Do internet venders negotiate on the discounted prices posted?

[drew2xx]

I''m curious, Has anyone negotiated a lower price when told that the prices posted are "rock bottom"? If so, How Much were you able to save and which vendors seem the most flexible?


Thanks....Andrew

 

[windowshopper]

i managed a smidge --and i mean like a smidge--i think the bricks guys have lots more room to maneuver--who knows tho maybe i am just a bad negotiator (probably)

 

[drew2xx]

Thanks

Has anyone else had any luck? I''m anxious to here how much and where?

 

[cushioncut]

I think dirtcheap diamonds and engagement rings direct both price match -- so if you see it listed lower somewhere, they will give you that price or beat it by a little. You will probably get the lowest price dealing with one of these two companies, in my opinion.

Other then that, I don''t think online vendors bend much on price.

 

[drew2xx]

It seems to me that diamonds have a very large mark up. With that in mind, should''nt their be room for negotiating? For example: if I call an internet vendor and they tell me that they do not have the stone I want in stock. They will tell me that they can find it and get it for me. If that''s the case, they are just a middle man that makes a profit for finding and purchasing a stone for me. It would seem that if a vendor has a stone in stock, they should have room to negotiate some! would''nt you agree?

 

[YoungPapa]

Drew2xx,

How much money do you think an Internet broker should make?

If I''m brokering a diamond that costs me $5000 and I offer it to you for $6000 is that a fair profit for me?

What if my asking price is $5700? How about $5500? $5300? $5010? $4900 and a dozen chocolate chip cookies?

Just curious.

 

[Paul-Antwerp]

To start, you are mistaken if you think that diamonds have a very large mark-up.

Of course, you are free to try and negociate. But you are now talking about vendors who are openly showing their pricing, and who are offering you all the freedom of comparison, before they even have the chance to communicate with you. This does not leave room to ask for an extremely high price, which can be negociated downwards.

Looking as a supplier to the pricing here, I would not want to work with any dealer who goes lower than their advertised pricing. A dealer needs to make a decent profit in order to cover his working expenses, and if he allows himself to sell cheaper than that, it means that at some point in time, I as a supplier will not be paid.

Therefore, in order to save my livelyhood, please do not haggle to hard

Live long,

 

[drew2xx]

Thank you for the comments

Obviously, a profit has to be made! As a consumer we just want the best price possible. When you see promotions for free appraisels, free shipping, free drawing... free..., this make one feel like He''s spending to much money for the stone, because nothing is for free! I think everyone wants to feel good about his purchase. maybe a little haggle not so bad. Some stores (not internet) carry-on like cheap used car salesmen. I just makes one wonder....thanks for your imput!

 

[Christmas Eve Proposer]

For your answer, check out my experiences on this thread. Specifically this post...

Well...Isn''t this interesting...

The same stone, from Abazias, listed twice, with the same Stock Number (9321202) but with TWO prices (It''s my Pear, 1.69, H, VS2)...

$8616.69

$8224.32 ($8039.00 on the Price Scope Search Engine Listing...And speaking of that...Can anyone tell me...What''s the deal with that? Can I get that price with a credit card? It doesn''t say it has any restrictions like "Cash Price" or "Wire Transfer" price like you''ll see when you click through and go to the vendor''s actual listing on most stones. I''ve gotten conflicting stories from Blue Nile concerning this...I haven''t spoken with Oscar about it yet...I''m just wondering if there is a "Rule"????)

I guess this teaches us one very important lesson...Prices are ALWAYS negotiable!!


I''ll play dumb with this info and see where it goes.

 

[Christmas Eve Proposer]

Date: 12/2/2004 4:23:35 PM
Author: Feydakin

Date: 12/2/2004 3:53:11 PM
Author: drew2xx
It seems to me that diamonds have a very large mark up. With that in mind, should''nt their be room for negotiating? For example: if I call an internet vendor and they tell me that they do not have the stone I want in stock. They will tell me that they can find it and get it for me. If that''s the case, they are just a middle man that makes a profit for finding and purchasing a stone for me. It would seem that if a vendor has a stone in stock, they should have room to negotiate some! would''nt you agree?

No, I wouldn''t.. It costs money to buy stones, and then let them sit in a vault waiting for someone to buy them.. You will find that 10% to 15% markups ar the norm in many internet vendors.. 20% to 25% markup in B&Ms is also toward the norm.. Now head to Wal-Mart.. Except for a few loss leaders, you will find 30% and up markups..

As was said below.. How much do you think a vendor should make for their service??

Wal-Mart? I sell to Wal-Mart, and their competition. Wal-Mart does make more than 30% in many cases...And they''re STUPID because they could be making TONS more. In many cases, we sell to Distribution and then they, in turn, sell to Wal-Mart''s competition. Obviously, that competition gets beaten by Wal-Mart like a circus monkey.

Our products, when run through normal channels (Not Wal-Mart, the IDIOTS), cost 8 bucks to produce, and you, the consumer, will pay 40 bucks for it. And be HAPPY!

Wal-Mart screws the market up by selling it for 25 bucks.

 

[silentbob]

So all this talk of margins is pretty interesting to me. I've been lurking on this board learning about diamonds and am about to make the plunge on a purchase, but while checking out various vendors and prices, the spreadsheet geek in me decided to do a margin analysis to try and estimate how much the diamond vendors on this site are making from an outside-in perspective. I'm going to take a real world example here. I picked a diamond that multiple Pricescope vendors had listed:

Blue Nile had the diamond listed for $12300 (adjusted for 100 PS discount)
Company X had the same listed for $11400
Company Y had the same listed for $11350

Now if we assume that Blue Nile is formulaic in marking up their diamonds from wholesaler lists, then 24% gross margin is a safe assumption, as I believe I read an article that indicated this number for BN. This would mean that the manufacturer is making approximately 9350 on the diamond and Blue Nile is making 2950.

This implies that Company X is making 2050 (18% gross margin) and Company Y is making 2000 (17.5% gross margin). This is pretty slim.

The margins get even slimmer if you factor in shipping costs, assuming free shipping. If the diamond is drop shipped to you, then its an additional $50-$60 hit (0.5% margin hit), if the diamond is brought in-house to the vendor first and then shipped to you, then the cost is an additional $100, or ~ 1% decrease in margin. Imagine what would happen if you had the vendor bring in 2-3 rocks to compare!

In conclusion, I figure, based on the prices listed on pricescope without negotiation, a vendor is making about 16.5-17.5% gross margin by brokering from lists and carrying no inventory. If you factor in the sales and marketing costs, and administrative costs, and taxes, I would be very surprised if net margins for vendors like company X or Y were very much beyond 4-6%, if that, unless volumes were very high. What a tough business to be in! Keep this in mind if you try to negotiate, there likely arent thousands of dollars of wiggle room, there probably aren't even hundreds of dollars of wiggle room.

Of course, the economics are completely different for the folks here who carry their own inventory. Their prices carry a premium (rightly so) and they have much higher inventory carrying costs.

 

[YoungPapa]

silentbob,

You would be wrong. Cut those margins in half.

 

[silentbob]

Jim, you''re right, I misremembered my numbers. I was going under the assumption that smaller vendors would probably do slighly worse than BN in terms of Net Margins. Blue nile''s Operating Margin was 8%, their Net Margin was 5%.

 

[Brian Knox]

Date: 12/2/2004 8:39:58 PM
Author: silentbob

...

Of course, the economics are completely different for the folks here who carry their own inventory. Their prices carry a premium (rightly so) and they have much higher inventory carrying costs.
...

Actually B&M''s or Bricks & Clicks or any dealer that owns their inventory are in a much better position to negotiate if they are so inclined.

The primary reason is:

Dealers that buy for stock can buy diamonds for less than the ''drop shippers'' that memo (borrow) diamonds.

However, there are not likely to negotiate below what the ''going. market price'' is.

Unless, you''re buying a ring as well

 

[zoobiedo]

WOW! What a learning experience this post was. Talk about small profit margins - it''s amazing these people can stay in business. I appreciate even more now the purchase I made. I thought my custom setting was a bit on the high side but based on the margins of the diamond I bought I ended up with a superb deal. I always thought it was a superb deal but now I think even more so.