Interesting pricing conondrum with one of my parts vendors

[fastfredracing]

I've been using these guys for a long time. I mostly buy euro auto parts from them A lot of you in the biz use them also . Recently , however, my local vendor merged with a larger company, and now I get similar deals on stuff that I do not have to ship . Makes life a lot simpler for returns and stuff. I also have had a bit of a slow spell on this sort of work, so in general, I have been buying less from them for the last few months .
I called to order something today, and was blown away by the price. They knocked me down on the pricing tier because of the numbers being lower .
Not sure if this a good way to retain a customer or not . He told me to pick up my orders and they will put me back on the better pricing schedule .
I said fuch em. Im not begging you to sell me parts, the other guys have the same pricing tier and I don't have to beg them for it. I just hit click and it shows up next day . My orders with them have dwindled before and I was not penalized for it in any way .
What do you guys think? I think they just lost a customer. I am a small potatoes customer in the grand scheme of things, but my bill is always paid.

[GH85Carrera]

Some college boy manager with no real world experience decided than customer retention is not as important as chasing potential new customers.

We have always fought hard to keep established customers.

[fastfredracing]

Pelican needs an east coast warehouse.

[Eric Coffey]

Getting shafted by Worldpac I assume? You wouldn't be the first. If you can source the same parts at a lower price, it seems like a no-brainer to me, as long as the customer service and delivery times are on par.
That said, you may want to ensure that the new vendor has the full catalog of parts needed available, and that they are the same quality/OEM parts (not some 4th-tier "OEM equivalent" garbage). YMMV...

[Norm K]

Originally Posted by GH85Carrera

Some college boy manager with no real world experience decided than customer retention is not as important as chasing potential new customers.

We have always fought hard to keep established customers.

That's a strong possibility. Either that or the larger company in the merger (probably more like a purchase, actually) is simply invoking their own long-standing practice in order to protect their existing large customers.

Here's a scenario and question I've put before many smarter-than-thou college boys:

In comparing two customers, both of which you've been doing business with a long time, both of which are very solvent and are likely to remain around for a long time, both of which pay their bills on time and both of which are generally very easy to do business with.

Customer X sends you $1M per year in business, spreading his other $9M among other vendors.

Customer Y sends you $500K per year in business, typically spending a tenth or so of that elsewhere, and then only because for one reason or another you can't get him what he needs as quickly as he needs it.

If you must rank these two, who's your "A" customer and who's your "B" customer?

_

[mattdavis11]

About 10 years ago there was a monthly quota that had to be met to even buy parts from them.

I was in parts sales for 3 years and got really pissed when corp. or my franchise owner "adjusted" customer pricing. It stopped. Having been a wrench, I knew what the selling point of our product was for every customer.

[dad911]

Happens all the time in my business (construction) then they wonder why I'll go to home depot....

One business was masonry/landscape supply. My father had an account with them in the early 70's, and we continued it into the late 90's. Then one day I get a call from my employees, account closed..... they cancelled all commercial accounts, no notice, went retail, and I would have to send a check/CC with my employees. Used to spend a few thousand a month easy, not a dime since.

Another lumber yard gets it. Even when the economy was in the dumps, and orders down, they kept my discount and service. Guess what, they get as much business as I can give them.

So FFR, I'd say eff'em, and buy by price and service. They have no dedication to past accounts.

[RANDY P]

It's a tough deal offering terms since margins are squeezed by big box retailers. Given the chance, I'm sure many fold up shop leaving the vendor high and dry.

Cash and carry eliminates those problems. With that said, gotta re adjust the scheduling with 3-4 different online vendors and only use Worldpac for the gotta have it now stuff. Certainly the customers will understand if the pricing make sense.

PS I've beaten by them too on their "OEM" stuff- got URO brand instead of Lemforder before.

rjp

[Shaun @ Tru6]

Good vendors are hard to find. One of mine has been doing great work and bending over backwards for me so I've been over-paying them. If the invoice is $200, they get 3 or a Not Your Average Joes gift card.

[impactbumper]

SSF right?

[Jeff Alton]

We have 3 great vendors in our area, Worldpac, Altrom and Autocamping. Altrom recently purchased Autocamping, but both will operate as independent businesses. The reps we get to deal with are all fantastic and understand our business and do whatever they can ensure we purchase from them.

We purchase from Worldpac the most and have worked with them to have them improve their inventory on things we tend to need over the last 4 years. We purchase enough volume from all of them to be on the lowest pricing schedule. That said I do understand the basic philosophy they all have to reward the clients that cross thresholds of purchasing. However, if you have been a loyal customer that has reached the thresholds in the past, have been easy to deal with (not to many returns, pleasant to deal with etc) and they feel your business with them will pick up in the long term, it would make sense for them to continue to offer their best pricing.

Call the district manager and have a chat with them...

Cheers

[Jeff Alton]

Originally Posted by Norm K

That's a strong possibility. Either that or the larger company in the merger (probably more like a purchase, actually) is simply invoking their own long-standing practice in order to protect their existing large customers.

Here's a scenario and question I've put before many smarter-than-thou college boys:

In comparing two customers, both of which you've been doing business with a long time, both of which are very solvent and are likely to remain around for a long time, both of which pay their bills on time and both of which are generally very easy to do business with.

Customer X sends you $1M per year in business, spreading his other $9M among other vendors.

Customer Y sends you $500K per year in business, typically spending a tenth or so of that elsewhere, and then only because for one reason or another you can't get him what he needs as quickly as he needs it.

If you must rank these two, who's your "A" customer and who's your "B" customer?

_

Norm, Customer Y is the A client, but the sales rep needs to find out why they are only getting 10% of customer X's business. Customer Y is marrying his success with the vendor's ability to provide useful pricing, just in time deliver and quality service/products. Hey is loyal.

[Jeff Alton]

Originally Posted by fastfredracing

Pelican needs an east coast warehouse.

You think their pricing is as good as you are getting from a vendor that deals only with brick and mortar shops?

[Porsche-O-Phile]

Rule of thumb I've heard is that for every nine dollars it takes to attract a new customer it takes one dollar to retain an existing one - the lesson being to value the customers you have. I'm not sure if that's 100% true and I'm sure it varies by industry, location, etc. somewhat but even if it's 1/4 true, it's a pretty stupid business model to think you can strong-arm your existing customers into being "upsold to". Sounds like a Midwestern / Chicago company / tactic.

[asphaltgambler]

Fred - at the end of the day with your vendors, its the value of cost & service of what you're reselling. I had very good dealing with WP for years only dealing with 1 sales guy who had a very 'Jersey' accent. Guy was good as gold and when pressed would give me the return rate on non OEM parts. He never made a mistake on his end. You'll have to weigh this out.........