Kayak Wholesale Prices.

Do you have any idea what they are, and or, how they are determined? I am totally amazed that many dealers only mark boats down by five or maybe ten percent, (and they think that’s a great deal). I suspect that the pricing model has to be somewhere near that of the publishing industry. (Retail price equals ten times cost.) By that model, a one thousand dollar roto-molded boat would cost somewhere around one hundred dollars to produce. (Yes, I know you need to “roll-in” the cost of the mold, but that is written off over time.) Wholesale cost to dealers would be around thirty to forty percent of the “suggested” retail. So…why no bigger discounts?




Not exactly!
Back in the day, when whitewater boats were well under a $K, the cost of the Nth hull was about halfway between one and two hundred to produce and were sold to dealers at a wholesale that was/ is 30 - 40 % below retail.

This did not includes the $65K cost of the mold, wear and tear on the $250K rotomolding machine or tooling for seats, rims, thigh hooks etc.

Composite hulls have a much lower mark-up to wholesale, maybe because tooling is around $25K for a kayak, hull, deck etc, and ~ $10K for a canoe. Composite hulls manufacturing equipment is also significantly lower than rotomolded or vacuum formed shops.

Once freight and interest on operating capital are included, most dealers are losing money at 20% off list, and a 10% discount is more than generous and fair. There are no significant margins in boats as there is in books, department store clothing, etc.

30-40 %

– Last Updated: May-21-12 7:43 PM EST –

You can't look at the cost to make a boat (materials plus labor to make it) as compared to what a retailer sells it for. The retailer doesn't buy it at parts and labor cost, but at wholesale. And you are right that most boats wholesale are in that 30-40% margin range.

Just think. $1000 boat that he gives you 30% off on, so you get for $700. If it was 35% margin, he bought for $650. You pay by credit card, so he pays a fee of 3.5% on the $1000, or $35. He has a total of $15 left to cover rent, payroll, shipping to him, insurance, utilities, etc. And he might have thrown a free class in on top of all this. And wear and tear on the demo boats which you used to make sure you got the right boat.

Retailers sure aren't getting rich.

your suspicion is wrong
30-40%, when you’re expecting 15% discounts as a matter of course you’re expecting the business to go out of business and the person helping you to be of no value.

I have been
in the sea kayak business 30 years. started in 1982.

If you think there is plenty of money to be made retailing kayaks get into it. There are fewer and fewer kayak shops every year and one of the reasons is that the mark up for the shops is so low. There are plenty of places in the country without a shop. Go For It.

How to make a million in the canoe &
kayak business:

First you start with 2 million dollars.

At least that’s what CEW said at a Raystown campfire.

Go ahead, blow out your trust fund!


You should compare to manufacturing
Not to publishing. Using your model, then a car with MSRP of $30K costs only $3000 to make. I don’t think so!

Kayak retail price = TEN TIMES the cost to make it??? Maybe 10x the material cost, but what about the labor? Especially for hand-made kayaks, which many of them are.

10% off MSRP is actually pretty good, assuming the kayak is a 1st-quality new one with full warranty, from an authorized dealer. You should never assume that, by the way. Find out for sure.

Freight costs
Besides the wholesale cost of the boat to the retailer, the other possibly big variable is FREIGHT. If a retailer can drive to the manufacturer, they often do, as it is cheaper and less prone to damage. But if it has to shipped cross country, could easily be $100 per boat. And freight cost is based on size, not price of boat. So as a percentage of the total retail price, it’s actually higher on say a short cheap rec boat than a longer boat. Larger retailers can order a container at a time and save, but this is not possible for smaller brands/shops.

Then you get the issue of damages. Depending on the contract with the vendor, the retailer might own it FOB - basically, as soon as it leaves the factory, the retailer is responsible. So if it gets damaged, the retailer needs to file a claim, then wait….for months.

You are way off.
I was in outdoor gear purchasing for some years and can tell you that your estimates on markup are WAY out of line. The best markup in outdoor gear tends to be in the lower tech higher volume items like clothing which are “keystoned”, which is insider slang for being bought wholesale for half what the list price is (that $100 polartec jacket cost them $50 therefore a 50% margin). When you factor in shoplifting losses and the necessity of periodic clearance sales, any shop that can maintain a profit margin of 15% overall is doing an outstanding job. The mean was more like under 10% net when I was in the business.

But, ironically, the higher tech major items like tents, frame packs and kayaks have a lower margin, generally only around 35% or less. Some items are even just 25% margin. If you ever see items like this on sale for more than 30% or 40% off the seller is just cutting their losses by trying to get them off the floor to raise cash and make room for stock that WILL turn over a profit.

Even though I have been an REI member since 1972 and there are now 2 shiny new REI stores in my town, I admit I voluntarily forgo the 10% member dividend more often than not by purchasing my kayaking and other outdoor gear at our wonderful local independent outfitter, Exkursion, who has served the region’s wilderness sports recreationalists loyally for at least 40 years with both an outstanding range of gear and excellent classes. They truly deserve my support.

I get frustrated by the trend towards the big box discount and “amazon-can-send-me-anything” attitude that so many people have in outfitting themselves. We are rapidly losing our choices and convenience in where and what we can buy. My good-sized city used to have 6 independent outdoor gear vendors in a dozen outlets. Now we are down to one in town and one an hour distant. The same thing (actually worse) has happened with bookstores. The big boxes came in, drove the independents out of business and now they too have pulled out. There are no bookstores within the city limits now except connected to the colleges. EMS has closed its stores here and if REI does the same, the city will be in rough shape selection wise.

Until people stop basing their purchases on squeezing the rock-bottom lowest price out of everything, we risk losing the invaluable blessings of personal service, local expertise and investment in teaching and community that independent shops can offer us.

End of lunchbreak rant.

Great post w-leaf

The biggest loss
Is that many dealers are no longer willing or enthusiastic about spending the time investing in the customer because they feel that the majority will milk 'em for info and then scan and scram for the best price. Can’t blame them because that is exactly what happens quite often. Also can’t blame the customer for wanting to save a few $ in the economy but long term maybe the dealer needs to start charging for that “shop education” time!

Can’t blame the manufacturer to selling to broad distribution channels because they want to get all of their product to market and the online sales channel is the fastest growing segment of new sales.

I’ve been in the paddlesports industry as a sales rep for top companies of PFDs/Paddles/Boats for 14 years and 7 years prior as a shop employee. The ma and pa stores are losing enthusiasm rapidly. Just spent 2 hours responding to one dealer that is getting hit with the price match and aggressive buyer so often that they are losing the passion that has helped produce countless new paddlers. Sad. In the end, the sport loses a community hub to meet new paddlers, expand skills and service the product they spent their hard earned money to get.

There is a good government study on the airline industries challenges in the mid 90s that is analogous to the online discount sporting goods market today:

Check this out: http://www.gao.gov/archive/1999/rc99221.pdf

Take home, the shops that evolve and offer more services can actually gain market share but there will be a loss of many retailers along that path.

Give your local shop a chance to compete and remember that you are buying a lifetime investment that you may need help with down the road. I often ask people at boat ramps the exact price they paid when they bought their boat. No one ever remembers but the ones that patronized the experts always seem better equipped with the right gear and a set of skills to pursue their adventure. Value can be calculated in more ways than % off the msrp.

Happy Paddlin,


2nd that. good post.

Reminder that REI is a co-op

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Since it is being used so strenuously in this argument, I feel compelled to remind everybody that REI is fundamentally different from EMS, Cabela's and particularly WalMart. It has always been and remains a member owned co-operative. I've been a member since 1972 when they mainly sold climbing and backpacking gear out of a Seattle store and a catalog. They pay a dividend yearly to every member and are governed by voting by that membership and a lot of direct involvement from their employees.


It's a good place to work because the employees and customers own it.

the “crowing” bothers me
I have to confess I was upset by WB’s crowing about walking out of the shop when the owner who he’d gotten so much information from got cranky. We all have bad days and i doubt you can really appreciate the level of stress and frustration that arises from trying to run a small outdoor business. i worked for 3 of them and have had friends that operated several more. They put enormous hours into those shops, and are usually teetering on the brink of personal financial ruin at some point every season. All it takes is a few months of bad weather or a dock strike in a foriegn country (like the year we couldn’t get any cross country skiis from Norway when the big XC fad hit in the mid 70’s) and all your work goes down the drain.

It would have been more gracious of WB to say – “Yes, I admit I took up a lot of your time and I really do appreciate how patient you were and how much I learned about this boat I am now prepared to buy. You’ll be happy to know your hard work is about to pay off.” I guarantee you would have gotten a humbled apology from that owner and he would have fallen over himself to see that you got the deal you wanted and needed.

We are too quick to be self-righteously indignant, I think, never acknowledging our own complicity in the events that offend us.

You sure hit the nail on the head with that one.

my local shop is owned by a resident

– Last Updated: May-24-12 7:58 PM EST –

100% of his state taxes stay in my state. 100% of his local taxes stay in my community. As a local merchant he understands the importance of community, so he spends as much as he can within the community. Want me to go on?

REI does a decent job and as I posted above, I shop there occasionally. They make an effort when it comes to events. But they do not compete with any local shop I've been to in the last decade when it comes to service or selection.

self righteous was an apt description
I really have nothing more to add. This person can make all the claims they want; it’s pretty clear that price was a big determinant. Well, down the road, you get what you pay for.

here’s what gets me
someone driving up in a Mercedes could spend $600 at a fancy restaurant paying for four people and tip 20%.

I’ll help that person for two hours in the showroom and at the water THEN they ask for a discount, “what’s the best deal I can get on these two kayaks?”

I’m thinking to myself, why don’t you do that at the restaurant or the Mercedes shop next time.

now just how do you think they got the

– Last Updated: May-24-12 9:50 PM EST –

money for the mercedes?!


Customers are NOT “always right"
I’ve spent most of my 45 years in the working world in businesses where my responsibilities were to directly “service” the needs of customers. The whole time I have firmly resisted the mistaken perception of “customer service” that is evinced by that old saw “the customer is always right.” This is no more true than it would be to say “my children are always right.”

Good customer service should be like good parenting – you, the salesperson and expert on the goods being considered, should be (like a good parent) the one who assesses what is in the best interests of the customer/child and then steers them towards making that choice. If the customer knew exactly what would best serve their purposes, they would not need your help but could just walk in, pick up the right item and pay for it and walk out. Pandering to misinformed or totally clueless customers does them no good and is poor “customer service”. Being a truly good salesperson requires a great deal of understanding of human nature, much patience and a strong spine. Sometimes it means being insistent, pushy and even rude.

This is particularly critical in sporting goods, since the wrong choices can lead to outcomes for the consumer ranging from buyer’s remorse to actual risk of life and limb. I can’t possibly tell you how many times customers walked into shops I worked in and demanded that I sell them items that were completely inappropriate for the purposes for which they intended to utilize them. It would have been simplest for me to just say, “sure, you’re the customer and you can have whatever you like” and marched them to the counter to pay for it. (it should be obvious I am talking about major items like tents, packs, sleeping bags, boats, skis and climbing equipment, not cans of Sno-seal or rain ponchos.)

But I always felt it my responsibility to gently draw some information out of them before closing the sale to determine if the purchase was going to meet their needs. Sometimes they can’t be rationally persuaded to consider other more suitable items, like the guy who came in demanding our “warmest sleeping bag”, which was a $300 down 12” loft arctic expeditionary bag. Turned out he had spent a miserably chilly weekend in a hunting cabin in an old army surplus bag and thought this purchase would guarantee his comfort. After I found out what was motivating his choice I tried to talk him into a more reasonable $75 polarguard 20 degree bag but he would have none of it and walked out with the arctic bag. Two weeks later he crept sheepishly into the shop and asked if he could put up an ad on our bulletin board selling the thing, which (as I had warned him) had been like sleeping in a sauna inside the cabin. I conferred with the shop owner and we made him a deal – though sleeping bags were not refundable once used (per state law), we gave him back the wholesale price on the bag plus a discount on the more appropriate synthetic model, then had the down bag cleaned and put it in our gear rental livery. After that he listened to me when I advised him on other purchases.

At the other end of the spectrum were the “tire kickers” (like what we have been talking about here), people who took up massive amounts of our time getting every detail of items in stock and never buying anything. Some clearly just wanted attention but I often picked up that they were merely very insecure people who had trouble making decisions. In such cases it was my responsibility in “serving” them to prod them into pulling the trigger on their purchases. We had a guy who came into our shop 3 or 4 times a week for two months one summer, and each time he would obsess over a particular premium Trailwise sleeping bag made with a very silky proprietary shell fabric. He would insist on having one of us take it down from the hanging display and lay it on the carpeted “try out” area so he could slide inside with his shoes off. Frankly, I thought the guy had some sexual fetish with it since he would lie in it sometimes for 20 minutes, grinning and patting the thing. His visits became an eye-rolling joke amongst the staff (though we were always courteous to him about it.) Finally he came in one night when the owner (a prosperous psychologist who ran the shop as a tax writeoff) was in the shop. The owner said “Is this the guy you’ve been talking about? Get rid of him.” Instead of evicting him, I volunteered to close the sale (the other sale staff then placed bets on my attempt.) I walked over to the guy (who was standing by the hanging bag, fondling it) and told him straight out “No more test runs. It’s time for you to take that bag home with you.” He was startled and said “but I’m not sure it’s the right one for me yet.” Says me “I know you really want this bag and it makes me sad to think you have missed out on all the camping trips you should have been taking this summer – no more looking, today is the day you need to leave here with a sleeping bag.” I took a chance that he would storm out indignantly. But instead, he turned and looked longingly at the bag and said “You’re right.” He bought it. (and our boss ordered the employee who won the bet to split his take with me)

Whether selling you hiking boots, a sleeping bag, a kayak or (as I do now) electrical upgrades to your facility, it is not my job to “kiss your ass”. It is my job to use my expertise to assess what you need and then make sure that you get it. It isn’t always the people who coddle you who are the ones best “serving” you.