Trade Discounts

[Spurfect]

Waltzed into a local electrical supplier and asked about mains cable to run underground to new shed. 16mm is what I enquired about or something similar that I would run in conduit. Spoke to my Sparky neighbour about costs and was told “huge mark ups to non trade punters”. 16mm mains is between $16- $25  pm “trade price”. Young girl looks up on computer and tells me $223.97 pm. Asked what trade was but was told I need an account to find out. What really gets up my nose is the lack of acknowledgement towards the cash paying customers. I could get my Sparky family members to buy on account for me but I always like keeping ahead of my outgoings plus I ‘m of the opinion that cash in the coffers is far better than promissory notes or stock on the shelves. I was in business from 1974 till I quit many decades later. My best customers were the “pay up front” ones. This allowed me to pay my debtors and staff and buy new stock. A few worldwide financial crashes told me that the buggers who owed money on accounts and went under, got away with a lot of people’s money. NZ is and has always been too easy to give others credit with the expectation of being paid on time, and i’m betting that many on here know the stress involved trying to squeeze blood from stones. Anyway I’m miffed that businesses are so reticent to offer people who pay up front any discounts at all. After all surely my dosh  up front is more valuable than the 3month promise to pay. I have bought huge amount of stock, I have built and renovated many places and repaired much in my time, meaning I have spent huge amounts and never had an account. I hate accounts because they always end in problems. Would you offer discounts for cash and if not why not? Thoughts?

[king1]

As far as I understand it the problem with discounts for cash nowadays is the proliferation of interest free terms... If you subsequently go and sell something for a cash price cheaper than an interest free terms price, it implies your interest free terms are not interest free.

I think the more important question though is the ridiculously huge markup - 16-25 at trade and 224 at retail, is the better part of a 1000% markup. I would shop somewhere else on principal alone if that were the case

[SueDonim]

Waltzed into a local electrical supplier and asked about mains cable to run underground to new shed. 16mm is what I enquired about or something similar that I would run in conduit. Spoke to my Sparky neighbour about costs and was told “huge mark ups to non trade punters”. 16mm mains is between $16- $25  pm “trade price”. Young girl looks up on computer and tells me $223.97 pm. Asked what trade was but was told I need an account to find out. What really gets up my nose is the lack of acknowledgement towards the cash paying customers. I could get my Sparky family members to buy on account for me but I always like keeping ahead of my outgoings plus I ‘m of the opinion that cash in the coffers is far better than promissory notes or stock on the shelves. I was in business from 1974 till I quit many decades later. My best customers were the “pay up front” ones. This allowed me to pay my debtors and staff and buy new stock. A few worldwide financial crashes told me that the buggers who owed money on accounts and went under, got away with a lot of people’s money. NZ is and has always been too easy to give others credit with the expectation of being paid on time, and i’m betting that many on here know the stress involved trying to squeeze blood from stones. Anyway I’m miffed that businesses are so reticent to offer people who pay up front any discounts at all. After all surely my dosh  up front is more valuable than the 3month promise to pay. I have bought huge amount of stock, I have built and renovated many places and repaired much in my time, meaning I have spent huge amounts and never had an account. I hate accounts because they always end in problems. Would you offer discounts for cash and if not why not? Thoughts?

You have several different issues. The first is the price discrepancy. I would say that the young girl on the computer looked up something different (eg 3-phase). A mistake. No supplier is going to put on that much markup when they are competing with sellers on TradeMe etc.

You seem to misunderstand how trade accounts and associated discounts work. The discounts are there so tradies can buy at trade price to onsell the goods to their customer. If you are doing the job on your own home then you are that end customer and you wouldn't expect to get a trade price. Having an account provides for a delay of 6 weeks at the most - not 3 months. After providing credentials and opening a trade account there would be nothing to stop the account holder paying cash - even if they have qualified for a trade account. The word "trade" is the important bit. It's for people in the trade who will have ongoing purchases month after month because they are tradies, doing jobs for their customers.

General discounts for cash are difficult in today's environment. A one man business usually does it to avoid tax and can really only fudge labour charges as prices of goods are shown on the invoices they pay and "losing" some could generate a "please explain" from IRD in an audit. Larger businesses need to ensure that what the customer pays goes into the till and not into someone's pocket, so the assistant at the till would be unlikely to have the authority to change prices.

If your renovation work in the past was for customers, then you would have been better off having a trade account and would understand how it works. If it was just your own homes, you may have spent a lot of money over the years, but that's not like someone working full time doing that work for multiple customers.

These days your best bet is simply to look for good pricing on TM and get what you want from there at a price that probably competes with the trade discount from the big suppliers anyway.

[gr8dadof2]

Just do what I did. Wear the right T shirt (Iron Maiden), pick the oldest most heavy metal rock looking counter person in the place, strike a conversation with them about heavy metal, and then after a while after you share a few laughs with them ask for as much discount as possible please (mustn't forget the 'please', that is very important, they love good manners lol). End result I got a bottle of Moreys oil stabiliser retail 38.00 for 29.00, and a set of front brake pads for the car retail 65.00 my price 48.00

You just have to be a quick thinking smooth talker LOL

[nzoomed]

Im pretty sure you can get that stuff at mitre 10 or bunnings cheaper than youve quoted.