Wholesaler charges more than retailer!

Kestas

Staff member
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The Motor City
I was putting together a shopping list for some fluids I needed, hoping I could get some deals from a local lube distributor. This was prompted by word on the internet that Mobil ATF 3309 for my Volvo could be bought from Vesco Oil Co. in Southfield, Michigan for $3.38/qt by the case. All other online sources charge $16/qt for the Volvo ATF. Hoping to pad the order with other fluids (they sell by the case, plus a 10-gal order qualifies for free delivery), and hoping to do better than retail, I asked about their price on Mobil 1 TSUV 5W-40. They charge $6.22/qt for this oil! Their other synthetic oils are also priced accordingly. My local Murray's Auto Store sells the M1 T&D for $5.59/qt. What gives?
 
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39,805
Location
Pottstown, PA
No different then the distributors around here. D1 is like $29/gallon last time I checked. The only break I can get is from the SOPUS rep where my buddy lets me have it for his cost ..which isn't all that great ..even if he buys a 55 gallon drum. The distributor sells service too. [I dont know]
 
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13,228
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1/2 hr N.E. of Detroit
quote:
Originally posted by Kestas: My local Murray's Auto Store sells the M1 T&D for $5.59/qt. What gives?
Murrays is part of a large chain of national auto parts stores. When you can purchase their kind of volume, they will give you the same discount.
 
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1,910
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Vista, CA
Costco sells Chevron Supreme for less than it costs a Chevron distributer to buy it from Chevron. Several of the Chevron dealers will come to Costco and buy 20 to 30 cases at a time. The price for 5w-30 at Costco is just over $16 a case for 24 quarts, or about 69 cents a quart.
 

Kestas

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13,940
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The Motor City
quote:
Originally posted by Gary Allan: Wasn't that the reason why WM initially took MC oils off the shelf? The dealers were paying more then they could buy it at WM [Confused]
This doesn't make sense. Why would WM take MC oils off the shelf if they sell it for less than the dealer can get it. You'd think WM would sell even more oil! I would understand it if MC would stop selling to WM.
 
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39,805
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Pottstown, PA
Well, yes, that's why WM took it off the shelf. MC was confronted with their dealers boycotting MC oils in favor of other offerings in the spec'd oil (we'll go with whomever will give us Ford spec'd oil "for a few $$ less" - cue spagetti western whistle). Apparently either MC said "Go ahead" when they saw the lack of throughput of the MC oils without WM ..or they offered it to the dealers at the same price. Either way ..that's why WM took it off the shelves. I didn't say that they wanted to. [Wink]
 
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2,849
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DELAWARE
quote:
Originally posted by Gary Allan: Well, yes, that's why WM took it off the shelf. MC was confronted with their dealers boycotting MC oils in favor of other offerings in the spec'd oil (we'll go with whomever will give us Ford spec'd oil "for a few $$ less" - cue spagetti western whistle). Apparently either MC said "Go ahead" when they saw the lack of throughput of the MC oils without WM ..or they offered it to the dealers at the same price. Either way ..that's why WM took it off the shelves. I didn't say that they wanted to. [Wink]
I have heard this enough to almost believe it. Any references outside of internet forum chat to back this claim? Hootbro
 
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39,805
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Pottstown, PA
Well, I respected Johhny's opinion on it. He was an industry insider at the time..in competition with MC for dealer traffic for bulk sales. I believe that he was approached for competitive bids for the dealer networks. Do you have an alternate explanation? Did WallMart strong arm MC and they said "pound sand ..you totalitarian retail mercinary!!" ..and then WM said "We'll fix you!" and took there products off the shelf? Which one won (besides the consumer) [Confused]
 
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1,088
Location
Baltimore, MD
Distributors must give great volume discounts. They aren't too interested in selling some lone guy a case of 3309 every couple of years. And probably the mfr gives good volume discounts, too. WM probably gets supplied directly from the mfr, bypassing any distributor middleman. I have noticed in every kind of product, distributors seem to be getting a heck of a mark up on stuff. They are digging their own grave, though, in my opinion.
 
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39,805
Location
Pottstown, PA
Sure. Now. And they did shortly after it came to market. Remember one of the stipulations of their CAFE allowance was to have the stuff produced and marketed in ample supply. I scored 20 quarts @ $0.50/quart (kicked myself for not going back with a shopping cart for the three additional cases I could have gotten) when WM cleared it out. It returned after a few months.
 
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2,849
Location
DELAWARE
quote:
Originally posted by Gary Allan: ........Do you have an alternate explanation? Did WallMart strong arm MC and they said "pound sand ..you totalitarian retail mercinary!!" ..and then WM said "We'll fix you!" and took there products off the shelf? Which one won (besides the consumer) [Confused]
No I do not have an alternate explanation but I do not let some "insiders" opinion evolve into an almost fact like event without other sources. In this case, it may never be truly know and this "theory" is probable but not definitive at this moment. Back in high school in the mid 1980's, I work in a WAL-MART distribution center and seen many stupid stuff when it came to product stock disappearing and then reappear months later with no reason. WAL-MART pushes it's suppliers to drive down cost by making them find more efficient means of production. For many, that has meant shifting production overseas. In the case of oil this is not feasibile from a economic/logistics standpoint so they have to deal with U.S. vendors. With the cost of raw oil going through the roof, I think WAL-MART was taken back that U.S. oil vendors had to pass on these costs in a rapid manner that WAL-MART was not use to as they were use to commanding price changes and not the other way around. Funny how two years ago SuperTech was considered a junk oil when it sold for 0.69 cents a quart, and is now a darling to alot since it is a price leader. Hootbro
 
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