Is this ETC pricing rumor true?

[Colin]

July means happy new fiscal year to me! In this bountiful month of refreshed budgets, I am updating an Express to an Ion.

It's deja vu because I just did the same thing about 2 1/2 years ago at my last job. Back then, I heard a rumor about ETC pricing and I've wanted to find out if it is true. We got bids for an Ion with all the trimmings from a couple vendors--one the big regional player that did the original installation in the facility a decade prior, and the other our friendly neighborhood company who we had done lots of business with for a long time. When we asked friendly neighborhood guy to bid, he warned that he probably wouldn't be able to compete because when a new console is bought to update an existing ETC installation, ETC gives preferential pricing to the dealer who did the original full system install. This was confirmed only by circumstantial evidence when his bid did come in way higher than the other company's. Our relationship with the local company was really good and I'm pretty sure he would not feel it necessary to make something up to explain why he can't get the price down, but I wonder...

Can anybody truly confirm or deny?

 

[ScottT]

I can confirm that pricing is "POA" - price on application for the higher budget items, but that's really all I know.

 

[gafftaper]

I've never heard that one, but pricing in this industry is a mystery. Manufacturers give wholesale pricing deals out how they want. I've heard that better pricing goes to the dealer who puts in a price request first, I've heard it depends on the volume that a dealer sells, I've heard that it depends on how long the dealer has sold a product. I'm sure there are other factors too.

The key is to get a lot of quotes from both local and national sources and then weigh the benefits of where you are getting the best price from.

 

[Colin]

Thanks guys for confirming that this is probably unconfirmable. I haven't asked any more of my salespeople directly, but I don't expect they would necessarily want to get into it. Today I requested three quotes, including one from the company that did the original system, which is Barbizon this time compared to High Output in my previous purchasing experience, so another big company with big purchasing power regardless of any additional discount they may or may not get for having done the original contract in the facility. I guess since larger companies are going to be the ones doing most medium and large venue installations it is unlikely that we'll find a situation where the rumor is really tested, i.e. a smaller local company as the original installer bidding against a big company with no prior work in the venue.

I appreciate the input!

 

[Robert]

My experience was that they give pricing preference to their "favorite" dealer. If the same job comes in for bid from another vendor, they will never give a lower price then for their preferred vendor. Multiple bids for the same gear from ETC will do no good unless you're looking at MAP and not a bid.

 

[BillConnerFASTC]

I don't think it is as arbitrary as suggested. Were it, i think you'd see dome federal anti-trust action (and some old timers in theatre lighting remember the last time this hspoened and are not rushing to do it agsin.) The more product a vendor buys (for resale among other reasons) the greater the discount. Pretty straight forward. Then a dealer who can actually get the product they represent may get "spec credit" in the form of a discount. It's a commission of sorts for getting the product specified and maybe a few points. There are projects with no spec credit (mine are like that) and some sales are not "projects" but just orders.

That's my view and understanding in my words. If they cross a law, then there are probably different words. Overall, seems fair to me. In the op's case, perhaps the original vendor was getting dpec credit but more than likely just the bigger discount for selling more (orders of magnitude quite possibly based on names mentioned) .

 

[Colin]

Thanks, Bill. I hadn't considered the legality of it all. Makes sense, and what you describe is much more what I would expect is going on.

 

[Footer]

If that was true Barbizon would actually be able to win a bid... which for me never happens.

 

[BillConnerFASTC]

I should have added that this is not that different among manufacturers.

Odd that Barbizon never wins a bid for footer but that im pretty sure they sell more ETC gear than any other dealer.

 

[derekleffew]

im pretty sure they sell more ETC gear than any other dealer.

More than say 4Wall or PRG?

he warned that he probably wouldn't be able to compete because when a new console is bought to update an existing ETC installation, ETC gives preferential pricing to the dealer who did the original full system install.

With no direct knowledge or inside information, I call BS on this "rumor." The only advantage I can see the original installer having MAY be familiarity with the installation. Since ETC has the factory drawings on file, even this is not much of an advantage. Notwithstanding @BillConnerASTC's explanation of "spec credit."

What you, as the end user, pay for a product depends on 1) the dealer's cost, based on how much product they move; and 2) what the vendor's mark-up is. The large national installer probably gets a lower dealer cost, but also probably has greater expenses. There are many reasons we say "support your friendly, local dealer"* around here. Price isn't everything; I know it's often difficult to convince a purchasing agent of that.

*From http://www.controlbooth.com/wiki/?title=Collaborative-Articles:Dealers-for-Supplies-and-Equipment :

A common Question on CB is "Where should I buy from?" The majority of CB pros agree that the best place is your local dealer. While the big national dealers or Internet dealers may be able to offer you a better price at times they are not going to be able save your show if something goes wrong on a Saturday night. Having an established relationship with your local dealer will possibly save you. On more than one occasion I've had the owner (or a sales person) from my local dealer stop by on his/her way home from work to drop off another unit to get my show up and running. Finally, having a long term relationship with a local dealer will get you better prices from that dealer, that will come close to what the national and internet dealers can offer. At the bottom of this post...

 

[Colin]

There are many reasons we say "support your friendly, local dealer"* around here. Price isn't everything; I know it's often difficult to convince a purchasing agent of that.

Agreed, and actually with the exception of the last Ion I bought, I've always gotten equal or better pricing from my local dealers for everything from gel to fixtures to even an $80K line array. Better/faster service, and they can squeak by at a lower margin knowing that I'll be a regular customer right around the corner. I'm still building those relationships now after moving to a different locale that seems to be serviced more by regional/national companies. I will say though that those big guys I have accounts with now (especially BMI) are doing a good job acting like friendly local dealers so far.

 

[gafftaper]

Manufacturer pricing for dealers aside, I think the bigger factor is the price the dealer is willing to cut for you. If a company installed your system they have already made a lot of money from you and it's in their best interests to cut you a deep discount to keep you as a customer.

I've been a loyal customer of the same sales guy at my local dealer for close to 20 years. When I'm looking for a price quote I always get a price that is around 5% less than the best price I can find online. He cuts his commission rate for me because he knows I'll be calling him back next year.

 

[BillConnerFASTC]

I've been told Barbizon sells more ETC gear than any other dealer, but that was several years ago.

As far as spec credit, if a dealer has a hand in writing the spec, they do get some credit in their cost for the project. Whether or not the original installer claimed spec credit or if they got it is unknown.

Not sure I agree large national dealers have higher overhead. Kind of contrary to conventional wisdom. Why did the big box stores put so many small local stores out of business with lower prices? I'm surprised I don't hear more about this kind of gear being sold on Amazon.

 

[Footer]

Keep in mind too that those "big national" dealers all started as small regional dealers. BMI still operates like that. To me, they are my "local dealer". I have had the BMI sales manager drop stuff of on his way home. For those of us who change gigs often it is nice to have a person who you can call no matter where you are in the country and know they can get you what you need.

If you have not gotten a quote pulled from BMI for awhile give them a call. You are in eastern mass... at most you are a 3 hour drive from their shop. They want your business.... and in the last few years they have really gone the extra mile to beat just about everyone's price point.

Plus, they will still sell you Lee gel unlike Production Advantage. (really, you won't sell lee gel... fix this... and don't tell me Rosco E-color is the same thing). This one fact alone has kept me from sending my bi-yearly consumables PO's to them.

 

[Colin]

Closing the books on this thread, I just took delivery of an Ion from BMI, who totally blew away quotes from Barbizon and ALPS.

Barbizon's quote was easily the highest, so in line with Footer's experience and another nail in the coffin of my old dealer's idea that the facility's original installer gets a special discount (unless Barbizon is extra super duper greedy and tried to pocket it all).

Not sure where that leaves us with the more logical idea that the dealer doing the most volume can sell for less. I guess BMI is probably somewhere in the same ballpark as Barbizon in terms of volume, and I'm sure that having an established relationship with me they tried harder than Barbizon. The difference between them was still surprising to me--close to 10%.

ALPS seemed like they tried a little but maybe couldn't compete with BMI's buying power. I was sort of interested in connecting more with ALPS since they're closest to me, but I also like my relationship with Paul at BMI so his low price was a no-brainer.

 

[rsmentele]

It also depends on your sales rep and the relationship you have with them. As most are commissioned and a bigger discount to you means money out of their pocket but if they feel you are worth it...

 

[BillConnerFASTC]

Odd that Barbizon has gotten our work and is large - so must get some work somehow.

 

[Colin]

Odd that Barbizon has gotten our work and is large - so must get some work somehow.

I don't have any data to back this up, but it seems like Barbizon is more focused on selling whole new systems rather than a "mere" console upgrade, so maybe they only start beating the competition with the big jobs?

 

[Footer]

Barbizon also has multiple offices in high rent areas where they have to pay more for property and the cost of living is higher. Barbizon also caters to the film guys where money is not as large of a barrier... But time is so those locations pay off. BMI's shop is in the foothills of the Adirondacks on the back side of a municipal airport. While being close to two summer vacation meccas it still offers a pretty low cost of living. You pay for the Manhattan office and storefront even if you don't use it.

 

[gafftaper]

I have a barbizon dealer I regularly deal with and he gives me excellent pricing. I think personal relationship with a regular sales guy and how much he is willing to cut his commission is probably the biggest factor in all of this