Fri 6 Jan 2006
These are just my observations and the conclusions I’ve drawn from them. I have not researched thoroughly, so the conclusions I draw may be made with incomplete data. I probably end up with more questions than answers
Skating in the late 80s was huge. Stacy Peralta, Tony Hawk and Steve Cabalero were household names. Skating was a mainstream pasttime for 10-17 year olds. In the early 90s it nearly died out. Specialist shops closed. Shops that had diversified into skate gear stopped selling it.
The late 90s and early 00s saw a huge resurgence, mostly in street skating. Parks ripped out the aging vert ramps and they were replaced with boxes, rails and concrete 1/4 pipes. Skating was cool again, and with it came the lessons of the surf industry: the real money is in the clothing and other accessories. Skaters ‘non-compliant’ attitude became popular, and with it the fashions.
Around this time, the New Zealand dollar, jokingly referred to as the New Zealand Peso, bought about US$0.38. A US$120 custom complete would cost in New Zealand about NZ$400, including the 7% import duty and 12.5%GST.
The New Zealand skate retailers are pulling the wool over our eyes now. I expect that the margins are huge, still charging what was a good price in 2000. Everything else has fallen with our rising dollar, in particular electronics. The NZ$ now buys about US$0.70, yet prices for skate gear are relatively unchanged from 2000. The Australian dollar has gone through similar, although less extreme swings in value, yet a board from Aus costs only slightly more than it does in the US.
Here’s an example: My longboard I bought in September 05 Cost NZ$500 in shops here. It costs US$149 in America. Even with US$70 freight, I still saved NZ$170 by buying from USA.
I’m looking to buy a shortboard too. I don’t care about graphics/brand etc., only quality. I can get a US made complete (blank/no brand) in New Zealand for around NZ$300. I can buy a similar board from Australia, including freight for about NZ$215. I can get a similar (minilogo) setup landed from USA for NZ$185.
So here are my questions (largely rhetorcal, but feel free to have your say): Should I encourage more people to shop in New Zealand, to increase volume and bring prices down? (Would it work or just generate more profits for retailers?) Should I encourage more people to shop overseas, to increase competition, wake up retailers and bring prices down? Should I join the bandwagon and start bringing in gear and retail it myself to fund my hobbies? Even buying at full retail from USA, I could still make money. I have only found one online store in NZ that I would consider buying from. Is building my own store another way to go? Should I find NZ wholesalers and see what sort of deals I can do? Or would Trademe be better?
The phenomenon you describe is not exclusive to skating. Radio Control has the exact same situation (although the history is different: it has always been ‘fringe’). I can get a 9-channel Futaba transmitter landed for maybe $600, but the shops will charge ~$1000.
The standard debate is that you should buy local to get warranty support and so that you keep the shop and the helpful experts afloat. This is only the case in my opinion if the shop is worth it. I regularly will buy small parts from Airsail in Auckland, despite the fact I can get them cheaper elsewhere, because the guys there are extremely knowledgeable and helpful. I think of it as paying them a few bucks a month for the great advice etc.
Larger items and things I can only get from the crappy hobby stores (with drones instead of experts behind the counter), I will import.
Perhaps you can see an analogy? Buy wheels and bearings locally if you like the shop and find their advice useful, otherwise stuff ‘em if they’re routing you on price and not using the markup to supply useful service.
On Markets and Pricing…
Joe writes an interesting post about the New Zealand Skate Market. The advent of the Global Intertron has opened many eyes to the fact that we in the smaller more remote countries have been being royally screwed by suppliers and middlemen for years.
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[...] Lindsay a local longboarder and previous skurfboards contest winner wrote a great article about the New Zealand skateboard market .This is a topic that is on the minds of most kiwi longboarders. New Zealand has most likely got [...]