Thanks gabe, I am fairly new to rod building and att least 90% of my original questions I ask on this fourm done get answered, It seems no one reads the first post they just follow off the last post made. Scooty

Al asked who had good service and here is an answer to the point of the question:
I've had great service from Mudhole. They aren't really that far from me (2 day ship point), I can always get somebody on the phone if I can't find something on the website I'm trying to order & the seminars they offer have been top notch.
To be honest, they're the only folks I've dealt with but because of the level of customer support and service I have no need to shop around.

Not for nothing, but before I steered teh thread off track there were 5 posts with recommendations on where to look for wholesale, one of which told you the that they all do. I would think if you were going into business, you would already have a relationship with a supplier that you are happy with. What good is getting recomendations on who has good customer service from people you dont' even know from teh internet anyhow? YOu're starting your business by basing your decision on who to purchase from based on people you dont' even know, which is a bit scary.

You can't go wrong with any of the sponsors to the left, I'm small time but I've dealt with most of them. Virtually all of the major suppliers in the industry are there and most sell wholesale. I highly doubt that you'll find any industry where the level of service and customer appreciation comes close to any of them.

I agree 110% that you should know who you like to deal with long before you think about wholesale and you should have a VALID and LEGAL rod building business to even qualify for a wholesale account. It just makes good business sense.

Steve

Bill,

I agree usually with most stuff you post about. But I can't for the life of me see what has got you so fired up with this topic. Why are you so against any business doing what they can to make a few extra bucks? Even more important, why do you feel like it is any of your business how any supplier prices or chooses account types for any of their clients? This is still America, and for the time being we are still a free market economy in which capitalism is the rule of the land. All rod builders, professional included are not created equal, and do not build for the same reasons or customer types. All rod shops don't cater to high end clients willing to pay $1000 for a fly rod because it has a snake skin inlay. I suggest you just sit back, relax, enjoy your trade and let each business or sponsor decide for themselves how they do business. How do you know that the guy with the dry cleaning business isn't an accomplished rodbuilder with a full blown rod shop in his back storage room? It doesn't make one red cent difference to the manufacturer what price any retailer/wholesaler sells their product for. Once the retailer/wholesaler pays the manufacturer, they can charge below or three times above msrp and the manufacturer doesn't make or lose one red cent more. Retailers/wholesalers work on very small margins and will and should do whatever it takes to earn a living. They don't need backseat drivers on a message board telling them how to do business. If anyone has a better way to make money, I suggest you open your own component retail business and then you can hand pick who you think deserves wholesale purchasing status with your business.

Tony, read TOm K's post and understand what he is saying. THen you might understand the OTHER side. IF you think my post is from my own point of view, it most certainly is not. I speak to enough of the Suppliers to know none of them are stupid enough to post what I did, but they know what I've posted is the truth.

"Hardly a week goes by when I don't get a call or email from a rod builder who has decided to "get into the component business." They see it as a something that must be extremely profitable and requires very little investment. Most of those who have taken the plunge found out quickly that it's not the road to easy street that they thought it was. Many, if not most, go by the wayside in short order, but the sales and discounts they offered while they were trying to gain some market share greatly undermined the long time "brick and mortar" dealers. "

COmbine TOm's quote, with teh fact that a great number of guys are looking to get wholesale pricing for no other reason thatn to save money on their own personal rods. I dont' know if I'm allowed to post that in public becasue I'll get everyone in a huff again - but it is what it is. THat is a major problem for this industry, as teh slim margins just got slimmer, and a heck of a lot of these "pro's" really have no clue what they are doing and have to have their hand held each time thy place an order. I guess I shouldn't post that either, but once again - that is how it is.

We're back off the topic again, but there is something here worth pursuing so I'll add this. Billy and the other dealers will understand what I'm about to say.

Guys often ask why there aren't more rod building component supply dealers located in their area. They'd like to be able to shop locally and in person for rod building supplies. There are several reasons that isn't ever likely to happen and I'll give you one of those reasons below.

I opened a custom rod building shop, a brick and mortar store, in 1988. Because I did so much business I was buying wholesale and in some cases was buying direct from the manufacturers (this was back when direct manufacturer buy-ins required an up front investment of $3000 to $10,000). I set aside an area in the front of my store and kept a wall full of rod building components. Kept about 200 blanks on hand and plenty of other stuff to go along with them. All for sale at prices that were comparable to say, Cabelas, which was known for good prices on components. There were a number of rod builders in a 50 to 100 mile radius that visited and shopped with me. We all benefitted.

Then, one of my customers, who did not operate a rod building business (at least not a legitimate one, on the books and reporting FET) found out that one of my suppliers would sell to him at the same price they were selling to me if he had any sort of business license. He gave them his electrical contractor's license and they set him up with a wholesale account, same price as they were giving me. Word got around and others sent in their non rod building business licenses as well. Pretty soon that very supplier, that I was buying from, became my biggest competitor, selling to retail customers at the same rate they were selling to me. Enough guys eventually sent in their various non-rod building business licenses that it pretty much cut my rod building supply business by enough that it was no longer worth pursuing further. So the region lost its only walk-in component supply business. (And the same guys who had stopped buying from me then started complaining that they had nowhere to actually go and look at the blanks and other stuff.)

As long as this goes on, few people can afford to operate a legitimate walk-in rod building supply business. It is up to the manufacturers, distributors and dealers to determine who and how they want to sell, but some practices build a strong industry and others weaken in. The rod building industry is weaker than it has ever been. In fact, it is dangerously weak right now.

One last thing for Tony - I appreciate and understand your comments but would like to add this,

"How do you know that the guy with the dry cleaning business isn't an accomplished rodbuilder with a full blown rod shop in his back storage room?"

If he's an accomplished rod builder with a full blown shop in his back room and is selling rods to the public, then he'll have a business license for his rod building business which he can provide to the dealer for access to wholesale pricing. The only reason I can see for someone providing some other type of business license would be because they do not, in fact, have a legitimate rod building business. They may simply be wanting to save a few bucks on the pieces they buy for themselves or they may be hiding from the tax man and therefore have not applied for such a license.

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Or he may actually just not want to deal with the headaches of having two different business entities to report when one will do? I can sell cars and toothbrushes out of the same building and still only need one business license.

My only issue is that someone, started this post by asking a simple question. He was in my opinion fired apon for no good reason, basically in an attempt to aire an off topic beef. This topic is a great topic to discuss, and many above stated points are very valid, but this topic should have its own thread. If this person is a single rod builder or a rod business and should or should not get wholesale pricing is for the business he is speaking with at the time to decide, not any of ours. One possible solution for a supplier is to not simply ask for a FIN, anyone can get one of those for many reasons, and that alone can't possibly speak to the validity or scope of any business. Ask to see their latest excise tax filing.

Nothing wrong with a little competition guys. It makes us all tighten up our skirts and sharpen our pencils-who wins? The consumer, our customers. You have to produce a higher quality product at a competitve price or your out.

For the record, I don't know the original poster of this thread, and can't speak for their intentions, just didn't think the attack on his attempt to get wholesale pricing was warranted.

To the original poster of this thread. I have really only had significant dealings with three of the sponsors on the left. All of them, and a few more for specialty items, have proven to be extremely good at customer service. I think as already stated, you can't go wrong with any of them. If you think you deserve wholesale pricing, by all means apply for it.

There is one more aspect of this that I haven't seen mentioned here. In Minnesota, if you buy parts wholesale and build a rod for personal use you must pay MN "personal use" sales tax on it. It's on the honor system of course. It may be the same in other states as well.

Tony,

It may be a hassle, but it's the law. A rod building business will require a different code on his schedule C than his other business. Again, that's the law.

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Maybe so on a Schedule C - 1040 - so you have some evidence there. But that's a sole prop.

What about the guy who is incorporated, has an LLC, etc that has a diversified business who files corporate returns? (I can't speak to this as mine is done by an accountant and I don't have the returns in front of me at the moment.)

Many different facets to all this.

One of the big things I notice as well hurting the industry is the failure to impose minimum advertised pricing and minimum price point. If it's there, I don't see it. Many other industries, including those in fishing, have supported their distributors by enlisting such measures. I believe even some of the reel companies maintain this among distributors. I know it's that case in the jewelry industry. One reason Rolex has maintained their reputation and status is because they review what stores are selling the watches for. If they are selling at reduced costs, the line gets pulled and given to another jeweler. Harsh, but it protects the manufacturer and the distributor and to some point the end buyer. Hearts On Fire has the same protocol. Not too many questions asked either prior to pulling the line.

I'd think a thorough review of all this would probably need to include what protectionary measures are between the manfacturers and distributors prior to any sales being conducted.

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Alex,

Price setting only protects the big companies, not the manufacturer, or the consumer. Smaller shops willing to work on a smaller margin are told that you can't sell below MSRP because that is the price Cabelas needs to make their margins. The consumer loses out by having to pay too much, so that Cabelas can make $50 on a single Tekota reel, maybe more depending on how far above MSRP they risk going this month. I am not going to argue if Monopolies are good for any industry, souds like that is what some want. Sounds like a lot of sour apples to me.

Tom, you or I are not tax professionals, we live in different states, you don't have the same accountant I have, so an argument over scemantics of tax law is a waste of time, and not what this thread was supposed to be about. My taxes have survived the scrutiny of IRS re-examinations.

I am just going to bow out because I am not going to beat my head against a wall with elitist mindsets. Being stuck in an old paradigm mindset is what has killed several industries in this country, times change, we have to change with them or risk being run over.

Tony,

No offense intended - you probably don't know of my history with the Sportsfishing FET. You made an incorrect assumption about what I know about taxes (particularly that one). We'll agree to disagree and move on from there.

The entire scenario we got off on was just a "for instance." The fact is, there are many rod builders who are not in the "business" of rod building, and yet have managed to get wholesale prices that were once the property of legitimate rod building businesses. It's hurt them, and it's hurt the industry. Many long time companies, brick and mortar stores built on service, are really hurting. I doubt many rod builders know the real situation for so many builders and dealers right now. It's not pretty and it's been caused by short-sighted business practices within this industry.

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Alex,

What you mention is called "Fair Trade Pricing." It benefits everyone, but mostly the smaller, independent retailers. With it, they buy for the same price as Cabelas and Bass Pro, and because all have to sell for the same price, competition becomes one of who offers the best service and help, not who has the lowest price.

Fair Trade Pricing built the fly fishing business into the envy of the entire fishing tackle industry over the past 20 years. It's a matter of fact. Yes prices were higher, but the consumer won because it created a strong, service oriented, regional fly fishing trade. It's what the rod building industry needs if it's going to get stronger. The big companies can always get by on smaller margins due the quantity they sell, but the little guy needs those higher margins if he's to stay afloat. In the fly fishing industry, Cabelas pays the same for an item as "Joe's Fly Tackle" and they both sell it for the same price. And, there is dealer territory protection (a little harder to do now in the internet age) and limited numbers of dealers for each manufacturer. That keeps each slice of the pie large enough so that all can do well. We know it worked - the proof is still there.

The idea that price wars, continual sales and all that sort of stuff somehow benefit the consumer is very short sighted. In the long run, it results in fewer places to buy product, less selection and far less service. And it will happen to the rod building industry if changes aren't soon instituted. We have the sad history of the general fishing tackle market to learn from.

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Edited 1 time(s). Last edit at 04/23/2009 05:25PM by Tom Kirkman.

IMO, the REAL issue is that everyone is NOT on a level playing field and they should be ... as a matter of fact, the laws of this country specifically state that they are entitled to be.

Anyone building rods for profit who is not collecting/remitting taxes, reporting income AND holding the proper licenses is breaking the law. It is not a question of "sharp pencils" and a "free economy". By LAW, I am entitled to ONLY compete with those that are similarly encumbered.



As far as component pricing, here are my thoughts and observations:

IF you are a hobbyist (no legitimate business), IMO you should be buying at "retail pricing".
IF you are a professional (business licenses, taxes collected and remitted, etc.) IMO you should be buying at "wholesale pricing".

Anything less than the above structure and a chaos economy results. Once that happens, decay begins to eat at all levels and NO ONE has the ability to generate profits to sustain their endeavors.

Obviously, this IS a free country and capitalist economy ... pricing is controlled by individual vendors. However, all of them really need to start thinking long-term and not short-term. The same can be said for manufacturers and others that are involved in the marketplace.

The best thing that could possibly happen in the near future is the forming of a "trade association" among the manufacturers and distributors. This would allow controls to be put into place to properly manage the marketplace and therefore restrict predatory practices.

I am not going to try to predict the future ... but things are NOT going the way that most think they are. What I am seeing currently, will leave everyone paying MORE for components AND having fewer choices, not the other way around - it is just a matter of time.

"By LAW, I am entitled to ONLY compete with those that are similarly encumbered."

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Jim,

That was very well put and not only is it right and fair, but it is the only way that any business model can not only prosper, but survive over the long haul.

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There is no need to speculate what happens in these situations. Look at the parallel histories of the general fishing tackle business versus that of the fly fishing business in the last twenty years!

The general fishing tackle business went to the highest bidder and lowest seller. Prices were slashed, discounts were offered. Mom and Pop shops closed by the thousands leaving most fishermen no choice but to shop at Wally World, Bass Pro and Cabelas. They bought it cheaper and sold it cheaper. Loss leaders, low margins and high volumes. They drove the independent dealers out. I wonder if the average fisherman really won in this case?

Compare the fly fishing business. They went whole hog on the fair trade pricing thing. Everybody including Bass Pro and Cabelas bought at the same level and sold for the same price. The independent Mom and Pops survived and thrived because the big box stores could not run them out by selling for less. The fly fisherman won because he was likely to have a local fly fishing shop where he could get lessons, see the tackle in person, get real service and advice. I bet fly fishing does not make up even ten percent of the total fishing tackle business but in many places you are more apt to find a fly fishing shop that you are a real fishing tackle shop.

The different trade practices of both industries has left us with a history that proves what’s what. No need to guess.......just look!

Interesting... Thanks for sharing the fly fishing history. Does make a good business model comparison.

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I was at the ASA show in Atlanta the year (1987 I think) the fly fishing people broke away and formed their own trade group. It has been a tremendous success. An excellent business model for the rod building industry to emulate, if it only would.

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JIM, very well spoken and to the point, I hope everyone visiting this forum will read this and take it to heart. I also have a concern with some of the manufacturers letting so many builders buy directly from them at different levels and omitting the rod building supply businesses from those sales. It leaves them with only supplying small components and materials that the manufacturers don't carry and don't want to sell. There's no doubt its a nickle and dime business leaving the rod building supply business fewer nickles and dimes. One thing that Loomis did a good job with several years back by going to a handful of reputable US dealers and not selling directly to rod-builders whether they had a storefront brick and mortar store or building in there basement, a good level playing field. Its there right to sell to whom they want how they want, just hope it don't deteriorate the rod-building suppliers business to a point where there are too few that can sustain.
Back to the question asked, contact Fishsticks, Mudhole and Custom Tackle, I know they can let you know what they require for wholesale pricing. These are the only suppliers I have used and can comment on, all which has served me well.

Mike Thompson
Thompson's Custom Rods

It is impossible to make anything foolproof, because fools are so ingenious!

You know what I think is funny, the individual that asked the question to start this post has not posted any comments.... If he is new to this site and is new to this business, he must be pretty intimidated over the extent of this discussion. I agree and disagree with many coments posted here. I'm like many of you scanning this, low budget working 40 hours a week at a job that I don't 100% care for...... At least I have a job, that is what todays economy is telling me. I am not a business man, but I love this trade, I love the look I see in peoples eyes when they see the rods that I build. I pray that some day I can make a living doing this. They say find something you love to do, and you will find a way to make a living out of it. We live in a big market world, the rich get richer and the poor get poorer, the big thing that I have seen is the lack of customer service. The day of the Ma and Pa shop may be gone, but I can tell you one thing, I will pay more to go to a place where the person selling me really cares, the person knows my name and I can have a five minute conversation with this person on a human level. This site has been so helpfull to me, learning and reading these post's. I would say that I didn't really build rods before I started visiting this site, I just assembled them. I purchase whole sale, and I pay my taxes and my SPET, I am small time, but you know what.... at the end of the day, I'm just another American trying make my way through life doing something that I love..... And That's all I have to say about that ( Forrest Gump

Thanks for reading my rant,
Steve

Steve Bro
(BroCo Custom Rods)