
Originally Posted by
iggyskier
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We exist because of direct orders. Margins to dealers with our COG are more or less nothing. That is why you see brands like Faction/Black Crows/etc in this rush to scale, because if you are in a heavy retail model (even with a COG that is far below ours), it is all about volume. Based upon Faction's latest money raise, they are still losing money selling 30,000 pairs/year and are heavily investing in scaling. Retail is very difficult in the ski industry.
We started as direct, found we could scale retail a lot faster, so started pushing into retail with more effort, before realizing there is no way for the business to be profitable doing so as dealers were cannibalizing our direct sales capacity. That is why you saw us pull back from SIA, change to a different product release timeline, and move on from most of our dealer network. We've turned down a lot of new dealer requests over the past two years, because our dealer allotment is usually sold out before the new line even drops.
The dealers we work with now we do so because they offer something tangible besides just sales revenue and have shown a willingness to be supportive and work with us beyond the norm. They help us form a strong base in markets we value (evo - Seattle/Denver, Chalet - Bozeman, Creel - Spokane, Pow7 - Front Range, Pinewski's - Midwest park scene, Fresh - Calgary, etc). Portland obviously a bit of an exception, but our presence + evo + Next cover a lot of the market here in Portland.
To manage the fiscal component, we limit our dealer allotment, weighing the non-fiscal value dealers offer vs the cost of selling that inventory outside of the direct sales channel.
So, yes, typically brands would prefer the sale to be direct, but the dealers we work with are dealers we support to the fullest, so if they are local to your market, we strongly back supporting them.
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