Breaking To Many Sticks

[Jason Harris 31]

Biff,

You have omitted the R&D, staffing, testing, marketing and everything else that goes into a launch, you might as well say that a mercedes cost of parts is only $5k so why isn't it 15k

Very true. But why do I need to pay for that? I am happy with the top of line sticks right now! If some China company is willing to reverse engineer one, and give me quality of at least 90% of what easton does, I would be perfectly happy!

The cost from China is greater than you think, probably because their factories are more modernized than many of us realize.

A couple of years ago, Gouche asked me if I could track down the prices of sticks for a promotional, so I contacted the factory that had been on my shipping labels, as well as two others. I'm going off my memory but the top end sticks were over $50 for quantities of 300-500 of the same specifications; i.e., all LH, 85 flex, Curve 12.

One thing to consider is these were "off the shelf" sticks, so I don't think their top end was quite as good as other top ends available that were more protected intellectually. They weren't bad sticks, but maybe they were 85% of the top end on the market. On the other hand, I'm sure that the Big Boys were buying in quantities that gave them much better pricing, although I have no idea how much better. I'm just guessing, but maybe they could get discounts of 20% to 30% based on volume of thousands of sticks. Add a buck or two for freight and let's guess their landed price is probably around $40.

Now we go back to adding salaries/benefits, offices/warehouses, tariffs, advertisements, etc. I have no idea what that adds up to, but most large companies try to target a 15% profit at the end of the year, 20% if they're lucky, so those other expenses are obviously at least doubling the COGS for the sticks.

[TBLfan 25]

So what you're saying is that Easton's profit margin is NOT 250%????!?!

hahaha :D

[mrusse01 0]

stop using pro stocks and buy the regular sticks that have the warranty u end up getting 2 for the price of one just break it before the 30 days lol

So you break a less than 30 day old stick on purpose only to wait a couple weeks to recieve the same stick? No wonder they cost over $200 bux lol Unless you wanted to sell the replacement to get something else I don't see the point.

This guy is obviously retarded...but what I have heard of people doing is say you buy a Stealth, break it 45 days later, then you just go into the store and buy another new Stealth, use the receipt from your new purchase and send that in along with the broken stick to get your refund. You just got 2 sticks for the price of one.

Would be easy to stop this kind of fraud by marking the serial number or something on the actual reciept when you buy a stick, but in my experience I haven't seen stores doing this.

So, the only question I have is why doesnt some manufacturer in China whack them out at half the price, and flood the market with $125 ones and make a >300% profit?????

You just answered your own question.

It's because they can't...the costs you have quoted are inaccurate obviously, otherwise someone would have stepped in and flooded the market with $125 top end sticks.

Now THAT is supply and demand.

[Rustpot 1]

Would be easy to stop this kind of fraud by marking the serial number or something on the actual reciept when you buy a stick, but in my experience I haven't seen stores doing this.

When you buy a stick now (for the expensive ones) one serial number is stuck to the receipt that it peeled off the stick. If stores aren't doing this they need to be reported as Easton, THC, and NBH could loose tons of cash from them.

[biff44 0]

Where is your proof they could not do it in china for $20? I at least did an anlysis, you guys are just blowing smoke!

And I am not talking about a 300 stick order, I mean a 200,000 or more stick run. How do you think they can turn out an Ipod for $60? They have the cheap materials and cheap labor!

[TBLfan 25]

But you're looking at it as in your estimate of basic materials and what your estimates of what the employees in the plant make. You're not looking at it in a real world situation.

[Jason Harris 31]

Where is your proof they could not do it in china for $20? I at least did an anlysis, you guys are just blowing smoke!

And I am not talking about a 300 stick order, I mean a 200,000 or more stick run. How do you think they can turn out an Ipod for $60? They have the cheap materials and cheap labor!

But what unknown brand would be willing to buy 200,000 sticks, even if it could get the cost down to $20?

I sold 300 sticks my first year and was encouraged. I think I sold closer to 500 the second year and began to realize I could make a decent profit if I could just sell 1,000 sticks. But you're suggesting someone invest at least $4 million to try to get the price cut in half -- which I doubt they'd get that much of a price break -- then hope to convince people their $120 stick is truly just as good as the $200 stick.

We know parents would love to pay $120 for a stick compared to $200, but do you think the kids would be williing to be un-brand conscience? Enough to convince 500 to 1,000 stores to carry the stick? They could always sell direct, but it's definitely a pain wrapping and selling onesies/twosies. Plus it takes a lot to get to 200,000!

So, the only question I have is why doesnt some manufacturer in China whack them out at half the price, and flood the market with $125 ones and make a >300% profit?????

I've noticed that some of them will display at the trade shows with their knockoffs, but I don't think they are trying to to sell to retailers. If you think about it, their strength is in producing quantity. Large quantity. I don't think they want to create the infrastructure of setting up salesmen and warehouses in North America, then worry about shipping and collecting for 10 sticks to a shop in Wisconsin.

It's obvious their business model works for them, since much of the R&D is done elsewhere. All they have to do is build to spec and then put it on a boat. They're already paid before it leaves the factory. They don't even have to do much selling, since companies will track them down.

[gxc999 7]

Again, looking at it with high school logic. There's R&D which costs a LOT to put out a better product every year. Advertising, facility costs(the plants that manufacter the product and head offices. Pro reps, reps, travel expenses. The list goes on and one... Then there's retailer markup. Retailers need to pay to stock their store, lights, A/C, morgage, etc...

Everyone gives crap to nike for their shoe prices. When I worked at TSA, I could see the price they paid(cost) and what it retailed at. Air max 180, cost $50. Retail $110.

You're exactly right. R&D probably adds another $10-15 to the $20 cost of material, manufacture and labor. Even still, total cost of $35-40, selling for $90 to R, who then marks it up to $209 is a sweet deal

[Jim A 4]

in the end retailers, companies, etc can sell sticks for $200+ because people buy them..

if they didn't sell enough to be profitable, they'd go away and we'd be back at traditional/tapered shafts & blades owning the marketplace with a few woodies tossed in..

sort of like the liquor laws when i lived in Dallas, in public everyone was against it being sold in a supermarket, put it to a private vote and it wins by a 90-10 margin..

biff ..somehow I don't think you'll be able to buy a stick based on what qualities you want to pay for..oh well

[mack 44]

Jeeze guys, it's supply and demand.

[Jason Harris 31]

Even still, total cost of $35-40, selling for $90 to R, who then marks it up to $209 is a sweet deal

$90 on a $209 selling price is at least a 57% discount if $209 is the MSRP, even greater if the MSRP is higher than $209. Retailers don't get anywhere near that kind of discount. They generally will receive a 50% discount on the small items like tape or laces, but they are closer to a 35% to 40% discount on equipment.

This is just a guess, but maybe the bigger online stores could get close to 57% on closeouts, but definitely not on new items.

[ronnychencharik 0]

And people wonder why I use $80 ultra lites.