Is the Cavallino a rip-off?

They may have said it but they sure never did it.

 

Fixed.

I think that is what they actually said.

 

They charge the maximum amount they can get away with, there is no rule for how much you can mark something up. Extends to parts also, the cars are full of $20 switches and buttons which cost $hundreds if you need to replace them

 

That's for sure!

 

When I was a kid I worked at Radio Shack ( back in the day they were profitable) they would send us the inventory sheets from the warehouse with their cost and the retail price. The markup was sometimes 10 times what they paid for something.

 

Ferrari is a luxury brand. Just like Louis Vuitton, parda, Rolex etc. they sell at these price points because they can. Through clever marketing they have been able to position themselves in a market that is willing to spend big money on an item that is really not worth even 1/4 what they charge for it.

If anybody is to blame for this, it's the consumer not Ferrari. If I could make a little trinket for 2 cents, and then turn around and charge 100 bucks for it, damn right I would, and so would anybody else.

 

And if you were successful in positioning your brand to get away with it they would call you a genius....unless they wanted to buy it in which case you would be an *******.

 

Hard to really know who those customers are.

Some customers that do buy things, even pricey things, don't "truly" have the cash nowadays.

Some of the customers that look now will buy in the future. Ferrari dealers may not understand that, some other dealers do.

Some of the customers that are perceived to have tons of cash now, may not have quite so much in the near future (China anyone?)

My approach to treating people is treating them all equally, regardless of who may be in a position to help me now vs. likely will never be. I would hope to run a business the same way, in part because you never know how things will work out.

I've seen it from the flip side.

I can see it being annoying / frustrating to deal with "tourist" type customers, but absent harassment or disrespectful / damaging behavior, is it really that bad?

 

Yes, but remember those inventory sheets and costs are not true costs.

The true cost is the running of the entire operation to hold that inventory, or ship that inventory, or just have the system in place to reach that inventory.

Grocery stores pay a lot less for their fruits and veggies than they charge... but then they need to overstock / have excess that gets wasted, and they need to take up shelf space (sometimes in high rent areas) that would be otherwise filled with something more directly profitable.

Hard to do the dollars / cents computations without knowing all the true costs. The beauty of the modern economy is that some of that can be bypassed (ebay, Amazon) which has really forced more efficiencies into the system... or, in some cases (Radio Shack as you point out) pricing certain types of operations almost out of existence...

 

Some friends think I'm cheap because I look for good prices, even for relatively mundane / low priced goods. My wife says no, I'm just "value-aware"... I have no trouble dropping $500 for dinner if I see value in the experience, and I have no trouble dropping $XX on any given item or experience, if I see value there. Value is the subjective piece that allows luxury goods makers to charge so much. Some see tremendous value in the name, and so you can get a multiple of price vs. quality (and quality is usually what costs $$$ for companies to achieve).

I love Ferrari, for the perceived overall experience and design, and how I lusted after some of the cars as a kid... And I agree completely with what you just highlighted. The only risk is that if the quality to price gap becomes too great, your value proposition becomes more on the name -- and those who can and will pay for the quality aspect (plus some other intangibles) drop out from being buyers. The brand recognition of Ferrari is almost second to none, but even great brands can fall.

Keeping a slightly tighter gap helps ensure more of your customer base is buying for varied reasons.

All of the above is just hypothetical since I really can't say the price-to-quality ratio of Ferrari is any worse than Porsche, Audi, Lambo, McLaren etc... I will leave that to the experts

 

The merchandise is really good value if we compare it to next year prizes.

 

I can't afford any of the Cavallino shizzle after buying my 458 spider so ... What me worry ?

 

FAF did back in the day.

My first visit Ric Schumann brought out a 308 QV and took me for a ride. It was 1986 and I had just graduated high school one month earlier.

Steve Ahlgrim spent about 20 minutes talking to me and showing me around when we got back.

They were like that every time I walked in just to see the cars and take pictures. I was just a kid and they all treated me like I was a very good customer. I never forgot that.

That is the way to run a business. I came back 11 years later and bought a car from John Apen with Ric's help. Just returning the good will. Not really through FAF but the spirit was there.

 

It costs more BECAUSE it costs more. Look at high quality fakes in watches & jewelry; the differences are virtually undetectable, but most would see the 'value' in the real thing. Not many of our wives wear cubic zirconium. Look at real estate; being on the 'right' side of an artificially placed town/city line can be 'worth' hundreds of thousands, if not millions.

 

In a usury economy, financial wealth multiplies much faster than real wealth and is spread amongst fewer and fewer people leading to a concentration of bidders for luxury goods.

http://images.forbes.com/media/2010/10/23/CLEWI_chart_9-23-10.jpg

 

It is the same with fashion brands. A Louis Vuitton iPad case is som $500. On Amazon I brought an Apple case in leather for ca $50 (also leather)

In Sweden a Ralph Lauren 'golf shirt' costs $120. You can buy a shirt for $25 that probably is sewn in the same factory....