I ran into an interestin situation the other day that I thought was a little funky. Sort of uneasy with. I thought about it and said, the only way to see if this really is an issue is to let the professionals here illuminate the subject. As many of you know, there is a very large manufacturer and supplier located in Florida. Turns out that one of the people involved with the family ownership has recently opened an express wash in the same state. That's the first issue. Do you think it's fair to do this? Yes, I know it's perfectly legal. Just doesn't pass the smell test. This manufacturer has sold a lot of equipment based on low price. His retail is about my wholesale. His actual cost would be way below what an ordinary operator would pay. I can only speculate if their factory people installed it, as opposed to a normal operator who would be paying installers 50 to 80 per hour. He also bought advertising on a billboard right across the street from an established operator of a self serve, who just happened to have installed a new automatic. Here is this operator who just spent well over 100K only to see a bill board advertising a $3.00 wash with free vacs right across the street. What's your take on this?
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When a supplier becomes the competition
- Thread starter mac
- Start date
Interesting one, Mac. I have seen, in many cases, a distributor as a competitor, but not as many as a manufacturer as a competitor. The potential failure of a commercial wash for a manufacturer could probably be much less devastating than that of a distributor. A large compay, such as the one you mention, can probably suck up a loss if things don't pan out or if intended profits are not reached, and can move in on another washes territory and give it a shot without too much concern (not saying they should). A distributor on the other hand, probably has to respect the competition a bit more (not saying they always will) in order to maximize their own chances in realizing they have to compete with already established washes.
There are probably some people on this forum that can comment about how a major manufacturer that used to be located in Oregon handled this situation. At one time, I believe this company owned many washes, which I am sure could have caused potential confilict with several of their competitors.
It's a tough one.
There are probably some people on this forum that can comment about how a major manufacturer that used to be located in Oregon handled this situation. At one time, I believe this company owned many washes, which I am sure could have caused potential confilict with several of their competitors.
It's a tough one.
bigleo48
Active member
Mac,
The automotive industry is cut throat! As long as he is not selling him equipment without fully divulging his retail carwash business, I don't have a big problem with it. However, I would not be buying equipment from him if he is also a competitor.
When I built my wash I had an equipment supplier trying to sell me equipment while also trying to build a competing carwash in the same town without divulging his plans until they became public. Aside from being despicable, his actions are also know as fraudulent misrepresentation. I had contacted the companies he represented (some major ones we all know), all but one of them could not care less about his actions. I considered suing them, but had my hands full with a new wash. However, the car wash business is a small world and that kind of behaviour will come back to haunt them...call it carwash Karma.
BigLeo
The automotive industry is cut throat! As long as he is not selling him equipment without fully divulging his retail carwash business, I don't have a big problem with it. However, I would not be buying equipment from him if he is also a competitor.
When I built my wash I had an equipment supplier trying to sell me equipment while also trying to build a competing carwash in the same town without divulging his plans until they became public. Aside from being despicable, his actions are also know as fraudulent misrepresentation. I had contacted the companies he represented (some major ones we all know), all but one of them could not care less about his actions. I considered suing them, but had my hands full with a new wash. However, the car wash business is a small world and that kind of behaviour will come back to haunt them...call it carwash Karma.
BigLeo
Red Baron
Active member
I think it's potentially troublesome, to the same degree that he wouldn't like it if I opened up a low cost distributorship and started selling private-labeled soap dirt cheap on the side.
The customers of our roof equipment manufacturing business wouldn't stand for it. When we sell a roof rig we have to sign a noncompete in that area because if we competed with them we would have a huge/unfair advantage. Same thing applies to car washes.
The customers of our roof equipment manufacturing business wouldn't stand for it. When we sell a roof rig we have to sign a noncompete in that area because if we competed with them we would have a huge/unfair advantage. Same thing applies to car washes.
robert roman
Bob Roman
Mac,
Just how close are you to me? I know well the carwash that you speak of. When I ride my motorcycle out to the sticks, I always pass by it to see how much business it is doing.
One day I decided to stop and check out the wash. After I introduced myself, the owner?s partner told me that he knew who I was and then proceeded to treat me like I had leprosy.
Over the last five years or so, distributor operated carwashes seem to be happening with more frequency. I wouldn?t have an issue with this unless someone decided to build in my back yard. However, given the relationship between the owner and the OEM, I believe better judgment should have been exercised in terms of building new across the street from an existing wash. Given the leverage involved here, it is sort of like having the Tampa Bay Bucs play against one of the local high school football teams. Not a fair match but not illegal.
Unfortunately, this is just another sign of our times; screw the other guy as much and as soon as possible to get the biggest short-term profit.
I am a firm believer in what goes around, comes around. This is why I always try to get my clients to work with the right suppliers and vendors. Nice people tend to be more kind during tough times. On the other hand, greedy and unscrupulous people will do everything they can to bleed you dry. When you deal with these types, you will endanger your business.
Bob Roman
RJR Enterprises - Carwash Consultants
Just how close are you to me? I know well the carwash that you speak of. When I ride my motorcycle out to the sticks, I always pass by it to see how much business it is doing.
One day I decided to stop and check out the wash. After I introduced myself, the owner?s partner told me that he knew who I was and then proceeded to treat me like I had leprosy.
Over the last five years or so, distributor operated carwashes seem to be happening with more frequency. I wouldn?t have an issue with this unless someone decided to build in my back yard. However, given the relationship between the owner and the OEM, I believe better judgment should have been exercised in terms of building new across the street from an existing wash. Given the leverage involved here, it is sort of like having the Tampa Bay Bucs play against one of the local high school football teams. Not a fair match but not illegal.
Unfortunately, this is just another sign of our times; screw the other guy as much and as soon as possible to get the biggest short-term profit.
I am a firm believer in what goes around, comes around. This is why I always try to get my clients to work with the right suppliers and vendors. Nice people tend to be more kind during tough times. On the other hand, greedy and unscrupulous people will do everything they can to bleed you dry. When you deal with these types, you will endanger your business.
Bob Roman
RJR Enterprises - Carwash Consultants
raisetheprice
Member
jfmoran
Active member
Don't see the Problem
So if you own a hamburger stand and McDonald's moves in across the street with a company owned store is that wrong?
It may not be fair, but fair is not a part of our capitalistic society, the strong survive. If you don't like what this manufacturer did, don't buy from them, don't recommend them, but don't condemn them for participating in our free enterprise capitalistic society.
John
So if you own a hamburger stand and McDonald's moves in across the street with a company owned store is that wrong?
It may not be fair, but fair is not a part of our capitalistic society, the strong survive. If you don't like what this manufacturer did, don't buy from them, don't recommend them, but don't condemn them for participating in our free enterprise capitalistic society.
John
P
Patrick H. Crowe
Guest
Mac:
No way in hell this passes the smell test. If it was a one and only one demonstration unit, near the factory, then MAYBE.
Name the place so we can not buy there.
Those folks who claim "it's all capitalism, free enterprise" need ethics lessons. Greed is one of the seven and I could name another it violates.
Patrick H. Crowe
No way in hell this passes the smell test. If it was a one and only one demonstration unit, near the factory, then MAYBE.
Name the place so we can not buy there.
Those folks who claim "it's all capitalism, free enterprise" need ethics lessons. Greed is one of the seven and I could name another it violates.
Patrick H. Crowe
Red Baron
Active member
This is one of the things wrong with our society, imo. Capitalism and ethics go hand in hand. Aside from the fact that doing whats right is just the right thing to do, it is also a very good business tool. Do the wrong thing a few too many times and your company isn't going anywhere.
Besides all that, I think it is shortsighted of a distributor to compete with his customers. Loyalty takes a long time to build and Kleen-Rite is too easy to call...
robert roman
Bob Roman
Moran,
I believe this situation is a little different.
Many people believe that industry leaders have a responsibility to be stewards; exhibiting a willingness to be accountable for the well-being of an industry by operating in service rather than control.
Stewardship is an ethic that embodies the notion that industry leaders should conduct business in a manner that encourages others to act in the interest of the long-term sustainability of an industry.
I believe this situation shows a lack of regard for this. Nothing more, nothing less.
I believe this situation is a little different.
Many people believe that industry leaders have a responsibility to be stewards; exhibiting a willingness to be accountable for the well-being of an industry by operating in service rather than control.
Stewardship is an ethic that embodies the notion that industry leaders should conduct business in a manner that encourages others to act in the interest of the long-term sustainability of an industry.
I believe this situation shows a lack of regard for this. Nothing more, nothing less.
Thanks for your responses. This is pretty much what I thought it was. It shouldn't be too hard to guess who the manufacturer is. They make tunnel equipment in the Miami area and have a huge catalogue of supplies and parts. There is nothing wrong with a manufacturer having a site close by to monitor their equipment and operating practices. These people after all have a college to teach people how to operate a wash. This particular site however is four hours away by auto. Again, all this is perfectly legal. There are however many instances where a distributor or manufacturer has information that is not available to an outside independent operator. That's why the the FTC looks down on insider trading so much. I think the best way to address situations like this is to simply put all the cards on the table, and let you decide who to buy from. These are the same group that started the $50 minimum order policy. They seem to be on a streak.
So what your saying is if my brother makes widgets I can't sell widgets or really be in the widget business at all??? So much for land of the free. Don't get me wrong I can see how you can see this as an unfair advantage that they have. But arn't we all looking for an advantage over the wash down the street. If you inherited the land that your wash is on and I had to pay a million dollars for my land is that fair??? How can I compete with that??? LIFE is not fair!
Red Baron
Active member
I think a point is being missed here. What is legal and what is right isn't always the same. Also, competing with your competitors great, but having to compete against a distributor whose wallet you are thickening so he can compete with you some more, is another matter all together. It is dumb on the part of the distributor because, I suspect most wash owners are like me in that, the minute I think my dist is competing with me is the minute he loses my loyalty and I start doing some of my business with his competitors who offer many products for less money. Shortsighted.
jfmoran
Active member
Stop Being Coy!
Mac,
With all due respect, you haven't layed all your cars on the table. You refuse to name the manufacturer even though we all know who you are talking about and secondly, before you came on here and threw them under the bus, did you bother to get all the facts. Did you call the CEO directly and speak to him?
Aren't you a competitor of their's? Is what you are doing ethical? Anybody care to comment on the ethical nature of throwing a competitor under the bus? How does this do anything positive for our industry?
John Moran
Mac,
With all due respect, you haven't layed all your cars on the table. You refuse to name the manufacturer even though we all know who you are talking about and secondly, before you came on here and threw them under the bus, did you bother to get all the facts. Did you call the CEO directly and speak to him?
Aren't you a competitor of their's? Is what you are doing ethical? Anybody care to comment on the ethical nature of throwing a competitor under the bus? How does this do anything positive for our industry?
John Moran
Competition
Last time I filled up my truck with gas, I stepped inside of the mini-mart at the gas station to buy a cup of coffee. Did I commit an ethical sin?
After all, gas stations used to sell only gas, right? Now, in their apparently evil and greedy ways, they sell coffee which competes with local restaurants, and groceries that compete with local supermarkets. Oh no, this one also has a deli which makes sandwiches!!!
Claiming that a vendor within industry "X" cannot compete in industry "Y" exhibits an entitlement mentality. Sorry, but one cannot "own" an industry, and you can't just choose, based on your opinion only, which industries another company is allowed, or disallowed, to enter.
Last time I filled up my truck with gas, I stepped inside of the mini-mart at the gas station to buy a cup of coffee. Did I commit an ethical sin?
After all, gas stations used to sell only gas, right? Now, in their apparently evil and greedy ways, they sell coffee which competes with local restaurants, and groceries that compete with local supermarkets. Oh no, this one also has a deli which makes sandwiches!!!
Claiming that a vendor within industry "X" cannot compete in industry "Y" exhibits an entitlement mentality. Sorry, but one cannot "own" an industry, and you can't just choose, based on your opinion only, which industries another company is allowed, or disallowed, to enter.
pitzerwm
Active member
This topic has been interesting. There are some good points here both ways.
IMO, the question is that if you were a McDonald's, franchisee and without them talking to you they put in a corp store near yours and put up billboards near your store to promote theirs.
Actually, here is what does happen with McD, the local franchisee is a friend of mine and when McD, thought there should be a store in a certain location, they told my friend that they wanted a store there. When he argued that he didn't think the location was right, they said, "either you put one there or we will put one there".
I think the big difference is someone competing and the/a manufacture competing. In many industries, you and I can't buy direct from the manufacture/jobber because they are protecting their distr./retailers. Capitalism has been proven to be the best economic system and yes there are some ugly parts to capitalism. If you want socialism, there are many countries that you can move to where that is their way of life.
IMO, the question is that if you were a McDonald's, franchisee and without them talking to you they put in a corp store near yours and put up billboards near your store to promote theirs.
Actually, here is what does happen with McD, the local franchisee is a friend of mine and when McD, thought there should be a store in a certain location, they told my friend that they wanted a store there. When he argued that he didn't think the location was right, they said, "either you put one there or we will put one there".
I think the big difference is someone competing and the/a manufacture competing. In many industries, you and I can't buy direct from the manufacture/jobber because they are protecting their distr./retailers. Capitalism has been proven to be the best economic system and yes there are some ugly parts to capitalism. If you want socialism, there are many countries that you can move to where that is their way of life.
PaulLovesJamie
rural 5 bay SS
I disagree with how some of you guys define ethics.
But I do appreciate the info - based on what they are doing, I would choose not to patronize them. Heh... actually I dont anyway, I had 3 bad experiences in a row with them 12 years ago, I use their catalog to start fires.
I'm also curious - why the hesitation to name names?
But I do appreciate the info - based on what they are doing, I would choose not to patronize them. Heh... actually I dont anyway, I had 3 bad experiences in a row with them 12 years ago, I use their catalog to start fires.
I'm also curious - why the hesitation to name names?
