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BLT

The price of parts

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BLT
I have always noted from time to time people grumbling about parts prices. We think the dealer is doing a gouge. A lot of it has to do with how many steps in the marketing system that part has to go thru before it hits the end user and the participating dealer has no control over this. A classic example is with Briggs & Stratton. One of their most popular head gakets was made for them at less then $0.10 apiece in a volume of over a million a year. By the time it got out to the average user that little dude had a retail price of $1.35. WOW!!!!! Thats more than a 100% mark up. But you have to understand at that time, they had a four step marketing system, from factory to parts packaging, from the factory parts wharehouse to the 10 or 12 central distibutors across the the nation and then certain authorized wholesalers and then to a dealer. Each step of the way that $0.10 part kept inreasing in value. What further componds the situation, if that part is a real popular one, a paticipating dealer is offered a larger discount to buy unit packs, at twenty or more of that part. And whose pocket book supports that. Yours and mine. I don't endorse it or defend it, thats how it works. Certain items like, air cleaner elements, batteries, tires, belts and some engine parts you can buy at places like Sten's and they offer some pretty good savings and they have less steps in their marketing strategy. I have done it myself. And lastly a signed equipment dealer is bound buy contract to sell that part in that certain OEM carton or lose his franchise. And that dealer, unless his has a very high volume parts bussinees will charge you the price shown in the book. Remember he laid out cold cash to say, "Yessir I have it on the shelf" and that also comes with a price. And I'll be the first to say, "WOW, did you line that damn thing with gold"? Just thought you would like to know. BLT

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dyehrd
good point BLT. When my father used to sell and service Simplicity in the 60's & 70's his biggest challenge was trying to provide the needed parts at a reasonable cost. He was never able to get more than 15% markup and he was dealing directly with Simplicity. Most any other items in his Hardware carried anywhere from a 25 to 50 percent markup. Even Briggs parts were 20. But to stay competitive with other manufacturers in our area, sacrifices had to be made somewhere. He was operating in heavy Gravely country down here. Their original plant was right down the road from us.

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HubbardRA
When I first started tractor pulling, I had a limited sponsorship from a Simplicity District Rep. I asked him how much he could get a set of 26x12x12 tires and wheels for. When he told me his cost, I asked him how many sets he would like to have. This is because I could buy the exact same wheels and tires from a local dealer for about 2/3 of the the Simplicity dealer's direct cost from the factory. Doesn't make sense till you start looking at volume discounts.

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Kent
Great points, all! Also remember that it's a double-edged sword -- it you want the parts to continue be available, then Simplicity must sell enough of them to cover the costs of maintaining them in inventory, maintaining production capability (directly or through a supplier), etc. IMO, I'm pleasantly surprised by the easy availability for parts for this 30-year old (or older) equipment. Try getting parts for a 30-year old Ford, GM or Chrysler product from your dealer.... Or, try getting free parts, service or owners manuals for them, so you can figure out what part you need. Again, I think one of the things that makes it possible is Simplicity's "smart, simple" engineering, where they use the same part in several different products, over a long period of time. If the part were absolutely unique to a model for only a year or two production run, then it likely wouldn't be possible to continue to provide it. Remember also that the engines are NOT Simplicity products and they have little/no control over how long the engine manufacturer supports that product, nor what the price of parts are... At most, they likely have a requirement that the manufacturer agrees to provide parts for "x" number of years, but I'll bet that the "x" is a single-digit number, and certainly not 30 or 40 years....

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Michcruiser60
I agree with BLT, having worked the last 23yrs in whosesale plumbing I've seen about every way items get marked up. Buying in bulk is just one way and the most popular. I for one am very pleased to hear "I have it right here on my shelf". If I have to pay a few bucks more so what, I would have had to spend a few bucks more on shipping. Then there is "my time", waiting for my parts. Also I'm still thinking this is still a fun and cheap hobby for me. Now I've said the word "hobby" and I know to some guys its no hobby. You still have to admit this is allot cheaper then buying parts for a full sized tractor. And I've done that too. My two bits....

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