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.
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timba14
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Wed Nov 26, 2008 12:45 pm

'Local shops'.............. what local shops ?


One is a very nice Cafe (which you must try !), the other closed years ago (Boost), No one knows whats happening to the "Travel Agency", the one in the Lanes is for Hippies and Boardriders does'nt have a clue.

Airhead is too far away to be local but is the only one left now AFAIK
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CoNaN
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Wed Nov 26, 2008 12:47 pm

timba14 wrote:'Local shops'.............. what local shops ?
my point exactly

at least the internet's not gonna close
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Mike B
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Wed Nov 26, 2008 5:10 pm

I hear that there is a pheonix rising in hove....
Cabrinha UK
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Wed Nov 26, 2008 7:53 pm

Yes I hear those jungle drums a beating!!! God help those boy's who live down that way!!!
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GRF
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Wed Nov 26, 2008 9:01 pm

CoNaN wrote:
timba14 wrote:'Local shops'.............. what local shops ?
my point exactly

at least the internet's not gonna close
Open to trading up your kite as part of the deal on the next £1200 one then is it?

Interested in helping you exchange the busted buckle on your warrior 2 harness?

There to teach enough newcomers to buy your last years kit so you can get new stuff?

The internet store offering employment for local rider/instructors?

Ready to deal with the local council in order to secure or protect beach rights?

You might not have a store in your locale right now, but you can bet your socks internet driven sales didn't exactly protect whatever may or may not have been in place in the past, nor did any of these direct sell operators with no back up school support.
bonda
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Wed Nov 26, 2008 9:15 pm

CoNaN wrote:" its a business with up to 50% markup.
I hope that nobody is deluded enough to believe that kites and boards are included in that statement.
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timba14
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Wed Nov 26, 2008 10:10 pm

I do hope it is Boost re-opening 8)

It's just nice to see kit in a shop
james
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Wed Nov 26, 2008 10:56 pm

would be nice to see a shop open that is able to pay its bills....

james

naish uk
marktward
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Thu Nov 27, 2008 8:25 am

You might not have a store in your locale right now, but you can bet your socks internet driven sales didn't exactly protect whatever may or may not have been in place in the past, nor did any of these direct sell operators with no back up school support.
I sorta agree with some of your comments on stores over internet sales, but I think both have their place. I just purchased a fan for my 15 year old boiler from an online stockist in London, I live north of Aberdeen. Exactly the same and they also assured me the parts would be available for at least another 10 years. OK the kite market is changing all the time, as is the car industry and the mp3 player market, but the point is local stockists didn't have the parts, but the original design was supported, and the internet made it easy for me to find.

Is there a market for manufacturers to sell new models every year at higher prices to the few that want the new performance bits that have the latest go faster stripes, whilst the majority of the public will be happy with more standard designes that work well, last a few years and meet all the current safety desires of the flying public? At the end of the graphic changes are not an expensive annual modification to a workable design, so you can still look different withouth the need to pay for (all) R&D costs. The standard well proven designs require no additional R&D budget (apart from say improvements to design errors which will generally always happen despite the inability of manufacturers to admit it until a couple of years later when a new model is out), so these expenses should not be included in the retail pricing structure (maybe a minimal amount) which would possibly mean from a costing point of view the manufacturer can justify a higher margin for himself on this item but at the same time reduce the cost to the end user. For those wanting the latest in design and technology (which as in most industries will make its way into mainstream within a year or two) then they will probably be OK with paying the additional R&D costs. Does my Fawarwi get me there (see note below) any faster than my Focus if I stick to the speed limit? I remember Naish discussing in an article the process of development through to market introduction, and the fact that sometimes, with the delays in securing materials, manufacturing time etc., there can be quite a gap of 9 months, and so improvements (discovered during that time) might have to be quickly introduced to the current production run at short notice, which can prove costly. A new methodology might alleviate some of these issues, when you focus on getting the bulk of your output/revenue from well proven designs. Such a shift in thinking may allow for the market to grow as it becomes more cost inviting to newcommers, especially as the majority that do not need the latest improvement, will enthuse more about the enjoyment and afforability. If this did happen however, the "don't crowd my beach" brigade will be upset, but you can't have it all ways. As James rightly pointed out, people have argued that if the volumes went up, prices might (should) come down...but the reverse is also true if less people get into the sport as it is too expensive.

In the first decade of development things have moved so fast that there has been a degree of constant improvement that has often been safety related. Is that element of improvement (especially in areas of safety) going to improve in the same manner. I don't have the answer to this question. But to keep costs down but margins up (irrespective of whether it is cheaper to buy here or in SA) maybe manufacturers need to look at their whole structure of introducing new designs and where they are manufactured. Maybe there is a case of major brands funding some of you enthusiasts to set up small lofts in the locations out with the Great Factory of China so you can provide more standard products from a source close to home, and develop a business that also provides a bit of lifestyle. Coming from a manufacturing background I would love it if one of the major brands would provide me with the financial support to go into production of a standard range of products to create a few local jobs and some lifestyle. PM me if anyone is interested!! As most of these products are manufactured using pattern machines, laser alignment technology and sewing machines that don't require big fat fingers like mine, then the labour input compared to machine technology is probably the same in most locations. Arn't Ozone doing this?

I agree with the Rou statements regarding the media hyping it up, although not so sure about the Americans not being that focussed on it. My bro has lived in California for 30 years and has a view! But at the end of the day its like anything else in life...its how we handle the situation that is important. Out of adversity the smart ones will think of better ways to get and/or maintain market share, and hopefully the sport as a whole will grow and benefit from that thinking, which often comes in its best form when you have your back against the wall and have to fight to survive!

Anyway I'm sorta shooting a little from the hip here as I got up far too early. Note...."there" is the place where "they" live, and I want to be one of "them"!

Have a nice recession...time for me to continue the job hunt!

Mark
Living and Playing (but not much at the moment) in Scotland.
Toad
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Thu Nov 27, 2008 8:36 am

I'm pretty sure that manufacturing costs can decrease to a degree as the competition (desperation)for work escalates...kite companies would need to look for different suppliers, which is a risk in itself and takes time, but is definitely possible...

I have both manufacturing and retail outlets, and I can now buy some items cheaper than I can manufacture due to a more competitive market...just took a bit of digging...
Cabrinha UK
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Thu Nov 27, 2008 9:04 am

Thanks Mike for starting this thread, it's been interesting seeing how riders / customers see the manufacturing process..

As Mike pointed out right at the beginning, the problem is not the price at what we are buying kites from the factories its the currency in which we are buying it in!

When the Dollar rate was at 1.9 £799 for a Kite Complete we had no complaints, it was clearly a great price, now as the Dollar has dropped to 1.5 this kite should retail between £899 and £945, this is just the loss in currency, we have no options... How far these prices chance will depend on how the brands can support the UK market, thats the bottom line....

Cabrinha in the UK are changing retail prices after Christmas, to what level I'm unsure of, but if the currency doesn't swing in our favor NOW might just be the best time to buy a New Kite.....

I'm off to Hong Kong next week to beat up Mike Raper to try and get a better prices ;) (I wish)

Chris

Cabrinha UK
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Thu Nov 27, 2008 10:12 am

This is by far the best reading i have ever done on this forum!!

Angelo
http://www.S2AS.com" onclick="window.open(this.href);return false;
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dbinit
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Thu Nov 27, 2008 10:48 am

Cabrinha in the UK are changing retail prices after Christmas, to what level I'm unsure of, but if the currency doesn't swing in our favor NOW might just be the best time to buy a New Kite....
It looks highly unlikely that this will happen. As banks lower the exchange rate , and the government borrows more money , it will decrease the value of the sterling even further. Expect to see 1.4 , which will drive prices up even further. So dont wait for kites to get any cheaper.
Many shops/dealers are sitting with stock bought at around $1.7-£1. Once that runs out.... :shock: :shock: I have even heard speculation of $1.3. If it reaches that stage, we are looking at a 30-35% increase on price. EG Any kite that is £1200 now could become £1600. That will be an interesting thread to say the least and i hope we dont see it.
When the Dollar rate was at 1.9 £799 for a Kite Complete we had no complaints, it was clearly a great price, now as the Dollar has dropped to 1.5 this kite should retail between £899 and £945, this is just the loss in currency, we have no options...
The rise in currency is just one of the major things affecting it. Also as mentioned before by mark is the rising labour cost , and not to forget the increased freight/haulage and courier costs. And of course the costs of running a retail premises has risen greatly. Increases in electricity, water, Gas, rates, minimum wage .... and the list goes on. Oh , and the ever present large decreases in consumers spending as we all (or most of us) have less money in our pockets, thanks to american banks lending money to tramps to buy houses.

Kite shops (and other shops) are being hit from all angles with Rising prices and falling sales. The sterling is worth bugger all internationally, no-one has any money to spend. Happy Christmas.

However , A few plus points Not to forget.

Used kites will be worth more , which will equate to a slightly higher trade-in value , i would think.

All these new brands popping up (which i know the established dealers dont like )will die off. £1200 for kites you have heard of is easier to swallow than £1200 for a kite you havent. Bad news for anyone trying to get a new brand off the ground , that hasn't already bought the stock at a good price.

The Bigger or established shops should come out of this a lot stronger, depsite a tough year they should find the competition dropping off rapidly. Bad news for many of the little guys or new shops though.

Gone are the days when you could buy your kite cheaper in america or europe. Now you can buy it right here in the UK at a better price and you dont have to worry about Warranty issues( apart from that strange best warranty which is just weird),lack of service, avoiding VAT or Import duty. Just go local or your friendly UK internet stores, (which do give good service and backup... i might add), and you are getting a better price than in the USA or Europe. Griffins are about 10% more expensive in the US (and thats with a big credit crunch discount from a major kite store)and 25% more in france. I have noticed other brands are very similar.

Dealers and shops... get your name out there on the international scene. EG We have a lot of customers in the countries Europe where there are no griffin dealers, and in some countries we get tons of repeat business every year from the same groups of people. Some buy 4-5 kites at a time, to save on postage. Then the same customers scome back next year to upgrade.
Last edited by dbinit on Thu Nov 27, 2008 11:06 am, edited 1 time in total.
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GRF
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Thu Nov 27, 2008 10:54 am

What's a Griffin?

And if you're that worried about the dollar hitting 1.30, you should be hedging now whilst it's at 1.54

Since your Griffin will have to compete with better known brands hedged at 1.80.. :lol:
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Rossall
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Thu Nov 27, 2008 10:58 am

This is by far the best reading i have ever done on this forum!!

Angelo
http://www.S2AS.com" onclick="window.open(this.href);return false;

Yes I would agree, a sad state of affairs for the whole country at the moment, everytime I go to Houston the beer has gone up and don't even get me started on the price of beer here in Milan :shock:


Phil.
Last edited by Rossall on Thu Nov 27, 2008 11:04 am, edited 1 time in total.
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