The Cost of Skates and Full Composite Outsoles?

[gxc999 7]

What does it cost the manufacturer to produce a top end skate like a one95, vapor x-60, s17 or 9k? And how does that cost compare to a medium level skate like a vapor x-40 or one55? Another question I've often wondered is about the texalium composite outsole, I've noticed that the one75 is the cheapest skate on the market, retail cost, with a full tex outsole, I know it is basically a one90 with a better tendon guard, but is this costing Bauer money? How much weight saving is achieved by using a full comp outside and why is texalium so great specifically? Basically, I'd like some of the hardcore skate experts to break it down for me. Oh and by the way, I love my one95's...

[Wolfpack_1986 154]

weight? probably significant. compared to like plastics

Texalium is cheaper than carbon fiber, and is not as stiff. It's fiberglass with an aluminum coating of something on the order of a few hundred angstroms (10^-10 of a meter)... its mainly for looks than anything. and it sounds cool.

[JR Boucicaut 3805]

What does it cost the manufacturer to produce a top end skate like a one95, vapor x-60, s17 or 9k? And how does that cost compare to a medium level skate like a vapor x-40 or one55? Another question I've often wondered is about the texalium composite outsole, I've noticed that the one75 is the cheapest skate on the market, retail cost, with a full tex outsole, I know it is basically a one90 with a better tendon guard, but is this costing Bauer money? How much weight saving is achieved by using a full comp outside and why is texalium so great specifically? Basically, I'd like some of the hardcore skate experts to break it down for me. Oh and by the way, I love my one95's...

No way do I tell you costs.

75 made overseas is cheaper than a domestic-made 90.

You'll see that with ONE100 vs ONE95.

[camhockey16 5]

What does it cost the manufacturer to produce a top end skate like a one95, vapor x-60, s17 or 9k? And how does that cost compare to a medium level skate like a vapor x-40 or one55? Another question I've often wondered is about the texalium composite outsole, I've noticed that the one75 is the cheapest skate on the market, retail cost, with a full tex outsole, I know it is basically a one90 with a better tendon guard, but is this costing Bauer money? How much weight saving is achieved by using a full comp outside and why is texalium so great specifically? Basically, I'd like some of the hardcore skate experts to break it down for me. Oh and by the way, I love my one95's...

No way do I tell you costs.

75 made overseas is cheaper than a domestic-made 90.

You'll see that with ONE100 vs ONE95.

do they even tell you that? i would assume that there are only a handful of people that work at bauer that would even know that. but since i said that you probably do know somehow :P

[jimmy 194]

To shed some light on your orig question, plastic outsoles will flex. Power transfer is lost anytime there is movement in the skate. Texalium or other composites don't flex as much which translates to more power in the push off and stride. So yes better performance is a result, worth it to upgrade to the first model that does not have plastic.

[Jarick 5]

The most significant cost component in most any product is labor. Just think, if you have to pay somebody $10+ an hour, plus benefits, plus insurance, plus whatever other costs, compared to overseas where they work for dollars a day, that's a pretty big difference. That's why most goods have gotten cheaper over the last 10-15 years...moving production overseas.

[MorePower4me 0]

I'm a pricing analyst that's worked in quite a few industries, so while you won't ever get an official answer from the manufacturer, I can tell you some general trends I've seen with the companies I've worked for/with.

A company with an in-house selling arm cleans up on total margin. A 'luxury brand' purse may easily sell for $600 and cost $55 to produce. This is especially true if its a China/Indonesia/misc 3rd world country made. That margin tends to decreases the larger/more complex an item gets (like a riding lawnmower) but its always high.

If that same company sold the item through authorized retailers, the retailer typically gets about 30-50% worth of mark-up, with the producing company keeping the rest.

This reason is why so many companies love the 'flagship' store concept.

If your retailers have a MAP of $500 on a $550 retail skate, and you've sold them the skate for $350, you've made $350 on that $550 skate sale.

In a flagship store, you can sell your own skate for $500-$550 and make the extra margin yourself. Other 'industry' folks have alluded to this trend becoming more common in the future and you can easily see why.

This is also why you can (often) only buy a Luis Vuitton/Gucci/Coach/Prada/Craftsman/Ferrari in the company stores. Because when they sell through Nordstrom/Barney's/etc they lose out on all that money. *They can still sell through these stores in smaller volumes, but they always try to lure you back to theirs with exclusives, etc*

On a skate its tough to call. If you follow the normal rules, the actual manufacturing costs of a mid level skate (still using fancy holders/steel) shouldn't differ too much from a top end skate (still produced overseas). The incremental costs in materials alone shouldn't account for more than a few $$ in the volume a manufacturer would purchase them in (especially something like 'Texalium' - thats pretty cheap). So I'd estimate about $50-$60 for a skate selling for $200-$250, with maybe a bump to $70 for a $350 skate. This is much, much higher incrementally than a pair of shoes for instance, (<$15 to sell at ~$100) and I believe that to be a driving factor behind Nike leaving the hockey 'game'.

The non-china skates would be much, much more expensive to produce, and I'd anticipate a much smaller margin, so maybe $250-300 to produce a $600 skate.

Far from scientific, but I am pulling from a lot of experience, and its probably about as accurate as you'll get unless you get Bauer to give up the goods themselves - and I wouldn't hold my breath.

Its also worth mentioning I see nothing wrong with the prices/markups the companies use. .

Bauer (or whoever) makes their products to make a profit. Thats why they go to work in the morning.

There is certainly a passion for hockey (or else you'd see Bauer cereal, or Bauer TV's) but they are a business first and foremost. There are a lot of behind the scenes people/costs that go into getting you your skate (and making sure its a quality one) and they have costs too.

What I'd really love to know though (but also won't hold my breath) is what % of the total skate is made in USA/Canada when it says it is?

There were some huge scandals recently in lots of other industries about the actual country of origin vs the stated one.

Channel had some items made in China with 'finishing touches' added in France, and a few big carbon bike companies had the entire frames made in Taiwan but painted in Canada/USA and both claimed the majority of the 'value' was added in the Paris/Canada/USA (respectively) and labeled them as such...

So if my Canada skate is made in Canada, are the holders/steel? What about the materials, are they flown in from China? And if so, are they sent in 'chunks' (completed tongues, completed boots minus 1 or 2 details) like most other industries?

Am I basically just getting a bunch of stuff made in china, sewn together in Canada?

That's in no way a dig towards China, just a desire for a bit more disclosure in where my products come from.

[Jordan 13]

Good synopsis about the marginal cost of producing the skate.

That said the manufacturer also has to recoupe design costs, marketing costs, cost of prototypes, testing, tooling, shipping etc.

[MorePower4me 0]

Good synopsis about the marginal cost of producing the skate.

That said the manufacturer also has to recoupe design costs, marketing costs, cost of prototypes, testing, tooling, shipping etc.

R&D/design, prototyping, tooling & shipping would be including in my hypothetical example above.

Marketing, (the largest cost in any 'name brand' good) endorsement deals, and product testing would not be. As you mentioned these will be large, real costs the manufacturer has to pay before it makes $0.01 profit from actual product sales.

[shotty 7]

a company i used to work for switched from hiring a boutique manufacturing facility in tunisia to build their product over to renting manufacturing space in china, employing chinese workers AND purchased/maintain its own machines and it was able to decrease the wholesale cost of their product by almost $75 per unit (about 10%).

so now they're able to control every aspect of the building process (machine tune-ups, volume, quality control) and save considerable amount of money because of location.

[GimpIndustries 1]

So if my Canada skate is made in Canada, are the holders/steel? What about the materials, are they flown in from China? And if so, are they sent in 'chunks' (completed tongues, completed boots minus 1 or 2 details) like most other industries?

Am I basically just getting a bunch of stuff made in china, sewn together in Canada?

I also would like to know this. A lot of other industries use the method you have stated and are fairly open about it, why does hockey have to be different?

[shotty 7]

it usually says "made in canada (or what have you), assembled in china" because the manual labor is what costs the most. in some cases, everything is done overseas except the design element.

[jww83 0]

What does it cost the manufacturer to produce a top end skate like a one95, vapor x-60, s17 or 9k? And how does that cost compare to a medium level skate like a vapor x-40 or one55? Another question I've often wondered is about the texalium composite outsole, I've noticed that the one75 is the cheapest skate on the market, retail cost, with a full tex outsole, I know it is basically a one90 with a better tendon guard, but is this costing Bauer money? How much weight saving is achieved by using a full comp outside and why is texalium so great specifically? Basically, I'd like some of the hardcore skate experts to break it down for me. Oh and by the way, I love my one95's...

No way do I tell you costs.

75 made overseas is cheaper than a domestic-made 90.

You'll see that with ONE100 vs ONE95.

Sorry if I'm completely misreading what you are actually saying, but is this your indirect way of saying the ONE100 is going to be made overseas as opposed to the domestically made ONE95, resulting in a ONE100 that is cheaper than the current ONE95?

[gxc999 7]

Interesting stuff. My guess for the very top end skates is that total cost, everything, to the manufacturer might be $150-200, at most. It's hard to imagine it being below 100 or above 200, because then the margins go very wacky.

[DarkStar50 679]

Bauer moved all skate production overseas last season starting with the Vapor X:60 line on down. The new Supreme skate line is also completely made overseas. Bauer is not making a cheaper ONE100 than the ONE95. After all the time and money Bauer spends flying back and forth across the world to maintain QC, cheaper is not part of the equation.

[gxc999 7]

Bauer moved all skate production overseas last season starting with the Vapor X:60 line on down. The new Supreme skate line is also completely made overseas. Bauer is not making a cheaper ONE100 than the ONE95. After all the time and money Bauer spends flying back and forth across the world to maintain QC, cheaper is not part of the equation.

I thought about it too, but if that's the case and they're only saving a little bit at the cost of a great headache, why do it? It must save them substantial money long term.

[MLSman 22]

Although many arguments have been made in the past about the difference in materials from Canada/USA vs overseas...it is more difficult to make that argument because of the various overseas companies that sell their labor and space only. For example, you could move a software company to vietnam, where it would cost you $6,000/yr for a developer with a bachelors degree, $10,000/yr for a manager with a masters degree, and $16,000/yr for an individual with a PhD. That is very tough to compete with in Canada or the USA.

Overseas manufacturing really comes down to the one simple answer: labor cost.

[MorePower4me 0]

I agree with MLSMan completely.

Unless skates behave differently than every other product... ever... cheaper is most definitely part of the equation in moving overseas.

QC should be handled in the factories either by ex-pat Bauer employees or by the factory managers. Unless Bauer is significantly smaller than I imagined, they are not doing flights to China every week.

Most medium sized manufacturers have (at a minimum) a few field engineers to cover the product lines and stop QC issues as they happen. These guys may travel to the factories every few weeks (and talk/communicate daily), but to imagine huge groups of poeple going overseas, or thinking travel costs are that high is not giving Bauer enough credit.

The chinese factories may have ocassional QC issues (as would any factory) but they are quite capable of turning out a quality product without US intervention.

As an example of cost changes, a lawn equipment line I was working on a few years back moved from a Briggs engine made in the USA to a Briggs made in China, and it decreased OUR product cost by $40/unit. A few years later we moved to a non-Briggs engine, still made in China, and we decreased costs by another $35. This was on a unit where our actual cost started below $250... FWIW product quality dropped by about 2% with each move, but additional service costs were a fraction of additional revenue.

These moves are never done accidentally.

[DarkStar50 679]

Bauer isn't flying to China all the time! However, like any company, they have to insure the manufacturing process is correct even when slight adjustments are made in production engineering.

[shotty 7]

Bauer isn't flying to China all the time! However, like any company, they have to insure the manufacturing process is correct even when slight adjustments are made in production engineering.

like morepower said, there's likely a small group or individual who lives there and is employed by bauer for this very reason.

[DarkStar50 679]

There is a group in place. However, sometimes the main man has to fly in. B)

[xaero604 0]

regarding the comment about why they choose to use carbon graphite and texalium composites over plastics for higher end skates, it's true that they are lighter but a reliable source once told me that the reason why those expensive materials are used is because of their highly elastic properties. Unlike plastic or aluminum, those composites will retain their ability to return to their original state after they've been deformed, therefore supporting the argument for "higher efficient energy transfer". It's mostly the reason why they're used in the chassis of race cars, aside from the weight argument.

[MLSman 22]

Unlike plastic or aluminum, those composites will retain their ability to return to their original state after they've been deformed, therefore supporting the argument for "higher efficient energy transfer". It's mostly the reason why they're used in the chassis of race cars, aside from the weight argument.

Absolutely correct. Composite materials are fairly stable, have great tensile strength, and usually don't fracture...they either retain shape...or they shatter completely. This is the argument for why stick technology is so awesome...and I want to throw things at the TV when these idiots talk about wood sticks all the time. With a composite material, there is a much higher chance of every stick feeling close to the same as the last. With wood...I have heard stories of people going through dozens of sticks to get the same feel due to the nuances of natural wood...not to mention the quick breakdown and chip fractures you get with wood. If you need an example....look at baseball.

[Wolfpack_1986 154]

regarding the comment about why they choose to use carbon graphite and texalium composites over plastics for higher end skates, it's true that they are lighter but a reliable source once told me that the reason why those expensive materials are used is because of their highly elastic properties. Unlike plastic or aluminum, those composites will retain their ability to return to their original state after they've been deformed, therefore supporting the argument for "higher efficient energy transfer". It's mostly the reason why they're used in the chassis of race cars, aside from the weight argument.

ha i feel like a dumb ass for not even considering energy transfer. i took it from the strength to weight ratio solely. good post.

[monoclub 5]

It is an interesting discussion. Bauer for one have offices in 3 Asian countries that I know of. Things in Asia are also evolving, it is not only a one way street with the designer telling the manufacturer how to get the job done. The locals with every passing year are gaining experience and adding vaue to the end product with new processes or manufacuring techinques etc. In the clothing industry they are even designing and showing off whole lines of clothes in a bid to get the manufacturing business!

It may also be a factor that a wider range of materials are more readily available now in bulk and at better prices in Asia than in NA.