Large corporations have better buying power because of the volumn in which they purchase. Their buying power alows them to out price the independent pool business, and gain market share solely on price.
How do we take this community of pool genius' and leverage it into better buying power to compete against the big boxes and corporate stores.
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For your situation with taxes, warehouses space, etc I agree that buying in bulk is not advantageous. What I am speaking about is utilizing the sheer numbers that the independent pool person represents, and getting better pricing. Even if you do not buy in bulk, why should we not be able to compete agains the $5.50 bag of salt. If the customers don't mind the higher prices because of the service, then why (as business people) should we not make a greater profit.
Don
At the end of the day we decided to purchase from our local distributors and quit warehousing equipment.
We are not really retail so I can not comment on the retail items. We do sell quite a bit of chemicals, our local box store sells salt for like 5.50 we sell it for 10.00 a bag but we sell a brand the box stores can not, we also find the customers dont mind the higher price because of the service and information they get in general conversations when they come in.
The money we would save on buyingin bulk wasnt enough to justify taxes, warehouse space, fuel for the forklifts, extra man power.
I absolutely don't think that an equipment manufacturer would sell directly. I do think that with this large of a group the pricing would be much better at the distribution level. Also, there are a number of chemical manufacturers that do sell directly, as you and I have seen from your discussion, the pricing that they would give for a group as potentially large as this could be amazing. That would allow us to compete, because the majority of purchases at a retail level are chemicals. I would assume that in service (correct me if im wrong) you are purchasing more chemical than major equipment as well.
Maybe starting a new buying group is to big of an undertaking, but how about a much better deal than 5k to sign up and $500 a month to build a bigger group, and achieve better buying power.
Don
Luke Norris said:
Aquatech society seems to be a information group similar to our Pool Genius Network, while Carecraft looks like it satisfies what this discussion relates to. Though if Luke is correct 250K is alot of money to spend before it being worth while.
More importantly this is being done out there on some scale. What kind of buying power could we have, how could we change the industry if we could focus on information, customer service, and quality without having to worry (as much) about the cost of goods and competing with the big boxes.
-Jeremy
Florida Leisure Pool & Spa
www.FLLeisure.com
Like anything else, if we are to stand alone, against the big boxes and the corporate entities, we will be crushed by their buying power. As an independent I can buy a chlorine tablet for nearly the price a home depot can, yet I can crush them on service. Its time to level the playing field. If independent distributors can unify against manufacturers and get better pricing (which by the way I am a huge fan of, because theoretically it means better prices for us) why can the independents.
Don't get me wrong, I absolutely believe in the spirit of competition and that without competition we would die. The most important thing about competition is it forces you to be better than you were. The problem with big box competition is we are not able to compete on price, and in a poor economy being the person on the block with the knowledge and expertise only keep customers so long before they stray.
I think a independent/service buying group can be done, people just need to believe in it.