Price fixing.

[Thingy]

Just wondering how prices are fixed in the caravan world. When buying say a new car or caravan, there is usually room for some movement/haggling, depemdant on how good or bold you are at that very subject. I am usually red hot and can always find a bargain. But, various items in the caravan world, such as the Kampa air awnings, no matter how much i shop around, I cannot find so much as one penny different the length and breadth of the country. Seems to be so for quite a few of the awning manufacturers, so, do you think this is some sort of price fixing. Im not moaning you understand, just musing on a slow Sunday evening.

 

[ProfJohnL]

The way the law stands at the moment, the manufacture of a product cannot tell a retailer what price to sell it for. They can however suggest a recommended retail price, but the retailer can ignore that and sell an item for whatever price they like.

A lot depends on how the item is retailed. For example if a manufacturer wants to encourage a retailer to carry stock, they will usually offer a better discount to the retailer, than if the retailer has to order on demand. I'm guessing that none of the dealers you have contacted actually carry stock of the awning I'd be pretty certain if you want one, they would have to order it from the warehouse or direct from the manufacturer.

If that is the case the discount offered to the retailer will be much less, which in turn reduces the haggle margin they may be able to offer to the customer.

If you suspect there is a price fixing arrangement on a product, then report it to your Trading Standards Department, who may offer some advice to you and may investigate it.

 

[Chrisjkerr]

Morning Thingy,

From my experience over the last 7 years with touring in a large tent and then onto buying 3 Caravans in 18 months (for various reasons). I found that almost everything seems to be of a similar price and not many dealers are prepared to discount anything at all knowing this. It's as if there's a secret among dealers and accessory retailers to keep the prices the same with little or no room for negotiation. I understand that some dealers have larger overheads than others and accept that they need to make a profit to stay in business but sometimes it feels as if they're pulling our trousers down as we're on the way out.

I'd rather we all get a good deal. Good service, competitive prices, the dealer makes a bit and the customer goes away thinking he got the deal he wanted.

When I traded my caravan in to a dealer, I knew I would be offered less than If I sold private and I didn't want to, nor have the time to sell private. It's the same with cars I guess, but what I wasn't prepared for was the constant devaluation of my caravan at every dealer. They all offered me the same trade in against a new Continental 645 and all gave me the same figure to change give or take £50 and a dealer delivery fee removed. One dealer even told me when I tried negotiating hard... "why would I sell to you with more discount when I can sell this van to someone else next week at the asking price"

I never expected to get anything thrown in or given the price i paid the year before but when they trade a van in for 12k because the Glasses Guide says so....it becomes one of those things that really grates on me, especially when they tell me it'll retail at "ONLY" £14k and then I see it on their website at £15.5k a week after! They tell you that they need the margin to offer the great service and excellent warranty and all the other usual salesman spiel! My caravan was still within the dealer warranty period!

I'm not surprised this industry is worth over £6, billion!
Take for instance Isabella. I purchased a new Ambassador Seed in June from a large Warwickshire dealer who told me that Isabella don't give them much room for discounts This awning was advertised at RRP £2,604.00 and they're advertising it with a £534.00 discount bringing the cost to £2,070 which is pretty much the same at all of the other Isabella re-sellers I tried. Not one of them would offer me any more discount on the already supposed/fixed discount. I had to buy an awning carpet which is where i manged to haggle £10 per square meter discount saving me about £70.00 overall

I would say I'm a good haggler, always have and always will be but the caravan industry is by far the hardest sector to grab a bargain at any time of the year!

Chris

 

[Thingy]

Its not just me then :cheer:

Im glad others have noticed this, I was beginning to think I was losing my touch.

Maybe a good idea to have a section in the forum titled "bargain watch".

 

[Raywood]

I have to agree awnings seem to be priced at virtually the same price everywhere although I have seen some minor differences in the advertised price in magazines. I think you might get a bit off if you haggle as there is a fair profit margin and the dealer will probably give you something if you point out that you can go to the next one if he does not . I am afraid you just have to be brave and cash rather than a credit card might also help.
On other accessories where the price is less well known the cost can vary quite a bit so shopping around can help. I have seen a difference of £30 on a wheel clamp.

 

[Chrisjkerr]

I've just forgotten I had this.

Just to add to this price fixing Topic, Whilst I was at my local dealer last week, I managed to sneak a peak to what was on the screen as I was being served. It's an Isabella invoice to the dealer. I've blanked out the invoice details for confidentiality and left the onscreen costings. I assume these figures are NET and don't include VAT. I've worked out the VAT element and also worked out the approximate profit of the items based on their average website prices. Hopefully this gives us an idea on how much a dealer can be making on a top brand item!

Capri Coal awning and Carbon X frame.

Carbon X Frame for Capri Coal Awning £350.05 +VAT
Capri Coal 1025cm Awning £801.06 +VAT

Total cost for the awning components £1,151.11 +VAT

£230.22 Total VAT @ 20%
£1,381.33 Total Inc VAT

£1,597 Is the Discounted RRP they sell to you at.

Dealer profit £215.67

Isabella 80 X 60 Table RRP £79.00 they sell to you at.

Cost of Table £47.78 +VAT
£9.56 TOTAL VAT @ 20%
£57.34 Total Inc VAT

Dealer Profit £21.66

Isabella 80 X 120 Table RRP £94.00 they sell to you at.
Cost of Table £56.47 +VAT
£11.29 Total VAT @ 20%
£67.76 Total Inc VAT

Dealer Profit £26.24

Isabella Single Cupboard 60x48x86 RRP £70.00 they sell to you at.
Cost of Cupboard £41.99 +VAT

£8.40 Total VAT @ 20%
£50.39 Total Inc VAT

Dealer Profit £19.61

 

[chrisbee1]

When I bought my last caravan I couldn't get the dealer to drop one penny off the awning price even though I was spending over £14.000 on the caravan. I don't know how true it is but the shop assistant told me if they sell awnings at a discounted price, the manufacturer wont supply them with any more. Does that constitute price fixing? I suppose to stay in business a dealer has to mark up goods by a decent percentage.

 

[RayS]

I had just the same experience when buying a new porch awning in the Autumn of last year hoping that there would be some seasonal negotiation room. With an extensive on-line search including the awning specialists offering 'lowest prices ever' etc. the spread of prices was just over 1%, and usually delivery extra.

 

[ProfJohnL]

...................................................

Capri Coal awning and Carbon X frame.

Carbon X Frame for Capri Coal Awning £350.05 +VAT
Capri Coal 1025cm Awning £801.06 +VAT

Total cost for the awning components £1,151.11 +VAT

£230.22 Total VAT @ 20%
£1,381.33 Total Inc VAT

£1,597 Is the Discounted RRP they sell to you at.

Dealer profit £215.67

Isabella 80 X 60 Table RRP £79.00 they sell to you at.

Cost of Table £47.78 +VAT
£9.56 TOTAL VAT @ 20%
£57.34 Total Inc VAT

Dealer Profit £21.66

Isabella 80 X 120 Table RRP £94.00 they sell to you at.
Cost of Table £56.47 +VAT
£11.29 Total VAT @ 20%
£67.76 Total Inc VAT

Dealer Profit £26.24

Isabella Single Cupboard 60x48x86 RRP £70.00 they sell to you at.
Cost of Cupboard £41.99 +VAT

£8.40 Total VAT @ 20%
£50.39 Total Inc VAT

Dealer Profit £19.61

Hello Chris,

I'm sorry but you have made a fundamental mistake. The difference between sale price and cost to purchase is Margin not profit. There will be overheads such as wages, heating lighting national insurance and taxes, interest on loans etc that has to be calculated in and have to be paid for out of the margin. The dealer's actual profit on the sale will be somewhat smaller than you suggest.

 

[Chrisjkerr]

Evening Prof.

I knew when I clicked Submit that you'd come here and comment, I also knew when I read it back that I hadn't mentioned the fact it doesn't cover business overheads and associated costs and I should have corrected it to read Margin but didn't have the time. So, I guess you're right. As usual.

I was only trying to highlight quickly to the forum members the differences on a basic buy and sell for the items in the picture. So when they won't give us a penny more discount we can see that they actually could do if they wanted to.

 

[MichaelE]

Morning Thingy,
t.

When I traded my caravan in to a dealer, I knew I would be offered less than If I sold private and I didn't want to, nor have the time to sell private. It's the same with cars I guess, but what I wasn't prepared for was the constant devaluation of my caravan at every dealer. They all offered me the same trade in against a new Continental 645 and all gave me the same figure to change give or take £50 and a dealer delivery fee removed. One dealer even told me when I tried negotiating hard... "why would I sell to you with more discount when I can sell this van to someone else next week at the asking price"

All dealers say this , we got up and walked away from a deal when we told something similar , he chased us across the car park saying he could do something better now, but it was too late.
Thats why buying at the shows are really good because you can walk off and go to another dealer without driving miles.

 

[ProfJohnL]

Hello Chris,

I didn't disappoint you then :cheer:

Different products will attract different margins, and as I pointed out, a lot hinges on whether its an item to be stocked or ordered on demand.

I know because I worked in the industry, that the mark up on spare parts can often be as high as 40%,for stock items. This is to make it attractive for retailers to actually carry some stock. the awning sale you highlight is only attracting about a 20% mark up which as I pointed out means it was an on demand order.

20% margin is not a lot, and when you take into account all the other overheads, it might translate into as little as 5% net profit.. That is not a lot, and I can see why on this example there would be very little haggle room on just an awning.

However if it were part of a larger deal such as the purchase of a caravan, then if the dealer saw a deal possibly slipping away for the want of a little flexibility they may be more inclined to move the awning for even a break even price if it levered the sale of the more valuable caravan.

 

[Chrisjkerr]

No, No disappointment!

Yeah, I see what you're saying Prof.

 

[colin-yorkshire]

ummm interesting thread, I wonder, what if everybody expected a discount on everything they bought, like a tank full of fuel or a weeks shop in a supermarket. the word chaos springs to mind.
you would not expect Tesco's to give a discount so why would you expect a dealer to give one on an awning or a van surely a price is a price you accept it or walk away,

 

[Thingy]

Think you may have missed the point Colin. I wasnt saying I expected a discount or have a right to one, I was making the point that in most other markets there is some room for haggling if you are prepared to do it, but within various sections of the caravan market, the prices are utterly identical and there isnt a deal to be had.

Mind you, if I could get a discount on fuel, I really really wouldnt say no.

 

[ProfJohnL]

It is entirely up to the retailer to decide what price to sell something at, and it can be quite an interesting exercise to try haggling with retailers. It usually most successful with independents but it has worked in some national stores for things like tyres, or for ex display items when its been the last one in store.

You need to remember that when a retailer displays a price its not a fixed thing, but its their first offer to entice you to purchase. There is nothing to stop you offering what you think its worth, but the retailer is not obliged to accept you lower offer. In fact the retailer is not obliged to accept your custom at all and may refuse to sell to you.

In national stores it is more difficult because the ordinary shop assistant is not the named retailer, and they do not have the authority to vary prices, but managers may have some discretion.