| SkullandBonesSkateboards.com Forum Index » BUSINESS, SHOPS & RETAILERS » BLUE bus Skateboards - Looking for Distribution Partners |
|
Page 3 of 4 Goto page Previous 1, 2, 3, 4 Next |
|
| Author |
Message |
| BLUE bus |
 Posted: Sat Oct 16, 2004 2:12 pm |
 |
|
|
Joined: 12 Oct 2004
Posts: 62
|
It looks like it's time to put the train back on the tracks.
I started this forum looking for "legit distribution" help. I've read through some of your comments on other forums and it sounds like a lot of you need help in understanding how the skate industry works and how a true distributor operates.
Hard Goods Skate Industry Distribution 101
For the most part there's basically three classes of players in the hard goods skate industry; 1.) The Manufactures 2.) The Distributors and 3.) The Retailers.
The manufacture makes the product and usually sells it through two channels either to a distributor ("middle man") or directly to the retailer. When a manufacturer (i.e. Girl) sells directly to a retailer (i.e. Church of Skatan - SB CA) they're getting great margins but what a manufacture lacks when selling directly to a retailer is a lot of volume (inventory turnover). But when the manufacturer (i.e. Girl) sells to a Distributor (i.e. AWH SALES - Evanston IL) the margins aren't as great (15% cut) but what they pick up is sales volume. If your a manufacture you need those consistent large chunks of cash flow coming in from your distributors to keep your manufacturing business above water. A good manufacture like Girl will diversify it's sales so that they get the best of both worlds; 1.) They get the great margins but not so great volume by selling directly to the retailer 2.) They get a large amount of sales in units but not so great margins by selling to a distributor.
So what's a distributor?
Like I said above a distributor is basically a "middle man". A distributor will buy products from a manufacturer and then tacks on a margin somewhere around 15-20% and then sells it to the retailer. You�re probably saying 15% is a pretty weak margin, how does a distributor make money? Again a distributor makes it's money buy selling a very large amount of products. If you've ever worked in a shop and been hounded on the phone buy an AWH or Eastern sales rep it's because they've got to move a very large amount of products out of their warehouse doors to stay in business.
So are Dwindle Distribution, DNA Distribution, Blitz Distribution and Giant Distribution really legit distributors?
No they are not. Dwindle, DNA, Blitz and Giant are really manufactures who think it�s cute to call themselves distributors. These companies add �Distribution� to the ends of their names as a marketing tactic to confuse newly opened retailers into thinking they are legit distributors. If they were legit distributors then why do they sell to other distributors like AWH Sales in Evanston ILL?
So who are the legit distributors?
There are four legit major skate hard goods distributors in the USA. 1.) AWH � Evanston IL 2.) Eastern Skateboard Supply � Wilmington, NC 3.) Smoothill � CA 4.) South Shore � Houston TX
That ends the lecture. Like we said we�re looking for some �legit� distribution help. So if you know of a small up and coming distributor have them contact us.
There is a forum called �SHITTALK ONLY� maybe you guys should go play in that sandbox. |
|
|
| Back to top |
  
|
|
|
| oasis |
| Posted: Sat Oct 16, 2004 4:02 pm |
|
|
Joined: 28 Jun 2003
Posts: 364
Location: Hilo,Hawaii
|
Word.
Think of it like WalMart or McDonald's- how can they sell all that shit for so cheap? OUTLETS. They are selling mass volume so they can make their profit margins miniscule and still be profiting nicely.
I never thought about those "distributors" not really being distributors, good call. What do you think about VK and Podium?
I would like to work on getting a distro going but the trouble I see getting us out there. Why would any retailer out of our respective local regions want to take a leap of faith on some random company that's in a distribution that they've never heard of? If you can answer that question and come up with an executable plan of action than I am behind you 110%.
Or are you just looking for someone to pick you up on their already established distribution? |
|
|
| Back to top |
 
|
| skinny |
| Posted: Sat Oct 16, 2004 4:26 pm |
|
|
|
Joined: 12 Sep 2004
Posts: 2706
|
| Yes yes, However I still didn't get an answer about dist for my shit. So once again is it set up to handle 100-200 decks plus shirts and stickers a month? Where is the main area of distribution for you guys. Let me know k.-Milt |
|
|
| Back to top |
|
|
|
| Slim |
| Posted: Sun Oct 17, 2004 1:12 am |
|
|
Joined: 06 Sep 2003
Posts: 2954
Location: pedro point, nor cal
|
Nice explanation BLUEBus, except that in the skate industry, many of the companies that you are calling "manufacturers" aren't manufacturers. They are most often better termed "marketers". In some rare cases, we could give them credit for being product designers as well. But these companies don't manufacture a thing. They are just another form of middle men between the manufacturers and the end user of the product (the skater).
These skate companies call up some actual manufacturer and get some boards made. Usually to the same molds and specs as many other companies. Sometimes they are involved enough to at least come up with their own board design that requires a custom mold, but this is rare, as any browsing of current boards on the market will show. Then they do the same thing with wheels and soft goods and so on.
Now, there are a few large skateboard companies/brands that are also manufacturers. And even some tiny companies too! Some, like Powell, just do their own stuff. Some, like Madrid, do their own brand(s) and boards for others (pocket pistols' wood decks for example).
But your company (bluebus) and 90% of skate labels on the market today shouldn't be called manufacturers. They buy from a manufacturer. What they add to a product is in the worst cases is simply marketing image and in the best cases some product design innovation too. |
_________________
the pen is weak. skateboarding is as deadly as all hell - gonz |
|
| Back to top |
|
| BLUE bus |
| Posted: Sun Oct 17, 2004 5:54 pm |
|
|
|
Joined: 12 Oct 2004
Posts: 62
|
Great Volley Meraboutslim
I tried to break down my explanation with a set of terms that I thought the majority of this forum would understand. When you walk up to get your badge to walk the floor at ASR they will basically throw you into one of three categories your either A.) A Manufacturer B.) A Distributor or C.) A Retailer. Also when I filed my taxes last year my accountant choose �Manufacturer� as the classification that best described my business practices.
Yes you are correct 90% of skateboard companies out on the market today don�t have the capabilities to produce a deck or a set of wheels in house but in a broader since that�s the nature of running a �manufacturing� business in 2004. I�ll try and illustrate. During the day until BLUE bus can really see some cash flow I�m employed as a Marketing Director for an 86 year old sporting goods manufacturer. When this sporting goods manufacturer first started to produce it�s products back in 1918 all of the products were manufactured in house and up until 1999 the majority of products were still manufactured in house. But since 1999 this sporting goods �manufacturer� has gradually replaced all of it�s in house manufacturing with overseas manufacturing. The reason for this switch is cheaper raw material and cheaper labor. This �manufacturer� who once created all of it�s products in house has now become as you call it simply a �marketer� of the products it imports. Like it or not the rules have dramatically changed for running a �manufacturing� business. If you aren�t currently outsourcing your manufacturing you�d better have a plan to outsource before your competitor does or your business won�t survive.
Even though we may not be �manufacturing� the stuff in house it�s not like it�s a walk in the park to run a skate company. Try managing a deck supplier, a t-shirt supplier, a wheel supplier, and a hat supplier all at the same time. And that�s just the �Cost of Goods Sold� side, that doesn�t even take into account all of the marketing and day to day operations responsibilities.
Why do you think P&P was so big in the eighties? Was it because George Powell was creating innovative products in house or was it because Stacey Peralta and Craig Stecyk formed the best team, made the best videos (witch was a marketing innovation not a product innovation) had the best deck graphics and created the best print ads? P&P�s success had much more to do with it�s marketing efforts than it�s product innovation.
The bottom line is you can create the most technologically advanced skateboard products on the planet but if you can�t get a 13 year old skater to pull that product down from his local shop�s wall (through marketing) and buy it then you�ll never make it. |
|
|
| Back to top |
|
| DunnDiego |
| Posted: Sun Oct 17, 2004 6:28 pm |
|
|
Joined: 12 Jul 2003
Posts: 2817
Location: San Diego
|
|
| Back to top |
|
|
|
| Slim |
| Posted: Sun Oct 17, 2004 7:42 pm |
|
|
|
Joined: 06 Sep 2003
Posts: 2954
Location: pedro point, nor cal
|
BLUE bus wrote: If you aren�t currently outsourcing your manufacturing you�d better have a plan to outsource before your competitor does or your business won�t survive.
This depends on your business model. If your business is built on selling quantity of lowest common denominator products to the masses, then yep, you better keep your manufacturing costs as low as your competitors. But there will always be a market for higher quality, innovative, locally made products.
I have nothing against marketing companies or design companies. It's what I do, in fact. I just think that when explaining the industry to people, we need to differntiate between a manufacturer who makes boards and wheels, and the image company that orders them and then markets them to customers.
The skate industry is not like the surfboard business, where for the most part surfboards are still made by real live americans by or under the direction of the master shaper whose name is on the board (al merrick and harbour being my favorites). I see no reason why skateboards have to be a mass-produced look-a-like product suitable for manufacturing by a few companies, and only differentiated by graphics and the clothing worn by the brands' team riders, but that's the sad reality we currently inhabit. |
_________________
the pen is weak. skateboarding is as deadly as all hell - gonz |
|
| Back to top |
|
| DunnDiego |
| Posted: Mon Oct 18, 2004 11:12 am |
|
|
|
Joined: 12 Jul 2003
Posts: 2817
Location: San Diego
|
For now slim, but the time's they are a changin'.......  |
|
|
| Back to top |
|
| BLUE bus |
| Posted: Mon Oct 18, 2004 11:53 am |
|
|
|
Joined: 12 Oct 2004
Posts: 62
|
My business model isn't based on "selling quantity of lowest common denominator products". It's based on selling a high quality product and being smart about how I spend my resources (time & money). If somebody is offering to produce for me a high grade product and I don't have to deal with all of the headaches and the money with actually getting that product produced then I'm all for it. Buy outsourcing the production of my products that gives me the added focus of concentrating on other aspects of my business that need more attention in this industry like marketing.
How do we categorize somebody like PS Stix who according to your definition is a true manufacturer but has now begun outsourcing some of his own production overseas?
It's only a matter of time before the surf industry follows the skate industry when it comes to manufacturing. You should check out the latest issue of Transworld Biz, there's an article on the lack of future shapers in the surf industry. Twenty years from now the majority (not all) of surfboards will be spit out of some CAD programmed machine and not out of a shaper's shack. |
|
|
| Back to top |
|
|
|
| Slim |
| Posted: Mon Oct 18, 2004 12:13 pm |
|
|
|
Joined: 06 Sep 2003
Posts: 2954
Location: pedro point, nor cal
|
BLUE bus wrote: It's only a matter of time before the surf industry follows the skate industry when it comes to manufacturing. You should check out the latest issue of Transworld Biz, there's an article on the lack of future shapers in the surf industry. Twenty years from now the majority (not all) of surfboards will be spit out of some CAD programmed machine and not out of a shaper's shack.
The custom shaper will never disappear. Surfing, being an activity that relies on the swell and tides and nature in general is too organic to adopt equipment that is made in foreign factories. There has been growth in the factory surfboard market but these are bought by new surfers, who buy traditional boards when they buy their next board. The connection between surfer and shaper is just too deep in the culture, as is the availability of a wide variety of surfboard shapes for different sized surfers and waves. I participate in two forums on surfboard shaping and there is tons of activity so I don't believe there will ever be a shortage of shapers.
CAD will be used more. Even master shapers like Biolos of Lost or Merrick or even smaller guys like M10 are using CAD to design their boards and machines to cut them out. They are then hand finished: partly because it gives them a chance to remain hands on and partly because the precision involved would require so many more passes of the machine that doing the final shaping by hand is just as fast. I don't see any practical way to automate the glassing process so that will have to remain hands on.
The difference I see is that those in the surfboard business love the activity of surfing but also love the activity of making surfboards! While many in the skateboard deck business love the activity of skateboarding, very few actually are interested in the activity of making the boards or wheels or trucks themselves. And so skateboards have become/remained a factory-produced item for the most part (except in slalom and downhill equipment and custom shops like F13). |
_________________
the pen is weak. skateboarding is as deadly as all hell - gonz |
|
| Back to top |
|
|
