Test equipment price haggling - Page 1
Forum section: electronics / testgear

author: stafil
author_rank: Regular Contributor
timestamp: April 30, 2020, 12:03:58 am
content: How much room for haggling is there where buying test equipment for vendors like saelig, newark, etc.. Does it depend on the brand you are going after? Any insider knowledge on the profit margins?

author: tautech
author_rank: Super Contributor
timestamp: April 30, 2020, 12:52:47 am
content: Quote from: stafil on April 30, 2020, 12:03:58 amYep.Margins cover business running expenses and post sales support. Want a free lunch go buy from eBay or similar.

author: stafil
author_rank: Regular Contributor
timestamp: April 30, 2020, 01:04:20 am
content: Quote from: tautech on April 30, 2020, 12:52:47 amIt's not about free lunch. It's about finding the cheapest price that a vendor can viably sale. I don't see how this is bad..

author: Addicted2AnalogTek
author_rank: Frequent Contributor
timestamp: April 30, 2020, 01:34:07 am
content: Quote from: stafil on April 30, 2020, 12:03:58 amYour best chance is for you to find or ask for a discount code. If you're planning to make a significant purchase you should contact a sales representative. If you generate a significant amount of income for a particular company, you may be able to make a contact in sales that will shrink their profit margin on items that have a typically high profit margin.

author: tautech
author_rank: Super Contributor
timestamp: April 30, 2020, 01:44:26 am
content: Use the forum search: discount for EEVblog members

author: Shock
author_rank: Super Contributor
timestamp: April 30, 2020, 01:45:02 am
content: Worst advice ever from the guy selling chinese stuff to users here. There is always a free lunch and often they will take you out for one if you buy enough.We can get 6% discount from tequipment.net usingthe eevblog codefor a start. It also applies to most things already on special and they do free shipping.I negotiate everything substantial you just need to do your research first and know a price that is reasonable for both parties. It's then up to the salesmen if he is motivated enough to sell it. That is about it in a nutshell, the finer points are business and negotiate skills. Most people have none and they just pay full price on everything.Just don't nickel and dime people and over small amounts or act like a jerk, it's cringe worthy.

author: stafil
author_rank: Regular Contributor
timestamp: April 30, 2020, 01:54:35 am
content: Quote from: tautech on April 30, 2020, 01:44:26 amThanks, I am aware of the discount codes. But asking for vendors that don't have any.

author: NoisyBoy
author_rank: Frequent Contributor
timestamp: April 30, 2020, 02:03:30 am
content: It depends on a variety of factors:* What is your annual spend with them, and how long has your relationship been.* What else do you buy from them outside of TE, do you buy calibration, and warranty service and maintain a regular service contract.* The type of equipment, cheap equipment's margin is lower and has less room for negotiation. They are not going to spend a lot of time to negotiate a deal with $100 profit.* Do you have a regular rep that covers your account and he/she knows who you are and how much your business means to his revenue objective* Do you trade in old equipment to them and do regular upgrade* Have you been returning equipment often.* Do you thank them for their professionalism (if they deserve it).There is just a part of a broad set of factors that affects what type of discount you get outside of the published price. Just like anything else, it is relationship based. My advice is be nice, don't demand, negotiate, and build a relationship. Sometimes, getting the lowest price without relationship (such as any auction site, one-off private party, or on-line purchases), may not be the best option in the long run, especially if you take after sale services into consideration.This is just my experience, your mileage may vary. But I bought 90% of my equipment from a single brand, I work with the same person from sales, and I enrich their margin with services/add-on that is of value to me, while giving them more flexibility on discount on the whole package. I always get their direct contact info, if you are nice, they will share it. Having this info is very helpful when you are dealing with a large corporation so you are not talking to someone new each time you call.Good luck shopping.

author: tautech
author_rank: Super Contributor
timestamp: April 30, 2020, 02:26:19 am
content: Quote from: NoisyBoy on April 30, 2020, 02:03:30 amNailed it.....well the stuff that should be obvious to buyers however there's more to being an authorised distributor than this.To add to your list; lower /unit prices with multiple unit purchases.Just being a 'box juggler' brand partner is another matter............and their margins are rightfully generally less.

author: Electro Detective
author_rank: Super Contributor
timestamp: April 30, 2020, 02:42:52 am
content: What the gents state above is 100% on the moneyBut the reality at this point in time with this fear flu prevailing, it's anything goes and dog eat dog in salesSo if you know what you want or need, and not fussed with particular brands,shop around and find desperate sellers and grind them into the ground on price for their dust accumulating gearJust don't expect any serious 'support' or 'change of mind' return priveleges etcor a friendly rapport/relationship with that seller forced to drop the gear at cost or below, to cover last weeks rent or wagesMost of them may be out of business permanently anyway if corona keeps rolling along, so no support or love lost anywayYes, it's a dark comment I don't care for much eitherbut hey..

author: Shock
author_rank: Super Contributor
timestamp: April 30, 2020, 03:05:14 am
content: They are making it sound complicated. You don't have to go on a date to ask for a discount but obviously if you are doing repeat business you have more leverage. Drop shippers give discounts as well so you get even cheaper prices, anyone with the power to give a discount will consider it unless it's against company policy in which case you are speaking to the wrong people.

author: Shock
author_rank: Super Contributor
timestamp: April 30, 2020, 03:10:01 am
content: Quote from: Electro Detective on April 30, 2020, 02:42:52 amThings you will never see when you negotiate a price on something.

author: Pitrsek
author_rank: Regular Contributor
timestamp: April 30, 2020, 04:23:06 am
content: Another way how to get better pricing is to ask for refurbs. Or ex-demo units around end of year's time.

author: CatalinaWOW
author_rank: Super Contributor
timestamp: April 30, 2020, 04:33:17 am
content: There are huge discounts available if you are a volume buyer. Often in creative forms. At one large corporation I worked at (where literally thousands of pieces of high end TE were purchase annually) there was a straight 30% discount on every item. And then an end of the year kickback based on the total sales. The kickback was larger than the original discount.But that experience is not directly translatable to today. At that time interest rates were in double digits and inventory could be extremely costly for a supplier. Having predictable and assured sales had high value. You need to figure out what the economics for the vendor are. If you can do something to help his bottom line it gives him room to move.

author: OwO
author_rank: Super Contributor
timestamp: April 30, 2020, 04:48:54 am
content: Oh the margins are huge, but the costs and risks of selling something abroad with warranty and support are also huge, so there is no free lunch. Support costs a *lot* of money, even if it's just people answering some emails, since they have to at least be somewhat knowledgeable on the technical side. Your best bets are looking for some factory rejects without any branding, and be responsible for any repairs yourself.

author: Keysight DanielBogdanoff
author_rank: Unknown
timestamp: April 30, 2020, 04:50:33 am
content: I obviously can't comment too much on this, but here's some general industry knowledge I've picked up. Discounts are common when the total sale prices are 5-8 figures. The "low end" of the market (<$10-15k depending on the type of gear) doesn't have much margin at all, so often the best you can hope for is a promotion or a sale from a distributor. Bulk/volume buyers do tend to pay less here, though. Some companies can/will setup a "purchase agreement" with is a standard discount for all equipment. Or, if it's a "reference site" - meaning the lab will be duplicated other places, it's common to fight to win a deal using discounts. When I was in other jobs I've personally approved some insane discounts that had big payoffs for the company down the road. This always comes as part of an ongoing relationship with a sales person, they aren't random.The best way to get 1-off deals is to go refurbished through places like our eBay store.Margins are usually not huge. If they are huge it's because people are willing/have to pay for that specific technology/capability and that's what helps fund the other products that don't have a good margin.

author: stafil
author_rank: Regular Contributor
timestamp: April 30, 2020, 05:00:55 am
content: Thanks everyone! Just for clarification, it's not a matter of where can I get refurbished, or second hand gear for less.Reason I am asking is that when I bought my first car I paid MSRP only to discover afterwards that nearly no-one does, and almost every dealership gives discounts.Given that test equipment can be as expensive as a cheap car, didn't want to end up in the same spot again and pay for something $10,000 when I could have easily gotten it for $9,000

author: james_s
author_rank: Super Contributor
timestamp: April 30, 2020, 05:06:58 am
content: It depends on what you're buying. If it's something that costs as much as a car there's probably some wiggle room on the price, maybe you can get some nice options thrown in. The bigger the purchase, the sweeter the deal you're likely to get.If it's a $300 scope, forget it, the best you'll do in most cases is a coupon. High end expensive gear typically has a much larger profit margin than the low end that is sold as cheaply as possible already.

author: OwO
author_rank: Super Contributor
timestamp: April 30, 2020, 06:59:23 am
content: Test equipment >= $10k, the COGS is a very tiny fraction of the list price, or in other words it's > 90% profit. COGS is defined as the incremental cost to manufacture a unit, and does not include R&D costs. However it is stupid to charge R&D costs to a product or even product area, since it is an investment that carries over to all future products. I've seen plenty of corporations go down the shitter once they start micro-accounting everything and account R&D as a "cost" of a product.

author: tautech
author_rank: Super Contributor
timestamp: April 30, 2020, 07:14:10 am
content: Quote from: OwO on April 30, 2020, 06:59:23 amOnly when the manufacturer doesallthe marketing and they are the only POS.The moment they have worldwide marketing ambitions it's an entirely different ball game.

author: OwO
author_rank: Super Contributor
timestamp: April 30, 2020, 07:22:41 am
content: That's a matter of how the profit is distributed, but that profit is still what it is when you compare list price to COGS. Sure the distributor gets a 2x margin, and the manufacturer 5x. Actually even lower cost test equipment will have at least a 3x margin in total, but yes in this case the manufacturer could be squeezed for margin because the distributor takes most of it. Horribly inefficient system if you think about it, but the logistics, fees, middleman margins, support costs, etc adds a big chunk of the cost and that's why we can't have nice things. If I had the choice I'd buy test equipment with bitcoin, zero support zero warranty, direct from the manufacturer. But that's a pipe dream at this point.Marketing is optional, and as a user I do not have good feelings about my money going towards advertisements rather than the thing I'm buying. Every time I see an advert I make a point to avoid buying that brand.

author: Shock
author_rank: Super Contributor
timestamp: April 30, 2020, 07:46:37 am
content: My last new car I negotiated 35% off and got the options I wanted thrown in. Didn't even spend a day on the lot they ordered it straight in from the manufacturer. It's unrealistic to expect everyone to know how to even approach doing a deal like that, but I gave you hints earlier.Don't worry about having just accepted full price in the past, most people either don't negotiate or when they do get an option or something thrown in and think they have made a huge windfall. It's just experience of dealing with sales people and being direct and confidant.It actually makes no difference how much the item costs because it's unrelated to their markup. But like I said nickel and diming is pointless. If you want to save $20-30 now and again on occasional purchases there are much easier ways to save money.

author: Electro Detective
author_rank: Super Contributor
timestamp: April 30, 2020, 08:40:27 am
content: Quote from: stafil on April 30, 2020, 05:00:55 amHere's one possible upside to paying the full price:You may have got the nicest car in the bunch for starters, because you payed what was being askedI'm not saying that actually happened but I'm betting the good ones don't go to the serial bargaining 'you make cheaper for me?' rich asswipesand if something happens in a case where the Dealer can either repair and service properly or replace the item,because you paid the labelled price, the Dealer may give you a break that favors you,rather than cheap out because the low profit margin sucked to begin withIn most cases Dealers prefer customers that pay the retail price because their 'stay in business' math works a lot easier,and guess what? most decent Dealers WILL actually look after you, and not consider you a wood duck that pays retail,because repeat business is GOLD for anyone in business with a clueMany sales tards will tell it different because all they can think about is stitching customers up and getting hammered at the pub later,bragging to fellow c***s how much commission they scoredBTW: just for the record, have you had any major drama with that car?

author: Gandalf_Sr
author_rank: Super Contributor
timestamp: April 30, 2020, 09:20:55 am
content: @Electro Detective...You ARE Kevin Bloody Wilson and I claim my free-night-in-a-brothel prize!

author: Shock
author_rank: Super Contributor
timestamp: April 30, 2020, 09:29:49 am
content: I've also proven that this makes no difference in the past as well. Unless you are a pain in the ass they aren't going to look up your sales record and start calculating your worth to them as a customer. And if they do alter their service based on the sales price you would think they should disclose that upfront. I don't want someone refusing to tell me how to switch something on because it went on special.Plus there are both the distributor and manufacturer for support and warranty type issues. The manufacturers may even reimburse the distributors for certain things that can't be done over the phone. I've caught out a company charging customers for free manufacturer recalls before.

author: JohnG
author_rank: Frequent Contributor
timestamp: April 30, 2020, 06:21:49 pm
content: Quote from: OwO on April 30, 2020, 06:59:23 amrantThis is so true. My first job was with one of these. It was great and successful, and was the biggest, or one of the biggest, electronics companies in the world. MBAs, beancounters, and micro-management of engineers by accountants and statisticians turned hucksters (Six SigmaTM)* played a big role in bringing them down. Anyone remember Motorola...?/rantJohn*not to be confused with statistical process control or anything sensible

author: Keysight DanielBogdanoff
author_rank: Unknown
timestamp: April 30, 2020, 09:49:37 pm
content: Quote from: OwO on April 30, 2020, 06:59:23 amSorry, this is simply not true. I know for a fact that some of our products at >$10k list are barely viable and only sold because there are higher margin products in the same family that help carry it.Also, if you don't amortize in R&D, support, sales, and marketing costs into your total product cost model (COGS + business stuff + lights-on stuff) it's a sure-fire way to run out of money in a hurry. But, that analysis is more about product viability in the planning and development phase and less about equipment volumes once it's shipping.

author: Electro Detective
author_rank: Super Contributor
timestamp: April 30, 2020, 11:07:10 pm
content: Quote from: Gandalf_Sr on April 30, 2020, 09:20:55 amSorry mate, that offer's been pulled due to global Social Distancing complianceYou can reapply again in 2022 by the time corona fizzles out,but the regal ladies of leisure will be out of business and a closed shop by then, in all respectsThere's always warm apple pie

author: james_s
author_rank: Super Contributor
timestamp: April 30, 2020, 11:17:37 pm
content: Quote from: Electro Detective on April 30, 2020, 11:07:10 pmCan you stop bringing up your nutty covid rants in every damn thread please? There are several threads already dedicated to that topic, which the mods have been exceptionally generous in allowing such off-topic posts to go.

author: james_s
author_rank: Super Contributor
timestamp: April 30, 2020, 11:22:09 pm
content: Quote from: Shock on April 30, 2020, 07:46:37 amI've always just bought an older car for 1/10th what it cost new, and in some cases I've kept it longer than the original owner had it. I'm more than happy to let some other sucker take the massive depreciation hit and break it in for me.Then again, I do that with test equipment too.

author: Electro Detective
author_rank: Super Contributor
timestamp: May 01, 2020, 01:21:20 am
content: Quote from: james_s on April 30, 2020, 11:17:37 pmFYI: my reply was directed to Mr. Gandalf_Sr, and chances are the gent got a giggle out of itwell, maybe not the pie bit@ james_s:isn't there some 'ignore' function on the forum you can click on ?Do us both the favor so we can move on, I'm not happy if you're not mate

author: Shock
author_rank: Super Contributor
timestamp: May 01, 2020, 05:01:53 am
content: Quote from: Electro Detective on May 01, 2020, 01:21:20 amYou posting about Covid is spreading at a faster rate of infection than the actual virus in Australia. Ignoring you is not a solution to the epidemic. We need to cut it off at the source.

author: OwO
author_rank: Super Contributor
timestamp: May 01, 2020, 05:52:30 am
content: Quote from: Keysight DanielBogdanoff on April 30, 2020, 09:49:37 pmI'm not saying R&D costs shouldn't be accounted, but that an investment + payback model should be used rather than an amortized cost model.For example, you might invest $100k developing a product to get a $50k/year gross profit (income minus COGS), meaning payback in 2 years.If you instead amortize that R&D cost over each unit sold over the 2 years, at the same sales projection and pricing, your costing will find out that you are making zero profit, and you will want to raise prices further to get some "margin". However, this is wrong, because you are forgetting that the income stream is still going to be there after 2 years, and it's free money at that point. Not to mention designs can be reused, team expertise got improved, etc etc. R&D is fundamentally an investment and not a cost. You have to constantly pay into it to keep your team expertise up to date, but it costs nothing to make use of a design that has already been done.

author: Fungus
author_rank: Super Contributor
timestamp: May 01, 2020, 06:22:42 am
content: Quote from: OwO on May 01, 2020, 05:52:30 amSays who?(and R&D gets exponentially more expensive, not linearly)

author: stafil
author_rank: Regular Contributor
timestamp: May 01, 2020, 06:29:18 am
content: Quote from: Fungus on May 01, 2020, 06:22:42 amDSOX models that still sell 10years later maybe?

author: Mr. Scram
author_rank: Super Contributor
timestamp: May 01, 2020, 12:11:47 pm
content: Quote from: james_s on April 30, 2020, 11:17:37 pmAgreed. Anyone's entitled to even a senseless opinion, but starting the same shit in every thread not even remotely connected to it is just disruptive behavior.

author: nctnico
author_rank: Super Contributor
timestamp: May 01, 2020, 01:00:36 pm
content: Quote from: OwO on May 01, 2020, 05:52:30 amWhere this goes wrong is when you want to make sure there is an ROI on the investment. So basically you have to factor a bit of R&D cost in each product sold. You can't go on investing R&D money into the best product ever and hope it sells. The latter is a recipy for a financial dissaster. Before developing a product you need to have an idea on how much you can spend on R&D for the product to be viable.

author: james_s
author_rank: Super Contributor
timestamp: May 01, 2020, 08:41:47 pm
content: Quote from: stafil on May 01, 2020, 06:29:18 amOr longer, the TDS3000 series scopes for example, they've been in production for ~20 years with minor revisions. A brand new TDS3054C should be a $2k scope today, not a $20k scope. I guess someone must still be buying them though.

author: philipz
author_rank: Contributor
timestamp: May 02, 2020, 11:19:53 am
content: Quote from: james_s on May 01, 2020, 08:41:47 pmI don't know how good is selling TDS3054C for $20K, but if price was $2K I'm ready to bet one TDS3054C (for $2K) that sales will increase with hundreds or thousands percents. For last 10 years all T&M equipment I buy is mostly HP or Agilent, but only second hand, in most cases defective, and all of them now is working. Of course I like also Fluke, Textronix, Rohde&Schwarz, Keithley. Price policy of all this companyes is the same and of course quality is very good, best, perfect, The One. And most of them have successful products, staying on market for many years and unfortunately list price go up even R&D bill was paid long time ago. And unfortunately the reason is not only inflation.

author: Gandalf_Sr
author_rank: Super Contributor
timestamp: May 02, 2020, 12:19:52 pm
content: Quote from: philipz on May 02, 2020, 11:19:53 amNot that it's fair to single out Keysight butthey pay their CEO $9 million per year, that's got to come from somewhere /s

author: Mr. Scram
author_rank: Super Contributor
timestamp: May 03, 2020, 02:42:12 pm
content: People don't seem to understand the price of a product is almost exclusively defined by what people are prepared to pay for it, not by cost.

author: OwO
author_rank: Super Contributor
timestamp: May 03, 2020, 02:50:34 pm
content: Quote from: Mr. Scram on May 03, 2020, 02:42:12 pmThat's what happens in a monopoly market. In a free market with competition the price "should" approach the cost of production over time, as long as there is sufficient economy of scale. Such economy of scale evidently exists with oscilloscopes, and lately the nanovna has shown it exists with network analyzers too. It has baffled me for years why no one came up with more reasonably priced test equipment much earlier, but it is happening (slowly).

author: Mr. Scram
author_rank: Super Contributor
timestamp: May 03, 2020, 03:24:16 pm
content: Quote from: OwO on May 03, 2020, 02:50:34 pmThat's only true for a commodity market where competition can't distinguish themselves from their competitors. That's rarely the case as even plain water is sold at wildly differing prices. You definitely don't need a monopoly for the price to be different from the cost of production. If you can provide something over your competitors you can set a different price. This can be quality or a history of excellent support or a product others can't quite match or simple exclusivity and many others things. It's also worth noting that the market place is not driven by pure rational reasoning.