Don’t cut your own throat. When I was sixteen years old (let’s see, that was 1983¿seventeen years ago) I remember buying skateboards. The amazing thing is that a complete then cost between 120 and 150 bucks. Here we are now in the Year 2000, and you can buy a competitive-quality complete for under 75 dollars. Well isn’t that great? Whose brilliant idea was this? I know that at Tum Yeto we modeled our company on logical margins in order to have sufficient budgets for promoting our team riders, our brands, and the future of skateboarding.
The same should go for retail. Retailers need to maintain certain margins in order to properly facilitate the promotion and growth of their stores and the sport in their local communities. I recently reviewed one area and found the larger stores that did the most volume in hardgoods are also selling products at a premium price. Hmm … interesting.
Undoubtedly you will always have a local competitor that will not bat an eye before underselling you, but that retailer will also be jeopardizing the long-term existence of his or her business. Flash in a pan. You, in turn, by maintaining proper margins will have money to develop your business. You will be able to provide the best customer service, promote your business, and be able to grow and stay competitive. And your competitors will be goners (or severely struggling) because they model their business on low margins and depend on high volumes.
Imagine, if you will, a world full of skateboard retail stores that all carried only pricepoint products. They would all carry the exact same lines of identical products, all would be selling at the same low price (or still trying to undersell competitors), and all would be struggling to stay in business.
Hey! Time to branch out into Pokéman trading cards, right? Unfortunately, the disease was introduced to skateboarding years ago¿manufacturers pumping boards out at cost, requiring no minimums, and selling to any dickhead who had cash in hand. So-called premium companies resorted to cheap pricepoint tactics in order to gain market share because of their own failing marketing programs.
I had people tell me to my face that they wanted all the major companies (including Tum Yeto) to lower wholesale prices so that “we” can knock out all the competition, because supposedly, the competition would not be able to operate under those economic conditions. Luckily, reputable companies saw the hopelessness of this approach and didn’t follow suit.
I was attracted to skateboarding as a sport because it offered creative freedom, ingenuity, and limitless possibilities. I got into the business of skateboarding because it offered the same possibilities and the satisfaction of promoting something I grew to love, which undoubtedly changed my life.
So here we are in the Year 2000, and skateboarding is growing beyond belief. You have parents and customers complaining about the cost of skateboards and skateboarding. The reality is that skateboarding is one of the most inexpensive activities parents can support, and one anyone can do. What else can kids do that only requires 100- to 150-dollars worth of gear and five dollars to use a park for an entire day of physical activity? Skateboarders love to go skateboarding; drop them off and forget about them. They’ll go every day if possible.
Snowboarding, just one day at the slopes can cost upwards of 200 dollars. Not to mention that the gear can run about a grand. And don’t think they won’t want to upgrade next season, not to mention the hassle of getting them to the slopes. And how often? Once? Twice? Three times a year?
For that same money you could buy your kid ten new completes a year, plus get them out of your hair for hours a day. No driving all day to the mountains¿just point to the curb out front and voila! How about BMX? A new bike is 5000 to 600 dollars. When I was a kid, racing was like 30 bucks for a few rides on the track. Baseball? Gear is 200 to 300 dollars, plus Little League fees. And how much do they actually get to play? The fact is that skateboarding costs less, keeps kids active longer, and has proven to be one of the most fulfilling things a kid can do with his or her free time (at least in my experience).
This is what you can explain to parents when they don’t understand why they have to pay so much for a skateboard. “But I can get a complete for 25 dollars at the local mass merchant,” they say. Well hell, if you want to buy your kid the lowest-quality product, realize that a product designed to fit a pricepoint rather than for skateboarding is inherently more dangerous. Broken arm¿1,500 to 2,000 dollars in hospital fees. Or 120 bucks for the best skateboard, designed by professionals for reliability, performance, and durability.
I say maintain your margins, provide the best in customer service and support, promote skateboarding locally, and as always, don’t overextend your finances. This is the positive difference between your business and the local discount competition. Skateboarding is all about quality, not quantity¿not to say that quantity at higher margins isn’t great!
Keep on rolling.
Tod Swank is owner of Tum Yeto, Inc., and the architect of Foundation’s World’s Largest Skateboard.