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Unread 05-19-2009, 06:25 PM   #1
kirkw12
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Schluter Price Increases?

I just received an email from an online distributor that said that schluter will be raising prices on ditra and kerdi 12%, drain 14%, and shower kits as much as 17%. I'm curious if anyone else has heard this. There was also mention of a new unilateral distribution policy that will only allow online distributors to sell schluter products inside there territory.

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Unread 05-19-2009, 06:33 PM   #2
johntrent
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Haven't heard that one - I'd have to say I'd be kinda suspect of that...not that I am a marketing guy but that doesn't make any sense to me - only selling online I mean.

but like I said - what do I know..
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Unread 05-19-2009, 06:44 PM   #3
Bill Vincent
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Crap! In the last 6 months, I've FINALLY gotten two contractors I deal with, talked into using Kerdi on every shower we do, and it took some talkin!
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Unread 05-19-2009, 06:45 PM   #4
kirkw12
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I should clarify. They don't have to be sold online but if you are an online distributor then you can only sell to people who live in your designated territory. Assuming all this info is correct.
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Unread 05-19-2009, 08:22 PM   #5
ceramictec
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I heard from my rep a while back that the online sales was going to get the whip on where they sold or something like that.

some of the local tile distributors are raising hell saying they cant compete with the internet sales and they want it fixed.

I was getting my Kerdi drains for $68 online and it went up a little plus the shipping runs it up.

Bedrosians beats the internet price for me now.
my local Master Tile wants $80 for the drain so they can take a hike.
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Unread 05-19-2009, 09:23 PM   #6
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Yep, just got an email today stating the same, I think when I was talking to CD a couple weeks back that they made mention of that too.

Here is the stickler - I try and buy out of state on line cuz me no pay no tax - higher profit margin for my biz. but just switched to a local guy for the great prices (buying on line local) great prices even with paying tax local - now he is upping the prices per Schluter with limited territories.

Now there is buzz on regulation for tax on internet sales across state lines.
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Unread 05-19-2009, 09:50 PM   #7
gueuzeman
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Tim- the "buzz" is old news, tax on interstate sales is "de rigeour" here in NY for sometime now.

But I know it takes a while for these trends to hit Minnesota. Heck, most of us regular states have 2 senators.

I understand the local dealers dilemma, buy local when you can, the investment is in your community.

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Unread 05-19-2009, 10:28 PM   #8
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Gueuze, us "flat landers" always get the newest trends last. cept when it comes to fishing boats and fun on the lakes. (and Senators).

How did the Uline gun work ? sorry
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Unread 05-19-2009, 10:31 PM   #9
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Schluter to Al Franken to Fishing to the TLS ...

That has to be a record threadjack in the shortest number of posts.
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Unread 05-20-2009, 05:36 AM   #10
scuttlebuttrp
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Quote:
Originally Posted by Brian
my local Master Tile wants $80 for the drain so they can take a hike.
Brian,
The Shoreline here in Jax refuses to sell to installers at less than full retail. The one guy tells me that they're selling drains all the time for $101. Full rolls of Ditra for $5xx something. I told him what Bedrosians charges and he couldn't beleive it. Claims they're selling at cost.
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Unread 05-20-2009, 05:57 AM   #11
David Taylor
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Here's how I see it...

*Attention - long post ahead*

A while back, Schluter was made aware of a few things which didn't sit well with them; online retailing, price-point selling and non-stocking distributors.

Online retailing was new to Schluter, so they were a little apprehensive about who was engaging in it and what their intentions were. Obviously, they'd want to protect their product image if it's being sold in this fashion, just as it would be important if you walked into the brick-and-mortar stores (BAMS) to view it.

You might expect the online retailers to be able to offer the lowest prices all of the time, but that wasn't the case (and later, everyone saw that it wasn't beneficial to always have the lowest price). Many BAMS would retail DITRA and KERDI for close to cost; the lowest price I heard was 79 cents a square foot - which is actually well below cost. This slippery slope pricing war caught the attention of Schluter... and the reason the BAMS gave for pricing those products that low was to compete with the online retailers.

Unfortunately for BAMS, that claim was unsubstantiated - the lowest price ever offered online by anyone was 94 cents per foot. The actual reason was because the BAMS were competing against each other. Here's where price-point selling comes into play; 99 cents seems to be what most BAMS are selling DITRA and KERDI for. It makes sense to them (not for them) to do this - for the same reason why gas is priced as $2.499 rather than $2.50. Schluter wanted value emphasized more for their product than price - a valid concern on their part.

Schluter's price increase is mainly due to the Euro and Canadian currencies getting much stronger, but these increases also deal subtly with the price-point sellers. If you want to sell DITRA or KERDI for 99 cents a foot after June 1st, you're most certainly going to lose substantial money on the sale whereas before, you'd take a much smaller loss.

Let's talk about the BAMS again... the reason I started Tile-Experts.com in March 2003 was that each time I went into a distributor, they didn't have the products (and rarely knew what I was talking about). They'd sometimes look at me like I had a giraffe on my shoulders (hey, it was the style at the time ). This was frustrating from my end as a contractor where I knew more than the people actually selling things (think Big Orange Box Store x10).

This fact was relayed to Schluter and they encouraged (or otherwise made incentives towards) the BAMS to stock more product than they currently had. From my perspective, the program failed miserably - it's still the same scenario at many of the distributors I come across in my travels.

In the interest of fairness, I'd like to say that all online retailers of Schluter are not sugar and spice, either. A few online companies (some of which are distributors' entities too) don't stock product either and have Schluter drop-ship products for them. Some are also part of the price-point group. How easy it is to shuffle a few virtual papers and make money off of it... well, that ability is coming to an end for those companies soon. Remember the MAP policy from Schluter? That was directly solely at the online retailers. Well, they found their way around Schluter's policy quite nicely. Schluter was not impressed.

We've never been one to use Schluter's generous drop-ship program, mainly since we like handling the product. We also like it when the customer comes to buy Schluter or any of our products, that we have it in stock. Boy, what a concept. The customer really likes it too. Schluter likes it that the customer likes it. So, not only is drop-shipping being eliminated, but the urge to stock more product is now paramount. We suggested Schluter implement this strategy over two years ago and it seems they're now finding the logic in it (or should I say they've now come up with the practical solution? Yes.). Better late than never.

It should also be said that although Tile-Experts.com retails Schluter online, we're not a distributor ourselves. They won't let us be one, so we've been able to watch this play out from the sidelines. If they would have let us be a distributor, we'd already be in the position to honor their new policies without making any changes from our end.

Although I haven't seen the whole document, on the surface it seems very fair; reward those who stock your product... and sell the products on their merits and value rather than by a price point.

Does this Unilateral Distribution and Internet Sales document apply to Home Depot as well? That is yet to be determined.

The final thing you can take from this is: without the product, you can't offer service. Schluter wants you to provide service.

Side note: You know, we shouldn't have to suggest to the BAMS how to run their businesses... but when you lose common sense on how to sell products, I think it's warranted; they cried wolf once already.
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Last edited by David Taylor; 05-20-2009 at 06:14 AM.
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Unread 05-20-2009, 06:11 AM   #12
bathroomremodeler
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David,

I buy my products from you and appreciate all that you do. Hopefully, any new changes ... won't change the fact, that I can still purchase products from your great online store.
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Unread 05-20-2009, 06:35 AM   #13
scuttlebuttrp
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Dave,
You mentioned Bams relying on dropshipping over stocking; this is one of the biggest irritants I've seen. I know Schluter, TEC, Laticrete and everyone else makes lots of great products but they're never stocked anywhere. You're always told just "use something else". "I've never heard of that product". Or my favorite "Tell your customer it's on backorder and they'll get it in 2-3 weeks".
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Unread 05-20-2009, 07:06 AM   #14
David Taylor
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Thanks, Dean!

Royce: You bring up good examples of what I went through on Cape Cod; my favorite was "it doesn't exist and I've been here for 30 years". When I showed them it does exist, they'd come back with the popular "I've never heard of it", "we don't stock it" and eventually, "it'll take 4-6 weeks to come in - it's a special-order product".

You see, there's a chain of responses depending on your ignorance of the product. Hehe!

...and the funny thing is, I'd bring it in myself in two days, install it on the job (the customer would buy the tile from this retailer) and the retailer would accuse me of cutting them out of the sale of two strips of Schiene. Sheesh.
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Unread 05-20-2009, 07:31 AM   #15
Levi the Tile Guy
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I understand that schluter makes good products, but a substantial price increase will definitely put a stop to my using it, or slow it down at least. Bidding is tight around here, and I do go to potential customers and sell a kerdi shower etc... but if the price raises on that much I won't be able to do that any more.
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