Sage One at costco...

Discussion in 'Fly Fishing Forum' started by WA-Fly, Jun 28, 2013.

  1. generic

    generic Active Member

    Joined:
    Nov 21, 2010
    Messages:
    3,575
    Likes Received:
    921
    I'm well aware of this. I use to be in retail as well.

    What I'm saying (to Sage) is, that they shouldn't hurt the pro shops, and let them sell it at the same price. They are well aware of what Costco is doing. Who says Sage can't change the "rules"? Was it (or is it) not Sage that sets that price? They can change it. There's no law that says Sage has to make the pro shops sell at a certain price.... it's Sage saying the pro shops must sell it at a certain price. And I am well aware of why they do that as well. It is kinda tricky, but if they don't pull their product from Costco, maybe the pro shops shop "rebel" and sell them at the same price.... maybe $5 cheaper! <- Yeah, yeah, I know...:mad:

    As far as the top 2% goes, ultimately I agree. We have the power to say no. If we don't say no, we can't blame the 2%. I can't pick at a scab, then get mad that it got infected. If I drive 100 miles an hour, I can't get mad at the cop who pulled me over.

    I bought 2 Winston BIIX fly rods from a local fly shop, when I could have bought both for a lot less online. For me, it's a matter of principle.
     
  2. pastorbrian

    pastorbrian Member

    Joined:
    May 10, 2006
    Messages:
    187
    Likes Received:
    2
    Location:
    Ellensburg, WA
    Sage doesnt sell directly to Costco.
    Costco buys through a third party and resells..."loss leader" style. Its only a handful of rods and not approved by sage.
    Some people on here know the truth.
    Read carefully.

    oh..and maybe buying something made in our state in a local shop will help our economy instead of buying it for a few bucks less online out of state
     
  3. generic

    generic Active Member

    Joined:
    Nov 21, 2010
    Messages:
    3,575
    Likes Received:
    921
    I guess you're right pastorbrian, I don't now the truth. I'm sure Sage has no idea. :rolleyes:
     
  4. freestoneangler

    freestoneangler Not to be confused with Freestone

    Joined:
    Jan 1, 2006
    Messages:
    5,891
    Likes Received:
    1,522
    Location:
    Edgewood, WA
    This suggests to me that Sage is price gouging. Where the hell is the outcry from all the same folks who crapped all over petroleum industry for this very same despicable offense? This is unfair because, unlike gasoline and diesel, we all need fly rods to survive.
     
    Dave Kaiserman likes this.
  5. _WW_

    _WW_ Fishes with Wolves

    Joined:
    Feb 18, 2005
    Messages:
    2,400
    Likes Received:
    1,229
    Location:
    Skagit River
    Occupy Bainbridge
     
    constructeur and Jason Rolfe like this.
  6. jeff bandy

    jeff bandy Make my day

    Joined:
    Jan 19, 2006
    Messages:
    2,877
    Likes Received:
    1,147
    Location:
    Edmonds, Wa.
    Nothing illegal about it as far as I can see.
    http://en.wikipedia.org/wiki/Competition_law
     
  7. Freestone

    Freestone Not to be confused with freestoneangler

    Joined:
    Sep 30, 2003
    Messages:
    3,137
    Likes Received:
    2,889
    Location:
    Central WA
    What Costco is doing is totally BS, IMHO. Sage and their dealers are the ones being hurt.

    Setting and enforcing MSRP is totally legal according to the FTC and is very different than antitrust:

    "Dealings in the Supply Chain: Manufacturer-imposed Requirements
    Reasonable price, territory, and customer restrictions on dealers are legal. Manufacturer-imposed requirements can benefit consumers by increasing competition among different brands (interbrand competition) even while reducing competition among dealers in the same brand (intrabrand competition)... an agreement to set minimum (or "floor") prices or to limit territories may encourage dealers to provide a level of service that the manufacturer wants to offer to consumers when they buy the product."

    http://www.ftc.gov/bc/antitrust/manufacturer_requirements.shtm
     
    JesseCFowl likes this.
  8. Brady Burmeister

    Brady Burmeister Active Member

    Joined:
    Jan 24, 2010
    Messages:
    820
    Likes Received:
    383
    Location:
    OH
    I agreed with Freestone the first 2 times this happened, but I find it odd that Sage isn't able to avoid this now. They're aware of what Costco does,...they really can't keep a closer eye on where their stuff goes? I also find it odd that this keeps happening with Sage. Why not Echo, TFO, or Sage's Asian brand Redington? If they're using foreign companies to set up they're diversion shipping practices, I would expect it to be even easier to do that direct from a foreign factory or distributor. Someone in the purchasing offices at Costco must be a Sage fanboy.
     
  9. Porter

    Porter Active Member

    Joined:
    Jan 1, 2003
    Messages:
    6,977
    Likes Received:
    838
    Location:
    Kenmore, WA, USA.
    Don't forget G.Loomis too....
     
  10. Brady Burmeister

    Brady Burmeister Active Member

    Joined:
    Jan 24, 2010
    Messages:
    820
    Likes Received:
    383
    Location:
    OH
    Yeah, but Loomis is owned by big bad Shimano. Sage is supposed to sit on the hallowed ground with T&T, Scott, and Winston.
     
  11. Porter

    Porter Active Member

    Joined:
    Jan 1, 2003
    Messages:
    6,977
    Likes Received:
    838
    Location:
    Kenmore, WA, USA.
    Doesn't change the fact that fly shops have to sell the GLX's for 700 bones and costco is selling them for 400.
     
  12. Flyborg

    Flyborg Active Member

    Joined:
    Mar 17, 2006
    Messages:
    2,387
    Likes Received:
    667
    Location:
    Kalama, WA
    http://www.nytimes.com/2007/06/29/business/28cnd-bizcourt.html?_r=0

    It wasn't until fairly recently that the supreme court ruled enforcement of MSRP wasn't antitrust. Granted, people have done it for decades, but there was a time it wasn't legally cool. I've worked at places where we weren't allowed to discuss MSRP with customers as it could bring a lawsuit.

    As for price gouging, the fly fishing industry average is between 30-40% Gross Profit Margin, which is better than some industries but by no means is great compared to many. Especially when you consider that the cost of a lifetime warranty isn't something most industries have to deal with. The idea that Sage could be price gouging is laughable. Costco is notorious for taking high end items and selling them at cost in order to draw new customers; it's much cheaper than traditional advertising. Costco doesn't do it to other fly rods because they don't need to; Sage is at the top of the fucking food chain.

    As far as who Costco is getting them from, it could be anyone. The "freight forwarder" blamed the first time seems odd to me, since that would imply Costco was selling stolen goods. My guess is they're buying small amounts from dealers sitting on too much inventory, or one of Sages distributors. Most of the companies in the fly industry feel compelled to use additional distributors because it lowers the rate of excise tax they pay. When you're making quarterly payments to the government for 10% of your sales (in addition to regular taxes), you look for legal alternatives to pay less. Having a distributor is one of those alternatives. Unfortunately, that often means you're dealing with a company that's essentially competing with you domestically selling your own products, and it can lead to brand imaging issues.
     
    Gary Knowels and Freestone like this.
  13. JesseC

    JesseC Active Member

    Joined:
    May 12, 2009
    Messages:
    2,035
    Likes Received:
    1,009
    Location:
    seattle, wa
    I never understood how many people make a living simply by sitting in the middle of supply chains and rerouting merchandise through different channels. I worked with a major retailer opening 30 stores this past holiday season and I'd say about 50% of the customers during the opening week were "people" trying to buy bulk quantities of the product specifically as re-sellers. It's a love hate relationship in the retail world. Yes, you appreciate the bulk sales initially, but it's a bummer to see product sold internationally in unglamorous circumstances or dumped to another distributor and sold through a channel that doesn't fit the brand (costco, etc)

    These people operate almost like ticket scalpers. They'll have 10-20 people they've recruited off craigslist to stand in line for product releases, they'll bribe employees, they'll bribe freight forwarders. It's unreal.

    It's probably not the same with Sage merchandise, but I'm betting that they're dealing with an international reseller that's dumping product domestically through costco. The international reseller is probably based in the Seattle area and has a relationship with procurement in Costco.

    Seeing this happen for the third time is interesting. You'd think they'd be able to track down the source via serial numbers on the rod. But, perhaps their ERP isn't that sophisticated.
     
    Anil likes this.
  14. zen leecher aka bill w

    zen leecher aka bill w born to work, forced to fish

    Joined:
    May 6, 2008
    Messages:
    3,821
    Likes Received:
    1,389
    Location:
    Moses Lake, WA

    I had the same thought about tracking thru serial numbers to see where the problem resides. It should be a no-brainer.
     
  15. Freestone

    Freestone Not to be confused with freestoneangler

    Joined:
    Sep 30, 2003
    Messages:
    3,137
    Likes Received:
    2,889
    Location:
    Central WA
    Good idea but I have a feeling this problem is like wacka-mole - they close off one channel and the scum bags figure out a new one. I get multiple calls and emails a week from liquidation companies who want to know if I have excess or dead inventory to sell them (at steep discounts). I never sell to them as I want to know where our products are going and they can't tell me. They will sell to anyone so no good manufacturer of premium products would sell to them. Better to sell directly to STP, etc., know where your is going and how it will be sold and for what price then to risk these low-ball liquidators. But how many fly shops have gone out of business in the last few years? How many of them have been approached by liquidators who offer cash money for inventory in desperate times? Or, if the shop's assets were seized by the IRS, what happened to the inventory after the IRS got it?

    As Flyborg said, even with the best distributors, you still have potential issues if people either don't do their jobs (screening new accounts) or are willing to look the other way for a fast buck and a 'Oops, sorry I screwed up, I won't do it again Sage/Loomis/etc.' The reasons we see only premium brands like Simms, Sage, Loomis, etc is no one is going to flock to Costco to buy Hodgeman or Shakespeare. Even if they did, the price is so low there is not much profit in it for Costco plus Costco could probably buy them through normal channels anyway.

    There are a million ways this stuff can end up at Costco. Like I said, wacka-mole. Costco once wanted some of our products and we said no. We then held our breath and hoped they didn't really, really want it and go get it through dirty, backdoor means - the 'gray' market as it is known and it is something that all good manufacturers with controlled, specialty shop distribution worries about.