Really smart guys

[skeets]

I do have a question for the guys well versed in money management and marketing.

So please follow along if you will. Early in the week, I went to start a fire in the wood stove, and as every time before I start one I clean out the ash pan. The pan was jammed in the stove, 2 hours later and many many naughty words, I find the cast iron grate had over the years reached a point of instability and separated for its mating grate requiring a new grate. OK, off to the manufactures web site.
After I cleaning the coffee off the screen ( $119 a piece) I go on a search. TS shows them at 49 bucks each, back ordered, unknown when they might get them in.
So I went to the jungle (Amazon), and found the grates for 26 bucks a piece. I ordered so I ordered them 63 bucks shipping and tax for 2 new pieces.
I figure chinlee junk but if they work for a while, I can put up with them.

Now I can get to the meat of my question. The box is delivered to day and I opened it expecting,, well you know. In the large shipping box are 2smaller boxes containing the grates. Now on each of those boxes, are shipping labels one to amazon, and the return address is to the stove company.
So some one please explain to me how an amazon site/dealer/seller or what ever they are called can sell the same item, same stock number same part number for 93 bucks cheaper than the manufacturer?

 

[GreensvilleJay]

hmm, the same way as Kubota sells BX23S rear tire for $500 or rear tire,mounted on rim, with valve and air for $340 !!

some HVAC disti sold me an LG icemaker for $110 LESS than direct from LG

I also get computer chips(available 40 miles away) ,sent from Thailand,via India, Germany, Canada for free too.

I don't understand it either.....

 

[John T]

So some one please explain to me how an amazon site/dealer/seller or what ever they are called can sell the same item, same stock number same part number for 93 bucks cheaper than the manufacturer?

A few reasons.
Mainly Amazon can buy in bulk.

Also Amazon has a larger audience and can basically consignment sell for a profit.
Amazon can also ship for substantially less than any other shipping option.

I'm sure there are more reasons.... Or a more articulate explanation for what I just said.

You ask for "really smart guys"

I'm not smart, I just know stuff.

 

[GreensvilleJay]

I don't care how big a reseller( Amazon in this case) is, they can't buy from the MFR for LESS than what the MFR dictates.
If it costs the MFR $20 for the grate, they won't sell them for less than $21..otherwise they'll go broke , eventually.
Unless their using the 'new Kubota math'........

 

[John T]

I don't care how big a reseller( Amazon in this case) is, they can't buy from the MFR for LESS than what the MFR dictates.

Thats pretty obvious.

The thing is, You or I have NO IDEA what the MFR "dictates" or agrees on.

 

[John T]

If it costs the MFR $20 for the grate, they won't sell them for less than $21..otherwise they'll go broke , eventually.

There is a lot more at play that you realize.

It's not as cut & dry as you are thinking.

 

[xrocketengineer]

It's magic.....

 

[L35]

Could be counterfeit.

 

[GeoHorn]

It’s because Amazon was able to market it without having to “warehouse” or “floorplane” it for months or years.

Don’t worry. You got it cheap. Be happy.

 

[Spam Bot]

Many times, a manufacturer calls an item "out of stock", but the truth is that it is no longer carried in inventory because, for the most part, it is obsolete. Some savvy reseller will purchase all the remaining stock from the manufacturer for pennies on the dollar, and will list it on Amazon for less than the list price, or even the wholesale price, and still make a profit.
Many years ago, I would buy obsolete parts from Chevrolet dealers, pay pennies on the dollar, walk out of the parts room with $3,000 to $4,000, and give the dealership $500 for all of it. I would then sort it and sell the bulk of it to other resellers, such as swap-meet or mail-order vendors. I made a profit, the people I sold it to made a profit, and the person who bought it at the swap meet felt they got a great deal on a part they needed. The Chevrolet dealership took the cost and listed it on their tax return as scrap, and the dealership owner pocketed $500 and was happy. The pieces that I didn't sell and I kept for 35 or 40 years, which I own for $5.00, are now worth 100 times my cost, and when I sold just one part for $500, I was happy. I am also happy to say that just about everything that I bought way back when is gone today. About 10 years ago, I sold the bulk of what was left to someone much younger than I, and he sold it to those who wanted those parts. Today, dealerships have computers, and if a part doesn't sell in 90 days, it is returned to the manufacturer's warehouse. If it sits in the warehouse too long, then it is scrapped, and the manufacturer takes the cost as a loss against profits. That is why you can't get a part for a 10-year-old or older car, except from the aftermarket or a salvage yard. I have a friend who works as a dismantler in a salvage yard, and they start stripping the car as soon as it hits the yard. 14 days later, what is left is in the crusher. There are companies that specialize in specific items, such as dashboards, and they box and ship dashboards in lots of 125 pieces at a time. It isn't like the old days when the cars would be in the yards for years. This particular yard processes between 200 and 300 cars a week!

 

[GeoHorn]

….
That is why you can't get a part for a 10-year-old or older car, except from the aftermarket or a salvage yard.
…

That statement may have some truth in it… but it’s not the primary reason.

The Primary reason mfr’s and dealers rarely supply NOS parts more than 10 years old is due to simple marketing/accounting practices coupled to tax-policies.

I used to work with a warehouse-man for Chrysler/MoPar in NW Houston. He explained that one of his primary duties was to go thru inventory on a Monthly-basis….and identify that stock which was reaching Ten-Years since OEM mfr. That inventory was Removed from the distribution network and one of two avenues was selected: either send expired items to auction (such you indicated)..

…but the most offensive and most-common sad sight to behold…. HE and his fellow workers were assigned DESTRUCTION of such thnings as complete engines, blocks, heads, cranks, and other major components…. In accordance with contract-agreements with the previously-mentioned auction-re-marketers. (This was by design to reduce competition with those industries.)

One of the saddest days of my life was watching him use a huge hydraulic press that crushed and punched holes in complete, perfectly-preserved NOS 318 cu. in. V-8 engines ….so the factory could legitimately claim a Tax-Loss on that ten-yr old inventory. (Otherwise, if they sold it, they would have to report income.)

(He told a story of a co-worker who lost his job when he tried to abscond with one to give to a buddy. The guy lost a long-term job and faced a theft-charge instead of doing his job and destroying the engine.)