How Fly Shops Price Gear

MidCurrent had a short article on how gear prices are set in fly shops.

Except for a brief discussion on markup, most of the article focuses on the reasons for the lack of flexibility in retail pricing. That basically comes down to maintaining brand reputation and protecting fly shops from the big-box stores and discount online retailers.

As I noted in other posts, the fly fishing industry is tiny ($750 million revenue in 2012); compare that to Trident gum that had sales of $3.32 billion the same year. So the sales of all the rods, reels, waders, flies, and so on was less than the sales of one brand of chewing gum.

During that same year (2012), the average annual sales per shop was $314,789 – with shops in the West leading with sales of $431,294.

Out of those sales, a fly shop owner has to pay for building rent, utilities, taxes, salaries for employees, carried inventory, and finally take home enough to feed one’s family.

Now think about going into a fly shop. All those shiny rods, reels, waders, and clothing were all bought at wholesale prices, paid for by the shop’s previous sales. Until the inventory is sold, the fly shop is operating at a loss – the fixed costs (e.g., utilities, taxes, salaries) continue to accumulate.

Let’s have a little fun with numbers using the 2012 data and applying it to the present period.

The number of fly fishers was estimated at 3.83 million. Based on the total industry revenues, each angler would have spent an average of $195. For the sake of argument, we’ll assume the numbers hold true to today.

A fly shop owner has to do everything possible to get a customer into the shop because that shop needs roughly 1,600 sales transactions per year to generate the average annual sales of $314,789. Each day, every day, a shop needs over four sales transactions, averaging $195, Granted, there are peaks periods and slow periods, but the inexorable calculus is that a good deal of daily foot traffic is needed through the shop, and a percentage of that traffic must be converted to sales.

Looking out the window and hoping someone will stop in is a path to going out of business. If your local fly shop isn’t actively promoting the sport and itself (except perhaps in destination locations), it’s on at best a slow spiral on the same path.

Conversely, every time you go to a fly shop, at the end of the free information exchange about the hot fly or what’s fishing well today, buy something. That fly shop can’t do anything about the price of the Scott Radian or the Simms G4Z waders; all they can do is sell at the established price.

What they can do is share their knowledge of an activity we all love – if they can stay in business.

You can read the article here.

Resolutions

Early January of every year brings the human interest story on New Year resolutions by bright-eyed but seemingly empty headed talking heads on local television news. This year was somewhat more muted but present nonetheless. Perhaps, real news, or more likely sports reporting, crowded it out – as was certainly true in these environs with the late season performance of the Seattle Seahawks.

I don’t subscribe to the idea of resolutions as public spectacle – most apparent in the inevitable follow-up News at Ten report later this month or next when the clever answer is sought as to why someone’s resolution has already been tossed onto the trash heap marked “too hard.”

And yet, I think there is value in doing a reset on a present course of action (or inaction), a situation, or even a way of thinking about certain things. Any opportunity to take stock of where you are and a resolve to make a change is a good thing. I simply think that loading down the first days of a New Year as a poor choice of timing.

Nevertheless as this is the first post of 2015 there is some sense of synchronicity that compels me at this time to at least think about what I should be doing or looking to achieve in the now 359 days that remain. And as this is nominally a fly-fishing blog, some of those reflections should be related to that theme.

As I get older, I have more of a sense of time. I’m completing almost four weeks of time away from work (using vacation time with the company Christmas/New Year holiday). And while it has been great, it has sped by with a pace that has been almost incomprehensible. So, perhaps the primary focus of the remainder of the year and the years left to me on this rock should be to learn to better treasure every moment with everyone and everything I value. There should be no lost moments.

As much as time-focus outward, there should be time-focus inward. To find inner peace in world gone mad with electronics, a societal neoliberal mindset gone insane with impossible schedules, contingent employment for too many, and a predatory owner class, requires a turning inward for quality time with one’s own mind. And there is no better way to do that than meditation. Spending even five to ten minutes daily turned inward is important for the body and soul.

Combining the above two thoughts leads to the fly-fishing reflection for the new year. Fly fishing in itself can be a form of meditation if properly approached. The cast is zen-like its ability to impart peace as one works line from forward to backward (remembering of course that if actually fishing hopefully sooner than later the fly must be presented). Standing on the shore or in the water provides serenity – even if civilization is not many yards away. It is a time for self reflection and self awareness – and that is meditation.

Oh yea. I do have some other things one might call resolutions for 2015. I need to actually plan for moving behind the corporate job I’ve been doing for too, too many years. And finally, this is the year I get a migratory salmon on the fly.