One of the brands that I brought along with me for the ride was Ninja Bearings, also known as Absolute Speed. Ninja makes a very, very solid product. They asked me to talk to shops a little bit about them, while I was out and about. And, being the accommodating Joe that I am, I happily accepted.
One thing that Ninja has, are very well-defined wholesale prices, as well as very clear MSRP’s. If you've been living in a cave for the last 30 years, or flunked Retailing 101, MSRP stands for "Manufacturer's Suggested Retail Pricing".
So, I'm out on the road, talking to shops about Ninja Bearings... and, when the shops would ask me what their pricing is, I wrote it out in two columns. One column, the 'wholesale' price. And, the other column, was 'MSRP'. I didn't think that it was a really huge deal, to make this absolute minimum of effort. Yet, you'd think that I'd just handed these shops Willy Wonka's Golden Ticket or something.
"Ohh... my... gawwwwwwd!", one shop squealed in delight. "An honest-to-goodness, MSRP! How awesome is that?!?!" I don't know? Kinda-awesome, maybe...?
"That is too awesome!!!!!", shop owner squealed. Then, she actually gave me a hug. A hug! Imagine that! Just for having an MSRP in hand. Go frickin' figure.
Apparently- and, this is strictly going off of what the shops all told me, here- MSRP's... and by that, I mean available, easy to find, published, and sensible MSRP's... are rarer than hen's teeth these days. Then, we have another problem that I'll also address here. And, that problem is: The meaninglessness of the few MSRP's that are available, easy to find, published, and sensible. What good is an MSRP, if shops are either encouraged- or, in some cases, forced- to deviate wildly from the damned MSRP...?!
One shop, for example (which I'll keep anonymous, although they assured me that it'd be entirely cool to quote them on the record) told me that, they are taking huge sales hits, because their online competition deviates so blatantly from MSRP. "Here's one example", they told me. "A kid came in last week, with a complete longboard setup." I'll also leave out the brands, just to save the innocent from getting an unfair beat down from shops. "This board should have retailed for about $320.00. We sell it here, at our shop, for $265- just to stay competitive with the online e-tailers..."
"That's a pretty hefty discount", I interrupted.
"Yeah. But, the worst part?! The kid bought the board online- fully assembled- for $260.00."
"Wait", I asked.” You’re telling me that the kid would rather order the board online... sight unseen... and, wait a whole week to get it... just to save a measly five bucks?!" I couldn't believe it.
"Yeah", the shop owner confirmed. "What's more, it happens all the time. At least once a week, sometimes two, three times a week."
"That's nuts", said I.
"I agree", said shop owner. "But, that's just the world we're living in these days, I guess".
"So, what's the solution?", I inquired.
"Simple. Have the manufacturers cut off shops... e-tail, or otherwise... that discount too heavily from MSRP."
Now, although this might sound like an incredibly difficult thing to do, I do know for a fact that some of our better manufacturers do, in fact, do just this. If they find a shop- whether that shop is a brick-and-mortar, or an e-tailer- that deviates too far from their suggested pricing... they will cut off that retailer in a damn skippy minute. I've seen it firsthand. There are actually quite a few precedents for just this sort of action. So, I have to assume that it's not that hard to do. It's just a question of doing it, that's all.
So, you're probably asking me, "What's the benefit to the manufacturer, to enforce MSRP's (within reason)?" Well, one really good answer is that, the MSRP of your product, in a very real sense, defines a lot of what your product is all about. If you're peddling a "price point" product, for example? Obviously, you're gonna have very low MSRP's. Likewise: If your brand is positioned, and marketed, as a "premium" brand? You're going to have very high MSRP's. So: If a shop is selling a 'premium' branded product, at a 'pricepoint' price? Well, you tell me: What is that doing, in the consumers' eyes...?!
From my vantage point, it's probably doing one of two things. One: It's probably contributing to some Confusion in the Marketplace. Which is bad enough. Or, on the other hand? It might be unnecessarily watering down the value of your brand, in the eyes of the consumer. Which is even worse.
Neither of these, as you can clearly see, is in the vested interests of the brands. Thus, it's actually in the brands' own interests to set, and enforce (within reason) reasonable, and accessible, MSRP's.
Lastly, for those manufacturers that choose to sell directly to consumers, via their own company websites: I would highly suggest that, you price your product, on your sites, at full MSRP. The reasons are simple. One, you don't want to be undercutting your retailers. Secondly: In case your retailers lose their order forms, catalogs... whatever you'll use to publish your MSRP's... a handy visit to your site will help them find 'em again, with just a click or two. This is good customer service at work. This is smart policy. This is, a way to make retailers' lives and jobs much, much easier. And, it'll give retailers a reason to visit your site more often, to boot.
Bud Stratford is a skateboarding business writer with strong roots and ties in the skateboarding industry. Feel free to contact Bud at budstratford@aol.com.
