On Thursday, November 13, 2014 2:26:35 PM UTC-5, SMS wrote:
On 11/12/2014 4:22 AM, trader_4 wrote:

I would be surprised if Costco didn't know to
the penny how much their cost is to install a tire, including the nitrogen
and they keep that in mind when setting the price.

You keep making the error of believing that price are set based solely
on the retailers costs, when so much more goes into pricing strategy.

You keep making the error of not reading what I post and making wild
assumptions. I never said any such thing. In fact, I explained via
economics why adding costs to a product results in higher prices. And
it's not by the strawman process that you keep going back to, ie just
adding a fixed markup to costs. Economics 101 says businesses don't
just add a fixed markup. They maximize profits.



Look at gas stations. Right now you can buy a gallon of top tier
gasoline in my area for $2.80 or $3.60. There is essentially no
difference in the quality of the gasoline. The retailers are buying fuel
from the same refinery and the wholesale cost is almost the same.

Why does a station charge 80¢ per gallon more, knowing that they will
sell far less volume? There are valid reasons for this that have nothing
to do with their costs.

No **** Sherlock. Do any of those stations sell premium for the same as regular? Now think about that in context of adding nitrogen to tires. There
are folks out there like you who believe nitrogen has extraordinary utility
beyone regular air. You told us it extends tire life, results in less
blow outs, less returns, saves lives, less need to check/ refill the tires, etc. That results into some
folks being willing to pay higher prices for tires with nitrogen in them.
Hell, if I believed even half of that stuff, I'd be willing to pay $10+ a tire
more. That creates a new demand curve for those tires, at higher prices. That
is economics 101.

On Thursday, November 13, 2014 2:33:14 PM UTC-5, SMS wrote:
On 11/12/2014 9:03 AM, scarecrow wrote:
trader_4 wrote:

I would be surprised if Costco didn't know to
the penny how much their cost is to install a tire, including the nitrogen
and they keep that in mind when setting the price.

I'm late to the party so maybe someone's also mentioned this, but
perhaps Costco figures if someone is dumb enough think they have to
drive miles to top up their tires instead of doing it in the comfort
of their own garage they might also, while there, go in and buy an
impulse flatscreen.

Tires are very high margin items, like mattresses.

More crap introduced as fact without any basis. Google quickly
produced this:

http://www.automotivemanagementnetwo...ales-margin/p1

No one there is talking about tires having very high margins. Unless
you think 20 to 30% markup, $16 to $30 a tire is very high margin. Interestingly, several tire sellers are saying that they do set their selling price based on just adding a markup to cost.

Doh!





You want to maximize
your sales volume. Prices are set to maximize profit, they are not set
by calculating expenses and then adding some percentage to that.
Costco's strategy is to maximize profit by increasing their market share
by pricing things competitively.

Costco also seems to have a corporate philosophy of not being sleazy.
They never charged separately for valves or road hazard

Now it's "sleazy" to charge separately for valve stems or road hazard
insurance? Good grief!

"trader_4" wrote in message
...

Now, as I've said before, neither you nor I know for sure how Costco sets
it's
tire prices. It could be that they throw a dart at a board. It could be
that
they lose money on every tire sold and don't give a damn. But economics
is a science and the expected result in a free market when you increase
the
cost of production is higher prices. Prices go up to maintain the same
margins.


I am sure people have been looked at in many years over the years. To
someone like me that has not, it seems difficult to know what drives people
to buy things. I know a small farmer that had some produce for sell at a
flea market. At 25 cents he could not sell any, but as soon as he took that
sign down and made it 3 for a dollar he started selling the same thing.
Peopel would pay more ,but probably thought they were getting a bargain.

While right or wrong, I am sure any business of any size has some people
looking at ways to get customers in the store and make the most profit.



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On 11/13/2014 11:52 PM, scarecrow wrote:
On Thu, 13 Nov 2014 17:35:36 -0500, wrote:

The advantage of Costco is they have EVERYTHING under one
roof.

So does my Walmart. And you don't have to pay to get in...


Big difference. I shop at both as they both have benefits tot he
consumer. The meat from WalMart sucks and is injected with brine
solution. The meat at Costco, BJ's and the like is top quality.

We use Cascade Platinum dish washing detergent. It is 17¢ a dose at
BJ's and is 23¢ at Wal Mart. Assuming a load a day I save $21 a year on
just one little item. Laundry detergent was a savings, paper towel was
minimal. I can save enough in meat in a month to pay for the membership.

Your money, your choice, but the Clubs can be a money saver to a smart
shopper.

On 11/14/2014 10:44 AM, Ralph Mowery wrote:


I am sure people have been looked at in many years over the years. To
someone like me that has not, it seems difficult to know what drives people
to buy things. I know a small farmer that had some produce for sell at a
flea market. At 25 cents he could not sell any, but as soon as he took that
sign down and made it 3 for a dollar he started selling the same thing.
Peopel would pay more ,but probably thought they were getting a bargain.

Everyone know that the three for a dollar stuff is better quality than
the quarter stuff.

I've seen that happen over they years. I've seen it with industrial
products too. A certain tape for cartons was $1 a roll. A guy started
making it and could profitably sell it for half that, but had no takers.
He increased the price to 75¢ and got orders. Eventually sold the
company at a nice profit too. .

On Fri, 14 Nov 2014 13:52:35 -0500, Ed Pawlowski wrote:

On 11/13/2014 11:52 PM, scarecrow wrote:
On Thu, 13 Nov 2014 17:35:36 -0500, wrote:

The advantage of Costco is they have EVERYTHING under one
roof.

So does my Walmart. And you don't have to pay to get in...


Big difference.

Squint again at the end of my sentence and you will see a smiley.

I shop at both as they both have benefits tot he
consumer. The meat from WalMart sucks and is injected with brine
solution. The meat at Costco, BJ's and the like is top quality.

We use Cascade Platinum dish washing detergent. It is 17¢ a dose at
BJ's and is 23¢ at Wal Mart. Assuming a load a day I save $21 a year on
just one little item. Laundry detergent was a savings, paper towel was
minimal. I can save enough in meat in a month to pay for the membership.

Your money, your choice, but the Clubs can be a money saver to a smart
shopper.

On 11/14/2014 5:20 PM, scarecrow wrote:

Big difference.

Squint again at the end of my sentence and you will see a smiley.


Hey, I can see it on this computer!

rbowman posted for all of us...



wrote:

So all "discernable advantages" should be paid for by someone else
and provided to you for free?? Sounds a little bitopportunistic anda
lot like a bad case of "entitlement"

I won't mention politics but SMS's view that he is fully capable of
maintaining the pressure in his tires by checking it with a tire gauge but
the general populace is not and should be provided with a free benefit to
save themselves from themselves has a familiar ring to it.

There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on tires
but it may a selling point that costs then very little in the volume they
do. Ask Claire, he will tell you they had a price structure they followed
and the only thing that wasn't figured in was rework. But that was included
in the labor charges and/or tech agreements.

--
Tekkie

On 11/18/2014 5:28 PM, Tekkie® wrote:


There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on tires
but it may a selling point that costs then very little in the volume they
do.


You make a good point. The only "free" stuff comes from the government.

Ed Pawlowski wrote:
On 11/18/2014 5:28 PM, Tekkie® wrote:


There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on
tires
but it may a selling point that costs then very little in the volume they
do.


You make a good point. The only "free" stuff comes from the government.

Hi,
Not really. You pay tax, No?

On 11/18/2014 11:16 PM, Tony Hwang wrote:
Ed Pawlowski wrote:
On 11/18/2014 5:28 PM, Tekkie® wrote:


There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on
tires
but it may a selling point that costs then very little in the volume
they
do.


You make a good point. The only "free" stuff comes from the government.

Hi,
Not really. You pay tax, No?

Didn't think I needed a smiley face, but here is one you can use.

"Tony Hwang" wrote in message
...
You make a good point. The only "free" stuff comes from the government.

Hi,
Not really. You pay tax, No?

Many that get free stuff from the government do not pay any tax. Maybe
sales tax, but that money is given to them .



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On 11/18/2014 10:58 PM, Ed Pawlowski wrote:
On 11/18/2014 5:28 PM, Tekkie® wrote:


There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on
tires
but it may a selling point that costs then very little in the volume they
do.


You make a good point. The only "free" stuff comes from the government.

Guy I know from church, military vet. He is so pleased
at the free phone, free medical care, etc. Every time
he says "free" my brain changes that to "taxpayer
funded".

Star Spangled banner: "O'er the land of the taxpayer
funded, and the home of the brave."

--
..
Christopher A. Young
Learn about Jesus
www.lds.org
..

On Wed, 19 Nov 2014 07:46:15 -0500, Stormin Mormon
wrote:

On 11/18/2014 10:58 PM, Ed Pawlowski wrote:
On 11/18/2014 5:28 PM, Tekkie® wrote:


There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on
tires
but it may a selling point that costs then very little in the volume they
do.


You make a good point. The only "free" stuff comes from the government.

Guy I know from church, military vet. He is so pleased
at the free phone, free medical care, etc. Every time
he says "free" my brain changes that to "taxpayer
funded".

Star Spangled banner: "O'er the land of the taxpayer
funded, and the home of the brave."
If he's a military vet, he's likely paid for it 3 times over. You
want to complain, retroactively trade places with him. Korea, VietNam,
Desert Storm, or Afganistan - doesn't make any difference.
There are a lot of invisible injuries (ptsd etc) that just don't go
away.

On 11/19/2014 9:05 PM, wrote:

You make a good point. The only "free" stuff comes from the government.

Guy I know from church, military vet. He is so pleased
at the free phone, free medical care, etc. Every time
he says "free" my brain changes that to "taxpayer
funded".

If he's a military vet, he's likely paid for it 3 times over. You
want to complain, retroactively trade places with him. Korea, VietNam,
Desert Storm, or Afganistan - doesn't make any difference.
There are a lot of invisible injuries (ptsd etc) that just don't go
away.


Would be nice if he'd say "taxpayer funded" instead.
At least his description would be accurate. From what
I know of his service, though, he's paid every penny
of the value in what he did for the country.


-
..
Christopher A. Young
Learn about Jesus
www.lds.org
..

posted for all of us...



If he's a military vet, he's likely paid for it 3 times over. You
want to complain, retroactively trade places with him. Korea, VietNam,
Desert Storm, or Afganistan - doesn't make any difference.
There are a lot of invisible injuries (ptsd etc) that just don't go
away.

Thank you Claire

--
Tekkie

On Mon, 24 Nov 2014 16:41:31 -0500, Tekkie®
wrote:

posted for all of us...



If he's a military vet, he's likely paid for it 3 times over. You
want to complain, retroactively trade places with him. Korea, VietNam,
Desert Storm, or Afganistan - doesn't make any difference.
There are a lot of invisible injuries (ptsd etc) that just don't go
away.

Thank you Claire
You are welcome. The young lad that was killed at Pettawawa last week
trained with the daughter of a very good friend of ours.

On 11/18/2014 2:28 PM, Tekkie® wrote:

snip

There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on tires
but it may a selling point that costs then very little in the volume they
do. Ask Claire, he will tell you they had a price structure they followed
and the only thing that wasn't figured in was rework. But that was included
in the labor charges and/or tech agreements.

Costco, or any store, determines prices based on what generates the
maximum revenue, not on what it actually costs them to provide a product
or service.

The mistake that many people make is to assume that the cost of the
included nitrogen is a line item in their price calculation of what to
charge for tires. Retail doesn't work that way, for better or worse.
They also include valve stems on non-TPMS tires instead of charging
extra for it as many tire stores do--$2 for a 10¢ item. Costco is not
going to lower the price of a tire by 10¢ if a customer declines the
nitrogen.

Costco's tiny cost for nitrogen is almost certainly offset by savings in
labor and warranty costs so if anything they should charge extra to
customers that don't want nitrogen.

On 11/13/2014 12:32 PM, scarecrow wrote:
SMS wrote:

On 11/12/2014 9:03 AM, scarecrow wrote:

I'm late to the party so maybe someone's also mentioned this, but
perhaps Costco figures if someone is dumb enough think they have to
drive miles to top up their tires instead of doing it in the comfort
of their own garage they might also, while there, go in and buy an
impulse flatscreen.

Tires are very high margin items, like mattresses.

If your argument is correct and tires really do last longer with
nitrogen then it appears that Costco is shooting themselves in the
foot since they would have less repeat sales over time, not more.

Costco is one of the few stores that sells tires that actually honors
tread wear warranties. They also include road-hazard insurance rather
than charge extra for it.

Like any business they want to minimize the cost of returns. They get
credit back from the tire manufacturer for tread wear returns but few
people take advantage of this even though they are entitled to. Road
hazard replacements aren't covered by the tire manufacturer, so they
want to minimize them.

If everyone was good about keeping tires properly inflated then there
would be little upside in inflating with nitrogen. They aren't so there is.

Remember, even though some tire stores may charge $5 per tire for
nitrogen, the actual cost to generate that nitrogen is about 1/100th of
that.

In alt.autos.ford Sasquatch Jones wrote:

For example.... one $55 tire over the phone at Big O Tires ended up being $107 after tax, balance, installation and recycle fee. The "4 for 2" special now being advertised by Big O Tires turned out to be four $55 tires plus extras, totaling over $400: two tires at $70 each plus $40 times 4 for balance, installation, tax and recycle fee, plus the "required" super deluxe lifetime front end alignment for $110.

I had a flat on my Durango while towing a horse trailer. Don't know when
it happened, spotted it when I came out of a restaurant. Drove across the
street to Big-O. They wouldn't even consider looking at it while the horse
trailer was attached.
grumble.
They took it off, said it was unrepairable, a zillion dollars for a
replacement. Fortunately, they were out of stock.

I had them put the full size, but different looking, spare on, and headed
home.

My regular tire guy said nothing major, fixed the flat, and I wore the tire
out.

--
Clarence A Dold - Santa Rosa, CA, USA GPS: 38.47,-122.65

On Monday, November 24, 2014 7:05:15 PM UTC-5, sms wrote:
On 11/18/2014 2:28 PM, Tekkie® wrote:

snip

There is NO "free benefit"! The customer pays for EVERYTHING. A business
must make a profit to survive. I don't know Costco's business model on tires
but it may a selling point that costs then very little in the volume they
do. Ask Claire, he will tell you they had a price structure they followed
and the only thing that wasn't figured in was rework. But that was included
in the labor charges and/or tech agreements.

Costco, or any store, determines prices based on what generates the
maximum revenue, not on what it actually costs them to provide a product
or service.

The mistake that many people make is to assume that the cost of the
included nitrogen is a line item in their price calculation of what to
charge for tires. Retail doesn't work that way, for better or worse.
They also include valve stems on non-TPMS tires instead of charging
extra for it as many tire stores do--$2 for a 10¢ item. Costco is not
going to lower the price of a tire by 10¢ if a customer declines the
nitrogen.

Costco's tiny cost for nitrogen is almost certainly offset by savings in
labor and warranty costs so if anything they should charge extra to
customers that don't want nitrogen.

You keep making this claim that the cost of nitrogen is offset in labor
and warranty costs, without a shred of supporting evidence. The only
actual real world data that I've seen is a test by Consumer Reports that
showed that tires that were purged of all air, then filled with N, had
a tire pressure difference that was about 1 PSI higher over the same
tires filled with regular air, a year later. It's hard to see how that translates into labor and warranty savings at Costco, or anywhere else.

And I don't think the poster is saying that the customer specifically pays
for Costco's costs on a line item, buy line item basis. But if Costco's
costs do get paid for by consumers, one way or another.

posted for all of us...



In alt.autos.ford Sasquatch Jones wrote:

For example.... one $55 tire over the phone at Big O Tires ended up being $107 after tax, balance, installation and recycle fee. The "4 for 2" special now being advertised by Big O Tires turned out to be four $55 tires plus extras, totaling over $400: two tires at $70 each plus $40 times 4 for balance, installation, tax and recycle fee, plus the "required" super deluxe lifetime front end alignment for $110.

I had a flat on my Durango while towing a horse trailer. Don't know when
it happened, spotted it when I came out of a restaurant. Drove across the
street to Big-O. They wouldn't even consider looking at it while the horse
trailer was attached.
grumble.
They took it off, said it was unrepairable, a zillion dollars for a
replacement. Fortunately, they were out of stock.

I had them put the full size, but different looking, spare on, and headed
home.

My regular tire guy said nothing major, fixed the flat, and I wore the tire
out.

Dats Nize

--
Tekkie