Forums > Kitesurfing General

Not a discussion, just a heads up - Currency = Price Rises

Reply
Created by Windgenuity 6 months ago, 16 Mar 2020
Windgenuity
NSW, 358 posts
Site Sponsor
16 Mar 2020 3:03PM
Thumbs Up

This morning the currency dove below 0.61 USD. Whilst pricing has not been set as yet, without a significant recovery this will impact Kite pricing for the coming season in the vicinity of 20-24%.

Along with increasing costs of shipping due to the shipping shortage right now, it will sting a bit to buy a new kite for the 2021 Season.

Nothing that can be done about it, just thought I'd put it out there whilst there's still relatively good supply of current model kites available at pre-corona prices.

That is all,

JB

Gazuki
WA, 1187 posts
16 Mar 2020 1:34PM
Thumbs Up

Wonder if Ocean Rodeo going to offer mortgages for the Alula line? Take it over 25yrs....

RAL INN
VIC, 2839 posts
16 Mar 2020 6:12PM
Thumbs Up

It's been a slow downhill slide by our dollar ending by falling of a cliff.

AUS126
NSW, 145 posts
16 Mar 2020 6:24PM
Thumbs Up

Select to expand quote
Windgenuity said..
This morning the currency dove below 0.61 USD. Whilst pricing has not been set as yet, without a significant recovery this will impact Kite pricing for the coming season in the vicinity of 20-24%.

Along with increasing costs of shipping due to the shipping shortage right now, it will sting a bit to buy a new kite for the 2021 Season.

Nothing that can be done about it, just thought I'd put it out there whilst there's still relatively good supply of current model kites available at pre-corona prices.

That is all,

JB


That's the least of my problems. I just want some flour and rice.

towradgi
NSW, 317 posts
16 Mar 2020 9:57PM
Thumbs Up

Not an issue to kiteshops with the right business model . These successful shops absorb the whole price rise to stay super competitive . To keep the cashflow coming in ,they have kite lessons in unsuitable wind conditions for newbys who have no idea . And get their wife to work more hours at Best and Less store . The other kiteshops have the new price rise, don't sell any ,but do sell alot of last years superseded new kites for $1200 . Its a lifestyle business .

Hardcarve1
QLD, 512 posts
17 Mar 2020 12:17PM
Thumbs Up

I expect a lot of good second hand gear up for sale as people loose their jobs and will sell to stay afloat. I don't think buying new gear before the financial storm is is a smart move with the expected job losses.

wishy
WA, 1463 posts
17 Mar 2020 9:09PM
Thumbs Up

Why would you tell people this and not just buy up second hand gear without the person selling it knowing their next kite will cost way more?

Seems foolish.

Gazuki
WA, 1187 posts
18 Mar 2020 4:58AM
Thumbs Up

Too scare them about the recession, more fear equals more desperation.

Alysum
NSW, 558 posts
18 Mar 2020 10:21AM
Thumbs Up

The kite shops are going to struggle but it's the end of season here in AU, there will soon be some even bigger sales.

ActionSportsWA
WA, 772 posts
19 Mar 2020 11:11AM
Thumbs Up

Hey JB,

I can't see kites going up 20-24%. (Unless it's made of Aluula )

I've heard rumour of 6% and possibly up to 10%. Any price rise will have an impact.

Does Windgenuity perhaps have a truckload of superceded Naish kites and boards in stock?

DM

Bara
WA, 647 posts
19 Mar 2020 3:27PM
Thumbs Up

Lol 61 US cents a distant memory.

We touched 55 today

SaveTheWhales
WA, 1786 posts
20 Mar 2020 8:28AM
Thumbs Up

Err if you are stock market savvy, or well researched on some shares - there are very good entry points coming..

Then buy yourself bran new gear for free.. next season :)

Who do you think is buying all these shares at the bottom - while all many are stupidly concerned with wiping their bottom ?

The Big guns / Whales will be enjoying this Boxing day sale that's on

THE PIN PULLER
WA, 362 posts
20 Mar 2020 9:16AM
Thumbs Up

Buy crypto it's germ free and not traceable

FormulaNova
NSW, 11444 posts
20 Mar 2020 4:56PM
Thumbs Up

If the currency stays low and next season starts up, no one is going to buy kites if the prices are out of this world.

I am sure you will get a few, but not enough to keep a kite shop going.

I struggle at $1500 a kite, let alone, what, $4000 for one. I think there will need to be a kite-shop bailout if those prices happen.

Alysum
NSW, 558 posts
14 Apr 2020 11:19AM
Thumbs Up

One of the shops keeps going on about a price rise of 20-30% but when I see that the exchange rate is still at 0.64 this doesn't add up.
I think they are just trying to sell their current stock....

Smithy
VIC, 849 posts
14 Apr 2020 12:39PM
Thumbs Up

I get that prices may need to go up for new stock coming in while the dollar is low, but riddle me this, why do prices seem to ratchet up and never come down if and when the dollar improves??

Windgenuity
NSW, 358 posts
Site Sponsor
14 Apr 2020 1:10PM
Thumbs Up

Select to expand quote
Smithy said..
I get that prices may need to go up for new stock coming in while the dollar is low, but riddle me this, why do prices seem to ratchet up and never come down if and when the dollar improves??


Hey Smithy,

There is no riddle. Every year there is inflation, just like wages, rents and costs of living, everything ets more expensive espoecially labor and overheads. These are continual regardless of the exchange rate though, so every year things shoud get about 3% more expensive regardless.
Also a company/importer like us will often wear a portion of a hard currency hit to try and achieve a more digestable price increase on hard years. This can often give a misleading impression when currency recovers as much of the recovery may have just been the amount worn by the importers (us).

Regards,

JB

Smithy
VIC, 849 posts
14 Apr 2020 2:33PM
Thumbs Up

Select to expand quote
Windgenuity said..

Smithy said..
I get that prices may need to go up for new stock coming in while the dollar is low, but riddle me this, why do prices seem to ratchet up and never come down if and when the dollar improves??



Hey Smithy,

There is no riddle. Every year there is inflation, just like wages, rents and costs of living, everything ets more expensive espoecially labor and overheads. These are continual regardless of the exchange rate though, so every year things shoud get about 3% more expensive regardless.
Also a company/importer like us will often wear a portion of a hard currency hit to try and achieve a more digestable price increase on hard years. This can often give a misleading impression when currency recovers as much of the recovery may have just been the amount worn by the importers (us).

Regards,

JB


Thanks JB yes I get that, but you started the thread specifically stating that prices for the coming season will jump 20-24% based on the exchange rate alone. My observation is that when this has happened in the past, based on exchange rates, they have not dropped when the rates have corrected themselves.

I am also interested to understand the 20-24% calculation. Are you suggesting this increase on the retail price or the wholesale price?

billygreen
65 posts
15 Apr 2020 10:03AM
Thumbs Up

Select to expand quote
Smithy said..

Windgenuity said..


Smithy said..
I get that prices may need to go up for new stock coming in while the dollar is low, but riddle me this, why do prices seem to ratchet up and never come down if and when the dollar improves??




Hey Smithy,

There is no riddle. Every year there is inflation, just like wages, rents and costs of living, everything ets more expensive espoecially labor and overheads. These are continual regardless of the exchange rate though, so every year things shoud get about 3% more expensive regardless.
Also a company/importer like us will often wear a portion of a hard currency hit to try and achieve a more digestable price increase on hard years. This can often give a misleading impression when currency recovers as much of the recovery may have just been the amount worn by the importers (us).

Regards,

JB



Thanks JB yes I get that, but you started the thread specifically stating that prices for the coming season will jump 20-24% based on the exchange rate alone. My observation is that when this has happened in the past, based on exchange rates, they have not dropped when the rates have corrected themselves.

I am also interested to understand the 20-24% calculation. Are you suggesting this increase on the retail price or the wholesale price?


You're right here Smithy...

On SB and other places I read about the impacts of exchange rates and covid on the kite industry. Some go as far as recommending people bring forward purchases to keep things afloat.

i am interested to know what part the industry will do to keep themselves afloat. Eg Will savings from team riders not flying around the globe subsidise price increases? Will shops stop offering gear at wholesale prices to their mates and make them pay? Will the 2021 gear development budgets for new colours and jargon be waived to lower wholesale prices? Will sites like seabreeze offer discounts to companies for advertising?....

everything I have read and seen so far relating to this crisis transfers the adverse economic impacts to the consumer to keep things ticking over, but if people are unemployed and have very restricted disposable income how will this work?
The industry needs to help us help them.

Peahi
VIC, 1273 posts
15 Apr 2020 12:33PM
Thumbs Up

Select to expand quote
billygreen said..

Smithy said..


Windgenuity said..



Smithy said..
I get that prices may need to go up for new stock coming in while the dollar is low, but riddle me this, why do prices seem to ratchet up and never come down if and when the dollar improves??





Hey Smithy,

There is no riddle. Every year there is inflation, just like wages, rents and costs of living, everything ets more expensive espoecially labor and overheads. These are continual regardless of the exchange rate though, so every year things shoud get about 3% more expensive regardless.
Also a company/importer like us will often wear a portion of a hard currency hit to try and achieve a more digestable price increase on hard years. This can often give a misleading impression when currency recovers as much of the recovery may have just been the amount worn by the importers (us).

Regards,

JB




Thanks JB yes I get that, but you started the thread specifically stating that prices for the coming season will jump 20-24% based on the exchange rate alone. My observation is that when this has happened in the past, based on exchange rates, they have not dropped when the rates have corrected themselves.

I am also interested to understand the 20-24% calculation. Are you suggesting this increase on the retail price or the wholesale price?



You're right here Smithy...

On SB and other places I read about the impacts of exchange rates and covid on the kite industry. Some go as far as recommending people bring forward purchases to keep things afloat.

i am interested to know what part the industry will do to keep themselves afloat. Eg Will savings from team riders not flying around the globe subsidise price increases? Will shops stop offering gear at wholesale prices to their mates and make them pay? Will the 2021 gear development budgets for new colours and jargon be waived to lower wholesale prices? Will sites like seabreeze offer discounts to companies for advertising?....

everything I have read and seen so far relating to this crisis transfers the adverse economic impacts to the consumer to keep things ticking over, but if people are unemployed and have very restricted disposable income how will this work?
The industry needs to help us help them.


I was going to wait for the OP to respond, it seems he is saying other costs contribute to that but I doubt it.
'
20-24% is alarmist and sounds like someone who is overstocked and trying to get rid of it. Our AuD is back to 64c and probably will climb higher with US is much more trouble. The drop from 64c to 57c is a 11% drop and was only temporary.

Cabrinha and their dealers may have dodged a bullet here by stopping production last year and most shops holding small amounts of their stock.

Yes and tell the shop pimps and "pros" to go get a job like the rest of us.

I'll be waiting for more second hand bargains as they arise, buying new is never a financially wise decision (you lose 50% straight away), and if you're cashed up and ready to buy next year's gear new, you're not going to be paying 20-24% more that's absolute BS.

Also I calculated that cost of kites in real terms have gone down in last 13 years, A Cabrinha Switchblade 12m in 2007 was close to $2000, and our AuD was actually a bit higher.

Smithy
VIC, 849 posts
15 Apr 2020 1:47PM
Thumbs Up

Select to expand quote




















Peahi said..




Also I calculated that cost of kites in real terms have gone down in last 13 years, A Cabrinha Switchblade 12m in 2007 was close to $2000, and our AuD was actually a bit higher.


But remember in 2007 a kite came complete with a bar and pump...

billygreen
65 posts
15 Apr 2020 12:00PM
Thumbs Up

Select to expand quote
Smithy said..


























Peahi said..





Also I calculated that cost of kites in real terms have gone down in last 13 years, A Cabrinha Switchblade 12m in 2007 was close to $2000, and our AuD was actually a bit higher.



But remember in 2007 a kite came complete with a bar and pump...


And in 2020 you don't even get a chicken loop included with some bar n lines setups.
Surely production volumes have skyrocketed worldwide since 2007 and there are considerable savings from economies of scale.

Peahi
VIC, 1273 posts
15 Apr 2020 3:59PM
Thumbs Up

Select to expand quote
Smithy said..


























Peahi said..





Also I calculated that cost of kites in real terms have gone down in last 13 years, A Cabrinha Switchblade 12m in 2007 was close to $2000, and our AuD was actually a bit higher.



But remember in 2007 a kite came complete with a bar and pump...


Not that I recall, bar was extra so maybe $2300 package

Peahi
VIC, 1273 posts
15 Apr 2020 4:06PM
Thumbs Up

Select to expand quote

Smithy said..
billygreen said..



And in 2020 you don't even get a chicken loop included with some bar n lines setups.
Surely production volumes have skyrocketed worldwide since 2007 and there are considerable savings from economies of scale.



Economies of scale don't work so well with a worldwide production of only 130k ? (not millions) and materials, designs R&D are still expensive. Cheaper brands (there have been a few) have not been able to get a foothold, most people are prepared to pay good money for a quality kite.

Go whinge to your local member about the cost of kites. If you can't afford it don't do it.

stoff
WA, 226 posts
15 Apr 2020 4:17PM
Thumbs Up

I've had a couple of emails recently from packaging companies that supply me about price rises. One is going 12.5% on 1st April and the other is 5.8% on the 1st May.

Interestingly the one with the lowest increase has also committed to reducing prices if the dollar stays above 65c.

If the OP is really implementing a 20% plus increase his competitors are going to smash him

billygreen
65 posts
15 Apr 2020 4:35PM
Thumbs Up




This is the standard 12m sb deal I can see in multiple stores. If they can offer a better price why don't they advertise it?

Do you get mates rates?

billygreen
65 posts
15 Apr 2020 4:38PM
Thumbs Up

Select to expand quote
Peahi said..

Smithy said..
































Peahi said..






Also I calculated that cost of kites in real terms have gone down in last 13 years, A Cabrinha Switchblade 12m in 2007 was close to $2000, and our AuD was actually a bit higher.




But remember in 2007 a kite came complete with a bar and pump...



Not that I recall, bar was extra so maybe $2300 package



Select to expand quote
Peahi said..



Smithy said..
billygreen said..




And in 2020 you don't even get a chicken loop included with some bar n lines setups.
Surely production volumes have skyrocketed worldwide since 2007 and there are considerable savings from economies


Economies of scale don't work so well with a worldwide production of only 130k ? (not millions) and materials, designs R&D are still expensive. Cheaper brands (there have been a few) have not been able to get a foothold, most people are prepared to pay good money for a quality kite.

Go whinge to your local member about the cost of kites. If you can't afford it don't do it.



You can't say that over the last 10 years there hasn't been significant improvements in technology and manufacturing techniques that haven't lowered production and business costs and savings in other areas.
the industry are happy to pass on cost increases without creative thought around helping the consumers.
because the price of raw materials (petroleum) is at a low do you think we will see reduction in costs when it eventually makes it to the supply chain?
they might need to get creative with their business models now like stoffs packaging example above

Peahi
VIC, 1273 posts
15 Apr 2020 9:37PM
Thumbs Up

Select to expand quote
billygreen said..

This is the standard 12m sb deal I can see in multiple stores. If they can offer a better price why don't they advertise it?

Do you get mates rates?


Ok shz that is exxxy I'll hand it to you then, I have been riding drifters and following their prices. Usually I buy superceded models if I have to buy new eg, 2019 model in late 2019. Bar prices have gone up quite a bit since the early kites, but their longevity has improved so you can keep a bar for a few years or upgrade.

Wait till June/July that kite will be 15-30% less, or buy it now and complain about the price.

Also most shops don't have much 2020 Cabrinha stock so not much competition. Ring around and see what deals are on.

Windgenuity
NSW, 358 posts
Site Sponsor
17 Apr 2020 1:21PM
Thumbs Up

Select to expand quote
Smithy said..

Windgenuity said..


Smithy said..
I get that prices may need to go up for new stock coming in while the dollar is low, but riddle me this, why do prices seem to ratchet up and never come down if and when the dollar improves??




Hey Smithy,

There is no riddle. Every year there is inflation, just like wages, rents and costs of living, everything ets more expensive espoecially labor and overheads. These are continual regardless of the exchange rate though, so every year things shoud get about 3% more expensive regardless.
Also a company/importer like us will often wear a portion of a hard currency hit to try and achieve a more digestable price increase on hard years. This can often give a misleading impression when currency recovers as much of the recovery may have just been the amount worn by the importers (us).

Regards,

JB



Thanks JB yes I get that, but you started the thread specifically stating that prices for the coming season will jump 20-24% based on the exchange rate alone. My observation is that when this has happened in the past, based on exchange rates, they have not dropped when the rates have corrected themselves.

I am also interested to understand the 20-24% calculation. Are you suggesting this increase on the retail price or the wholesale price?


percentages are all relative - RRP or WS, it's a percentage.

Windgenuity
NSW, 358 posts
Site Sponsor
17 Apr 2020 1:38PM
Thumbs Up

Currency was over 70 cents at the time of purchasing 2020 kites (73 I think). At a low of 54 cents (57 at the time of the thread) and a recovery to 63 now, it is anyones call where it will be when pricing is locked in. But current rates would suggest at east 10%+

MrFreeze
265 posts
17 Apr 2020 11:47AM
Thumbs Up

Select to expand quote
Windgenuity said..
This morning the currency dove below 0.61 USD. Whilst pricing has not been set as yet, without a significant recovery this will impact Kite pricing for the coming season in the vicinity of 20-24%.

Along with increasing costs of shipping due to the shipping shortage right now, it will sting a bit to buy a new kite for the 2021 Season.

Nothing that can be done about it, just thought I'd put it out there whilst there's still relatively good supply of current model kites available at pre-corona prices.

That is all,

JB



Hmmmmm, hold off until 2022 season and this virus mess is sorted. One thing you can do.



Subscribe
Reply

Forums > Kitesurfing General


"Not a discussion, just a heads up - Currency = Price Rises" started by Windgenuity