Why is gear priced the way it is?

[Philpug]

In skis...The question is, should two ski models that have the same identical construction cost different amounts the they do not charge more for different length skis? You have two models, one is 88mm underfoot ant the other is 98mm. The 88mm ski is priced at $649 and the 98mm is priced at $699. Why? It can't be that they need more materials in the 98mm ski, if that was the case, the 186cm version of the 98mm should cost more than the 166cm version. Is it because the 98mm wide version is perceived to be a better ski because bigger is better? Yes, it comes down to marketing and perception. Some manufacturers are actually getting this, some are not.

We see this in bindings too, a 10 and 12 DIN binding might have exactly the same materials and construction other than the spring, yet the higher DIN model will be $30-50 more, why? When someone is skiing said binding at say a 6 or 7, why spend the extra amount for the same product, what are they actually getting?

Boots, here too, Boots are pigeon holed into a similar pricing structure where all 130 flex will have a MAP of around $699 and in many cases the 120 which is the same boot will be $599-649. Boot fitters sell boots by fit and need, customers buy boots by price and color. There is and always will be the biggest disconnect here.

I am not saying this as a blanket statement for every model with every manufacturer but it is situation that is across the industry. It is interesting seeing how products get priced and why.

 

[Monique]

Well, there's a supply/demand thing. It may very well be that the market will happily pay more for a different model, but will balk at paying more for a different size - so they just set the MSRP such that it averages out. There's the cost of testing a different ski. There's also an aspect where a cheaper item will be seen as less valuable/desirable, so that plays in. I remember seeing some study where based on the most expensive bottle of wine a person was shown, they basically always choose one price level down from the most expensive that they know about. I've seen this sort of behavior in my own choices.

 

[Monique]

I think I mentioned a few times back on Epic and really to anyone near me that when I bought my Sick Day 110 @ 172, the Pandora was also an option, but the SD110 was $50 more expensive. I went with the men's ski because I liked the graphic better, and bitched because they were identical skis. But now that I think about it, maybe it makes sense if the Pandora's price came from averaging profit across the sizes (with 172 being the longest) while the SD110 was averaged across the sizes (with 172 being the shortest).

 

[KevinF]

The President of the company of my first real job once memorably said "if the customer is willing to pay, we are willing to charge them".

 

[Bill Talbot]

The President of the company of my first real job once memorably said "if the customer is willing to pay, we are willing to charge them".

THIS is where I have a problem. If the ski cost x to manufacture/distribute/advertise and make their profit. And the retailer has to charge y to cover his costs and profit. The Skier has to pay x+y + whatever the market will bear? What is a 'reasonable profit' ???
Well, I think we know that money is still being made in March when they 'blow out' leftover stock, right? So that means at least another 30% is being forced on consumers that pay MAP not even MSRP.



So my question isn't the difference in model pricing as much as the non reality based structure to start with.

 

[markojp]

"Yes, because no one should be able to make a living doing any job that costs me money." seems to be the universal answer to most everything.

The whole MSRP/MAP thing is strange. For ski hard goods, I don't think anyone sells anything at MSRP, but the idea that shops are still making money hand over fist below MAP is pretty silly unless you're talking about someone the size of Backcountry.com or similar. Even EVO is having trouble making money with warehouses full of deeply discounted gear. Many manufacturers have inundated the market with a butt ton of product. There's just too much stuff out there. When they have the self constraint to limit production a bit and still make their numbers, everyone in the industry benefits.

So long as we'd like to have places to have boot fitting, tuning, staff with excellent product knowledge and experience to provide great service, then current MAP pricing seems pretty reasonable. Of course I'd be a liar if I told anyone I've paid MAP for much of anything outdoor industry related in longer than I can remember. I've met the enemy and they are us.

 

[Monique]

THIS is where I have a problem. If the ski cost x to manufacture/distribute/advertise and make their profit. And the retailer has to charge y to cover his costs and profit. The Skier has to pay x+y + whatever the market will bear? What is a 'reasonable profit' ???

In theory, in a free market economy, this will regulate itself - if profit margins get too ridiculous, someone will swoop in and start selling them cheaper.

In practice, I'm not sure that works for an industry that has a lot of upfront costs to produce a high quality product. Although companies like Icelantic have the NeverSummer plant make their skis ...

 

[markojp]

Of course there are particular markets where a slightly cheaper price makes a product be perceived as a lesser choice. I wonder how often this happens to Salomon with their skis.

 

[Bill Talbot]

Of course there are particular markets where a slightly cheaper price makes a product be perceived as a lesser choice. I wonder how often this happens to Salomon with their skis.

Never see it that way. I see it a better value or 'Bang for your Buck'

I wish the elitist snobs would get past this so us skiers could have better pricing!

 

[markojp]

Never see it that way. I see it a better value or 'Bang for your Buck'

I wish the elitist snobs would get past this so us skiers could have better pricing!

It's pretty tough to beat Salomon price points, and all done in countries with health care, environmental controls, and basic workers' rights.

I'm sure a lot of folks are waiting for Kastle to drop below the 1k a pair mark, but I'd rather just hold my breath.

 

[scott43]

The mark-up kills me. I hate paying retail. 100% mark-up on clothes and accessories hurts. At least bikes are only 40%. Skis were north of clothes as I recall. What was more irritating was being told we couldn't sell product below the selling prices of our local competitors without the manufacturers consent. Which kinda sucks when you've got 200 pairs of skis and it's March!!

 

[AmyPJ]

If the same skis were less expensive because they are shorter, would you not see a trend towards people opting to buy a shorter ski than they REALLY should be on, based on the lower price?

I actually have more of a beef with this kind of pricing for soft goods vs. hard goods. Why does a women's small or medium jacket cost the same as a comparable men's jacket in a L/XL (same model, brand, etc.)??? Quite a lot less material in my jackets and pants than my husbands. Odds are a person isn't going to squeeze into a jacket that is way too small just too save $20, but if they do, they're probably not going to hurt themselves (unlike buying skis that are too short because they are cheaper in the shorter length.)

 

[LiquidFeet]

.....Boots are pigeon holed into a similar pricing structure where all 130 flex will have a MAP of around $699 and in many cases the 120 which is the same boot will be $599-649. Boot fitters sell boots by fit and need, customers buy boots by price and color. There is and always will be the biggest disconnect here......

"Same boot"? As in, SAME BOOT?

 

[Philpug]

In many cases yes. Just a rivet removed from the spine or a slight variation in liner.

 

[fatbob]

To answer the headline question - 50%+ retail margin on MRSP?

Sorry I'm being facetious but having read the thread more carefully I don't begrudge stores that if I actually need or want the service they offer but reality is for any recreational product I will hardly ever pay that. I know that seasonal stuff gets discounted and I'm not a slave to the Current Year Model so.....

Skis aren't so different from say whitegoods and whitegoods are fascinating in terms of consumer psychology - the marginal manufacturing cost of that extra program cycle on a washer is peanuts (or in fact might actually just be a software tweak between them) but the more features regardless of whether 90%+ of use is on a single cycle command price differentiation. And consumers still fool themselves with a price=quality equation. Now that might make the difference between a Smeg and a Beko in terms of the warm and fuzzy high end feeling but in actual performance there is no way there can be that delta.

So people expect top pay more for the "expert" model or the wider = more off piste = more aspirational model. It probably at some point reflected relative volumes of sell thru but I'm not so sure anymore.

 

[markojp]

If the same skis were less expensive because they are shorter, would you not see a trend towards people opting to buy a shorter ski than they REALLY should be on, based on the lower price?

I actually have more of a beef with this kind of pricing for soft goods vs. hard goods. Why does a women's small or medium jacket cost the same as a comparable men's jacket in a L/XL (same model, brand, etc.)??? Quite a lot less material in my jackets and pants than my husbands. Odds are a person isn't going to squeeze into a jacket that is way too small just too save $20, but if they do, they're probably not going to hurt themselves (unlike buying skis that are too short because they are cheaper in the shorter length.)

Still lots of even smaller parts to assemble.

 

[AmyPJ]

Still lots of even smaller parts to assemble.

True for sure. I shall count my blessings that we can afford to buy the stuff at all

 

[Philpug]

Margins are margins and that is not what i am referring to here. I am talking more about the pricing structure from model to model.

 

[markojp]

Margins are margins and that is not what i am referring to here. I am talking more about the pricing structure from model to model.

As an example, it's interesting that Head prices the monster series the same across the board while Nordica basically adds $100 per cm on the Nrgy series. Seems a lot of folks overlook the Nrgy 80 because of it's relatively 'bargain' price tag compared to other perceived 'high quality' offerings.

 

[Bill Talbot]

Margins are margins and that is not what i am referring to here. I am talking more about the pricing structure from model to model.

It's a problem that say a LOOK Pivot 18 demands a higher MAP than a Pivot 15(Which they MUST make). They should both be the lower price so the skier can buy the suitable binding for their required DIN and not for illusions of 'cred or bad assness'. It's just a different spring.

I just want to pay a fair price giving both the manufacturer and retailer a REASONABLE profit, based on real costs, not marketing hype. It seems nothing is based on actual costs involved to make a ski (out the door), maybe what $75 a pair, to the end users MAP pricing north of $700...