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Kite shops not doing so well.

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driveonthebeach
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Kite shops not doing so well.

Postby driveonthebeach » Sun Jul 30, 2006 2:09 am

Let me put this out and see what people think.
Is it right for distributors to sell kiteboarding equipment directly to the consumer?

I, myself don't like it. I know of two local shops that used to be doing very well several years ago. Now the owners are complaining about lack of business. Customers would come in to see what kiteboarding was all about and end up buying a kite, board + harness and signing up for a lesson. Now it seems like these same shops can't compete with the distributors that have their banner ads all over the place advertising huge closeouts on last year's stuff.

Car manufacturers don't sell direct. You have to go to the dealer.

If the shop goes out of business there go the lessons. What shop owner is going to cater to a customer who walks in with his brand new kite that he just bought on line but who doesn't know a thing about it?

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theflyingtinman
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Re: Kite shops not doing so well.

Postby theflyingtinman » Sun Jul 30, 2006 5:32 am

driveonthebeach wrote:Let me put this out and see what people think.
Is it right for distributors to sell kiteboarding equipment directly to the consumer?

I, myself don't like it. I know of two local shops that used to be doing very well several years ago. Now the owners are complaining about lack of business. Customers would come in to see what kiteboarding was all about and end up buying a kite, board + harness and signing up for a lesson. Now it seems like these same shops can't compete with the distributors that have their banner ads all over the place advertising huge closeouts on last year's stuff.

Car manufacturers don't sell direct. You have to go to the dealer.

If the shop goes out of business there go the lessons. What shop owner is going to cater to a customer who walks in with his brand new kite that he just bought on line but who doesn't know a thing about it?


Car manufacturers don't sell direct because that business model wouldn't
work out with the numbers. A huge percentage of all families in the
country buy at least one, often two cars. The model works just fine with
the current demand for kitesurfing equipment.

This whole idea that kite sales should be tied in to lessons is an artificial
construct that serves no purpose other than to justify the existence of
the ridiculous manufacturer/distributer/retailer model. What other item
do you buy from a specific dealer rather than a better priced source
because you expect the dealer to teach you how to use it. Certainly not
a car!

The argument that schools can't sustain themselves if they loose kite
sales should be a motivation for schools to come up with a new business
model of their own - not a justification to artifically bind two businesses
together doubling or even tripling the price of equipment. Aren't some
successful schools already claining they make next to nothing on kites
but make their most profit on accessories and clothing? And maybe
lessons wouldn't seem expensive at a price that could sustain schools
if the newcomers to the sport weren't expected to buy kites at a price
that can grease the three set of hands through which they traditionally
pass on the way to the customer.

The only real justification I can think of for local retailers is to offer demos
but if all manufacturers offered say a 30 day money back guarantee for
any reason (even dog-ate-your-kite ;) ) then even that justification
becomes obsolete.

Sure it would be a bad thing if schools really disappeared completely
because of a business model that better fits the actually business but I
doubt that will happen. If there is a demand for lessons someone will fill
that demand and find a way to profit from it. Maybe not as many people
as currently try to make a living from teaching kitesurfing but that will
probably be a good thing judging by the quality of some of the lessons
I see being sold on the beaches now.


Steve T

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Postby Kurt » Sun Jul 30, 2006 8:34 am

I see your point of view.
But what about the shops that have little or no idea, pump out the sales on whatever they can at their best possible margins and offer expensive and shabby lessons?
There's no right answer.

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Postby Kite Scarecrow » Sun Jul 30, 2006 4:02 pm

The reality is, that with the advent of the internet, the need for a manufacturer/wholesaler/dealer-retailer relationship is gone.

I hate hearing about business owners going out of business, we had a local guy who owned his shop for 14 years go out of business. Now he has to get a "real" job...I hate that, because he was living the dream and his passion was his job. (we'll miss you WSP).

The way we are accustomed to obtaining any of the goods we currently consume has changed. A sound business plan if for the retailer to conform to what his customers want...not the other way around.

If you were a fly on the wall, you would find out that there is more in the way of business agreements going on behind the scenes in these situations then you will ever know.

iAN

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Postby gumball » Sun Jul 30, 2006 4:47 pm

As you know, Best sells direct to the customer and direct to the retailer. We don't use distributors so that mark up is passed on a savings to the customer. The 400+ retailers around the world that sell Best are having their best year ever with the waroo, they can't keep them in stock and their only complaint is that they can't get enough Waroos even though we're making them as fast as we can. I think if you take a close look, it's mostly the shops that don't sell Best that are having problems because they can't compete with the waroo on price or performance and many distributors are selling direct, behind the retailer's backs, trying to move inventory at reduced prices. The manufacturer/distributor/retailer model works ok IF there isn't someone rocking the boat and customers don't have options, but they do and Best is pretty good at rocking the boat. This whole discussion is the opportunity we saw 2 1/2 years ago when we started Best, and we have to be close to right because we're now far and away the biggest manufacturer in the industry. For example, I know for a fact that Flexifoil made 2,500 kites in all of 2006, Best makes that many in 2 weeks...

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I was noticing

Postby blowhard » Sun Jul 30, 2006 5:20 pm

That the number of hits on kite websites was highest in 2003

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Postby MistralWind » Sun Jul 30, 2006 5:22 pm

gumball wrote:For example, I know for a fact that Flexifoil made 2,500 kites in all of 2006, Best makes that many in 2 weeks...

wow hummmm :thumb:

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Postby panchito » Sun Jul 30, 2006 6:09 pm

gumball wrote:As you know, Best sells direct to the customer and direct to the retailer. We don't use distributors so that mark up is passed on a savings to the customer. The 400+ retailers around the world that sell Best are having their best year ever with the waroo, they can't keep them in stock and their only complaint is that they can't get enough Waroos even though we're making them as fast as we can. I think if you take a close look, it's mostly the shops that don't sell Best that are having problems because they can't compete with the waroo on price or performance and many distributors are selling direct, behind the retailer's backs, trying to move inventory at reduced prices. The manufacturer/distributor/retailer model works ok IF there isn't someone rocking the boat and customers don't have options, but they do and Best is pretty good at rocking the boat. This whole discussion is the opportunity we saw 2 1/2 years ago when we started Best, and we have to be close to right because we're now far and away the biggest manufacturer in the industry. For example, I know for a fact that Flexifoil made 2,500 kites in all of 2006, Best makes that many in 2 weeks...


Come on ....you can do it better man !!!!! you are comparing Best with a Uk local brand ???? this is a joke.....If you want to impress us why not mention North, Naish or Slingshot......

But keep going.... You know a lot of people really believe you....

Looks like your broken fingers are doing better :D sorry I mean your leg

Saludos

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Postby Eduardo » Sun Jul 30, 2006 6:19 pm

on the one hand, a kite seller looks like a good market because equipment changes so fast that most people are on relatively new equipment.

on the other hand, your average joe is scared of kitesurfing. while windsurfing doesn't seem to intimidate anyone, kiting intimidates many. so despite bow safety, etc. the people #'s are not huge.

if your city has 100 kiters each replacing their kites every 3 years, and each kiter has 3 kites, let's see... 100 kites per year. small profits for sure. some extras to sell like lines, harnesses, ... but not too much. Now subtract from the 100 kites those that will buy on-line, 1 year used equipment, maybe a competing shop, ... and it's looking bad...

1000 kiters and no competition, then it looks good. ;-)

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Postby terrios666 » Sun Jul 30, 2006 8:02 pm

Pop goes the business model. We're going to see a HUGE fallout in retailers over the next year.

From some of the prices I've seen so far for 2007, distributors are RAISING their costs [ I've heard that a Cabrinha 2007 12m BOW is like $1,800!!!! Thats $200 over 2006]. More spread, more margin and most importantly more profit.

But guess what? The retailer still needs to drop his pants and make the deal happen, starting at a higher retail price. I can call around to the 5 or 6 competitive shops in the USA and get a lower and lower price each time I ask. Once you get them down to $50 / $100 over wholesale, I'd say thats a good deal! [ hint, you always end up in Florida by doing this :) ]

On top of this, distributors are lowering their standards to establish retailers and for the consumer, this means more wholesale deals just so the retailer can get the cash back and try again. Ka-CHING for the consumer. Traveling to NYC on business and riding the local spots, I've found three new "reps" who were walking the beach claiming to have good deals on demo gear. Can they do that?

Best is stealing the show for the new market. This is awesome. Schools around the country bust thier ass to get quality instruction done and unfortunately some of them are "tied" into top brands. What happens? Their students walk and go buy BEST, a used kite or grab something off EBAY.

I had one school guy here in Georgia say he stopped doing lessons because all he was doing was building a pipeline of business for the top retailer in FL! Thats CRAZY! Granted he was teaching on a high end name brand, but the profit he sought to keep his business alive wasn't enough to keep the stundent from trying to get a better deal. Who can blame them?

Why on earth the likes of Cabrinha and North haven't had enough balls to come out with a "value" oriented kite is beyond me. Honda does it. They have Honda and Accuras. Burton does it. They have the core shop models [AK], then the chain models.

Because of this, I don't feel sorry for either Cabrinha, North any top brand or even the local retailer who tries to support them and their inflated margins. WHY? Because from the beginning it was their market to lose. GREED killed them and they don't even know it yet.


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