How big a ripoff is Snap-On, Mac, etc?

Saw this in Marketplace.


I didn’t think there were any other dopers who buy from a truck, and maybe there aren’t, but it raised a question in my mind. Can the Franchise owners give cash discounts.
My Snap-On guy won’t give discounts for paying in full on purchase, the Mac guy won’t, the Matco guy does. A buddy in Sacramento says the Mac guy will but Snap-On and Matco won’t, but a Cornwall guy does, don’t have a Cornwall guy here.
So I end up paying full bore for the new stuff I need but stretch it out to the max and make the shop buy as much as I can. (If we can show the boss that one necessary specialized tool will take care of the whole shop - 3 techs - he will usually buy it.)
I really appreciate the business model by the way. Young guys starting out don’t have the means to buy a complete set up and the pay by the week deal is really good. But after 20 years or more in the business, if you don’t have the financial wherewithal to shell out $200 or $300 for a special tool or that new shiny butterfly, you ain’t doing it right. So paying out cash ought to get you a nice discount and that’s where the model breaks down.
I’ve never looked into buying a route so I don’t know what the deal is, but my Snap-On guy has been my Snap-on guy for at least 15 years and the Matco guy for at least 10 so the opportunity hasn’t really come up around here and I am not going to relocate.
Thanks for any input.
Matt

So – Does anyone know what the real deal is? Can the individual route owners give a cash discount or is that verboten? Will they loose their franchise? Other sanctions? Or are we just dumb puppies and they have us by the scrotum?

I don’t know if this is a General Question or a request for opinions, (I’m leaning toward the latter), but it is not a debate.

Off to IMHO.

Speaking from experience…when the company shuts down, you’re stuck with thousands of dollars of tools that you’re not using.

Craftsman’s good enough.

Can’t speak to snap-on and the others, but as someone who owned a business selling automotive aftermarket parts I can tell you that even though it is your business the Manufacturer controls the price you can sell at. They do this to protect their brand image and other dealers. If you are caught discounting the product to increase your sales you cam be in serious danger. The manufacturer can instruct it’s distributors to cut you off and not supply you any more product. I became very disillusioned, free market my rear end!

Yes and no. The one thing that really makes your local tool guy better than Sears is that he’ll come to you and Sears won’t. There is some definite benefit to not having to go off to the mall, or paying a gofer to go to the mall, but yes, you do pay for the convenience. Also, unless you have an unusual Sears, they probably don’t have the specialized Everlasting Jobstopper tools. Need a left-hand metric adjustable wrench? Sears can order one and have it to you in two weeks, but your Snap-on guy probably has three varieties on his truck.

Says who?

And how big a discount would you like? Ten percent? My understanding is that Snap-On dealers buy the tools at 20% less than list – a 10% discount to the customer cuts his gross profit in half, his net profit even deeper. Whatever it might benefit him to be paid up front rather than over a period of weeks (or even months), I really doubt it’s worth such a steep cut in his income.

I don’t follow. This is relevant how?

For a pro, using the tools all day every day? Hardly.

Crank really hard with a Craftsman open end wrench, and the jaws spread and stay that way. Time for a trip to the store. Crank really hard with Snap-On open end wrench, and the jaws spread then return to their original position. Much better than “good enough.”

How big a ripoff is Snap-On, Mac, etc?
This doesn’t seem to relate to your post, so I’ve gotta ask, what do you mean by ripoff? Costs more than you want it to?

Im on my iphone now so this will be short. More later. Basically dealers get tools from snap on 32% off. For sockets, ratchets, and wrenches they are worth the money. Other stuff it depends. Toolboxes yeah there’s no comparison between the truck brands and sears/harbor freight etc.

If you arent a pro using the tools all day long go with blue point, silver eagle or us made craftsman.

Ps im a former snap on sales person.

I’ve known lots of tool guys over the years.
Their profit margin is small when you consider their investment, expenses and risk.
For small purchases the tool guy will allow the purchaser to make payments to him. No credit check, no interest. But if the purchaser defaults the tool guy can be screwed. He might get the tools back, but then again he might not.

I have also had tool guys that would wheel and deal on tools for regular customers. So this is not unknown here in So Cal.
::: shrug:::
I always treat my tool guy well. That way if I need him late on a Friday night he answers the phone.

What part isn’t free market? :confused:

IME. when it comes to tools, the adage “you get what you pay for” is spot on.

In my experience, Snap-on tools are very high quality. They are also very expensive. Whether or not they’re a ripoff depends on how much usage you get out of them.

I’d personally never buy Snap-on tools (I have a couple that I inherited) because I just don’t use tools that often. My generic Home Depot socket set and screwdrivers suit me just fine.

So, wait…there are tool trucks? Are they like ice cream trucks, that come cruising through your neighborhood? I have a mental image of one slowly driving down a suburban street on a Saturday afternoon, with with all the men running after it, dollar bills clutched in their sweaty little hands…

Not letting independent businesses set their own prices, The product I was selling I purchased for 35% off list price. There were a thousand dealers on the internet where I was based. I still managed to do well, thanks to advertsing and good reputation. However most people purchasing on the internet do so at the least expensive seller. When you have a manufacturer dictating that no one and I mean no one is going to sell the product at anything less than list they are stiffling the free market. How>

1: Customers are paying more than they need to. By implimenting a MAP (minimum advertised price) the manufacturer see’s to it that no customer will ever get a chance at a better deal. You might remember a big thing like this causing and uproar in this country. The breakup of AT&T and the regulation in the airline industries. Both of those were geared at assuring that price fixing was not going on, because it was bad for the consumer.

2: The dealer is pretty much screwed. By not being able to compete on price a dealer’s hands are essentially tied behind his back. What eventually happens is those businesses with the deepest pockets to spend on advertising eventually drive everyone else out. However, if the market is left up to it’s own, I can lower my price to attract more customers. Will my price stay low always? Who knows, but the important part is that I have a new customer and if I treat him right, perhaps a long time customer.

Bottom line is MAP is a bad idea for the sellers and for the buyers. The manufacturers like it for a couple of reasons. They say that they are protecting a brand image. Not diluting it by keeping the price high. They can satisfy their bigger dealers and in the case of the internet, keep their brick and mortar sellers happy as they can’t sell as low as us on the internet.

It also gives them a way to help preferred dealers, generally these are the biggest ones. This is done by giving large sellers a bigger discount, perhaps 5 to 10% more than anyone else. The point is how can you become a big dealer when you have no way to compete with them? That extra discount just gave them more money to use to advertise and shrink your market even smaller.

I am all for a free market and survival of the fittest. As long as the playing field is level.

That would be a stripper that you are thinking of! :smiley:

I could have been more clear. Sorry.
I’m referring to their sales method, not the tools. I love the tools, use only the best, I make a living with them. Of course everyone grouses about the price but that’s not the rip-off.
It’s buying at a price that already has the finance charges built in and not receiving a discount for paying in full just seems wrong. That’s the rip-off part. And I know it’s not the truck guy’s fault. Snap-On and the other companies do discourage that from all that I’ve heard over the years. When I bought my first R-12 reclaim unit I went through Mac’s finance program. Seem to recall it was 6 or 7 percent interest, not bad for the early 90’s so I didn’t feel too wronged there.

(Ir)relevant only because that’s the first thing that went through my (somewhat inebriated) mind.

I guess what I should have said is that unless you are a professional wrench turner and plan to be one long term and are willing to pay top dollar for the very best, you may want to consider buying Craftsman. It’s pretty good stuff. I used and abused Craftsman tools day in and day out for 11 years assembling construction equipment. Rarely broke anything.

I will agree that Snap-On makes tools of spectacular quality. In my personal experience it was easier to swing by Sears and exchange a broken tool than to wait all week for the Snap-On guy to come back. That’s because Sears is really close to where I live.

When I bought one of my watches, I found out that the company did not allow dealers to discount prices. I was told dealers who were caught discounting prices would no long be dealers. If I wanted a lower price I’d have to buy a used watch, or else find a ‘non-authorised dealer’ (‘grey market’?). I managed to get about an 8% discount anyway. I was planning to drive through Oregon, which has no sales tax. I told the dealer that I could save hundreds of dollars by waiting a couple of months and buying my watch in Oregon. So he sold me the watch at the full price, but waived the sales tax. I got a discount, and he made a sale.

Did he eat the sales tax? Or did he record a reduced price for the state, such that the amount I paid equaled a reduced selling price plus sales tax? Or does the company have ‘promotional funds’ or something that is tax deductible so that they didn’t lose money? Maybe the manufacturer just turns a blind eye to one-off deals. I don’t know. But ISTM there are ways of getting around a discount ban without actually breaking the rules.

My job is to process the data that goes into reports that help businesses decide the credit worthiness of other businesses. NET 30 or NET 60 means that the full amount must be paid within 30 or 60 days. Cash In Advance is obvious. Some terms offer a discount if the full amount is paid within a certain period; for example, 2% discount if the balance is paid within 15 days. A company looks to see how a business has paid other businesses, and their credit manager evaluates the risk and offers terms accordingly. Some companies simply have one term for all of their customers. Usually this means they do not offer a discount for the method of payment. This doesn’t stop them from offering discounts based on just about anything else; only that they might not offer a discount based on the method of payment.

Thinking about it whilst waiting for the caffeine to kick in, ISTM that not a lot of businesses offer cash discounts. Gas stations often do. But other than that, I don’t see retailers giving cash discounts even though it costs them money to accept credit cards. The fee is built into the price.

It’s more like “Oh crap Snappy’s here, gotta go run and do a test drive so I don’t have to pay my tool bill!” :slight_smile:
The “truck” brands like Snap On, Matco, Mac, Cornwell have trucks that drive a weekly route. Here’s how it works: I stop at Mike’s Garage every Tuesday around 11am. He knows I’ll be there to show the new tools etc. Say Mike wants to buy a $500 tool. Since I am there every Tuesday at 11, instead of requiring the whole 500 up front, I give him the tool and collect 10-15% each week so it’s paid off in ten weeks or less. 7 weeks is best because it ensures I get the full price collected right about the time I have to pay Snap On for the tools I ordered for the guy.

In addition, because he knows I will be there each week, if a tool breaks, he will call me and I will have the warranty replacement ready for him when I show up. This saves the mechanics from having to drive around looking for replacement tools.

You do pay a premium for that service but if you are working full time book rate, it’s well worth it to not have to take off a couple hours to go tool shopping.