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[Frank Ziebert]

From Rockauto's July newsletter:

"Dorman, a supplier to RockAuto for more than fifteen years, now demands all retailers sell at the same price (or higher) -- or not sell at all. The policy looks like an attempt to protect auto part chain stores and their "charge double what we paid" mark-ups, in the face of slowing sales and plunging stock prices.

RockAuto is an independent, family-owned retailer. We work hard to provide reliably low prices, on all the parts your car will ever need. Our customers depend on their vehicles to get to work, school and all the other places life takes them. We will not participate in any scheme to force consumers to pay higher prices.

Over the next few weeks, we will remove the affected Dorman parts from our catalog. Customers who purchased them in the past may obtain warranty replacements, if needed, through our Order Status & Returns page. We hope customers who need parts in the future will support us, and manufacturers who offer honest, affordable prices, by purchasing other brands."

[ShagWagon]

I notice that jegs and summit racing have the same prices to the point of wondering if it was the same company....

I guess I'll have to try to not buy dorman and someone else will come along with what I need for cheaper....

[rang-a-stang]

Saw that in the news letter. Honestly, I can?t imagine me being able to support RA any more than I already do. The only thing I buy from stores anymore are fluids...

[jeepman1]

Double edged rusty razor..

This is a tough one.. I started "Sports Automotive" selling almost nothing but jeep parts way before there was "Rock Auto" who seems to sell anything..Anyway I had my parts marked ridiculously low and out of a 10x10 building starting in the 90's, went on to sell about 4.5M worth of parts before selling my business, Crown Automotive and Al at Omix were my main suppliers. It never failed to shock me that even though I had my margin set at a crazy close proximity to cost (read; no overhead) there would be some fool selling an item for even less.. I loved my little jeep business, but I damn sure wasn't there for the heck of it.
Bose speakers have had this philosophy for decades, and nobody seems to mind, so I don't know if it's such a horrible thing to say "I make a good product and you will sell it for X-amount or more"
Anyway I'm sure Dorman will not go out of business because R-A will not carry their items.. Just my 2 cents.

[MJMadness]

The good news is I get a good discount on Dorman through my local parts place.

The bad news is they don't carry anywhere near as much Dorman stuff as RA, nor is it at quite as good of price. Which sucks, because they do make a lot of useful stuff, and often I can't easily get it through the local place.

[Frank Ziebert]

I just found it interesting that a major distributor/supplier would step up and say no.

[JeepsAndGuns]

The policy looks like an attempt to protect auto part chain stores and their "charge double what we paid" mark-ups, in the face of slowing sales and plunging stock prices.

My guess is that a few of these chain stores got together and started crying to dorman. I also guess that the chain stores all combined (every store across the country) have more stock of, and sell more dorman parts than rock auto, so therefore dorman listened to them instead of the "little man" rock auto.
It is sad, and when it comes time to buy parts, I may have to look for brands other than dorman first.

[rang-a-stang]

I totally see why Dorman did what they did; I don't have issue with it. Bidness is bidness. I disagree with it but I get. If I was CEO at Dorman, I probably would have done the same thing for the reasons mentioned above. It also effects mom and pop brick and mortar shops.

I also see why RA did what they did and I do agree with them, too. I wouldn't want a supplier to "strong arm" me and my company.

I am just glad that we get to pick where we want to go and buy our products! 'Murica!

[bkilby]

It sounds like what they're talking about is MAP pricing, which is Minimum Advertised Price. Many Mfr and suppliers have MAP pricing. When I had my Jeep parts business, I also had MAP pricing. It keeps everyone on the same level when advertising parts. Of course, what they actually sell for is a different thing. For example, say NAPA also has to advertise at the same price but if you have an "account" with them, you get cheaper prices. They didn't advertise it cheaper, just sold it cheaper.

A lot of this stemmed from a few years ago when all these "online only" sites started low balling prices and the larger brick and mortar shops started complaining. And I get the complaints too. If XYZ brick and mortar used to sell $100,000 a year (for example) of someones product then fell to $80,000 a year, their discount level would probably go up due to the lack of business that the web businesses took from them.

The bottom line is, all businesses need to make money or they go out of business. Gouging is a different story.

[TexasJ10]

Thanks to everyone for explaining how this stuff works in real life. It sure seems like MAP puts online only places like Rock Auto at a disadvantage. Other than dropping Dorman, I guess the only other thing they could do is automatically drop the price at checkout so that they could show it was advertised at one price and then sold at a discount at checkout like the guys with brick and mortar stores. I wonder if Dorman told Amazon that they would not let them sell at a lower price either. If all manufacturers did that it would be pretty disruptive to Amazon

[InternationalMarineBrian]

I'm in the marine outfitting business. We deal with a number of products that are MAP and those can only advertised at MAP, once its added to the "cart" it can then drop. We also have more products that are under MRP which is minimum retail price. What this does is level the playing field. A guy sitting at home in his underwear doesn't have any overhead at all. A legitimate shop that is an authorized dealer and installer of the products, has a storefront, offers tech support etc. has a huge overhead. The manufactures are supporting the authorized dealers in attempt to allow them to be profitable so that they stay around and continue to offer great service.

So many times I will be at a boat show and have someone tell me that they purchased XYZ from Amazon or Ebay but they cannot figure out how to use it. My reply is typically, "what did Amazon or Ebay say?!" and they reply with a blank stare.
They will burn me up hour after hour with tech questions and then go buy it from an unauthorized seller because it was "cheaper". Many people see no problem with this, myself it drives me nuts.
The value is in the service, support and so on.
The other thing that we get on a regular basis is people wanting a deal on products, saying "I'm not going to pay that". Do these folks go into the store and tell the butcher that they aren't going to pay the $20 per pound that the filet mignon is priced? On used products I see no problem with negotiating.

Profit is not a 4 letter word and is a requirement for a business to continue.

[TexasJ10]

I can see where MAP can have its uses and I see your point about service. The problem I have with auto parts though is that they are rarely stocked anymore and I get absolutely zero service from the people they hire behind the counter. Even a lot of the returns come with a note saying I have to send it back to the manufacturer myself. I'm willing to pay for service and value added, but in the case of auto parts, there is very little the parts store adds anymore.

[rang-a-stang]

I can see where MAP can have its uses and I see your point about service. The problem I have with auto parts though is that they are rarely stocked anymore and I get absolutely zero service from the people they hire behind the counter. Even a lot of the returns come with a note saying I have to send it back to the manufacturer myself. I'm willing to pay for service and value added, but in the case of auto parts, there is very little the parts store adds anymore.

I think that is very true at MCParts (Oreilly, Napa, Autozone, etc.). I find that Mom and pops/Brick and Mortar stores are what InternationalMarineBrian's talking about. For instance, if I want a driveshaft service, I am willing to pay a bit more to ship it to have J20 project (http://www.ifsja.org/forums/vb/member.php?u=649) do it because he has spent hours writing technically accurate posts on this site and is an FSJ driver so in my opinion, he has earned every penny I pay him. If I want a set of spark plugs, brake pads, shocks, etc. I'm going to RA/Amazon etc.

[TexasJ10]

Good distinction. I probably overly generalized the auto part segment.