Why is gear priced the way it is?

[Philpug]

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.

K2 is offering the Pinnacle 105 and 95 at the same price.

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.

#bringbackthepivot15 Let the movement begin.

 

[Karen_skier2.0]

I doubt that many of us on the boards ever pay MSRP--we hunt for bargains, wait until the end of the season, and then take the plunge when the item hits our price point.

I can't honestly say that I know the MSRP for my recent ski purchases so I just looked them up. I paid around 50% of MSRP by waiting. What I did notice is that the male and female counterpart of skis were identically prices for Volkls--wasn't sure if that would be the case. I have no idea why a Volkl Mantra/Aura is worth $50 more than a Kendo/Kenja.

As long as there will be people that go buy their tickets right at the ski areas without looking for discounts or passes, there will be people that go into stores and pay MSRP.

 

[Pat AKA mustski]

It's supply and demand. If the consumer covets a particular model more than another, it will cost more. It's got nothing to do with material costs. Even when we are purchasing way below MSRP, we still pay more for the more coveted models.

 

[Philpug]

It's supply and demand. If the consumer covets a particular model more than another, it will cost more. It's got nothing to do with material costs. Even when we are purchasing way below MSRP, we still pay more for the more coveted models.

You are right that it has nothing to do with material costs, because a 184 Kendo has more in materials than a 166 Mantra.

 

[scott43]

I can tell you in bicycle stuff, it's hard to explain the price differences sometimes..other times it's easier. There is some difference between higher and lower cost stuff. But some people may not understand that or have a real good understanding of those differences. Sometimes it's things that you can't necessarily see, manufacturing processes. Sometimes it's small parts or materials..metal bushings versus plastic. Tolerances. The ability to completely repair an item as opposed to it being throwaway with no parts availability.

And obviously, sometimes it's just marketing and hype. Are Oakley sunglasses worth $150 more than the pair at REI? To me, no. When I paid 20% less than 50% of MSRP they were worth it. But at full pop, no way. Think of how much people pay for Red Bull..like, seriously?

Are the construction materials and methods the same for a Kendo vs a Mantra?

 

[Philpug]

I can tell you in bicycle stuff, it's hard to explain the price differences sometimes..other times it's easier. There is some difference between higher and lower cost stuff. But some people may not understand that or have a real good understanding of those differences. Sometimes it's things that you can't necessarily see, manufacturing processes. Sometimes it's small parts or materials..metal bushings versus plastic. Tolerances. The ability to completely repair an item as opposed to it being throwaway with no parts availability.

And obviously, sometimes it's just marketing and hype. Are Oakley sunglasses worth $150 more than the pair at REI? To me, no. When I paid 20% less than 50% of MSRP they were worth it. But at full pop, no way. Think of how much people pay for Red Bull..like, seriously?

Are the construction materials and methods the same for a Kendo vs a Mantra?

Damn close.

 

[scott43]

Damn close.

Makes me think of the price point between the 911 and the Cayman. Perception and what people are willing to pay I suppose.

 

[Philpug]

Makes me think of the price point between the 911 and the Cayman. Perception and what people are willing to pay I suppose.

I will give you that the new Kendo, like the Cayman is a better Mantra, 911, sorry Nine one one for the Porschephiles.

 

[dawgcatching]

I suppose it may be to that a customer has a hard time differentiating performance between models without a pricing structure in place. It isn't like a car, where more go=more dough. It may be that the price of a model within a brand needs the price differentiation to seem more desirable or more performance oriented. Race gear costs more than all-mountain gear, but everyone gets deals on race gear. As far as the sizing goes, yes, I have no idea! And some skis are coming down in price (the Fischer Ranger series for example) and offering a top ski at a price below what is normally associated with a top level ski.

 

[dawgcatching]

With reference to margins: shops certainly aren't getting rich. I doubt it is much different than any other industry; that t-shirt you paid $18 for probably cost 90 cents to make overseas. The store may have grossed $8 and pocketed $1.50 when all said and done.

When you sell a ski, you have to account for:

3% off the top for credit card fees
fixed overhead ($15k/month minimum for a fully staffed shop in a decent location, figure 3x that for prime resort real estate)
marketing costs and maintaining a website ($1k a month)
Costs of attending industry shows/demos

I doubt more than a few shops actually make much selling skis off the wall. Now, bootfitting, that is a value-added service that can't be bought online. As is ski tuning. But skis are simply a commodity and tough to make any money selling.

 

[dawgcatching]

I will give you that the new Kendo, like the Cayman is a better Mantra, 911, sorry Nine one one for the Porschephiles.

Saw a Cayman GTS at the Porsche dealer the other day. Drooling over that car! Hoping they throw it in their "elite" rental fleet at some point and let me take it to the track.

 

[markojp]

I suppose it may be to that a customer has a hard time differentiating performance between models without a pricing structure in place. It isn't like a car, where more go=more dough. It may be that the price of a model within a brand needs the price differentiation to seem more desirable or more performance oriented. Race gear costs more than all-mountain gear, but everyone gets deals on race gear. As far as the sizing goes, yes, I have no idea! And some skis are coming down in price (the Fischer Ranger series for example) and offering a top ski at a price below what is normally associated with a top level ski.

Production moved to Ukraine.

 

[kickerfrank]

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 says it all. I can offer a couple different perspectives from the manufacturer side. First from the larger companies (I have no inside knowledge so this is just speculation). Different target markets have different willingness to pay. All-mountain skis tend to be cheaper. This is a larger group of skiers that have a lot of choices. They will pay much less than racers or even powder/Big Mountain skiers. The Powder/Big-Mountain skis are a lot more expensive and my guess is because this is a more specialized ski for skiers that spend more money on ski equipment. On the flip side park/pipe skiers often have the lowest willingness to pay. Park skis are often very cheap..

Now if we are talking about a smaller company who is growing then there are different issues. This is a seasonal industry and there is a short amount of time throughout the season where they have cash coming in. Most of the year cash is going out. Production is done over the summer therefore the companies have to float a lot of cash from buying materials in the spring and getting paid by retailers and customers in December. They may be selling their equipment with a 200-300% markup but it doesn't mean that the company is making much money overall. Not to mention all the R&D, marketing, and manufacturing upgrade costs.

There are obviously a ton of other considerations such as materials manufacturing processes and new technologies but I believe the bulk market pricing.

 

[Monique]

On the flip side park/pipe skiers often have the lowest willingness to pay. Park skis are often very cheap..

That's true, but I think it's also true that they don't want to pay a lot because they trash their skis so quickly ... and probably consequently those park skis aren't built with quite the same attention to longevity?

 

[Philpug]

It's funny that you mentioned park skis , earlier Frank had mentioned Hart skis which is a pretty obscure reference what was interesting is that Hart had an $800 part ski, it was a very well-made but did not sell Dave Peterson can tell you all about the graphics from it

 

[Lorenzzo]

Pricing of non-commodity products or services could be the most complicated exercise a business faces. I had exposure to this through involvement in pricing of commercial real estate space. We acquired a pricing model that was designed for a large apartment industry player that had been acquired from a large hotel industry player that had been acquired from a supermarket chain that had been acquired from one of the major airlines. Aside from taking into account fixed and variable costs during short timeframes and long ones, it looked at time of year, day and week pf purchases and associated pricing, domestic GNP patterns, supply, time remainimg before expiration, competitive product pricing and patterns and many, many more variables. The model was so complicated and numbercrunching intensive you couldn't run it on a PC.

One thing was clear: The least influential factor was cost of production. It mattered but all of the many other variables mattered more the goal being maximization of revenue. We knew what it cost us to provide our own individual supply and would not have continued to offer it if the price went below cost, or at least variable cost, but it certainly didn't drive pricing decisions.