Re: Kite Prices Inflated and Fixed (End of Story...)
- Interesting viewpoint that fits well with other retail industries.
Other things to think about:
1. a lot of kiters are moving from windsurfing and thereby
cannibalising the windsurfing sales.....
2. Kitesurfing has a very steep learning curve. Both in terms of
equipment complexity, safety and image. It may not grow to be huge
--- In email@example.com, wickedkiter <no_reply@y...> wrote:
> I like the discussion of kiting prices and your estimates and
> miscalculations of kite costs. Until last year, I worked in
> for a large kite retailer (don't ask for the name, I'm not
> I loved placing orders, etc. During every discussion, we (as
> retailers) were told by wholesalers to keep our markup as close as
> possible to MSRP, but to NEVER go below a 25-30% markup above our
> cost. If we did go below 25%, we would lose our account.
> Interesting talk in a free trade economy, don't you think?
> Why was this? Simply put--It's price fixing. This made me
> how much wholesalers actually make. The following example may
> some light on this. At the end of last year's season, Cabrinha
> their main distributor--also out of Florida) sent out a flyer for
> closeouts on blacktips and directional starter combo sets. The
> you ask? Our wholesale cost was $399.00 for both the board and
> kite/bar/bag/pump--Any size. This was rather a shock considering
> had been purchasing kites sets at the full wholesale cost for the
> entire season for $575-$725 depending on size.
> The store I worked for sold a lot of kites, including stunt kites,
> and the typical retail markup on stuntkites is 50% to 100% (Also,
> there's no threats of account deletion for retail sales). In
> contrast, the typical retail markup on a kiteboarding kite is
> Thus, if you paid $575 for a kite and managed to get 25% you're
> making a whopping $143.75. Not very lucrative... I mean think
> it. If we sold 10 kites in a month, we've made $1400.00. The
> monthly rent on our store was $1,100.
> I believe the premise behind this strategy is to establish a price
> standard; however, what the industry doesn't understand is it's
> shooting itself in the foot. Wouldn't more people come to kiting
> costs were low? Thus, improving volume, increasing distribution
> But who is getting rich here? Surprise, many of the same
> which made a killing on windsurfing. Thus, since there pricing is
> established, it's established--It is not going to change in 2006.
> Because you as the consumer view your 2002 kite as being some
> worthless piece of junk, thus you MUST HAVE your 2004 or the guys
> the beach will laugh at you.
> Solution: Fly it till it dies. Don't get a new kite. Or, instead
> get sponsored by one of the Top Industries. What is Lou's
> salary anyway? I heard $40,000. In contrast, what is Robby