Equipment prices, the economy, exchange rates and the future

Shoot the breeze and stay in the loop with the unhinged and unhooked word on the street.
Post Reply
User avatar
Mike B
Brand Rep'
Posts: 3259
Joined: Tue Oct 25, 2005 11:09 am
Location: the north

Thu Nov 13, 2008 11:44 am

Just wanted to post up a rather alarming set of circumstances that will effect us all next year.

Every year manufacturers put up their prices... in line with inflatuion, or prouction cost increases (thanks to oil price increases) or general greed.. it's all on the way up every year for a long time. All kites are traded in US Dollar, mostly as the raw materials are bought in dollars, so the currency is locked in from there. When I started back in 1998 (and we were the first uk importers back then) Wipika's Classic was £350 to £650 retail... Now we see some kites hitting £1200... the rise has been fairly gradual, with some brands pushing the envolope every year...

Next year the is going to be a serious problem.....

In 2007 the UK £ was trading at 1.8 USD, and prices are around £800 - £850 per average 12m kite...

In 2008 the UK £ was trading at 2.00 USD, and the price increase this season was swallowed as we were getting more USD for our pound!

For 2009 the UK £ is now trading at 1.55 USD, and there have been bigger price increases due to oil and ecomomy inflation.

So to cut a long story short, the exchange rate has tipped 25|% against the UK and prices have gone up from the manufacturers - 10 - 15%...

the result...

we are looking at an £899 kite this year costing a minimum of £1200 next year, and if you paid £1059 for an expensive kite this year you may see £1500 next....
Tony
Site Admin
Posts: 5053
Joined: Sat Oct 23, 2004 12:06 pm
Location: WWW
Contact:

Thu Nov 13, 2008 12:09 pm

I had a converstion with another distributor about this very same thing last week!

Tony
wh155
Posts: 923
Joined: Thu Sep 28, 2006 1:15 pm
Location: On a Motorway...Stuck in Traffic!

Thu Nov 13, 2008 12:25 pm

:cry: :evil: :cry:

Just to rock the boat (sorry shops and distributers)...
if we all hold out to buy kites (or cant afford to in my case) doesnt that mean the shops will have to lower their prices to stay in business, and then hence distributers/importers too. Competition is also healthy, it only takes one and the rest will follow.

Shame we cant do the same with fuel, clothes, electricals... oh wait the xmas sales have started already!

DW
User avatar
Mike B
Brand Rep'
Posts: 3259
Joined: Tue Oct 25, 2005 11:09 am
Location: the north

Thu Nov 13, 2008 12:39 pm

wh155 wrote:Just to rock the boat (sorry shops and distributers)...
if we all hold out to buy kites (or cant afford to in my case) doesnt that mean the shops will have to lower their prices to stay in business, and then hence distributers/importers too. Competition is also healthy, it only takes one and the rest will follow.
Competition is one thing, having no margin and working for free, or worse at a loss, is another. What's scarey is that many buinesses start running at a loss long before they realise it's time to stop trading and do something else... That's when we as importers get defrauded... and it happens a lot!

If kites don't sell at the higher prices, brands will fold, shops will close, and to make it even worse the cost of living is so much higher that shops and kite buiness needs to make more money to survive, not less... we'll all be coming to ask for a job at your office! So watch out! .. lol
wh155
Posts: 923
Joined: Thu Sep 28, 2006 1:15 pm
Location: On a Motorway...Stuck in Traffic!

Thu Nov 13, 2008 12:43 pm

:shock: :evil: :cry:

Have u asked for a bail out by the goverment yet? Halifax are having £1m worth of xmas parties according to the news today after their 22million bailout!

DW
wh155
Posts: 923
Joined: Thu Sep 28, 2006 1:15 pm
Location: On a Motorway...Stuck in Traffic!

Thu Nov 13, 2008 12:48 pm

Perhaps the brands will need to spend less on development costs and manufacturing of kite cant be that much (especially in thailand)... ok transport and raw materials might go up a bit, but £1500 for a kite seems a bit steep... even with the cwap pound!

Perhaps we should of joined the euro after all, whilst the going was good 2 years ago. Is the finance move not towards leveling the Euro and pound so it seems more attractive for Britian to join?

DW
User avatar
Mike B
Brand Rep'
Posts: 3259
Joined: Tue Oct 25, 2005 11:09 am
Location: the north

Thu Nov 13, 2008 1:12 pm

wh155 wrote:Perhaps the brands will need to spend less on development costs and manufacturing of kite cant be that much (especially in thailand)... ok transport and raw materials might go up a bit, but £1500 for a kite seems a bit steep... even with the cwap pound!
Tell me about it! All kites made in china.. bar a few limited exceptions. Some kite and windsurfboard mafde in Thailand and they are even more expensive!!!
wh155 wrote:Perhaps we should of joined the euro after all, whilst the going was good 2 years ago. Is the finance move not towards leveling the Euro and pound so it seems more attractive for Britian to join?
For sure!! but I hear the Euro is teetering on a bit of a house of cards.... historically no common economic policy between countries has worked, and there are some big holes in the balance sheets across europe. It's just all a big mess and I'm afraid to say it looks like the retails side of things will get worse...

On the up side second hand prices and kit we have already bought will be going up in price, but manufacturers in the far east will be hit hard... many UK import goods have simply been cancelled... in all industries...
User avatar
tombabs
Posts: 249
Joined: Mon Jul 11, 2005 10:51 am
Location: Big Choke

Thu Nov 13, 2008 1:14 pm

Have u asked for a bail out by the goverment yet? Halifax are having £1m worth of xmas parties according to the news today after their 22million bailout!
Unfortunately, and i'm not agreeing with how banks go about spending our taxes, but the way that i see it is if Christmas Parties get shelved there is a further knock on to the establisments that host and organise. More businesses out of action and the downward spiral continues..... It is just a case of them continuing to operate as normally as before!

At least that is my interpretation of Economics....
Toad
Posts: 682
Joined: Wed Nov 03, 2004 11:52 am
Location: UK

Thu Nov 13, 2008 1:22 pm

..why can't we do what the governments and banks do, and just bury our head in the sand and pretend everything's gonna be OK?

..or stick your fingers in your ears and skip around singing 'lah, lah, lah-de-dah' when being told the bad news...that's what I do...then it doesn't count..
User avatar
Mike B
Brand Rep'
Posts: 3259
Joined: Tue Oct 25, 2005 11:09 am
Location: the north

Thu Nov 13, 2008 1:37 pm

Toad wrote:..why can't we do what the governments and banks do, and just bury our head in the sand and pretend everything's gonna be OK?

..or stick your fingers in your ears and skip around singing 'lah, lah, lah-de-dah' when being told the bad news...that's what I do...then it doesn't count..
because our pay is directly related to the economy... if it doesn't work for us then I can't afford breakfast! I wish I had a job that did... quite fancy the fire brigade!
The tom
Posts: 174
Joined: Mon Jul 14, 2008 8:32 pm

Thu Nov 13, 2008 2:31 pm

I just bought a brand spankin new kite (and a north not a toy one!) for less than £240, including shipping from the other side of the world. The tag has 2007 written on it. I dunno why people pay such rediculous prices for this years model when you know in a few months its going to be worth almost nothing. I appreciate there is a lot of R and D that goes into the new models, but made in china, they can only cost pennies to produce. If the prices where sensible, id probably buy new; all my blades were new when i bought those back in the day but with such a gap in price between a new kite and an almost new now, its a no brainer surely.
Safety_Crab
Posts: 746
Joined: Sun Oct 22, 2006 9:17 pm
Location: Director of Forum Bureaucracy

Thu Nov 13, 2008 2:39 pm

Individuals who can’t stretch to the higher kite prices will probably react by hanging onto their kit a year or so longer, so these hikes will have relatively little impact on those that shift their priorities accordingly. As a result we should see a reduction in the depreciation of relatively new but used kit, holding up the price of older kit for cash strapped beginners. Not just the scuffers, the wealthy too will become more cautious with regards to ‘non-essential’ purchases. A pretty miserable situation for retailers. They are going to need to make a great deal of noise about the incremental differences in year to year equipment design, so maybe we should expect to see super hyped up adverts for 2009 kit. Safety recalls of everything pre -2008 might give you the leverage you need! Godspeed …
User avatar
Mike B
Brand Rep'
Posts: 3259
Joined: Tue Oct 25, 2005 11:09 am
Location: the north

Thu Nov 13, 2008 2:54 pm

I guess this is the situation in a lot of industries who depend on far east supply.

There are only a few factories that produce kites, so they are all the same price at mfr. The north one you bought will be sold at someone's loss for sure, sign of the industry coughing and serious, desperate bailouts.. eventually it will all sort out, but the fact remains.. when all the cheap kites go... there will be no other options left... it may take a while though.
Safety_Crab
Posts: 746
Joined: Sun Oct 22, 2006 9:17 pm
Location: Director of Forum Bureaucracy

Thu Nov 13, 2008 3:47 pm

There's probably a mountain of unsold Core kites somewhere in Germany, I know its not perfect but if we can find them we'll have kite security for the next decade....

Digging for victory
User avatar
Mike B
Brand Rep'
Posts: 3259
Joined: Tue Oct 25, 2005 11:09 am
Location: the north

Thu Nov 13, 2008 4:13 pm

Safety_Crab wrote:There's probably a mountain of unsold Core kites somewhere in Germany, I know its not perfect but if we can find them we'll have kite security for the next decade....

Digging for victory
ha ha... you may be right! but it's not good for me!! lol
Post Reply