Did you ever bother to ask what your distributor's markup is? If my customers cared what my markup was they would ask. The problem with your argument here is that you are trying to debate my service based business against a distribution based business and neither one is similar. In my market I consider my services to be the best available and people pay more for that quality service because they know they can rely on it. They don't care what my markup is because it's the end result they are after and they are willing to pay more to get it. With a distributor you're selling the same product as everybody else in the market. I could care less what his costs to get that sale are. If Enviro has it $50 cheaper because they are a wholesaler and they manage their costs better so they can keep their markups lower, guess where I'm going?

If you want to debate with me about this stuff that's fine, but that's not what this post was about. We're supposed to be helping these new guys get their businesses going not advertising that it's ok to get screwed.
 
Mark correct me if I am wrong but the online company and the wholesaler are not the same company, right?

Ok assume that is right then the wholesaler should not have put that catalog in your order to start with UNLESS he is trying to take business from the other guy.
Now if it is the same company then his prices should have been the same online as in his catalog or very close to it, some discount a little to make up for shipping which you pay for.

I personally like to buy from companies that have stores and not online but my reasons are my out of safety and security then any other reason.

Zippo concerning the pharmacital companies, I understand and agree they spend millions developing those drugs and have to recoup that money but how do you explain this situation concerning prescription drugs:

The same drug, same strength yet a two hour drive to Mexico and that very same drug sells for pennies on the dollar? I used to buy this one drug up here that cost $90.00 a month, took a drive to Mexico and paid $15.00 for it. Now the only difference is the instructions are in Spanish, nothing else has been changed.

Also most, not all but most of those pharmacetial companies really manufacture it down there too, they develope it in the USA but make it South of the Boarder.

We all know it does not cost that much to ship it up here, it is done for the cheap labor and no taxes to the USA and I believe you would agree that is wrong.

Jon
 
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Listen guys, I did not mean to stir it up like this. I am not trying to trash anyone either. My order was less than $200.00 so it was more of a slap in the face than anything else when I saw the catalog prices.I realize that there is always going to be a mark-up on equipment ( otherwise distributors would not stay in business). I figure that just as this person was looking out for hisself I too, am looking out for myself. All bitching aside, if I can get a better deal from this company I will.He knew it and that's why he agreed to give me the stuff at cost.I'm not sure he was cutting me a deal, I think he was more embarrassed than anything. Incidentally, the company that included the catalog was Enviroscope and it was wrong of them to do so. They made him and themselves look bad. I don't think it's appropriate for me to give this guys company's name out. He, like us, is merely trying to make a living. Mark
 
Jon

The manufacture of pharmaceutical and R&D is looked in terms of total cost of product and proportioned out to wholesalers in all countries based on a complicated formula. The short answer is that we are subsidizing the third world medical needs. If you take a given item that retails for $100 and over the border the same item is sold for $25-the burden of distribution and sales along with the consumer ability to pay are the factors in the cost difference. In other words they could not buy the item because of the income level and the lack of a good distribution system. Thus our ability is greater and the that is why the price change.

Another way to look at this -take the $100/$25 or $125 @ 50% would be $75. The sales of those item in the 3 world would be less, thus the cost would have to up to cover the negitive sales. Each item or brand has to meet the sales so that the overall average is equal.

David
 
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David good way of explaining that and it makes sense, even if we as a whole don't like the idea of supporting others, be it 3rd world or fellow Americans.

Mark, you did not stir things up here, one of the things like Lance said about the board is that is what it is for.

You as a newbie should ask questions so the more experiences ones can help you avoid the same pitfalls we made.

Believe me everyone of us has made errors, some won't admit it but it is true.

If you feel embarrassd to ask a question here Email me or any of the others and I am sure they would reply to you.

By the way Mark I have this bridge for sale rather cheap if your interested.

Jon
 
Just an opinion

I just wanted to throw another opinion into the ring for something to think about.

Many of you know that I play both sides of the fence. My background and passion is in wood restoration service. I also do sales and promotional work (retail) for R. W. Anderson, Inc.

It was said that a retail business is completely different from a service based business. In some respect that is true however there is one MAJOR factor not being considered. If your concern is truly for the "new guy" then you have to consider the amount of SERVICE that goes into supporting a new contractor. A company like Envirospec with it's tight margins cannot offer the support to go with their products.

I have spent well over 30 minutes on the phone with a customer answering questions about pricing, technique, marketing, etc., and sold them nothing more than a gun or special tip. Now if I were to work off the same margins as the wholesaler, the sale would be a loss and in fact small sales like that usually are. The difference is we are also selling SERVICE.

We have a lot of customers who know they can save a few bucks if they shop around or buy from a wholesaler but they are loyal because of the service they get. We know that it's not about how much is made off any one sale, it's about doing whatever it takes to insure that our customers are as successful and profitable as they can be. As long as we have successful customers, we to will be successful.

I know that is a lot to chew on, but keeping that in mind when you think about how much you are paying and what you are truly getting. Until you factor in the value of information and service how can you determine a "margin"?

Best of Luck

Russ:)
 
Just to put this in perspective, here in Cali if a cigar store buys a cigar for $4 he has to add the tobacco tax on which is 30% so the cigar is now $5.20 then the usual mark up is 100% so the cigar is now $10.40 thats a 160% mark up! What does this have to do with pressure washers you ask? Diddly squat, but business is business. Whether you sell goods or service, someone isn't going to like your price.
 
Moral of this whole this is simply the following.



You can please some of the people all of the time but you cannot please all of the people all the time.
 
this thread was a good thread.LOL

I can agree with everyone... i see that the guy needs to make a living. I also realize mark made a mistake because he thought he paid to much. Lesson learned.

Evirospect sending the wholesale pricing, what a mistake.....
 
prices

Hey mark you made out good, most people don't know about evirospec from the beginning and truly that is where distributors make out because they will not tell you. You are their bread and butter until you get more experience or search the net very good because it appears like some people wont share that information. Evirospec has the cheapest prices period, not on everything, but you need to know how to do everything yourself. Everyone here got burned I feel at the beginning before they knew, and since you got the catalog in your order it might have been and error since they have alot of customers I suppose. Now that you have that magazine am pretty sure the next time you need a water pump you will think twice before you pay as much as 800.00 dollars compared to the price in the magazine. Remember guys the reason we share information here is the same reason many property, general managers and supervisors share information..... so as a group they can save $$$$$$$$$$$$.
 
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