Forum Discussion
SidecarFlip
Jun 26, 2017Explorer III
If consumer-end users only knew what components actually cost to make, they'd probably have a coronary.
I always use the tie rod end example. It costs to manufacture tie rod ends for Ford 350 pickup trucks about 25 cents each or 50 cents a pair and most of them are made in Portland Michigan at Dana corp. been there many times.
Anyway, when you buy them retail, they don't cost 50 cents a pair, more like 50 bucks a pair, even at a 'discount' auto parts store. The difference is called 'Markup'. Each time thos parts change hands, the next party mars up the cost. So, from Dana to their distributor they get marked up. From the distributor to a dealer warehouse...they get marked up again and then again when the dealer or auto parts store sells them to you.
I'm sure you get the idea and why it's to your advantage to back source parts.
On most everything there is no comparison between manufacturing cost and retail cost, at all.
859 bucks may sound outrageous but, if the market will bear that cost, it's to the dealer's advantage to sell them for that. All about making money. How business works.
I always use the tie rod end example. It costs to manufacture tie rod ends for Ford 350 pickup trucks about 25 cents each or 50 cents a pair and most of them are made in Portland Michigan at Dana corp. been there many times.
Anyway, when you buy them retail, they don't cost 50 cents a pair, more like 50 bucks a pair, even at a 'discount' auto parts store. The difference is called 'Markup'. Each time thos parts change hands, the next party mars up the cost. So, from Dana to their distributor they get marked up. From the distributor to a dealer warehouse...they get marked up again and then again when the dealer or auto parts store sells them to you.
I'm sure you get the idea and why it's to your advantage to back source parts.
On most everything there is no comparison between manufacturing cost and retail cost, at all.
859 bucks may sound outrageous but, if the market will bear that cost, it's to the dealer's advantage to sell them for that. All about making money. How business works.
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