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Pullin' Thread
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Discussion Starter #1
We all know, or at least I assume most of us know, that retailers routinely mark fly fishing product up 40% - 50%. I simply ask is this reasonable?

The manufacturers don't make any more money on a product regaradless the markup of the retailer. Perhaps the problem lies with manufacturers catering to or desiring to protect smaller retailers or marginal retail operations? Might this be the basis for high end manufacturers requiring retailers to charge the suggested retail price or face losing the manufacturer's product line?

Along these same lines, should we all run out like lemmings and buy the newest, improved, updated rod, reel, waders, wading shoes, lines just because the manufacturer's advertising tells us we should, or the retailer and his employees, who are ever mindful of making more profit and selling more stuff to us, tell us that it is the best thing since chocalate cookies or Ben & Jerry's Ice Cream?
 

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Do you know any retailers getting rich?
What kind of cars do the employees drive. Do they own houses? Do they deserve to make a decent living?
No one is forcing anyone to buy anything. I don't think that anglers are as stupid as you make them out to be. If they can't afford, or don't want the "latest and greatest", they don't buy it. Right? And the good news is that everyone(if they have the time)can still catch fish! So, what's the problem?
 

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Indicators Anonymous
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I'm with Eddie!!!

Many retailers are struggling to make ends meat...many vendors have lists upon lists of retailers that are 30-60+ days past due.

The owners of the shops that are staying afloat and making a decent profit are by no means rich...after all their expenses and paying the typical just above poverty-line wages they have just enough money to make it worth their effort and time.

You don't seem them living in extravagent homes or driving fancy cars...

Imagine what would happen at a profit margin of 25%??...I wouldn't be surprised to see most, if not all shops go under.

If you want to complain about an industry that rips its consumers off, I can name many and the flyfishing industry isnt one of them.
 

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Discussion Starter #4 (Edited)
Eddie,

I have a very good friend who had a shop for only 16 years. He started out by putting all $65,000.00 of his retirement and savings into the shop. After 16 years he was a milliionaire and retired at age 60. I call this getting rich by being a shop owner. Interestingly, he did it by selling things at a markup of about 25%. All I'm asking is why can't other retailers do the same?

Ryan, you can buy a pound of marabou for about $40.00 give or take a few dollars. This is then packaged by most retailers, if they buy it by the pound, into 1 once or 1/4 once padkages and sell the 1 oz. size for about $8.00 or $9.00 and the 1/4 oz. size for about $3.50. Why can't they sell it for less? They will still make a good and reasonable profit.

As to the retailers that are 30-60-90 days past due on their accounts with manufacturers and distributors, why not have the manufacturers and distributors pull the plug and not sell them anymore product unless what is overdue is paid in full and then place the these retailers on COD status? And is it the fault of the customer that these retailers are in financial difficulty? I think not!

Why should the customer be made responsible for the success or failure of a particular retailer? Is it not the retailer and his customer service, or lack thereof, that is the deciding factor as to whether he makes it or not?

Why do manufacturers refuse to sell anymore of their product to a retailer who doesn't charge the full suggested retail price for their products? Why can't the retailer decide for himself what to sell the product for?

As to the wages paid to employees of the retailers, it is the employee's choice to work for the wages offered. If he wants or needs more income, it is up to him to either get the retailer to pay him more or he leaves and gets a job elswhere. And the wages a retailer's employee gets has nothing to do with why high end manufacturers have protected prices.

Eddie, would it be a tragedy if some of the shops went out of business? Again, I think not.

As to buying the latest and greatest, I see this all the time. For example, a customer goes into a shop and asks for breathable waders for less than say $200.00. I've seen many a retailer or his employee tell this customer that sure he can get a pair of breathables for $200.00 or less but they won['t be as good nor last as long as the $350.00 ones he has in the shop. What drivel this is. I have a pair of breathables that I have been using for 4 years that I paid less than $130.00 for. No, they are not Cabella's. They are a well known brand from a manufacturer that has been around for over 100 years. Funny how they work just as well as the $350.00 ones and last just as long.
 

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Indicators Anonymous
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I do not know why I am getting involved in this arguement again...it is liking beating the left over bones of a poor old dead horse that decayed years ago after being beatin into oblivion.

For all those that complain that flyfishing equitment is too exspenive and shops are making too much money off you, I would love to learn what you do for a living.

I would love to hear about how your occupation, business, industry doesn't try to make any money.

Last time I checked, this was a capitilistic society, if you don't like, dont open your wallets.

If you dont like the fact that Simms, Sage, Lamson, Ross etc. etc. etc. price protect their merchandise (or for a better term, franchise their merchandise), then protest and do not purchase it.

You are more then free to go to Outdoor Emporium or GI Joes or any other discounter and price shop...go and shop around for the best price on that Lamiglass you've been drewling over or that Okuma you have been dreaming of.

And since you know more then any shop employee Flytyer (every chance you have had, you have made numerous comments about how shop employees do not know jack...you know for hating shops so much, you sure have lots of tales about your experiences in them), you will have no need to ask Joe Blow Powerbaiter about which is the best Speyline to match up with your brand new Lamiglass Mushwell Spey Rod...oops I forgot, GI Joes and the like dont sell Speylines.

Actually, I think I am with Flytyer, I am so pissed off that no matter what McDonald's I go to, a hamburger costs $.59...God forbid they have sales or allow their franchisee to disount a large strawberry shake because they feel like it.

We can go picket McDonald's and then run across the street and tell the local flyshop owner that he makes too much money as he hops in his 1986 Toyota pickup to head home after putting in another 12 hour shift.

btw-I do know of a couple shops that have done very well for themselves but is because they have been around for many many years, provide excellent service etc. etc....but they are by no means the norm.

So I think we should start a poll..."The maximum income one is allowed in a year."

I'm thinking $60,000/yr flytyer, how 'bout it???
 

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FT, have you asked your "friend" if he worked hard for that money? I bet he thinks that he earned that million bucks. 16 years ago, 65 grand was alot of money. I know that most fly shops didn't start with that kind of capital. Your friend was already "rich", and I'm sure that he has a very good businessman. I won't begrudge his success and I wish it on every one. "Uh, Dr. Evil...a million dolars isn't that much any more.".
Selling every thing at a 25% mark up doesn't work with the volume of sales in the industry,the total of which grosses 100 million a year for tackle. Call that 175 million @ retail. You do the math and figure out how many shops there should be, operating at a 25% margin.
"Would it be a tragedy if some shops went out of business?" They do every year. It IS a tragedy when ever people lose their jobs, and investments. You don't agree?
Now to the waders. I have sold many hundreds of relatively inexpensive waders. They were an excellent value. When they worked, they were great. I would get a few pairs returned a week. I used the same waders myself. They never lasted half a season. I worked at another shop and we sold the most expensive waders. We hardly ever got returns on those. I use them, and if you did, you would know the difference is worth it. You get what you pay for, and buy what you need. Isn't that the way it's supposed to be?
It is obviouse why NF16 and I care about this issue. We work hard for not much and so do our friends. We have seen how it works from inside good succesful shops. We have thousands of happy customers. I guess the law of averages dictates that one in a thousand isn't happy but we try for 100%. So, if some one suggested that you take 50% off your income, you would probably object. That explains us. What's your deal? Why so bitter?
 

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I think for every time I'm treated poorly or ignored in a fly shop, that shop owes me something for free...And the size of my compensation should be relative to the degree of my displeasure with the experience...

If they don't smile when I walk in, I get a #1 grade neck...If I have to seek someone out to ask a question, that's a new Tibor reel...If the clerk disagrees with my philosophical stance on an issue (fishing, politics, etc.) or is too pushy for my tastes, then I'm due a new pair of Simms waders!...And if I unilaterally decide that the fatcat shop owner is gouging me...well...don't get me started on that one!!!

Also, if I go into a shop and they don't have exactly what I'm looking for, they should have it overnighted from the manufacturer to my home (including Saturday deliveries)...free of charge, of course...

Ya know, seriously, if a guy spends $65,000 to buy or start up a shop, and he retires 16 years later a millionaire, gawd bless him...let's see...80 hours/week for 50 weeks/year times 16 years...at $1 million, that's $15.63/hour...subtract out his inventory costs, labor costs, taxes and other expenses...I think he's earned his money...Don't begrudge him his due...or your business....
 

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flytyer

I owned and operated a small bicycle shop for 9 years. I guess my sales volume was simular to most small to medium sized fly fishing speciality shops. My cost of receiving, inventory,advertising and sales was 27% of my cost of goods. If I sold everything at 25% mark up I would have lost 2% on each sale. Can't make that up on voulme. How did your friend calculate his cost of goods? Did he add in his freight, rent factor, interest on inventory, overhead, etc. before taking the 25% mark up. I taught parts management courses in the auto industry and most auto dealers parts departments probably do a greater sales volume the most fly shops. The cost of maintaining a parts department is between 25% and 30% of the cost of goods delivered to the door. If your friend calculated his mark up from his delivered cost then he had some other unusual situation which allowed him to operate at such a low margin.

Any speciality retail shop is a very challanging business to operate.

Rich
 

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Wow, I thought this one was dead and gone but guess not. A new direction possibly.

Flytyer, some good questions. I guess I have to side up with Ryan on this one. It is a capitalist society so the prices we pay are what the market supports. Blame it on people having too much discretionary income but as long as we are willing to pay $750 or more for a rod, they will keep selling them. As an aside, the recent marketing of value priced spey rods by Sage, Winston, etc. may signal that many of us can no longer affort the top of the line stuff.

As for the shops setting the cost of merchandise, you have a valid point on the marabou example. On the issue of rods, the manufacturer often sets these. This is why you never see sales on current model Sage, Winston, T &T, Scott, etc. rods. Maybe someone can tell me why but I'm guessing they don't want to foster price wars among shops. These would lead to less shops and thus less opportunity to move product.

And this is just too good to pass up

:hehe:
I do know of a couple shops that have done very well for themselves but is because they have been around for many many years, provide excellent service etc. etc....but they are by no means the norm.
Did this refer to shops doing well as not being the norm or was it shops providing excellent service??? If the latter, I think we are back to my point from a few weeks back. I will state it again, we need to support those shops that provide outstanding service and also work to protect the resource. For those that don't do both, I take Ryan's advice and don't open my wallet.

Flytyer,
I have also tried the value priced breathables. So far I have tried three from three diff. manufacturers. After getting only a year out of each on average, I bit the bullet and laid down the 3 bills. I will never go back. I agree that there are many items that you can be frugal on and be none the worse performance wise. For me though, waders were not one of them.

Finally, Sparkey, rumor has it that you got an opportunity to make more than
the typical just above poverty-line wages
. Best of luck at your new shop. So when can I expect the spey fishing section to be open for business?

st
 

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Wow, Sparkey, it's rants like these that I'm sure your new employers are going to love. Keep it up, it makes for some good entertainment around the shop!

Kev
 

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I do about 90% of my tackle buying in one store. I never pay the sticker price for anything. The store owner knows that if I walk he looses around $4000 in yearly sales.
I think all the serious anglers who buy in the store know that you can cut a deal. However, I see guys in there all the time buying tackle at the sticker price--they never ask for a discount.
The store I buy in is in a BC border town, and increasingly, I see more and more customers from the US who just nipped arcross the border to buy a new rod or reel. It's not just the low canadian dollar, after all most of this stuff is made in the states, our prices tend to be lower.
When you consider that the store owner has to factor in the cost of a medical plan and other social benefits for all his employees, I can only imagine that the customary markup on the other side of the border is much higher.
 

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Many good points by all.

Discounts? Some shops down here do (one gives 'family' an automatic 10%). Most don't ... but guess who has first crack at my wallet? Just wish they carried more fly tieing gear.

Reasonable profit margin: can be anything from soup to nuts ... but it takes a heck of a lot of 1/4 oz packages to pay the rent, wages, taxes, heat, lights, etc. And you can't just have a hundred packages of 'black.' You probably have to stock a dozen different shades/colours. Again, all adding up to the stores cost of doing business incrementally. But still adding towards 'the last straw on the camels pack.'

It takes a heck of a lot of guts to be an independent business person. Last stat's I saw on it suggested that 1 out of 5 don't make the first year. 4 out of 5 don't make it to the 5th annivsery.

Crummy odds:eek: But suggest the fellow referred to above is a true survivor.
fae
 

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well....

All i can say is you do get what you pay for and we all have a choice to buy as well...theres no use than beating this issue oh well....
anyways tightlines
 

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Pity the poor flyshop owner who is caught between the manufacturer and the wholesale jobber. From what I can learn its really the jobber who is gouging. In the last ten years manufacturers have been reluctant to deal with retailers and have signed with the brand jobbers .These middlemen who contribute nothing to either the customer or the process have shoved prices to the sky.
If we could get rid of the jobbers we would be back to normal.
 

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Pullin' Thread
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Discussion Starter #15
Ryan,

To answer your question about what I do for a living, I have two jobs: One for 40 -50 hours/week during the day Monday through Friday; the other one as a "part-time" instructor at the local communidty college teaching four 5-credit class sections/quarter, which is one mmore section than a full time instructor teaches, year round for 45% of the wages a full-time instructor gets paid for his first year of college teaching with no experience doing so. Between them I make more than your mythical $60,000.00 maximum. However, I put in 70-80 hours work nearly every week of the year.

You are also misquoting me and putting words in my mouth. I never said I hate shops; but I did say that if a shop doesn't have good customer service or gives bad information about products the shop doesn't carry, I will not do business with that particular shop.

Also, I don't use Okuma and other such poor quality equipment. I have very good equipment, which I bought with hard earned money. And I have been buying quality equipment since I was 16 and got my first job. This was 35 years ago. I have no problem paying for equipment; but I will always ask for a discount just like I do at a car dealer (which is a true franchise). After all, this is capitalism and shop owners/employees should not get offended if a customer requests a discount of some sort.

Eddie,

I'm not bitter, not down on shops. I am simply asking if it is reasonable for manufacturers to require an independent retailer sell its products at the "suggested retail price". Fly shops are not a true franchise like McDonald's where the owner of the local McDanald's must pay a franchise fee to McDonald's Corporation for the priviledge to sell McDonald's products and use the McDonald's name. They also have to build the store to the specifications of McDonald's, sell only McDonald's products, and buy their supplies from McDonald's.

A shop owner can buy from any manufacturer or distributor he desires. And as you know, his so-called franchise from a manufacturer is nothing more than having met the minimum opening order in an area that the manufacturer has deemed OK for him to sell the product.

Also, I have lost jobs due to layoffs in my life. And I have quit jobs to get other jobs. When I have been laid off, I went out and found another job. Was this a tragedy, not at all. Instead it was an opportunity for me to do something different or expand my horizons. Just because someone has started or opened a business, he has no guarantee that he will still be in business 5 years or even 15 years later. That depends on many factors. However, capitalism requires that a business succeed or fail on its own without government intervention to prevent it from going out of business.

Gracies Dad and Eddie,

My friend is very much one of my best friends. And I do not begrudge him his success, I rejoice in it with him. He worked hard for it and spent many an 80 hour week in the shop. He earned his million the old fashioned way, he worked for it and watched his spending.

Ol Rich,

My friend paid cash for all his inventory right from the get-go. Therefore, he never had interest payments on it and he expanded his stock of inventory both in quantity and diversity as he increased his sales volume and could afford to do so without borrowing. Yes, this meant for the first 3 years he lived on rather meager wages had no vacation from the shop, and worked all holidays except Thanksgiving and Christmas Day. Also, he never opened on Sundays, said he needed one day/week to recouperate and get some fishing in. But after the 5th year, his income literally took off.

He figured his markup after the cost of freight. He hardly ever advertised and built his business on word-of-mouth so advertisizing cost was negligible. His knowledge of fly fishing and fly tying materials is outstanding, and he had tremendous customer service. Also, he thought nothing of giving fly tying product away to teens who came into the shop, or throwing a top quality fly line in with the purchase of good reels or rods, backing included. He would splice lines at no cost, put loops in lines for interchageable tips, and was always willing to give casting lessons free of charge. This things endeared him to many who then told others about his shop. And he had customers who made trips from over 1500 miles just to buy things from him yearly. They would then spend several thousand dollars in his shop.

Why can't all shops do these things for all their customers like he did?

Sinktip,

Maybe the problem is that very few customers are willing to ask for a lower price on the highest priced items because they don't want to anger the owner/employee of the shop. I do think there is something to the major rod makers starting to offer lower priced rods. Why does a rod maker need to have a suggested retail price of $700.00 for a rod that cost about $130.00 to make? Maybe the manufacturers need to put an end to the replace the rod free if it gets broken regardless of cause. I noticed over the years that even high end gear and spinning rods made of the same material as our beloved graphite fly rods are far lower in price. Maybe this is because gear guys and spin fishers refuse to spend $700.00 for a rod.
 

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Flytyer,

Interest thoughts on the impact of warranties on rod prices. Replacement percentages and costs are no doubt factored in to the high sticker prices of top quality rods. I'll admit that I wouldn't pay that kind of money unless there is a breakage warranty. But them I'm a clutz ;) This only goes so far though as you pointed out the cost to manufacture is relatively small. Replacement cost would be also minimal in most cases.

I would guess marketing demographics is a big part of the price level. The rods we love are for the large part marketed at affluent users. As I said above, they charge what the buying public can afford to pay. In your example of gear rods, I would venture that these are targeted at a diff. demographic; one that is on average less affluent. I don't want to get off topic and bring up the perceived elitism of flyfishing and flyfishers but I believe these seperate demographics contribute to that perceptuion.

st
 

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Indicators Anonymous
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L A Smithers said:
Pity the poor flyshop owner who is caught between the manufacturer and the wholesale jobber. From what I can learn its really the jobber who is gouging. In the last ten years manufacturers have been reluctant to deal with retailers and have signed with the brand jobbers .These middlemen who contribute nothing to either the customer or the process have shoved prices to the sky.
If we could get rid of the jobbers we would be back to normal.
Coot-
I can agree with that statement if we are discussing general purpose tackle shops but flyshops are a total differnt story (Canada may be differnt though because I know some US companies dont sell directly to Canadian flyshops but to wholesalers).

When you walk into a flyshop, most if not all the product came directly from the manufacturer and those that do come from a jobber are already at such a low price that it makes little differance in the long run.

Products such as Loon, Griffin, Thompson and a couple others were always much easier for myself to get from a jobber then direct but that made little price in the end.

But if you were to look into the gear side of the industry, the trend you mentioned is very apparent. Very few large companies are easy to deal with as an independant tackle shop because of the assonine minimums needed and because of the pricing structure.

Only the GI Joes, Sports Authority etc. etc. can buy direct and because they buy in such volumes they get the best prices and do not have to mark up their products 40% to make a decent profit.
 

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I'm not going to add much to this pointless discussion, other than to point out that most everyone here is making the common mistake of cunfusing markup with, ' Margin.' Even the former bicycle retailer has missed it.

50% markup equals 33% margin. 33% gross margin is typical in fly fishing and bicycles. In nearly every other specialty retail business gross margin is typically 50% or more.

Fly fishing retailers can get better margins, by paying cash and buying big quantities. Not many shops can do this.

The easiest way to make a million dollars in retail, is to start out with two-million.
 

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2hand, very good point. Many specialty shops are opened by enthusiasts, and not BS grads. You are right this is a pointless arguement.
 

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every morning I wake up and I thank God for 600 dollar fly rods and 500 dollar reels!!!!

Opinions may vary a small amount but among serious fishermen i think you will find that there is a general concensus that cheap gear sucks!!!

If a top of the line reel could only sell for 50 bucks there would be no.. Ross, Abel, Hardy,Orvis (yes they make good reels), Tibor, Lamson,Etc. And ya know it's the advances that thoes companies made that allow cheaper manufacturers to make the stuff they make. So there's also be no Okuma either! In fact there never would have even been a Phluger!!! The fly fishing industry is driven 100% by the hige end market! Why do all the cheap reels like Martin copy Hardy???
Same goes with rods sure you can go to GI Joes and buy a North by Northwest IM6 rod for 90 bucks but ya know what even though it's a piece of junk it wouldn't even be that if it were not for the technologies perfected by the high end manufacturers.
Even if you use the cheapest gear you can find you owe a lot to the high end manufacturers because it is through their development and through there opening up of markets that allow the low end makers to even have a business!
Personally my job absolutely depends on people being willing to pay 5-800 dollars for a rod and so does my boss's. If we could only sell rods for 50 bucks we'd have been broke a long time ago.
No one is being gouged by fly fishing retailers!
the prices are set by the manufacturer. If a shop wants to continue to carry a particular line they have to sell it at MSRP. I know a fly shop owner who lives(literally) in the shop he owns he will open for anyone at any time of day and he is barely making enough to live on and he never ever gets to go fishing! yet as a service to his customers he stays in business.
If you think you are getting gouged by a shop you are simply wrong! Sure you may get bad service and all that but I have never been in a shop that has asked an unfair price for anything!
If it makes you mad that you can not afford the most expensive equipmentthen you need to re-evaluate your motivations. There is some very good inexpensive equipment out there but it is not the best equpiment on the market..

Just another thought here from the manufactureres perspective.. How much does a modern milling machine cost??? How many does Steve Abel need to meet production demand?
How many reels does it take to pay for a milling machine???
If you know anything about machining tools i think you'll get my point.
 
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