I noticed on the board a reference was made to the fact that prices of rod building components have been discounted. I have not found that to be the case. I realize that over time, prices seem to rise, but after checking my invoices, the prices have risen significantly. Even the 2009 catalogue of a couple of the shops have significant increases. I do not have a state license, so I pay retail. After looking at what I want to order and the costs now, I really don't see a discount on any of the items. I am going to order in any case, but I will be paying more than less than a year ago.
Sanford Hochman

Sanford;
I believe the comment was more along the lines that the profit margins have gotten so small that even with the higher price tags. There is little room to provide bigger discounts.

That is correct. Dealers are selling more product than ever, but making less money than ever before.

Nobody pays retail, except for a very few items. You may not be buying wholesale, but you're not paying retail. Few dealers can charge retail and stay in business. Most everything now sells at a substantial discount.

..............

Check out the sponsors for any sales

Bill - willierods.com

Work with the sponsors. Have them spec the rods possibly, let their knowledge direct you to the best components for what you need to build. They know what may be specially priced. Good suppliers have to make a profit. If they do not, they go away.

You will get better pricing by buying correctly from you suppliers. Try to buy the whole build from 1 supplier, if possible. Compared to buying from 4, you can save $20.00 just in shipping. A lot of their costs go up also. Manufacturing usually does see a discount in operating costs. Not without cutting quality, and/or services. I do not like rods with cardbard shimms, but they are out there cheap. We tend to always want to use the best products for building. The best is never the cheapest.

As Bill said above, shop the deals. When you see a good reel seat, or guides on special, buy a few, as long as you know you will use them. It is kind of like buying winding checks. Why buy 1, buy $200 worth, they shipping and handling costs are the same. You can ship a lot of parts for $6.00. Or 1 reel seat.

As a person builds and sells rods, their costs are reflected in the selling prices. Sometimes a builder wants to compete with the $50 rods on the market. Can't do that. I have seen some kits that are very reasonably priced, with good quality blanks. It all depends on what the builder wants.

I own a business in the art field. I have never seen any product costs go down. Suppliers do run specials, and bargins on discontinued, or last years inventory. These are the times to shop for bargins. They are out there, just got to go look. Does the cost of carrying a small inventory of supplies offset the cost of money, plus the reduced shipping. This is true in almosty all businesses.

What Sanford said is true. But as Tom said, margins are less for everybody. This tends to happen in a recession. Fat gets trimmed, so do margins. But sometimes in the long run, there may be some efficiencies found also.

Our suppliers are busting their butts trying to keep the prices in line, and still stay in business. This is the one thing we can be sure of. Without they doing this, costs would be a lot higher than we see now.

Kyle Robinson



Edited 1 time(s). Last edit at 01/01/2010 12:20PM by Kyle Robinson.

The last time I built a rod was in the '80s. Pricewise something that has changed is that it used to be that you could build a rod with a "name brand" blank and comparable components for less than the cost of a factory rod. Today the "name brand" blanks are priced so that's no longer the case. And if you add the shipping cost for components and the oversized package costs for buying blanks, the cost is going to be higher to build a "famous name" rod compared to buying a factory built rod from a "free shipping" warehouse store. For professional builders that can buy in bulk, and that can make a better rod that is customized to the user's needs that's fine, but it does discourage the casual "hobby builders" that just build an occasional rod.

Dan

P.S. I'd love to see a supplier that ships free on orders over $100, etc.

The reason they can't ship for free even on a $100 sale is that there isn't enough margin in a $100 sale these days to cover the shipping of a rod blank. I know several people that have gotten into the component business in the few years and most have had a somewhat sour awakening as to what the component business is really like these days. It is not a lucrative business in any way, shape or form.

Another thing to keep in mind, is that in the 1980's the available product selection was extremely limited compared to what we have available today. The lower end blanks offered in the 80's was most often junk. Today, there are numerous products at the lower end that offer exceptional value and allow the builder to complete and sell a very good rod for not very much money.

.................

Let me give you an example of margins from a real live example that we were advised of just today...

We just got a price increase notification this morning. No notice, effective today, a 15% price increase at the "wholesale" level. The price at RETAIL is un-changed. On top of that, the "Packager/Distributor" also maintains a retail business and to compete with him after today's price increase, we make a whopping 22% GPM. I don't even think a "Dealer" working out of a "home business" can operate on that. Now throw in a building to do business from, business insurance, employees and their health insurance, advertising, utilities, etc, etc, etc... and you're well past 22%. Oh yeah, and I'm supposed to make a living too?

Luckily this is a worst case and something that I don't plan on putting up with for long. But even from real live "manufacturers", margins aren't what you probably think they are. The higher the price, the lower the margin. Low $$ items generally carry a higher GM for a dealer, however making a living on high margin $0.05 items isn't anything I've been able to do.

I should aslo add that we're shipping free on $250. Even at that, if you were to pick the right combination of blanks, we'd lose money on the sale!

Mark Griffin
[]
C&M Custom Tackle
San Dimas, California



Edited 1 time(s). Last edit at 01/01/2010 03:26PM by Mark Griffin.

Tom Kirkman Wrote:
-------------------------------------------------------
> The reason they can't ship for free even on a $100
> sale is that there isn't enough margin in a $100
> sale these days to cover the shipping of a rod
> blank. I know several people that have gotten
> into the component business in the few years and
> most have had a somewhat sour awakening as to what
> the component business is really like these days.
> It is not a lucrative business in any way, shape
> or form.
>
> Another thing to keep in mind, is that in the
> 1980's the available product selection was
> extremely limited compared to what we have
> available today. The lower end blanks offered in
> the 80's was most often junk. Today, there are
> numerous products at the lower end that offer
> exceptional value and allow the builder to
> complete and sell a very good rod for not very
> much money.
>
> .................

I'm not faulting the rod building component suppliers for the cost of components or shipping. My point was that the "name brand" domestic blank manufacturers are holding their prices high relative to their finished rods in my opinion and are squeezing many hobby builders out of the picture. If that's what they have to do to stay in business in the competitive market with import rods, that's fine, and I do appreciate that they make their blanks available to the public. It is a bit grating to pay $20 - $25 to have a blank and components shipped, when you can buy factory rods with free shipping on all orders over $50, etc. and living in "the sticks" there aren't any sources available in this area.

As to the rods and blanks in the 1980's, yes, the selection and quality compared to today were bad, but "top" quality Fenwick blanks could be built on for less than a factory rod. And as to selection, I had to build my first flipping stick because they weren't offered as completed rods in any of the catalogs I had at that time.

Like with most things, there were good and bad things about "the good old days."

Dan

I totally agree with Mark. In the old days when you built a rod you discovered it cost a lot more than a shelf rod. Now you discovered the craft of custom rod building and made a few bucks. In todays world everyone wants a piece of the pie. Newbies have discovered it is better to get a retail license and save. Then they discovered what it cost to open a small shop. What I have found is to get the best deals is to do business with a select group of suppliers, do not piece meal your orders Look a head and figure out what you may be purchasing in the near or distant future and stock pile. No matter what. When I first started out 30 plus years ago. for every custom order I also ordered a extra blank and four component parts. In no time at all I had a good selection of guides, grips, reel seats and thread. I can almost guarantee by next year you will see a increase from every one. Just remember if you are a custom builder you dedicate what you rod will cost your customer never give your talent away. Time is money and you have spent lots of time knowing your craft

Good Wraps Bob

Happy New Year Bob:

That's all well and good, But check out whats on the shelves. Split grips, split seats, colored blanks, and some one here had mentioned that maybe micros will be coming soon ??

Bill - willierods.com

My biggest gripe is with the way that most suppliers charge based on the amount of the order, as opposed to charging actual shipping costs.

George, thats the only real feasible way to do business online. The reason is the volume of orders they get on a daily basis. Business 101: you pay someone hourly to sit and watch the orders come in, figure out how much it will cost by each carrier and then send out via the least expensive one. You'd have to have someone doing this 24hours, (maybe even 2-4 people for some of the higher volume distributors)a day by the way, dont forget their health insurance, your added expense of paying said person/people, keeping the lights on now 24hours, having a managerial type person there as well during overnight hours which equates to another employee. All this would simply do is end up making components more costly, but hey, you'd pay exact shipping.

No one likes shipping the way it is, but IMO it's the way it makes the most sense.

Sean Cheaney Wrote:
-------------------------------------------------------
> Business 101:
> you pay someone hourly to sit and watch the orders
> come in, figure out how much it will cost by each
> carrier and then send out via the least expensive
> one. You'd have to have someone doing this
> 24hours, (maybe even 2-4 people for some of the
> higher volume distributors)a day by the way, dont
> forget their health insurance, your added expense
> of paying said person/people, keeping the lights
> on now 24hours, having a managerial type person
> there as well during overnight hours which equates
> to another employee. All this would simply do is
> end up making components more costly, but hey,
> you'd pay exact shipping.
>
> No one likes shipping the way it is, but IMO it's
> the way it makes the most sense.

Where there is a will there is a way.

A simple data base with a look up table linked to the on-line order form would negate the issue with no addtional support people. We have one admin that supports our $10M a year parts business. :)

Helpful thread in allowing me to understand the challenges dealers are facing.

Thanks,
Mo

ps: Did Fuji raise their wholesale cost already in 2010?

Sean Cheaney Wrote:
-------------------------------------------------------
> George, thats the only real feasible way to do
> business online. The reason is the volume of
> orders they get on a daily basis. Business 101:
> you pay someone hourly to sit and watch the orders
> come in, figure out how much it will cost by each
> carrier and then send out via the least expensive
> one. You'd have to have someone doing this
> 24hours, (maybe even 2-4 people for some of the
> higher volume distributors)a day by the way, dont
> forget their health insurance, your added expense
> of paying said person/people, keeping the lights
> on now 24hours, having a managerial type person
> there as well during overnight hours which equates
> to another employee. All this would simply do is
> end up making components more costly, but hey,
> you'd pay exact shipping.
>
> No one likes shipping the way it is, but IMO it's
> the way it makes the most sense.


Hmmm... Maybe that's why I'm not rich yet. That's how we figure our shipping charges (we charge actual cost), but haven't adjusted prices up to cover it.

Clyde,

We looked at having shopping cart software written that would go down to calculate a correct price on items as light as a micro guide, however the odd sizes, shapes and combination of items that we ship still threw it off, and it was EXPENSIVE to put online. The programmer suggested "padding' the weights a little to cover it, however a little padding on 100 guides was more than we were comfortable with.

Mark Griffin
[]
C&M Custom Tackle
San Dimas, California

Fuji has only one supplier in the States that I know of. So their price is predicated on what the supplier wants to charge. Most dealers charge the same price. As mentioned earlier, if you have a business lic. and buy in quantity you can save a bunch. If you are just a hobbyist plan on not saving a thing. Your only savings is you can build a better quality rod than a off the shelf product even using the same parts

Good Wraps Bob

Those that want to save money ... come to the Expo and bring cash.

You can buy enough stuff at a single show to last one, two or even three years. Best of all, you can touch it all before spending money. No need to ask anyone about the action, the color or anything else - feel and look for yourself. There are some items which are completely unique and unavailable at other times. If that isn't enough, you can follow the crowd at night and be thoroughly entertained.

From what I have been told get in early and make a plan what you want to see first, then shop. Also Tom has made arrangements for UPS to be there. That means you do not have to worry about getting it home

Good Wraps Bob