05-19-2015, 07:28 AM
(05-19-2015, 06:25 AM)Teamwalker_imp Wrote:Veech,(05-19-2015, 12:54 AM)veech_imp Wrote: In the IT world we run into this problem all the time. We tell a customer that to install a computer in our data center it will cost them, lets say, $10K a year. They come back and tell me they can buy the same computer at Best Buy for $1800 and that this is outrageous. I tell them to go buy it at Best Buy, take it home, set it up in their bedroom closet and be happy with their 'great deal'. If they want us to put it in a temperature controlled secure facility, with 24 hour support, backups, disaster recovery failover, patching & maintenance, licensing, insurance, etc. it will cost $10K a year...Veech,
With all due respect, your example is apples to oranges. Not relevant here. I am sure your increased $10k price has some justification in the costs associated with running your center and all the costs that entails. How does that relate to a doc fee that someone hits a few buttons and it spits it out in 10 minutes. Probably someone who the dealer is already paying minimum wage. Now, if you have an $1800 computer and want to sell the same thing to me for $4000 without doing anything, that would be a better example. I can have Best Buy hand me a box for $1800, or you hand me a box for $4000. Hmmmm, wonder which one I would buy.
Another example. Local BMW (you know they aren't cheap) dealer was having their "Spring Open House" with deals glory. Present was a representative from Arai who discussed their lineup and did personal fitting of a helmet. Dealer was offering a 15% discount because they knew internet prices (around 10% off) and figured extra 5% was for the tax that most people would not pay because of internet sale. Their price was better then the internet and they got my business. Up to then I was about to order from internet, but got better deal and personalized advice and fit.
To be that dealer is a genius and made a lot of money during the "Open House".
With all due respect, your example is apples to oranges. Not relevant here. I am sure your increased $10k price has some justification in the costs associated with running your center and all the costs that entails. How does that relate to a doc fee that someone hits a few buttons and it spits it out in 10 minutes. Probably someone who the dealer is already paying minimum wage. Now, if you have an $1800 computer and want to sell the same thing to me for $4000 without doing anything, that would be a better example. I can have Best Buy hand me a box for $1800, or you hand me a box for $4000. Hmmmm, wonder which one I would buy.
Another example. Local BMW (you know they aren't cheap) dealer was having their "Spring Open House" with deals glory. Present was a representative from Arai who discussed their lineup and did personal fitting of a helmet. Dealer was offering a 15% discount because they knew internet prices (around 10% off) and figured extra 5% was for the tax that most people would not pay because of internet sale. Their price was better then the internet and they got my business. Up to then I was about to order from internet, but got better deal and personalized advice and fit.
To be that dealer is a genius and made a lot of money during the "Open House".
The main point I was trying to make was that in business there are often many more indirect costs involved than most people are aware of. Granted, there are many unscrupulous businessmen that would love nothing more than to fleece us of our money, but I would argue that there are just as many that are just trying to survive, especially independent dealerships who are often leveraged to the hilt. They may for example be paying someone minimum wage to process the paperwork, and if that was the only cost they would be making a healthy profit. But then they have overhead like the facility the bike was housed in, the insurance of the bike, the juice for financing they had to carry even if they only had the bike for a short time, utilities, support staff, etc. The list goes on and on but these are all things that they have no way to charge directly for but have to pay just to keep the doors open so it comes out of the profits of everything they sell. The actual processing of the paperwork of one particular deal is just the tip of the iceberg.