Interesting, I just read the July Rockauto newsletter and they are discontinuing some Dorman products because Dorman is requiring them to be sold at the same price as everyone else. I hadn’t heard of this tactic for years where it used to be used for brand name clothing.
Ouch! That’s bad news for me. I have purchased a Dorman air bag sensor and a door lock actuator from them at very reasonable prices.
Dorman will find out quickly that such tactics will soon cost the dearly. I like Dorman products but I will find other brands if I get ticked off. Most people will do the same.
Still very common with Golf Equipment and High-End Audio. In fact a few years ago a local golf club pro-shop got caught selling clubs at a discount. The manufacturer showed up the following day with a truck and removed all their brand name clubs.
Apple has done this for decades, Bose does it too.
Counter intuitive to me. No matter what the end price is why would you intentionally risk point of purchase opportunities for no added profit, thinking the wholesale price is the same for everyone.
Barky, could you draw me a word picture of what you’re talking about, perhaps with simple examples?
Sorry, It’s hot and humid here , I’m exhausted from running the golf course, and red wine time has begun here (health reasons, of course).
Sorry, that’s all the excuses I have. My brain just doesn’t work hard enough to really grasp your point.
I’ll let you do the work if you don’t mind.
Thanks in advance. I owe you one.
Glad you got some golf in.
Dorman part wholesale price $45.
Vendor A sells for $47
Vendor B sells for $50
Dorman sold the part to each for $45. What difference does it make to Dorman?
Sorry vendor a you are undercutting the competition, we will no longer sell our parts to you unless you charge $50 like everyone else.
Now Dorman wants to say you have to sell the part for $50 even though they wholesale the part for each at $45, and now rock auto is going to drop them because of mandatory pricing, less sales the result for Dorman
You owe me nothing, like we used to say in the chef business, you are only as good as the last plate you served.
I can only guess that Dorman thinks this will help maintain the maximum number of vendors. If hundreds of local shops are undercut, they might drop Dorman (maybe already threatened to do so).
Thanks, Barky! Good job explaining it to me. I see your point.
I wonder if there are any Dorman aftermarket competitors or start-ups waiting in the wings who’ve sat out because they couldn’t compete at the really low retail prices. I’d like to see them move in and move in to Rock Auto and take some sales.
Definitely, part of the reason the Rock Auto prices seem so extremely low is because the dealer prices and Auto Parts chain prices are so ridiculously high. I felt like I was getting a steal at RA when I was probably paying a fair price.
I don’t buy much at Rock Auto because the shipping charges eat up most of the savings and if it there is double the shipping.
This is a common practice in the retailing industry. Many product packages are even preprinted by the manufacturer with the final retail cost.
In today’s world, however, where international boundaries are less of a barrier to selling or buying, low cost alternatives readily overwhelm higher-priced alternatives, and the internet has demolished barriers to price comparisons and to ready access to the product by the retail customer, I think the practice is collapsing. Manufacturers simply no longer have the leverage over the retailer that they once had.
IMHO Dorman is making a mistake if it’s trying to “fix” prices of its products. The market will decide what’s acceptable no matter what Dorman does. Any opportunity to undercut any of their prices that are too high will quickly be pounced upon by other manufacturers… who no longer even have to be in the same country. And retailers will quickly be offered comparable products at lower wholesale prices. In the old days a company like Dorman might have been able to make lots of money during the time it took the retailers to become aware of and change to less costly alternatives. They only became aware of them via annual “trade shows” where retailing buyers went to see what was new on the market. Today the retail timeframes are far too fast for a company like Dorman to benefit from long reaction times. It all happens instantly now.
By the way, I believe that if Dorman is truly trying to force retailers to sell only at their prices, it’s a form of “price fixing” that violates federal fair trade statutes. Perhaps if no one here researches the Fair Trade Act, I’ll go back and take a peek tomorrow.
I ftwlag or whatever the term was and looked on google for the story and could not find anything relevant about rockauto dropping dorman, Fake News?
Barky, it’s not in the news, it was on Rockauto’s July newsletter. The link is in my first post and if you click on the highlighted word “demands” in their explanation, it will take you right to Dorman’s pdf of the new requirements. Not everything that is not on national news is fake.
did not click on the link, apologies, why is this unobtanium in a web search?
Dorman may be getting complaints from auto parts stores. I can envision this happens frequently: a potential customer walks into the local auto parts store and prices out a Dorman part, then tells the auto parts staff they’re going to order it online instead, due to a lower on-line price. I had a thread here a while ago about unusually high prices for type-194 light bulbs (used for license plate lights, side markers, etc). Rock Auto had them priced at 27 cents each I think, but the local auto parts stores were pricing them at $2-$4 each.
Because it is a company newsletter for customers not a press release.
I suspect the chain stores such as AutoZone, O’Reillys, NAPA, and so on are applying pressure to dorman behind the scenes to hammer Rock Auto.
It should be noted for instance that the AutoZone stock price has really tanked; going from well over 800 a share to 500 and something while O’Reillys has gone from under 300 to a shade over 200 per share.
The panic mode starts taking over and the bloodletting begins.
Try and get a lower price on an Apple product or a Weber grill. The manufacturer can and does set market pricing all the time. End price reductions are at the instruction and approval of the manufacturer. Sales contracts are written everyday detailing what end pricing is acceptable in order to do business together. One example comes from startups. A company spends money to design and build a product. Some other company agrees to buy and market them. They both have money invested in the start up costs. Of course, they both want assurances that the other will not undercut them at the first chance to do so, so they sign a mutual agreement that has protections for each. You will sell me product for $X and I will in turn not sell it below $Y. When the product manufacturer looks to increase distribution and sell to someone else (Sales Company B), they will both be bound somewhat to the original conditions. Neither the manufacturer or Sales Company A will want Sales Company B to undercut Sales Company A…
Dorman is pretty big in the aftermarket world. They have spent considerable dollars developing their products to be OEM equivalents. Although there are competitors, that would be a big hole to fill and it won’t happen overnight. I suspect that RA will blink first…
Rock Auto is my go to store for parts. Their prices are not necessarily cheap as much as they are reasonable. I have bought Dorman products in the past but not something I am brand loyal to. If they are not available when I go order then I will buy a competitor part.
I am replacing a V10 in my van. buying all new guts for the engine and replacing all hoses and numerous parts under the hood. I find from time to time that RA is not always the cheapest but maybe it will save me time in running to 4 different stores to get all the parts at the best prices. I have over $1,000 in parts on mt RA cart now. I need to add a few more parts before I order but need to confirm the parts first. The RA cart is going to be shipped from about 7 different warehouses for about $100 in shipping cost. Yeah that is kinda high but so is my 10% sales tax rate. Shipping and tax are often a wash for me.
I try and stay away from the local parts stores unless I get in a jam.
I guess the point of my long rambling is that if Dorman is discontinued from RA, I will not buy many more parts of theirs in the future. Chances are, I will never miss them.