I often wonder why flyfishing goods are sold for the most part at the suggested retail price. Is this a long standing tradition given a niche market? Or pricing imposed by manufacturers and distributors to place each retailer on a level playing field?
Part of the answer may be that there isn’t that much of a mark up (usually 40%) in the first place. As far as manufacturer’s stipulations: Rumor has it that years ago, BPS lost their Orvis line for a time due to underpricing. (Stores like BPS can buy in huge bulk and probably get outstanding wholesale prices giving them more room for sale pricing, which, at that time, the manufacturer didn’t like.)
But for the mom and pop fly shop, sale pricing probably isn’t an viable option.
In this day and age where you can purchase the same reel on e-bay for a fraction of what a fly shop would charge gives the impression that fly shops are demanding top dollar. But in reality, anything below MSRP wouldn’t make running a fly shop worth it…which is why many have or are going out of business.
If memory serves me right, the price you paid for a rod may vary depending what shop you bought it from. Price standardizaton came when manufacturers started placing their merhandise with the big box stores. To level the playing field. I also think the ability to buy on line has pretty much standarized prices as well. Kind of screws the independent fly shop owner.
I disagree to a point. Let’s say the price of a rod is the same price at a big box store vs my small local shop. The guy working the big box covers shoes as well as Fly Fishing. He has not clue on putting fly lines on reels let alone advice on fishing local waters. Now the local small Fly Fishing shop will rig up my reel and line etc, tell me what flies to use on what waters. I can even call them for up to date conditions etc. Since price no longer matter since the rod is the same price at both places, which would you buy from? I drive an extra 10 miles to pass a big box store (Sportsmans Warehouse) to get to the small fly fishing shop.
When I have a problem, the local FF shop also is very good with taking care of things. Why would I not shop the little FF shop?
-wayne
I totally agree with Waynep. I would much rather support my local shop than any of the big box stores. Plus, the local shops usually throw the fly line and backing line in if you buy a rod and reel. The big box stores don’t. There’s a pretty good savings right there.
There is an online store that is not carrying a major brand of hooks anymore.
He sold them at the price he got for quantity and not the MSRP.
They do not sell to him anymore.
Rick
In the early seventies a manuacture (Large One) was giving retailers prices that the merchandise was to be sold at.
Price fixing was the verdict.
Out came MSRP.
When a bunch of suppliers get together and all agree that they will sell things at a fixed price that is ‘price fixing’. Like if all of the milk suppliers in a state ‘fixed’ milk at a certain price.
When a manufacturer of (say, fly reels) says that they will only sell at a certain cost and the retail will be a certain set price that is ‘fair trade’. Everyone who sells the reels must sell them for the exact same price. If they do not, they will no longer be supplied and will no longer be a dealer.
MSRP is a figure that a company ‘suggests’, a retail price.
Hi Tyrone Fly,
I spoke with a major supplier: catalog, online, and phone. He told me that he could no longer discount one of the certain product lines that he had formerly discounted. If he did so, and was caught, the manufacturer had made it perfectly clear to him that they would cut off his supply, and drop him as a seller. He did, however, continue to discount most of his products.
Regards,
Gandolf
Speaking of Orvis. When they discontinued the 06 line of Superfine rods. They sold the normal priced $345 rods for $235.
What did that do to the mom and pop stores who had those rods in stock?
One of my local fly shops was given a warning about some of their pricing, so rather than loose a manufacturer/supplier they just give discounts at checkout.
Here’s how I would answer the question:
To protect the industry; i.e., to keep the fly fishing industry from suffering the same issues encountered in other industries (general tackle) due to heavy discounting practices.
“Big box” and other chain retailers can afford to operate on a smaller margin. By forbidding discounting of certain goods, many fly fishing manufacturers protected all of their dealers, prevented their product from being “cheapened,” and made “service” the key to gaining a competitive advantage.
I think the manufacturers have been successful at keeping the industry healthy by adopting this practice.
Competition is good. Competition based on service is even better.
I always support my local fly shop.
Even if the price is a little more, it’s worth it to me to help keep a local shop open.
ABSOLUTELY!! I only wish MSRP was the practice in my industry. I would KILL my competition if it was just about service!
I still wonder how they get away with it though. I know of no other industry that legally stifles competition by eliminating discounts under the threat of termination of the product line. It seems almost un-American. Volume discounts are fair to the merchant because of reduced costs to produce, process & ship larger lot quantities. There can also be additional discounts offered by suppliers for quick payment. So it really wouldn?t be fair to eliminate discounts to the merchants. But to prevent a merchant from passing along HIS savings to YOU…well, it just isn’t right IMHO.
All things being equal; if I pay less for my widget and offer the same level of service as my competitor and could possibly get the sale IF my price was less; I SHOULD be able to discount. Should the customer just flip a ruble to see who gets the business? Even if I pay the same and I can operate on lower margins than my competition; why shouldn?t I be able to discount without repercussion? Maybe the customer walks away from the MSRP item entirely? As far as concern for the little guy versus the big box behemoths; sorry but that starts to sound a little like kiddie T-ball: everybody plays, everybody wins, nobody loses; we don?t keep score?
?is this America we?re talking about?
I have NEVER paid MSRP for any car I’ve bought. Even the potato chips and bread that I buy with a price already stamped on the packaging is sold by my grocery store for less. It?s ONE of the reasons I shop there. Many of us relish the discounts we can get by buying in bulk or shopping at stores who buy in large quantities. I for one don?t want to give that up in favor of a more equitable system of MSRP for everything. Discounts work fine in every other industry; why NOT fly fishing stuff?
I always look for deals AND service but if I can get the same item for less because a dealer wants to live on the edge and discount; he gets my dough. A lot of fly shops have resorted to giving away fly lines or other stuff with new rod or reel purchases. Does THAT count as a discount? It would to the IRS. Is that practice fair to the small shops who can?t afford to? Should that be ?illegal? too? I wonder how the fly line companies; (some that are owned by the same companies that won?t allow rod discounts); feel about dealers GIVING away their products? But maybe that is a (wink, wink) OK way of discounting.
I don?t know?
BUT?
?There probably wouldn?t be a TFO, White River or Cabela?s Traditional series if there wasn?t price fixing; because there ARE some folks like me who will walk away from an MSRP only deal and seek alternatives. So I guess that?s one good side; a lot of folks can get in without breaking the bank. That also forced the "high priced spread? to offer cheaper alternatives to compete; so they MAY reconsider their position someday if they lose more market share to no-name brands.
As for me; I am one of those people, dressed as they are; who come from all over the United States to make deals here at the Marketplace of America?
The software industry has done this for a long time… and not just “Uncle Bill”. Many of the big name companies require retailors to sell at or above the MSRP. Failure to do so results in losing the ability to sell the product. You won’t find BestBuy discounting Photoshop. Never. Ever.
I can see both sides of this arguement. Everyone but the consumer is protected by the MSRP thing. And maybe in the long run, but protecting the integrity of the industry so are the consumers. maybe… sometimes… I guess…
ED 8)
TyroneFly
Love the post.
My theory is this. How often dose a rod, vise, reel, ECT wear out. Just about everything have warranties for life. So unless you?re buying equipment for the sake of buying it companies have just a few shots at getting your money. So why not aim high?
I know if I sold you something and the only time after that I would see you would be when you broke or lost it I would mark it up, treat you like a king and pray that you lost it in some manner.
Just my theory,
Sean
To answer Gramps Q . Back when Budge owned the Beaverkill Angler in Roscoe. When Orvis dropped the price the shops were ordered to drop the price including old stock. Even if the new price is less than the shop paid wholesale. He took a beating at times. If you noticed no store sells a piece of gear cheaper than the Manufacturer’s catalogs.
Tom
That’s just wrong. Orvis should have sold them all for the normal price until they were gone. Most of them ended up on ebay. They made money and mom and pop got screwed.
Whereas when the USDA does it, it is government policy.
Ed
This has been a really interesting discussion so far and comes back to something I noticed when I first started in fly fishing about 2 years ago. I couldn’t believe that nowhere were there discounts to be had on the major brands of fly fishing equipment; it just didn’t make sense to me. Then after thinking about it for a while I realized that fly fishing isn’t all that different than many other lines of goods that have manufacturer set minimum prices.
For instance in golf, most stores sell their products for the same price regardless of where you shop for the first year or so after an item is available. After that it seems the price control goes away and the store can sell for any price they can get for the item. This means whether I go to a local shop, online or a big box retailer I’m going to pay the same price for that new driver or new set of clubs, etc.
That being said it isn’t something that I like or even think is “fair” (but who said life is fair?). I don’t know how much play the following story got in other parts of the country, but as it occurred in my local area it got a lot of air time in the local media. The essentials of the story were that a local boutique was selling Brighton Leather goods at a 20% discount in violation of their agreement with Brighton. Brighton when they found out about this stopped selling to this store and the store sued saying Brighton didn’t have a legal right to A)discontinue selling to them just because they were discounting the product and B) didn?t’ have a right to set the minimum price that an item could be sold for. In court Brighton countered by stating that they felt the laws in place were anti-competitive and “antiquated”; they further countered that this store was essentially diluting the exclusivity of the Brighton brand by selling at a discount.
Well, long story short the case made it all the way to the Supreme Court which ruled a few months ago that what Brighton was doing was legal and that the law should reflect that. What does this mean for joe and jane consumer? Well essentially a manufacturer of goods can now legally set the minimum price that an item can be sold at, and a retailer chooses to sell that item at less than that price at their own peril. Not only can they lose the right to sell that product any longer they can be taken to court for violating the contract they have with the manufacturer.
Here are a few links that summarize the story pretty well.
http://uspolitics.about.com/b/a/208054.htm
http://www.dallasnews.com/sharedcontent/dws/bus/industries/retail/stories/DN-RetailAntitrust_25bus.ART.State.Edition1.379c0e5.html
http://www.inddist.com/article/CA6455285.html
Perhaps the ironic thing in this whole story is that the retailer that lost is a small mom & pop and not a big box. I’m all for supporting my local fly shops (of which there really aren’t any in my area, only “outdoor shops that sell fly fishing equipment”) and I do so as often as I can. For the most part it is a shorter trip to the local retailer than it is to the “big box” (Cabela’s) on the N side of town so I might as well save some gas and shop at the local retailer, but it still rankles me that if I want to get a “discounted” item I can’t.
Just my .02 (and from that I probably owe you change!).
Brian