"Jeffrey J. Kosowsky" wrote in message
...
"TURTLE" writes:

"Jeffrey J. Kosowsky" wrote in message
...
"TURTLE" writes:
Earth to Jeffrey , If you think Home Depot is giving you a big discount
on
equipment such as HVAC stuff. I run a HVAC contracting business and sell
at a
30% mark up on parts. Home Depot sells at a 50% mark up and if I sold at
Home
Depot's prices I would have to go up on prices by 20% higher. Whatever
Home
Depot sells for $1,000.00 -- I sell for $850.00 or so.

Earth to Turtle -- clearly you didn't bother to look at Home Depot's
financial statements. While results for individual items may vary,
Home Depot's gross margin according to their latest 10K filing is just
shy of 32% (not 50%), giving them an operating margin of
10%. Considering that their buying power allows them to get better
pricing than other supply houses let only the price that wholesalers
sell to contractors like yourself, I find it hard to believe that your
retail pricing is on average 20% better than Home Depot. Now that
doesn't mean that there aren't individual items where you can beat
Home Depot on price, just that I don't believe that you can buy from a
local supply house, add your own markup and still sell parts on
average 20% cheaper than Home Depot.


This is Turtle.

Huuuuummmmmm , Well Home Depot sells a 3 ton condenser only no labor for
$1,121.00 . I buy it for $411.00 + [ 30% $123.00 ] = $534.00 X 2 = $1,068.00
my
cost of condenser installed with labor included. Now do you see the profit
margin of the HVAC industry is a different story than what you see on a 10K
filing.


If you can buy, install, and profit for less than HomeDepot gross
margin of 30%, then that is truly amazing!


This is Turtle.

Well to be more exact here. There is another discount system set up for discount
/ wholesale buyers that is rated in a scale of A to Z type buyers. I'm a G buyer
and Home Depot is said to be a W buyer or could be a Z buyer. The W buyer will
be a 11% more discount than me at a G buyer level. So Home Depot can buy close
to 11% cheaper than I can.

The reason you see the higher prices from HD is they have a higher over head
than I and have to account for them. This is why Home Depot, Sears, and Low's
stores is getting their ass eat up by independent contractor and the customers
don't check prices out at Independent contractor before buying. These store are
tring to cut the over head down and now are hiring the cheapest independent
contractor to install their equipment for them and they are having too many
return calls to pay for by not installing the equipment right the first time.
They do hire the cheapest or the Rookie of the year contractor to try to keep
the overhead down to compete with the regular hvac contractor.

Now i love to bid against Sears because I alway bid about $1,000.00 cheaper than
Sears on complete hvac systems. All sears does is get a Independent contractor
to do the job and then stick a $1K on top for them as profit and handling the
paperwork and selling the unit at the stores. I don't install for Sears because
they wanted me to sign a agreement to not bid against them in my area. I would
not sign because i think the public should have a choice of prices and dealers
to choose from.

Now like I said before I walked off into a bunch of Non-Wholesale buy to try to
explain the discount system.

2 cents more.

TURTLE