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Why are Kites so damn expensive

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wakijis
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Re: Why is Reedin Kites so damn expensive

Postby wakijis » Thu May 13, 2021 9:22 am

dice wrote:
Thu May 13, 2021 6:48 am
wakijis wrote:
Thu Apr 29, 2021 9:49 pm
Long time reader of the forum and now finally the need to write something made me create an account.

Maybe you want to ask your local dealer why he is selling a kite for 1349 while he is paying roughtly 660 for it. I wonder how much he pays for the other ones listed.
I also wonder how much the company pays for the production of the kite in china and how high the material cost are in the end. If you cut it down: same margin for reatailer, company and producer you´ll end up with your life hanging on 150 bucks of material.
This is simply how the world works. The material is only a little part of the costs.
You have manhours, R&D, transport, storage, administration, taxes, profit, ...
I'm still amazed about how little people know about this.
Look at restaurants, look at how much you have to pay there and look at how much you have to pay when you make it yourself at home.
Huge price difference right? Wow they must be scammers then, the material cost is so little :roll:

The world runs on demand and supply.
So you think a 72,5% margin only for the retailer is fine, because that´s what we are talking about here.
The median of products traded for where I´m from is 33,2%, which includes fresh vegetables, which are traded at roughtly 100% (but hey, fresh stuff, you know - gets "unfresh").
It would be interesting to know how other companies prices come up, i.e. if they put the same margins on retailers.

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Re: Why is Reedin Kites so damn expensive

Postby Matteo V » Thu May 13, 2021 1:36 pm

wakijis wrote:
Thu May 13, 2021 9:22 am
So you think a 72,5% margin only for the retailer is fine, because that´s what we are talking about here.
The median of products traded for where I´m from is 33,2%, which includes fresh vegetables, which are traded at roughtly 100% (but hey, fresh stuff, you know - gets "unfresh").
It would be interesting to know how other companies prices come up, i.e. if they put the same margins on retailers.
Why only a 72,5% margin? Why not a 172,5% margin?

The answer is competition. Margins are typically capped at a rate that maximizes profit, without allowing room for unwanted competition. If too high a profit is taken from somewhere in the supply line (or multiple places) links in the supply chain, then there is opportunity for new companies to enter the market. And there is nothing that kite companies hate more than competition.

In the luxury recreational industry, there is also quite a bit of discretion on the part of the buyer. No one needs to kite to survive (though it sometimes feels like I do). Thus a company which can provide 2 kites for the price of 1 kite from another company, given similar actual quality, will steal market share from the more expensive company. Given "economies of scale", this lost sale hurts the more expensive company more than just the loss of one sale. It reduces that companies volume purchasing power, while at the same time increasing the volume purchasing power of the lower priced company.

So again, you can see that there is more of a cap at the upper limit, as opposed to a lower limit. Just be thankful that cap is on the top. You wouldn't want to be a buyer in a market where competition is restricted to the point that companies can charge what ever they want.

dice
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Re: Why is Reedin Kites so damn expensive

Postby dice » Thu May 13, 2021 3:46 pm

wakijis wrote:
Thu May 13, 2021 9:22 am
So you think a 72,5% margin only for the retailer is fine, because that´s what we are talking about here.
The median of products traded for where I´m from is 33,2%, which includes fresh vegetables, which are traded at roughtly 100% (but hey, fresh stuff, you know - gets "unfresh").
It would be interesting to know how other companies prices come up, i.e. if they put the same margins on retailers.
Yes that's definitely fine. People still buy them right? So why should the retailer lower their price?
They are not forcing anyone to buy them. You always could wait another year and buy them with a big price drop.

I think that you'd be very surprised if you knew about all the margins in the world.
72,5% for kites is really not that exceptional.

Raynski
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Re: Why is Reedin Kites so damn expensive

Postby Raynski » Thu May 13, 2021 3:53 pm

Exactly the reason why I either buy used/secondhand or cheaper brands like Ventum or others.

I refuse to pay those exorbitant amounts for almost little to no increase in tech. Absolute madness some of these amounts
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Kitemenn
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Re: Why is Reedin Kites so damn expensive

Postby Kitemenn » Thu May 13, 2021 7:27 pm

dice wrote:
Thu May 13, 2021 6:48 am
wakijis wrote:
Thu Apr 29, 2021 9:49 pm
Long time reader of the forum and now finally the need to write something made me create an account.

Maybe you want to ask your local dealer why he is selling a kite for 1349 while he is paying roughtly 660 for it. I wonder how much he pays for the other ones listed.
I also wonder how much the company pays for the production of the kite in china and how high the material cost are in the end. If you cut it down: same margin for reatailer, company and producer you´ll end up with your life hanging on 150 bucks of material.
This is simply how the world works. The material is only a little part of the costs.
You have manhours, R&D, transport, storage, administration, taxes, profit, ...
I'm still amazed about how little people know about this.
Look at restaurants, look at how much you have to pay there and look at how much you have to pay when you make it yourself at home.
Huge price difference right? Wow they must be scammers then, the material cost is so little :roll:

The world runs on demand and supply.
Thanks Dice that maybe the best explanation on how the chain works and where the price difference comes from material to actual product!

That being said there is a lot of money lost in the chain which some small brands cut out and this saves you in the end a big deal! Buying a 3 quiver kite duotone is with discounts still 3500€ where the smaller brands this is around 2200€ thats still quite a lot of money which can be spent better somewhere else

NotsoShort
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Re: Why is Reedin Kites so damn expensive

Postby NotsoShort » Thu May 13, 2021 8:03 pm

It’s also down to the market which the industry believes makes it sustainable. The rub is when it starts to exceed people expendable income. It’s frustrating when you take up something you enjoy and then it becomes something for a certain pay band can enjoy if buying new gear. What you pay for an incomplete kite today is more than a kite package including kite, bar, harness and board (with straps) 10 years ago.

It’s probably a poor comparison. Most people don’t mind paying more on things for the experience within their expendable income range. Eg. Go for a drink down the pub. A pint cost average £5 at pub. I could go to a supermarket and get a couple of pints for £5. I feel kitesurfing is edging this way like windsurfing, it may be the way the world works but it’s going to eventually out price a majority. Most of the local kite shops are not pure and are branching off into other water sports, to sustain

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Re: Why is Reedin Kites so damn expensive

Postby tautologies » Thu May 13, 2021 8:24 pm

I would challenge the numbers here. I think Wakijis is comparing apples and oranges.

The margins for the retailer is not anywhere near 72%. I would guss it could be closer to maybe 30-35%. The margins including the importer I can imagine being nearer the mark, but it would be false to say the store price is whatever the price for an importer is. The shop simply cannot sell the kite at lower prices because it would ruin the market for other shops and no brand would allow that.

Several brands have shown that shops are needed to grow beyond the initial production.

wakijis
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Re: Why is Reedin Kites so damn expensive

Postby wakijis » Thu May 13, 2021 8:40 pm

tautologies wrote:
Thu May 13, 2021 8:24 pm
I would challenge the numbers here. I think Wakijis is comparing apples and oranges.

The margins for the retailer is not anywhere near 72%. I would guss it could be closer to maybe 30-35%.
Sadly you are wrong. Reedin dealer pricelist calls 656,86€ for a new SM v2. Subtract the taxes and that leaves you at 72,5% margin for the retailer.
Frankly speaking this is the internetz, everyone can say anything. You want verification? Contact Reedin, or their retailers.

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BillyGoatGruff
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Re: Why is Reedin Kites so damn expensive

Postby BillyGoatGruff » Thu May 13, 2021 10:36 pm

Subtract the taxes and that leaves you at 72,5% margin for the retailer.
Frankly speaking this is the internetz, everyone can say anything.
Really... If so I'm getting into kite sales, you would only need to shift a kite every 3/4days to maintain a decent living. Retailers might make 20 to 25% tops on a full RRP sale, not 72.5%.... but hey this is the internetz!

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Re: Why is Reedin Kites so damn expensive

Postby jorg » Thu May 13, 2021 11:03 pm

Here is an example from Canada.
The dealer wanted $1050 for a bar when Reedin became available in Canada. Something happened either the distributor ditched them or got ditched. Now he is selling the bar for $450. There is more than %50 margin there, for sure.


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