WARNING

[#96 0]

Easton sticks cost $13 to make. they have the huge markup because they claim that they put a lot of money into the designing and engineering of the product, which they claim they want back. (corporation conversion = people are buying it at this price, so we are going to make as much money as possible....).... ripofffff

Wait, do Easton sticks actually cost 13 or are you just throwing that number out for the sake of the argument?

[DarkStar50 679]

And you would, too, if you could. They can, they do, they will. It is called a "free marketplace." Supply and demand drives the price. This is Economics 101. It has been going on like this since the Romans. Nobody is forcing the consumer to buy anything. If you don't like the price, don't buy the product. "If you want to dance, you've got to pay the band." Otherwise, stay in your chair and tap your feet.

[#96 0]

Ok than, I respect that. Do you guys (Retailers) get full retail value back or do you get cost back ?

I thought you knew how much sticks were at wholesale. What does full retail value mean? Why would a dealer sell a new product for cost? I'm in business to make $. My shop is not run as a charity event for hockey players. Could you be a little bit clearer about the points you are trying to make.

He's actually on your side. What he's saying is not that you should be selling sticks for cheap, but rather, if your stock was to be stolen, chances are insurance would only cover what you paid for them (value to you), rather than full retail value (if you had sold them all). Insurance would make sure you didn't lose money on them, but I doubt that insurance would cover as though you sold each and every one of them with profit.

Basically the store hasn't lost money on them, but in the long run will lose money they could have made, since they don't have stock to sell during this busy season. Add in the costs of opening and operating each day, and they will feel the loss of sales. Even if they didn't sell EVERY single stick they had, they would have sold some and the profit is needed.

I could be wrong, and maybe LHS do get full retail value on stolen merchandise. That doesn't seem right though since that would now put liability for sales on the insurance company. It would seem real tempting for a store that is being run under to suddenly have a lot of merchandise stolen.

Thanks Project , that is what I was saying

Of course insurance companies only cover YOUR value. It's like a car. You total it, they give you the value of the car, not the value of what you could have sold it for.

But yes, I guess you would lose sales during the period where you don't have sticks on your racks cuz they were stolen.

All this stealing reminds me of a story my bro told me. When he was UMaine his freshman year, Nikos Demitrakos from the Sharks got caught stealing a bike on campus. When campus police caught up to him, he had the bike's chain around his neck, and tried to tell the cops that it was jewelry. Smooth Criminal.

[chippa13 1844]

Easton sticks cost $13 to make. they have the huge markup because they claim that they put a lot of money into the designing and engineering of the product, which they claim they want back. (corporation conversion = people are buying it at this price, so we are going to make as much money as possible....).... ripofffff

It's possible that $13 is the cost of the materials that make up a single stick. However, that is not the only cost that goes into making the product. There have to be workers in the factory, research and development, marketing, overhead, etc. etc. So, please, before you try to rip into a company maybe you should learn a thing or two about how companies work.

[DLIGHTNING 0]

Afterall if it wasn't for these companies we would still be using those white Canadian sticks or the strait Northland !

Long live oldtime hockey but it is because of these products that our game has reached a new level

[golfpuck 0]

the person who gets hurt in this is the store owner,

most store owners rarely have insurance for this type of thing

[jimmy 194]

I remember when they hit Just Hockey a couple years ago. Didn't they just drive a car through the front door?

I wish someone would steal all my OPS in inventory, at least that way insurance would recoup my investment, as opposed to selling them below cost after they are discontinued here in a couple of months. :o

[DarkStar50 679]

Jimmy,

Which OPS brands are dead in your shop? Just curious. How many pieces are you sitting on? Mainly Sr, Int, or Jr?

Every booking season the temptation is easy to order them all. Next time, don't!

[beaucoup_fish 0]

This has certainly been an interesting thread to follow...it is my assumption that Easton and every other manufacturer is reaping significant profit on each OPS sold. I wonder how much it really does cost to make an OPS as well, and I don't doubt that R&D, moulds, labour etc. cost more than $20. However with volume, I am positive that benefits from economies of scale apply. I do however, still think that 99% of retail buyers have no use for a $200 hockey stick that breaks in a week.

I also have to believe that the hockey gear market is not a pure supply/demand driven market. If that were the case, several pieces of gear would probably be selling at half the price they currently sell at, though I suppose clearouts solve this problem. Rather it is, like others mentioned, an effort by the manufacturers to recoup the costs of making the stick, while turning as high a profit as possible. You can't really blame them for this as that is just the nature of business. They don't exist to give gear out on the cheap, they exist to make money. I personally find the concept of OPS "value," a bit flawed and practically non-existant, but if people are willing to pay for it, then why not?

[sogaduch 0]

well if a store is robbed so many times then there not insured anymore because the insurance company sees them more as a liability

[beaucoup_fish 0]

I laugh at all these people jerking off over the Vapor XXX Lite OPS and that stick is Made In China...

I could get into a debate about the quality (or perceived lack thereof) of Chinese labour, but I think that's best saved for another day...heh... ;)

Thanks for the Ego booster, SRI.

[beaucoup_fish 0]

I could get into a debate about the quality (or perceived lack thereof) of Chinese labour, but I think that's best saved for another day...heh... ;)

Thanks for the Ego booster, SRI.

I don't dispute the quality. The cost of labour is cheaper, and thus, the cost of the stick is that much (and yes it is a significant amount) cheaper.

If anybody (outside of a store owner/manager) knows retail margins, it is easy to do the math. It is absolutely scary and once you do the math, you will see why some companies hand out replacement warranty sticks like they are candy.

The labour savings is huge, definitely. I don't know what margins are like in hockey retail, but I'm assuming that the manufacturer's markup to the retailer is quite big as well...assuming 100% markup (though I gather manufacturer to retailer markup is more than this) thru both layers and a $200 final retail price, that's still huge profit.

[Jason Harris 31]

I just looked up "Key Statistics" for NKE on Yahoo.

I'm well aware that companies know how to massage the numbers to their benefit, but Nike was listed as having a 9.38% profit margin. I think most of us would agree that under 10% profit for the year is not excessive. I've said it before, but these companies have a lot of layers and expenses.

It's possible some of those layers and expenses are excessive, but the net profit is fair.

[beaucoup_fish 0]

I just looked up "Key Statistics" for NKE on Yahoo.

I'm well aware that companies know how to massage the numbers to their benefit, but Nike was listed as having a 9.38% profit margin. I think most of us would agree that under 10% profit for the year is not excessive. I've said it before, but these companies have a lot of layers and expenses.

It's possible some of those layers and expenses are excessive, but the net profit is fair.

That's for Nike as a whole though, not any individual business unit. I'm sure the margins on say, the athletic shoe business, is higher than that of golf equipment...if you can get your hands on the non-consolidated financials (since Nike is a public company), I wonder what you'd find...

[golfpuck 0]

easton, and other hockey companies are no different than any one else..

oil companies.. clothing..

every one is in it to make a profit, no one does it for free.

they can charge what ever they want to charge... its up to us if we want to buy it..

[Jason Harris 31]

That's for Nike as a whole though, not any individual business unit.  I'm sure the margins on say, the athletic shoe business, is higher than that of golf equipment...if you can get your hands on the non-consolidated financials (since Nike is a public company), I wonder what you'd find...

I'm aware this a consolidated balance sheet: Edgar Online - NKE.

However, as best as I can understand it, Bauer's revenues is rolled into "Other" along with Cole Haan Holdings Incorporated, Converse Inc., Hurley International LLC, NIKE Golf and Exeter Brands Group LLC. I believe these accounted for 12.6% of Nike's revenue.

It's hard to imagine that Bauer essentially floated the rest of Nike. In other words, if Nike had a 9.38% profit for the year, and Bauer is part of a group that accounts for only 12.6% of the business, I can't imagine that Bauer had 40% profit, while the rest of the company had 2%, and that combination lead to a 9.38% consolidated profit.

[beaucoup_fish 0]

That's for Nike as a whole though, not any individual business unit.  I'm sure the margins on say, the athletic shoe business, is higher than that of golf equipment...if you can get your hands on the non-consolidated financials (since Nike is a public company), I wonder what you'd find...

I'm aware this a consolidated balance sheet: Edgar Online - NKE.

However, as best as I can understand it, Bauer's revenues is rolled into "Other" along with Cole Haan Holdings Incorporated, Converse Inc., Hurley International LLC, NIKE Golf and Exeter Brands Group LLC. I believe these accounted for 12.6% of Nike's revenue.

It's hard to imagine that Bauer essentially floated the rest of Nike. In other words, if Nike had a 9.38% profit for the year, and Bauer is part of a group that accounts for only 12.6% of the business, I can't imagine that Bauer had 40% profit, while the rest of the company had 2%, and that combination lead to a 9.38% consolidated profit.

Bauer is practically irrelevant when it comes to Nike's financials. Bauer as a unit, hypothetically speaking, could've had a 100% profit margin and not made much if any change in the bottom line of the Nike income statements. The operations of Bauer is immaterial, especially when that group you mentioned includes Converse and Nike Golf, both of which, I'm guessing are bigger in revenue generated than Bauer.

That said, I think a large portion of why Nike's profit margins are lower on the whole is MASSIVE marketing and endorsement costs.

[Jason Harris 31]

That said, I think a large portion of why Nike's profit margins are lower on the whole is MASSIVE marketing and endorsement costs.

I agree. And that's why I think there's not as much net profit at the end for any of these companies as some have been suggesting.

Companies feel compelled to spend heavily on advertising for good reason -- it works. It adds to the price of products, since the gross profit from sales has to cover it, but effective advertising generally increases revenues. In turn, that should increase profits.

[Jason Harris 31]

PS I'm sure most of the larger companies in this industry are no different than those in other industries, in that their executive staff is WAY over compensated.

I've seen statistics that US execs average somewhere around 400 times more income/compensation than the common worker, while Japanese execs are something like 38 times the common worker.

Who knows, maybe an economist could present evidence that this is actually good for society?

[Chadd 916]

At the very least it's good for the execs.

[beaucoup_fish 0]

PS I'm sure most of the larger companies in this industry are no different than those in other industries, in that their executive staff is WAY over compensated.

I've seen statistics that US execs average somewhere around 400 times more income/compensation than the common worker, while Japanese execs are something like 38 times the common worker.

Who knows, maybe an economist could present evidence that this is actually good for society?

I agree. And that's why I think there's not as much net profit at the end for any of these companies as some have been suggesting.

It's true, it's true, they can't, and it isn't. Executive compensation is almost as out of hand as professional athlete compensation. The rich keep getting richer...

I don't think that people are upset that manufacturers are making money as a company, but rather that they're making a killing on each individual stick that is sold.

[Jason Harris 31]

I don't think that people are upset that manufacturers are making money as a company, but rather that they're making a killing on each individual stick that is sold.

That doesn't make sense to me.

Since it all rolls down to the bottom line, and the bottom line is around 10% profit, the only way they could making a killing on the sticks is if they are taking a significant loss on other products. To that end, I've had retailers suggest to me the manufacturers will often have loss leaders, but these tend to be on products that don't sell as well as the sticks, so they wouldn't have enough volume to offset "killer" profits.

Overall, my guess is the companies apply similar pricing structures on most of their products, so they are either making a killing on nearly everything or their operating costs are such that a healthy gross profit boils down to a fair (10%) net profit -- if we accept all elements of their operating costs as fair. (Going back to my post above, I'm not sure I accept all their expenses as fair. ;) )

[djinferno 2]

I don't understand why this was started, so sticks got stolen... and then what? hopefully the store gets there money back in there coverage, as for sticks selling cheap, sign me up for a couple please, I could use 3 or 4 left handed Sakics...

The fact is, sticks like that are most likely untracable unless of course, the cops finds someone with a stack of OPS in his basement or something, other then that, this is a dead issue, ebay has full of stolen goods....

I feel bad for the store tho, putting in claims can be a hassle unless you got all your paperwork in order...

[djinferno 2]

I don't think that people are upset that manufacturers are making money as a company, but rather that they're making a killing on each individual stick that is sold.

That doesn't make sense to me.

Since it all rolls down to the bottom line, and the bottom line is around 10% profit, the only way they could making a killing on the sticks is if they are taking a significant loss on other products. To that end, I've had retailers suggest to me the manufacturers will often have loss leaders, but these tend to be on products that don't sell as well as the sticks, so they wouldn't have enough volume to offset "killer" profits.

Overall, my guess is the companies apply similar pricing structures on most of their products, so they are either making a killing on nearly everything or their operating costs are such that a healthy gross profit boils down to a fair (10%) net profit -- if we accept all elements of their operating costs as fair. (Going back to my post above, I'm not sure I accept all their expenses as fair. ;) )

Bottom line is, all companies make a killing of products, it's a fack, if it's hot and it can sell, it will be up there in price, in this hockey world, they just make you acustom to hight prices by putting a high price on the newest baddest product, like the one90 will set the standard for skates over 600$ like Synergy did over 500$ as Vapor did over 400$ etc...

Sticks are no different, watch them put punps on helmets and sell them 300$... :lol:

[beaucoup_fish 0]

I don't think that people are upset that manufacturers are making money as a company, but rather that they're making a killing on each individual stick that is sold.

That doesn't make sense to me.

Since it all rolls down to the bottom line, and the bottom line is around 10% profit, the only way they could making a killing on the sticks is if they are taking a significant loss on other products. To that end, I've had retailers suggest to me the manufacturers will often have loss leaders, but these tend to be on products that don't sell as well as the sticks, so they wouldn't have enough volume to offset "killer" profits.

Overall, my guess is the companies apply similar pricing structures on most of their products, so they are either making a killing on nearly everything or their operating costs are such that a healthy gross profit boils down to a fair (10%) net profit -- if we accept all elements of their operating costs as fair. (Going back to my post above, I'm not sure I accept all their expenses as fair. ;) )

Bottom line is, all companies make a killing of products, it's a fack, if it's hot and it can sell, it will be up there in price, in this hockey world, they just make you acustom to hight prices by putting a high price on the newest baddest product, like the one90 will set the standard for skates over 600$ like Synergy did over 500$ as Vapor did over 400$ etc...

Sticks are no different, watch them put punps on helmets and sell them 300$... :lol:

Holy crap, RBK pump helmets for the pefect fit for my mellon?!? SIGN ME UP for the first $300 helmet!!

On tracking, are OPSes serial numbered or no?

EDIT: Pump helmets could make for some pretty bad head injuries...imagine the pranks...ok boys, you hold the rookie down while I pump his helmet 'til he passes out or his head explodes, ok? Ok, GO! (I could see the Penguins doing this to Sid if the rook/vet atmosphere there is as bad as some say it is) :lol: