Canoe msrp/list pricing question

-- Last Updated: Aug-10-16 8:07 AM EST --

Why have the high end canoe manufacturers established their own form of price fixing? There's no fair market competition? Have canoe prices been inflated due to the shrinking industry compared to kayaks? I just saw a dead mint Swift prospector retail (3495) reach 1800 on ebay. Not even the reserve and half of the price. Maybe the summers almost over, even though sept and October are awesome months to paddle. Maybe people didn't want a forest green and champagne canoe. I'm all for small business and the work that goes into it. Seems like once you take these cars off the lot their worth 50%. Anyone? Tim

low margins
I think consumers have become too accustomed to the general overpricing of goods that are then “discounted”. I worked for many years in both retail and wholesale good sales – most of the clothing and household items that you buy have “list” prices that are marked up 2 to 4 times what the store paid for them (100% to 300% mark-up above their wholesale cost). In other words, they have profit margins of 50% to 75%. So even when you got that leather jacket at a department store for 60% off, they were still making money on you.

On the other hand, most outdoor gear, particularly higher end items like quality tents, large backpacks, kayaks and canoes have margins around half that of other consumer goods, more like 20% to 35%.

Boats are NOT cars and to expect the same sort of depreciation on them is not realistic – apples and oranges. A kayak or canoe that has been properly stored at a dealership for 3 years is just as good as one that just came off the truck last week. The lowest price I ever paid for a new kayak was 30% off and the shop owner was basically selling it to me at cost because he needed to raise cash for new seasonal stock, needed the space for other merchandise, it was the end of the paddling season and I had been a loyal customer for years.

Prices on used watercraft are market driven, as they should be. A well cared for used boat is just as functional as a new one so a popular and desirable model in good shape can command close-to-new prices.

Building canoes is a costly process – prices are not “fixed”, they actually reflect the expense required in labor and materials more accurately than the majority of other products on the market. This is reflected in the price differentials between different materials used for various models (i.e., carbon fiber and Kevlar are more costly than fiberglass or plastic).

Also, as with everything
I agree with willowleaf on the margins/materials points. Also:

If you’re selling it on craigslist, the forums, or ebay, I expect 50% off or more. I think $1800 for a non-dealer lightly used boat is fair.

I would never pay a private party over $2000 for a used boat, even if its in mint condition. Why? If im spending 70%+ of the new cost, why not just buy it new and get exactly what you want with a dealer warranty and such? The reason I buy used/ebay/craigs/forums is to save money. I have bought 6 boats in my paddling career and at most paid 40% of retail cost, with the cheapest being 20% (for boats in good condition). The consumer on ebay isnt looking for a ‘discounted retail’ price; we’re looking for a good deal, which for me, even if the boat is mint, means paying less than $1400 for a kevlar boat, and really a good deal is less than $1000. I go online to pay 10-40% of retail. Often it takes a year of searching, but I can usually find what I want for a very good price with enough patience, a willingness to drive a few hours, and lots of searching.

Anyways, that’s my .02

Agree with the above
Most softgoods operate on “keystone” (50% margin), so you can discount a tee-shirt at the Gap 25% and still make money.

A canoe, at MSRP, is a 30-35% margin at best. Add in $50-120 per boat for freight, etc, etc, and you see that the $2800 canoe in your local shop might net the owner $700-800 IF you buy it at list.

Then figure in the costs of rent, insurance, blah blah blah, and you realize that you’ve got to sell a buttload of canoes in order to cover the overhead, pay the employees, and hope to have something left for yourself at the end of the year.

If someone buys a canoe for $2800, uses it for a year, loses interest, and wants to dump it, then anything they can get back from their initial outlay is fine. Better a loss of $1000 for them than a wasted $2800. The dynamics of the sale, in other words are completely different.

Price fixing?
Is that what we call it now, when competition and market forces result in similar pricing for similar products?

I agree with all of the above. I will pay as much as 50% of new pricing and maybe a little more if I can examine the boat in person and it’s essentially pristine. Ebay buyers commonly have to consider the risk of an item being not quite as good as presented, and figure that into their bid - so the comparison to new pricing isn’t quite relevant. .

Price fixing?
Raw materials, rent or investment in a shop facility, climate control of that facility, OSHA requirements, labor costs, investment in infusion machinery ( costly) state and local taxes which vary widely, workmens comp and other required insurance.

There is no price gouging. Mfrs are just looking for some profit to keep the business going and to pay themselves a buck an hour. E bay is a wild card… Often you have no idea what you are actually getting and have no recourse if things do go wrong.

The OP ought to go work in a canoe shop to understand this better.