So, ONE segment of their customer base gets a price break and another doesn't? Perhaps this is common practice in the sales industry but it still rubs me the wrong way...
They've done a lot of damage to Port Supply as well. The original setup was a wholesale company and a retail company. As is normal, the wholesale sold to those who would resell the product and worked on a very slim margin in doing so. No different than any of the other wholesalers who sell to dealers, boatyards and yacht management companies. Industry professionals like captains and engineers fit in between somewhere.
However, along the way they decided to try to consolidate under the West Marine name and locations. As a result, Port Supply is no longer a pure wholesaler as their discounts are not competitive. Also, they stopped giving the full discount to many of their customers who now get a lesser discount.
It is common for companies to have a wholesale business and also go into retail. However, it's extremely important they keep the two separate and are firm in customer requirements for the wholesale customer.
Here is their current requirement for purchasing from West Marine Pro.
West Marine Pro offers competitive wholesale discounts for companies that are in the full-time business of selling boats and/or selling or installing marine equipment, government agencies, full-time charter companies or companies who are purchasing marine equipment for use in the manufacture of non-marine products. Accounts must maintain a minimum annual volume of $1,500.
A brief look at a company that has maintained wholesale and retail independently. D. S. Hull Company is a long time wholesaler located in Fort Lauderdale. They're the "other one" on the list. They opened Boat Owners Warehouse as a retail company. While BOW does have good pricing, they do not offer the pricing DS Hull does, nor should they. However, Port Supply is no longer competitive with DS Hull and West Marine isn't competitive with BOW. A lot easier to be in the marine business in South Florida than to be nationwide however.
This is common in other industries but one must be careful not to compromise the wholesale side. We sell some products both wholesale and retail. The wholesale companies sell only to legitimate retailers. They do not allow any walk in customers. Their locations are in warehouses. Meanwhile the retail stores are in high traffic areas, have no wholesale or discount prices. Their overhead is much higher. The average sale of the wholesale company is 50 times that of the retail. The rent of the retail location is 10 times that of the wholesale. Other overhead is also many times. Even buying is very different. The retail will buy one of a kind or small quantities of identical items, typically no more than 10 or so of any item per store. The wholesale will not buy less than 100 of any item and often buys many times that. The two businesses are kept separate in every way.
