How's your Fly Shop doing?

Discussion in 'Fly Fishing Forum' started by Steelie Mike, Nov 18, 2009.

  1. HauntedByWaters

    HauntedByWaters Active Member

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    Well my buddies and I could never and would never pay for a fancy trip to Alaska and yet we sport all that fancy gear.

    Why?

    Because it is the best quality and is built to last.


    Your thinking is based on the experience of a guy who is merely interested in fly fishing. If you get deeper into it and start meeting people, you will realize that many of us fly folks are passionate about this and will be doing it until we die. If it is what you do with all your free time, you are doing yourself a favor by buying quality stuff. You actually save money in the long run.
     
  2. Kent Lufkin

    Kent Lufkin Remember when you could remember everything?

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    No debate whatsoever! Of course you're exactly right - larger stores order more product which means they qualify for deeper discounts from the manufacturers whose products they sell.

    The problem with the MSRP fixed pricing model is that all stores who offer protected products have to sell them for the same price (there are exceptions, but that's the general rule*.) This penalizes smaller shops since their profit margin (the difference between their 'wholesale' cost and the fixed retail price) is thus smaller. So the bigger stores make a higher margin due to their lower wholesale cost while selling the product at the same retail price as the small shops.

    The big get bigger while the small struggle to remain alive. It's a modern twist on survival of the fittest, just like Darwin predicted!

    * It's obviously in a manufacturer's best interests for all their retail outlets to maintain MSRP pricing. However, since they make the rules, they can also choose when, if ever, to break them.

    One example might be when Sage recently decided to reissue their XP rod line, but only offer it through Cabelas. Since nobody else could sell that line, Sage presumably negotiated with Cabelas to set a retail price that may or may not have been the same as when the line was offered by all shops several years ago. Since there were no other XPs available for sale anywhere else, there was no contradiction in pricing between various competing outlets.​

    K
     
  3. pmjasper

    pmjasper Member

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    Correct guys....maybe my terminology was wrong but the point I was trying to make is that Peen Reels charged my buddy "X" price, which was not necessarily the "retail" price but it wasn't that far off from there. In comparison, their own representative explained to him that larger stores like Dicks Sporting Goods, Bass Pro Shops, Cabelas, etc., who order thousands of reels, would get a larger "discount" because of the quantity they reached in their agreement. Therefore, just as an example and not an actual price, if Cabelas charged $50 for a reel and made a small profit off of each sale, my buddy needed to sell the reel for $55 or $60 to have a similar profit. He did own a legit bait and tackle store, registered in the state of NJ, with all the proper paperwork filed. Now I will say that perhaps this was just Penn Reels that constructed this pricing schedule based on quantity, but I doubt that they are the only manufacture doing that. Common sense states that if you have a large outfitter who sets an agreement in place to purchase a large number of rods, reels, etc. at a somewhat reduced rate they might get a better overall price on the items as opposed to the guy who is just buying 10 each year.

    Again, I want to be clear that this may not be the case with every vendor but it was the case with my buddy and Penn Reels and I do believe that that certainly has some effect on pricing at smaller shops versus the big box stores. That's all I was saying.
     
  4. NomDeTrout

    NomDeTrout Fly Guy Eat Pie

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    I don't doubt that it is the best quality and is built to last (for the most part). I buy quality gear myself, I've spent thousands on gear thats built to last. My issue is not with that, my issue is that regardless of experience level or amount of interest you have, you are expected to look the part with all the proper equipment. So when Joe Schmo that is interested in fly fishing walks into a fly shop and see's all the cool gear, he's in heaven...then he sees the price tags and he's in hell, but everywhere he looks indicates that a true fly fisherman looks like this - *insert picture of guy decked out with Sage rod, Simms waders, boots, etc etc etc* Sadly Joe Schmo will never be able to look the part because of his finances, thus Joe Schmo goes home and picks up a WalMart spinning setup and goes fishing in his sweatpants and sneakers.

    Sure there are plenty of fly fisherman who still hold tightly onto their cheapo fly reel and rod that they've been using for decades, but for the most part, fly fishing is a very much glamorized and expensive sport.

    The point is that it seems with the prices where they are, it's tough to gain new comers.

    My thinking is based on a guy who merely interested in fly fishing but has been fishing gear just as long as you have been fly fishing and who knows, may or may not until i die. Perhaps I'll switch full time to fly fishing at some point but the point I was getting at is that the whole industry of fly fishing is inflated quite a bit as far as cost goes, and it is quite deterring to a lot of newbies who want to learn fly fishing. Perhaps my perspective on this might not sound credible since I'm not a fly fisherman, but just think, its a perspective from the outsider who has many friends who are gear fishermen who think likewise. This deterring factor is what took me over 2 years to actually pick up a fly setup. It is very intimidating.
     
  5. Don Barton

    Don Barton Member

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    I support local fly shops when ever I can. Their most valuable commodity is ADVICE. They don't charge for it so I feel I must buy something to say thanks. I have no need for new rods or reels but I don't tie my own flies so I can always drop $20 to $50 on flies or leaders, or ....... I generally know which shop personnel are active in which fisheries.

    I have been affected by the economy as much as most of you. So I have fished less this year than last and have tired to fish more economically. This thread caused me to think of the number of stores I have patronized in the last year and why.
    • The second story fly shop in Port Townsend where I bought a Les Johnson book because the owner talked me out of buying a certain nipper because he taught me how to sharpen the one I already owned. I was just browsing and my wife shopping
    • Puget Sound Fly Fishing because I had heard excellent reports and had never been there before and I was near. They talked me out of buying a new Simms staff because I could get warranty support to replace my old one. They were right. I bought steelhead flies and poly leaders instead
    • Creekside in Issaquah and downtown because they featured a speaker on the Smith River and I appreciate their weekly email report
    • The downtown Kaufman's is my most regular store because it is close to my house and I appreciate the advice I get from Bob Aid.
    • Patrick's because they have good saltwater fly selections and their staff is active on the salt.
    • Orivis Bellevue because Leland knows everything I need to know about swinging for steelhead
    • River Run Anglers because Aaron selflessly provides a free Saturday river-side spey casting clinic
    • Yakima River Fly Shop in Cle Elum because Jim Gallagher is a class guy, employs good people, gives good advice on upper Yakima river conditions and stocks a good selection of Yakima River and steelhead flies
    • The Evening Hatch in Ellensburg because Jason Boitano and Jack Mitchell are class guys who are free with quality advice
    • The Avid Angler in Lake Forrest Park because they give excellent classes, carry a good inventory, because Brenda is so sassy. I will miss Nathan a lot
    • The Desert Fly Angler in Euphrata because Darcy knows more than anyone about Rocky Ford and the desert lakes.

    This list makes me a little sad because it reminds me this is the first year of many where I did not wet a fly in either Alaska, Montana, Oregon or BC.

    I didn't spend a cent at Cabela's but in some years I have. I did make a few purchases on ebay -- it's tough to avoid bargains -- and I did buy some stuff from Fly Fish USA (in Oregon) via the web because it is independent, reasonably local, and has the best darned web site and weekly newsletter in the business.
     
  6. Flyborg

    Flyborg Active Member

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    Gotcha.

    That's not something that will ever change though. Vendors scale their margins to provide incentive for shops to order more.
     
  7. Mike

    Mike Active Member

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    Couple of issues here:

    Cabela’s is not the only seller of the Sage XP. Check out the Anglers Pro site. They have a wider selection than Cabela’s. There is some type of story here but I’m not sure how it goes.

    Also retailers that buy larger quantities from the manufactures do get deeper discounts and incentives. That is fair and legal. But those retailers also need to spend their money up front which ties up cash flow. They buy rods, reels and soft goods in January that aren’t sold until May and sometimes not until they are discontinued and put in the legitimate discount bin. So risk, the cost of money and inventory carrying costs take away some of the that discount.

    The decline of the fly fishing retailer is due to all the factors mentioned in this tread.
    • Stagnant market size
    • The economy – people not spending as much if at all
    • The cost to keep up inventory
    • Cost of lost sales due to low inventory
    • Internet competition and the free shipping subsidy (at 10% sales tax WA is a real loser)
    • People taking advantage of a shops inventory to check out stuff and then buying it cheaper on line
    • Low balling retailers (Ebay and bundling products) which until recently manufacturers failed to address
    • Changing demographics - aging and saturated customer base
    • Much more accessible used equipment market - Look at the Classified section on this site, it is very active. Not just “want to sell” but also “want to buy”
    • Small business management skills
    • Dried up capital (loans) to small business
    • Slow time of year for product sales
    The market will shake out, but to do the see and touch, some us may have to drive further. Then the cycle will start again, just not sure which direction.

    If you like your local fly shop and feel that you are getting value in either service or product, the best thing you can do is buy stuff there. Without customers walking in, some of the shops as we know them won’t survive.
     
  8. martyg

    martyg Active Member

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    Mike - how do you figure that the large retailers "spend their money up front"? Do you sell to / produce for any of those large retailers?
     
  9. pmjasper

    pmjasper Member

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    If there is any doubt, I just wanted to apologize to Marty for my response to his initial post. I do not doubt his experience in the business, nor did I want to come across as he was being untruthful or misinformed. I may have used my terminology incorrectly or gave the preception that one case is the standard throughout the business. Again, that may or may not be the case but the one thing I can say with certainty is that for my buddy in NJ, and his dealings with Penn Fishing Tackle, this was the case.

    Thanks all.
     
  10. Mike

    Mike Active Member

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    I was in Purchasing and Materials Management for over 20 years.

    Mike
     
  11. martyg

    martyg Active Member

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    Then you know that many of the big guys go NET 60 - even on FOB goods (from the time that it lands in their DC, and not when it x-factories) - and that NET 60 really means more like NET 90.
     
  12. Steve Saville

    Steve Saville Active Member

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    Large retailers do not buy up front. They run large "accounts payable" balances just like other businesses. I kinda wanted to stay away from this because I shop at all kinds of places for the items I need to participate in my flyfishing hobby. I support my local flyshop but they don't always have what I want. I have supported Wholesale Sports on occasion but they rarely have what I want. I go to Cabela's and look/sometimes buy depending on what I'm looking for. I eat lunch there on occasion which I cannot get at my local shop. All of the rods and reels, lines, books, etc. are basically the same price. The question, I believe, surrounded the demise of some of our best shops, including The Morning Hatch. It was a travety to see it go by the wayside but businesses fail from time to time. That's the nature of capitalism. Flyshops are not in a cutthroat business like Walmart and Kmart but then you can't buy a decent flyrod in either place. The economy has a good deal to do with it but some shops continue to thrive by offering trips, closeouts, lessons, etc. Others do not because of location or lack of quality service. Part of the issue is also the competion by suppliers such as Sage, Ross, Abel, etc. To keep their business going profitably, they have to continue to build the better mouse trap or fish trap in this case. We as flyfisher have to amke a choice as to what and where to buy the items we want. Buyingon line is sometimes cheaper but not always and you can't touch or feel what you're getting or insure the quality of what you bought is what is acceptable. It's a big game called capitalism. It's what our country was founded on and it will continue to as such, at least for the forseeable future. You have to make up your mind as to what part of the big picture you want to be in and then go for. Grousing about it isn't going to change a thing.
     
  13. bigfun4me

    bigfun4me Team Infidel

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    Pmjasper, I was the Penn rep in the NW for seven years and I'm going to have to stand behind MartyG on this one. There are programs available to keep the small retailer competitive.
     
  14. Flyborg

    Flyborg Active Member

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    Yep. They pay when they want to, and if you don't like it, deal. Meanwhile, if you ship something incorrectly or fail to follow one of their guidelines in their 200+ page shipping manuals, you get fined.
     
  15. fishin jimmy

    fishin jimmy New Member

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    So I'm in New England - its tough here as well. Been a member of the 10% club - unemployed for past 6 months. I go to several local shops & avoid the big box stores - cannot ever find what I want, or need in them. In 3 fly fishing clubs.
    - I see Charlie Shadan at Evening Sun Fly Shop, Pepperell, MA tonight to pick up about $100 of stock for a TU club meeting raffle next week. I always announce at the TU meeting what shop was supportive prior to the raffles & where they're located. I'll spend my own money there also, its such an addiction.
    - I go to Stone River Outfitters, Manchester, NH for exotic materials, mostly talk with Nate Harris for saltwater, or Dan Fitgerald for salmon/trout.
    - W.S. Hunter for spey stuff - Mike is the man. Only shop around who does spey equipment & classes.
    Yea, I go on line - but mostly buy from dealers who are at out of area shops.
    - The clerks at Cabelas, and their ilk know squat about flytying or equipment. Talk spey & they just look at you...in disbelief.
    - Charlie, Nate, & Mike know where to fish, can recommend what to use & are all ok guys as well. I'm told the flytying material sales have taken off. Shops hold flytying & fishing classes, bring in the converts - even our local library is holding seminars & classes. However, I do not see "gold" necks, or many $700 rods being sold.