Fly Fishing Forum - View Single Post - Powell Fly Rods Is Selling Direct
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Old 11-10-2003, 10:58 PM
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flyfisha1 flyfisha1 is offline
Marine Scientist
Join Date: May 2002
Location: NYC, South Jersey, Eastern PA
Posts: 1,080
There are several reasons that I suspect Powell is starting to sell direct to consumers. For one, if the company is indeed in a state of transition, the new owner may think that the terms dictated by distributors for excessive discounts and extended credit terms are a load of bull; this is, btw, regardless of how long the guy's been in the rod-building profession. In the long run, a distributor can squeeze the manufacturer for so high a discount that even though there are sales figures, the manufacturer is working his tail off and making literally no money. In that case, why continue to go through distributors? And if the stores happen to have agreements with their distributors that they will only sell what the distributor carries, then Powell is SOL in that case as far as sales at the retail level are concerned in those particular stores. So the manufacturer sells direct to the end user at wholesale, which is probably still more than three times the cost of manufacture. What's to lose?
There are other reasons to get out of distribution, but the ones listed above are reason enough. Let Powell sell direct; people will still walk into their LFS a couple of times each year and pick up a new rod by some other manufacturer.
If it were my company, I'd probable sell direct to stores at wholesale with discounts based on volume, and to consumers as well at prices a few points above the MSRP. That way, everone wins.