harlie said..

I'm a huge fan of online shopping; we buy a lot of stuff over the web.

However, in my search for a board recently I contacted 2 local shops. Both offered me multiple boards to try (leave your licence and sign a form and take the board for the afternoon - not 5 mins, see you in couple hours). One of these shops is where I had my lessons and have purchased before, they said upfront no questions asked "20% off RRP for you as a regular". I tried a couple different boards, and purchased for not much more than 2nd hand prices and significantly less then online.

Add to this that I found (while trialing) I didn't like the 2014 straps/pads on my prefered board, and actually prefered the 2013. So I ended up with a new 2014 board with new 2013 straps/pads.

Now I'm after a dedicated light wind board, with one email, my prefered option has been quoted at more than 10% below what they are listed for online in the US (where they make it) before shipping. And of course the email stated that I'm welcome to "try before I buy" to "ensure I like it".

So, I agree with the statements above. Create a good relationship with your local. I can't try anything from an online shop, and what my trials showed was the amazing difference that shape makes to a board of the same size, and how IMO one manufacturer has cocked up the new straps which I would have been stuck with.

Here's an example - Naish Apex pads n' straps RRP US$180 IIRC or ?28,000 aka almost $300 these days...

The reasons? Or should I say excuses.... The prices are set by the manufacturer, shipping is expensive, it's a small market in Japan... Truth of the matter is that Japanese people don't do English and will pay the rip off prices and so support the con jobs. If I wanted I could import the same gear for the cost of the exchange rate (sometimes to my advantage) and ... $40 shipping!

eppo said..

Plummet said..

eppo said..

goog64 said..

Buy for $60, sell for $100, you have made 66.7% gross profit on your buy price.

Well done young man, now where is my good work stamp.

Nah that's an F for fail! Go straight to jail and do not collect $200.

Its a 66.7% mark up.
40% gross profit!


Now thats enough about percentages from me. Its not a maths forum so lets move on.

How figure plummet...40%? Profit is based on your buy price and the return you get on your outlay of $60, which is $40.

Surely? Maybe my accounting skills are poor?

Nah, you're OK eppo, it's a murky world out there in financial definition land.
Gross profit as a percentage is usually calculated with respect to the revenue (as plummet says).
That's why I was careful to say gross profit on your buy price.

eppo said..

whew...actually i do vaguely remember that now with respect to gross profit....

Yes it seems wrong because we often think in terms of returns on investments in which case your profit percentage is calculated with respect to how much you started with. But gross profit margin is calculated as a percentage of what you ended up with.

eppo said..

For a point of learning (for me) what's the intended use for each type of measure here? Accounting wise?

Its easier knowing your gp% for point of sale discounting.

So...

Using our example and disregarding tax we buy for $60 sell for $100. GP 40%. I now know what % I am left with if I discount the product.
If I discount 20% then I have 20% GP. discount 40% selling at cost.

I have bought nearly all my gear from local shops. The advice provided helped a lot, and a few times I snagged last year's kit model for a good discount. +1 for supporting local shops. Building a relationship with your local shop is well worthwhile. They have also sold some of my second hand gear too which is very convenient.

Not sure what I could add, I didn't even know what gross profit was....bahahahahaha.

Support your local, if your local is a decent operator and stocks the gear you like to use,, even if it costs more.


That's my contribution, simple.

Yes and no. If you have problems with gear which can happen with all gear from all brands (this is not a swipe at switch) ....and I know of a problem right as we speak, the bit of gear needs to be sent a long way back to be looked at. Albeit the service is very good and they are very open to talking with customers to rectify issues.

A counter example. My buddy had issues with a bladder, guys at the local (wa surf) took his kite to look at and fix, lent him another kite to use.

I've done with this many times with kites and bars, with a number of retailers in WA.

Been looking for a certain bar lately, Jason at Westoz lent me bar to try. I needed some CFly footstrapd and pads ASAP and I could just drop in there and grab them.

That's the difference of having a local presence and something we should all contribute to if possible.

However a very good deal is a very good deal and I won't judge anyone who takes that opportunity. But the difference has to be significant. Crew that save themselves 50 bucks here, 100 bucks there, that I don't get.

Also as you know I have the opportunity to try a lot of kites, multiple kites at times back to back (and so do others around here) and that is an invaluable service local providers allow. Just demoed a kite from Phil at KSS and also two kites from Action sports in scabs.

Hence when I can my money is spent with these guys.

Not too mention too lightly that a lot of the good local providers also keep some benchmarks regarding lessons as well.

Nice to have a stocked local. I bet those are few and far between... we're back to that old point though aren't we.

Kitepower Australia said..

Gross Profit, is a long way from Net Profit. Nothing serves the local retail industry worse than all these discussions of gross profit and percentage margin, these big numbers look good on your puter screen, and make people think shop owners are lazy greedy profiteers, but nothing could be further from the truth in most cases.
Net Profit is what feeds shop owners and their families, and when volumes in a low volume market go down because people "think" they are getting ripped off here and "think" they are getting a better deal from some online webshop, then it gets even harder to see some profit at the end of the day. Plummets earlier example of selling 1 item and making $40 against selling 10 items and making $10 per item works when you have a massive customer base and population, but it does not work here in Australia at all.

Local shops are the ones that keep you going when you need something, they help with beach access issues, and all sorts of other things like demos etc. If we don't support local, then the sport will die off, and the only winners in the end will be overseas based online webshops.

An example for thought, last night worked back till 7pm doing a deal for 3 Cabrinha kites, 1 board, 2 harnesses and accessories, matching a quote that came from a well known overseas discount online store. We won the deal, on price and service - we had the stock, the online store could not deliver for 2-3 weeks, basically because they mostly don't order stock until the customer actually clicks "purchase now".

Think the big question on all of this is not about margin but more about what needs to happen in order that local guys can compete (by compete I mean advertise at similar prices) on a like for like basis with those offering big discounts via the net? Thoughts?

Kitepower Australia said..
Plummets earlier example of selling 1 item and making $40 against selling 10 items and making $10 per item works when you have a massive customer base and population, but it does not work here in Australia at all.

ahh.,.... why do people pick one thing out of context and run with it?

I'm not saying sell everything at low margins. Sell them at the highest margin you can. But don't walk away from sales if you still have some margin left.....

Anyway from a buyers perspective.

I want more than I can afford. I also want the best gear. I also have other sports. buggying, landboarding, longboardskating, mountainbiking.
Each one of these sports requires money spent on it. Plus I have 3 kids and 1 income, mortgage..... blah blah blah.... the money spending list goes on and on.

After the war office "taxes" 98% of it there's very little left for buying kites etc..... Typically I cannot afford to buy kites at full retail. I will look for near new second hand, ex demo or run out deals like kite republic man. Or very occasionaly I can punt for a new kite. But usually i still need to negotiate a healthy discount to consider it........

So I will support the local guy if i can afford it. But, selfishly, first and foremost I will ensure that I have what I want. If that means I have to look further a field to get it then I will. In saying this I have never purchased any kite parts off online suppliers. I have always purchased locally second hand on managed to negotiate a deal from a shop/kitesupply guy (because we are smaller again here in nz there aren't many actual shops. The local guy has a day job and sells kites out the back of his van afterhours).

Now if we talked mountainbike parts. The local guys just aren't even close to competing with the online stores!... i can buy online for far less than these guys cost price!.... When the price is 70% cheaper and i know exactly what I want then I import the parts. if its within 20% i'll buy local.

Kitepower Australia said..

Gross Profit, is a long way from Net Profit. Nothing serves the local retail industry worse than all these discussions of gross profit and percentage margin, these big numbers look good on your puter screen, and make people think shop owners are lazy greedy profiteers, but nothing could be further from the truth in most cases.
Net Profit is what feeds shop owners and their families, and when volumes in a low volume market go down because people "think" they are getting ripped off here and "think" they are getting a better deal from some online webshop, then it gets even harder to see some profit at the end of the day. Plummets earlier example of selling 1 item and making $40 against selling 10 items and making $10 per item works when you have a massive customer base and population, but it does not work here in Australia at all.

Local shops are the ones that keep you going when you need something, they help with beach access issues, and all sorts of other things like demos etc. If we don't support local, then the sport will die off, and the only winners in the end will be overseas based online webshops.

An example for thought, last night worked back till 7pm doing a deal for 3 Cabrinha kites, 1 board, 2 harnesses and accessories, matching a quote that came from a well known overseas discount online store. We won the deal, on price and service - we had the stock, the online store could not deliver for 2-3 weeks, basically because they mostly don't order stock until the customer actually clicks "purchase now".

well finally something I understand in this thread. After all the talk of GP% this and that.
To be honest i can't see retail surviving against online shopping anyway so you might as well enjoy the shops while there still around cos i don't know how your going to try a harness on or pickup a bladder before the weekend with an online shop.
I also had a similar example last week to Steve after a local was recommended to buy from a UK shop from one of you guy's in this thread
Turns out he almost saved $50 by shopping online

How many shops in Australia? Y'all are talking about "local shops" like everyone lives around the corner in Ramsgate... that's a jolly big country you got there, y'know.

Low volume businesses can't afford to keep a wide variety of stock in-house, sitting on shelves waiting for that one special customer... which is why big stores do well. Unless of course, you keep buying the same crappy brand over and over - to keep the store open.

Kitepower Australia said..

An example for thought, last night worked back till 7pm doing a deal for 3 Cabrinha kites, 1 board, 2 harnesses and accessories, matching a quote that came from a well known overseas discount online store. We won the deal, on price and service - we had the stock, the online store could not deliver for 2-3 weeks, basically because they mostly don't order stock until the customer actually clicks "purchase now".

Like a convenience store, you may pay more to avoid the hassle to going to the supermarket and waiting in the queue.

Service... well, here's hoping you don't have a cantankerous, easily-offended dealer who goes into a huff and blames the down-town of his business solely on your decision to buy a used kite and bar online...

Lessons I'd predict nay be their main form of cash flow...??

Plummet said..

Kitepower Australia said..
Plummets earlier example of selling 1 item and making $40 against selling 10 items and making $10 per item works when you have a massive customer base and population, but it does not work here in Australia at all.

ahh.,.... why do people pick one thing out of context and run with it?

I'm not saying sell everything at low margins. Sell them at the highest margin you can. But don't walk away from sales if you still have some margin left.....

Anyway from a buyers perspective.

I want more than I can afford. I also want the best gear. I also have other sports. buggying, landboarding, longboardskating, mountainbiking.
Each one of these sports requires money spent on it. Plus I have 3 kids and 1 income, mortgage..... blah blah blah.... the money spending list goes on and on.

After the war office "taxes" 98% of it there's very little left for buying kites etc..... Typically I cannot afford to buy kites at full retail. I will look for near new second hand, ex demo or run out deals like kite republic man. Or very occasionaly I can punt for a new kite. But usually i still need to negotiate a healthy discount to consider it........

So I will support the local guy if i can afford it. But, selfishly, first and foremost I will ensure that I have what I want. If that means I have to look further a field to get it then I will. In saying this I have never purchased any kite parts off online suppliers. I have always purchased locally second hand on managed to negotiate a deal from a shop/kitesupply guy (because we are smaller again here in nz there aren't many actual shops. The local guy has a day job and sells kites out the back of his van afterhours).

Now if we talked mountainbike parts. The local guys just aren't even close to competing with the online stores!... i can buy online for far less than these guys cost price!.... When the price is 70% cheaper and i know exactly what I want then I import the parts. if its within 20% i'll buy local.

Why did you think that I was taking one aspect out of context? I also never accused you of saying that shops should sell everything at low margin. I was simply agreeing with your example, but also stating that is does not work in a country with a small population.
MTB parts, for starters bikes are a humungous market in a global sense, and he market is much older and more mature, with many retail options. I bought a used camera lens today overseas, simply because the local retailer whom I've spent heaps with was not bother to follow up on my enquiry and no other shop in oz had stock or would follow up my enquiry, I gave them nearly 3 months, then spotted a good used one overseas and bit the bullet this morning. The new price for the lens was not that different from oz, but this used one was over 40% less than new price here and is supposed to be in VGC.

In the UK i was talking to one shop owner when I was there in July and he said the majority of his sales come from online ordering.
In Germany too when you order online stuff was delivered within 1 - 2 days and if it was wrong size etc there is a free of charge return to sender option available. got my entire snowboarding set up for around 40% of the RRP of the gear.

Unfortunately for Australia I think our high wages are what's killing us, it's a shame we are losing so much manufacturing too when a lot of countries (UK and US included) are working on bringing manufacturing back to their shores. We'll be suffering soon enough I think.