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What's The Typical Spa Price Markup?


craighaggart

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It's not hard to discover how much markup there is on a car, but what is the typical margin on a spa? I'm sure it differs between brands and, like cars, depends on the particular model, but what's a typical "dealer profit" -- 5%? 10%? 25%? 50%?

If anyone within the industry would like to respond but prefers to stay out of the limelight, please respond privately. I will honor any requests for confidentiality.

-Craig Haggart

Sunnyvale, California

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It's not hard to discover how much markup there is on a car, but what is the typical margin on a spa? I'm sure it differs between brands and, like cars, depends on the particular model, but what's a typical "dealer profit" -- 5%? 10%? 25%? 50%?

If anyone within the industry would like to respond but prefers to stay out of the limelight, please respond privately. I will honor any requests for confidentiality.

-Craig Haggart

Sunnyvale, California

If it's 50 percent which I think is close you will find that after overheads this number has decreased substantialy. I dout you will get a dealer to respond as this is private information.

If it cost 10,000 bucks a month to pay your operating expenses. and your tubs sell for 6000 bucks and they are marked up 50 percent so you pay 3000 but alot of customers negotiate you down to 5000 bucks so you make an average of 2500 bucks per tub and you only sell 3 tubs a particular month, well you get the picture. Most dealers are not getting rich but can make a decent living.

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HotSpring dealers only mark their spas up $10. But, they sell a lot of spas.

Terminator

Uhm, i really hope you mean 10% and not $10, otherwise they would really have to sell A LOT of spas. And i've heard the same that the mark up on most is around the 50% margin, that being from a friend who used to work for a company that sells tubs. But like it was said, there is not a large volume of tubs sold, so they need a little larger of a markup to make a living, the old profit margin thing. Also, some dealers (like mine) offer free monthly filter cleaning for life, and this is part of the cost as well (it may not cost much to do, but over 15 or 20 years this can add up), as well as any warranty work should there be any.

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It's not hard to discover how much markup there is on a car, but what is the typical margin on a spa? I'm sure it differs between brands and, like cars, depends on the particular model, but what's a typical "dealer profit" -- 5%? 10%? 25%? 50%?

If anyone within the industry would like to respond but prefers to stay out of the limelight, please respond privately. I will honor any requests for confidentiality.

-Craig Haggart

Sunnyvale, California

Craig,

You have a better chance of getting the launch codes for our nukes or the key to Fort Knox than getting what dealers pay for spas. It's the most closely guarded secret in the world!!!

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Thanks to everyone for the replies so far. I should clarify that I understand the need for dealers to make a profit (or else they couldn't stay in business), and I also understand that a number of factors might make it possible for some dealers to have more latitude in price bargaining than others (volume, overhead, etc.).

What I'm interested in is getting a feel for how much room there is in negotiating when I finally decide which spa I'm getting. It is, after all, a very expensive purchase (to ME, at least!), and it is also a luxury item. I do want a spa, but it's not a necessity.

One reason I asked about the markup is the odd situation with Sundance. They seem to charge much more than others for very similar spas, but nothing I've seen indicates that their product or service is substantially better. Given their seemingly high sales volume, I expected at least a competitive price. But the salesperson had a "take it or leave it" attitude. It made me wonder if this is simply their marketing plan (charge more and don't discount, thereby positioning themselves in the public's mind as the "premium" product) or if their dealers really have very thin margins.

-Craig Haggart

Sunnyvale, California

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One reason I asked about the markup is the odd situation with Sundance. They seem to charge much more than others for very similar spas, but nothing I've seen indicates that their product or service is substantially better.

It all depend on which spas you're comparing to that are "very similar". I've seen many second rate spas (IMO) say they're similar because they use equal parts, as if that's all it takes (assuming it's true of course). They'l say the difference is in the markup but I've also seen many older spas from major spa companies that last for many years because they're built to last while many bargain spas become huge planters far too often about 7 years down the line.

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It all depend on which spas you're comparing to that are "very similar".

The Caldera Martinique, Artesian Ruby, and Emerald 1409SE are all almost identical in layout, size, and features to the Sundance Marin. They all have similar claims of being the best. They all have similar warrantys. They all have plenty of satisfied customers (and at least a few dissatisfied customers). None appears to be "second rate." Sundance appears to charge a lot more and, as I mentioned, the dealer did not appear to be at all interested in discussing a lower price.

Maybe it was a unique experience; maybe it was just a bad day. That's why I joined this forum and posted my question -- I'm here to learn before I spend a boatload of money on a luxury item. I spend a LOT of my life at work to earn the money I plan to spend on a spa, and I have no desire to throw thousand-dollar bills at a salesman unecessarily.

Thanks in advance for any help!

-Craig Haggart

Sunnyvale, California

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The Caldera Martinique, Artesian Ruby, and Emerald 1409SE are all almost identical in layout, size, and features to the Sundance Marin. They all have similar claims of being the best. They all have similar warrantys. They all have plenty of satisfied customers (and at least a few dissatisfied customers). None appears to be "second rate." Sundance appears to charge a lot more and, as I mentioned, the dealer did not appear to be at all interested in discussing a lower price.

Maybe it was a unique experience; maybe it was just a bad day. That's why I joined this forum and posted my question -- I'm here to learn before I spend a boatload of money on a luxury item. I spend a LOT of my life at work to earn the money I plan to spend on a spa, and I have no desire to throw thousand-dollar bills at a salesman unecessarily.

Thanks in advance for any help!

-Craig Haggart

Sunnyvale, California

I can certainly appreciate your desire not to spend hard earned money foolishly. A spa purchase is difficult for many because of the cost but I think it is much more than just that, it is that very few are familiar with a spa and what really makes one better than another. I am unsure how knowing cost would equate to knowing its value but that is another topic. I would suggest as many seem to do and that is stick with what most consider the leaders. Watkins, Sundance, Marquis,D-1. Jacuzzi, Coleman and there are others. The reason these brands are most recommended are they have earned the reputations for taking care of their customers after the sale, they do spend money on research and development , their spas typically will operate in the most energy efficient manner possible. My point is a lower price does not mean a better or equal value a very common and accepted law of business is that it is almost foolish to expect to pay substantially less for something and have to be of equal quality( of course there are exceptions). And when spending 4,5,6,7,8 thousands or more on something you want to make sure it does what you bought it for. The guys who get mentioned most are because over the years they have prove to do give you pay for more often than not.

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I would suggest as many seem to do and that is stick with what most consider the leaders.

My plan exactly! Watkins makes Caldera, I already mentioned Sundance, and both Artesian and Emerald are spas people on opinion sites and web forums like this commonly mention as being among the top tier.

And I totally understand value rather than simply price. If you have any objective information about why one leading spa manufacturer would actually be a better value at several thousand dollars more than the apparently very similar competitors, please let me know! So far it appears to be simply about targeted marketing, but as I've said before: I'm here to learn.

Thanks!

-Craig Haggart

Sunnyvale, California

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My plan exactly! Watkins makes Caldera, I already mentioned Sundance, and both Artesian and Emerald are spas people on opinion sites and web forums like this commonly mention as being among the top tier.

And I totally understand value rather than simply price. If you have any objective information about why one leading spa manufacturer would actually be a better value at several thousand dollars more than the apparently very similar competitors, please let me know! So far it appears to be simply about targeted marketing, but as I've said before: I'm here to learn.

Thanks!

-Craig Haggart

Sunnyvale, California

That's a tough call, I guess you have to decide what is the best value for you. You seem to like Caldera, I do not. But if it fits you well than you can purchase knowing that Watkins will back up their product. I think for pure value Nordic seems to offer a decent product at a very fair price. Marquis is a very good company and I think for a similar spa jacuzzi is priced less than a Sundance.

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That's a tough call, I guess you have to decide what is the best value for you. You seem to like Caldera, I do not. But if it fits you well than you can purchase knowing that Watkins will back up their product. I think for pure value Nordic seems to offer a decent product at a very fair price. Marquis is a very good company and I think for a similar spa jacuzzi is priced less than a Sundance.

Value is very subjective. You will have a better chance getting opinions on the value of certain brands by posting looking for such. I to am not a fan of Watkins products, not because they are not fine products but because the marketing and excelent service after the sale they provide comes at a price. Some people need that extra Watkins throws in, at a cost, some don't. My couple grand more, can be spent more effectivly by me for me in other ways. But this is only how I handle luxury item purchases. Again some need what they offer at a price, some don't. I to think Marquis is a better value, Emerald, Hydropool, and a bunch of others that give you the same amount of spa for less money. And a whole lot of others will have there own ideas on how they percieve value.

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I can certainly appreciate your desire not to spend hard earned money foolishly. A spa purchase is difficult for many because of the cost but I think it is much more than just that, it is that very few are familiar with a spa and what really makes one better than another. I am unsure how knowing cost would equate to knowing its value but that is another topic. I would suggest as many seem to do and that is stick with what most consider the leaders. Watkins, Sundance, Marquis,D-1. Jacuzzi, Coleman and there are others. The reason these brands are most recommended are they have earned the reputations for taking care of their customers after the sale, they do spend money on research and development , their spas typically will operate in the most energy efficient manner possible. My point is a lower price does not mean a better or equal value a very common and accepted law of business is that it is almost foolish to expect to pay substantially less for something and have to be of equal quality( of course there are exceptions). And when spending 4,5,6,7,8 thousands or more on something you want to make sure it does what you bought it for. The guys who get mentioned most are because over the years they have prove to do give you pay for more often than not.

Dumpster dive your dealer for a week or so, you'll find out.

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My plan exactly! Watkins makes Caldera, I already mentioned Sundance, and both Artesian and Emerald are spas people on opinion sites and web forums like this commonly mention as being among the top tier.

And I totally understand value rather than simply price. If you have any objective information about why one leading spa manufacturer would actually be a better value at several thousand dollars more than the apparently very similar competitors, please let me know! So far it appears to be simply about targeted marketing, but as I've said before: I'm here to learn.

Thanks!

-Craig Haggart

Sunnyvale, California

Craig,

If you understand the difference between value and price then you're half way there. The reality is everyone in the industry has their own opinion (biased on not) and they certainly vary. My list of top spas is always Hot Springs, Sundance, Marquis, Caldera and D1. I don't have Coleman, Jacuzzi, Arctic and other notables in there but that doesn't mean I think they're necessarily inferior (your list can only be so big). In fact, I really think the most meaningful list is those spas which a spa professional (or educated customer) feels should be avoided. I have stated in the past that I would avoid Thermospas and Cal Spas as premium priced spas that don't have great reputations for Quality and service from what I know. Then there are the lesser priced spas that promise to give you better value but not all have a great reputation for Quality or service but some people feel if you get a good enough deal on they don't mind being the service guy (not everyone shares that thought). From that group I would avoid Hydro spas, Gulf Coast, internet spas that can't be seen or tested and require a leap of faith that they'll service them when issues arise and any of those infamous spas that sell in the Pennysaver touting that their spas are still wrapped and normally sell for $8,000,000 but they'll sacrifice one for $4,800 if you come to their storage facility today, etc. If the price is too good to be true you'll often regret you're the owner of the product down the line. I'm sure some will disagree with what I'm saying (especially if they sell/own the spas I refer to) and I completely understand that because after all, this is just my opinion.

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Craig,

If you understand the difference between value and price then you're half way there. The reality is everyone in the industry has their own opinion (biased on not) and they certainly vary. My list of top spas is always Hot Springs, Sundance, Marquis, Caldera and D1. I don't have Coleman, Jacuzzi, Arctic and other notables in there but that doesn't mean I think they're necessarily inferior (your list can only be so big). In fact, I really think the most meaningful list is those spas which a spa professional (or educated customer) feels should be avoided. I have readily stated in the past that I would avoid Thermospas, Cal Spas as premium priced spas that don't have great reputations for Quality and service. Then there are the lesser priced spas that also don't have a great reputation for Quality or service but some feel you get a good enough deal on if you don't mind being the service guy. From that group I would still avoid Hydro spas, Gulf Coast, internet spas that can't be seen or tested and require a leap of faith that they'll service them when issues arise and any of those infamous spas that sell in the Pennysaver touting that their spas are still wrapped and normally sell for $8,000,000 but they'll sacrifice one for $4,800 if you come to their storage facility today, etc. If the price is too good to be true you'll often regret you're the owner of the product down the line.

nice job, very sound advice.

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As a long-time dealer, I'll chime in here.

My mark up is:

Exactly what it needs to be to keep me in business and my employees getting paychecks.

My customers have gotten used to being able to call for after-sale service, and I hope to be able to keep giving it for a long time to come.

In the case of spas, people seem to feel free to grind and grind on the price, and they tend to get upset if the dealer won't play that game with them. They shouldn't get upset IMO. If you go to a store and they don't have the color you want, then you are in the wrong store. No harm no foul. So, if you find yourself in a store where they don't like to sell one price to one person and a different price to somebody else, why get upset?

I don't get it. I consider it fair to sell the same product to everyone at the same price. Every one of my customers is important to me, why would I charge one of them more and another one less?

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I don't get it. I consider it fair to sell the same product to everyone at the same price. Every one of my customers is important to me, why would I charge one of them more and another one less?

Because you like me better :D

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Yeah, I don't get it either. I'm a consumer but I don't understand why everyone wants to know what the profit level is for a spa dealer. I just purchased some flooring and the tile dealer sure didn't tell me how much profit he was making. I can't go to tilebluebook.com and determine his costs. Why should we be entitled to this information for a spa. I don't get it.

As a long-time dealer, I'll chime in here.

My mark up is:

Exactly what it needs to be to keep me in business and my employees getting paychecks.

My customers have gotten used to being able to call for after-sale service, and I hope to be able to keep giving it for a long time to come.

In the case of spas, people seem to feel free to grind and grind on the price, and they tend to get upset if the dealer won't play that game with them. They shouldn't get upset IMO. If you go to a store and they don't have the color you want, then you are in the wrong store. No harm no foul. So, if you find yourself in a store where they don't like to sell one price to one person and a different price to somebody else, why get upset?

I don't get it. I consider it fair to sell the same product to everyone at the same price. Every one of my customers is important to me, why would I charge one of them more and another one less?

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  • 2 weeks later...

...I don't understand why everyone wants to know what the profit level is for a spa dealer... Why should we be entitled to this information for a spa.

Who said anything about being entitled? I asked because I am interested, and I'm interested because a spa is an expensive luxury item, not a necessity. I have many choices about how much to spend, including the choice to spend zero.

-Craig Haggart

Sunnyvale, California

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Who said anything about being entitled? I asked because I am interested, and I'm interested because a spa is an expensive luxury item, not a necessity. I have many choices about how much to spend, including the choice to spend zero.

-Craig Haggart

Sunnyvale, California

The markup is an overall calcultion taking into account the costs of the spas + the cost of doing business for the owner + a certain profit margin the owner is attempting to make. It varies by area, brand, owner, etc. In other words, there is NO set answer.

I have an idea of what a set of good tires for my truck should cost NOT because I know anything about that industry but because I see comparable pricing from many tire stores. I also know that all tires are not the same so I know the best value isn't necessarily the lowest price but I can get a feel for it by shopping around and asking questions. If I came from another planet and knew nothing about tires I would have no idea whether what I was seeing was a good value. I'd either have to ask what the margains for teh product were or I'd shop around so I think you need to take the latter route.

There is no conspiracy going on in the spa world There is nothing driving up prices to an artificial high. If that were the case somone would break ranks and lower their prices to get business and someone else would follow and do the same etc. Just like everything else the market settles in as businesses compete so what you really need to do is to shop around and compare as that's the way to gauge what you're seeing.

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In the case of spas, people seem to feel free to grind and grind on the price

Why, you'd almost think they believed THEY should decide how to spend their own money! The nerve of some people, eh? Good thing we have lots and lots of salesman around!

-Craig Haggart

Sunnyvale, California

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Why, you'd almost think they believed THEY should decide how to spend their own money! The nerve of some people, eh? Good thing we have lots and lots of salesman around!

-Craig Haggart

Sunnyvale, California

You are certainly free to decide how to spend your own money but some have come to these sites thinking they should decide how much the dealer SHOULD be charging. There is nothing wrong with asking though.

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