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10th March 2009, 12:24 | #31 |
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Now who decides whether the price for a certain commodity is high ?? Customers would be more than happy to get tyres at Rs.100 a piece. It's the Companies and Dealers who know what price point to maintain to help sustain thier business. Like someone mentioned earlier there are people who take a hit on the tyres ka profit and make up for it in alloys and services. But that deprives someone without an infrastructure for providing services the chance to make a sale. So it's essentially done to make sure that the customer chooses what shop to buy from based on his judgement rather than 'coz of the price factor. |
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10th March 2009, 14:30 | #32 | |
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If he can't supply at a similar price then that is his loss. Business is all about competition and if he is scared of competition he should not be in business. | |
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10th March 2009, 14:32 | #33 |
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| Greenhorn, on what basis can you say that the tyre prices are HIGH? Here, no one maintains high prices. Of course, some people importing tyres which are not available here rip off the customers. But for 99% of the tyres, the prices are not high. Just because one place is able to sell it cheaper doesnt mean the other one has a HIGH price. It is higher but then that is the break even point of that dealer. I dont think it is possible for any dealer to actually have high prices. He will fail eventually. That is 100% guaranteed. At the most, there might be a few hundred rupees difference. I am talking abt the B'lore market here. tsk mentioned an incident abt Delhi. There it might be that the Noida dealer is selling at MRP. Not at RCP. Because he doesnt have competition, he might be able to make good profits. There is nothing wrong in that. the problem with the tyre industry is that we have always sold below MRP. We should have been like other retailers who sell only at MRP. That would have been fine. Customers would have got ripped off and not even bothered! : Ignorance is bliss they say!! rofl Here, people know that no one sells at MRP(well, almost no one) and so they properly take advantage of it and bargain like crazy. If you call this cartelisation, then what abt the garment industry? You mean to tell me that Louis Philippe, Arrow, etc make only 3-4% on their shirts and pants? Is the difference in "quality" between a neighbourhood tailor and the branded so much that people are ready to pay more than double? If you look at it technically, there is cartelisation everywhere. YOu know that before raising the prices of Parle G and Tiger biscuits, both Britannia and Parle have discussions, meetings, etc and both increase the price simultaneously. There is cartelisation EVERYWHERE. |
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10th March 2009, 14:44 | #34 | |
BHPian Join Date: Dec 2007 Location: Hyderabad
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As for who decides whether prices are high, demand and supply do. tsk's example supports that theory. As for garment retailers, do we not pay extra for a Michelin, as compared to say a JK Tyre? And yes, there is variation in the prices of Allen Solly across outlets. That is what this is all about, aint it? | |
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10th March 2009, 15:27 | #35 | |||||||||||||
Senior - BHPian | Quote:
Of course, earning a decent profit is the first & primary reason to start a business and there's nothing wrong in doing so. Just that the way the tyre industry goes about earning it's margins, it leaves a bad taste. I'm not against anyone making a margin while doing honest business, just that some processes used to obtain said margins in the industry are not really ethical. And just for the record unless you have massive volumes, you cannot sustain a business in the long term at 2-3% margins. Quote:
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P.S. What's your real name btw? Quote:
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I don't see one coming in the near future either. Quote:
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As a consumer, my objective is to spend the least amount of money to get the best possible stuff (regardless of what I'm buying) and in other segments I'm allowed to choose where I'm getting a good deal & buy from there. Quote:
And by that logic shouldn't the bigger dealers be the ones selling the tyres the cheapest? Quote:
Also, I do think that almost all companies price their 16/17/18"+ range exorbitantly high, The same tyres are available for less than half the money abroad. It's just that they know it's still a niche market & can get away with it so price them higher. Quote:
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I know the margins are higher there but just trying to illustrate the fact that you're comparing oranges to apples. Quote:
Last edited by iraghava : 10th March 2009 at 15:29. | |||||||||||||
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10th March 2009, 15:51 | #36 | ||||||||||||||
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I don't see one coming in the near future either. Quote:
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Dealer B isnt even an authorised dealer for Company X but he can give prices cheaper than another authorised dealer because he has very low overheads, doesnt invest much in terms of service, etc. So, Dealer C who is an authorised dealer and has invested a lot in his shop so that it is upto the level Company X wants loses out. So, even though Dealer C actually does more quantity than Dealer B, he is not able to match his price. Quote:
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You misunderstood me. Quote:
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10th March 2009, 19:55 | #37 | |
BHPian | Quote:
My name's Indraneel What is this about ?? The not reducing tire prices when crude and natural ruber prices have fallen / not passing on CenVAT benefit to consumers / taking deposits in the name of guru kripa finance ?? !! I seriously thought for a minute there ki all tyre companies are into some illegal work akin to smuggling | |
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10th March 2009, 22:37 | #38 | |
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I am sure the other trader is not losing money on the tyres or selling them cheaper out the goodness of his heart. He is obviously going for the volume market and sells enough to earn a decent living. Last edited by bigman : 10th March 2009 at 22:39. | |
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