From: steveth@netcom.com (Steve Thomas)
Subject: Van Dealers (was: Re: Done Over)
Organization: VisionAire, San Francisco, CA
Date: Fri, 20 Nov 1992 17:21:44 GMT

In article <1992Nov20.133554.1@cc.newcastle.edu.au> bibid@cc.newcastle.edu.au writes:
>	I'm after peoples comments, either good or bad, on the following
>topic.
>
>	I've been retailing kites from two Australian manufactures mainly
>at local markets and by flying in parks (I do not have a shop).  Because
>I do not have overheads such as rent, electricity, etc. I can afford to
>sell kites below RRP.  
>[stuff deleted]
>	Even at these prices I do not turn over a lot of stock as I 
>effectively work only one day a week.  My local competition has 
>complained to one manufacturer who will no longer supply to me.  I have 
>not spoken to the other manufacturer but I'm under the impression that 
>the story is the same.  This effectively cuts me out of the industry.
>

This issue of "Van Dealers" (i.e. "people who resell kites that have no
established stationary shop") keeps haunting the kiting industry.  I've heard
arguments for and against:

For:

Van Dealers can sell kites at a much cheaper price than shops because they
don't have the overhead.  Cheaper prices for consumers helps promote the
sport by making it more accessible to more people.  It also helps manufacturers
because their products are sold at a lower price, and therefore they sell
more of their product.  There are now many very reputible Van Dealers, an
example of whom would be the Bay Area's Tom McAllister, who has hosted the
very successful West Coast Nationals and will be hosting next year's World Cup.
Without Van Dealers, many people would have never gotten into the sport.
Since the sport is so new, dealers need to be as close as possible to where
there is flying going on--stores often have difficult times selling the
concept of sport-kite flying, whereas a van dealer is usually right next to
a field where they can demonstrate their products.  Overall, the Van Dealer
concept is a more advanced concept of selling products, since it is cheaper
and more effective.


Against:

Van Dealers are harmful to the industry because they take away business from
established stores that have invested time and overhead, and often have 
employees at stake.  This is eventually harmful to consumers and manufacturers
because Van Dealers do not represent a steady entity to do business with.
Given their temporary nature, there is a lot of room for abuse of consumers
and suppliers.  Since they do in fact sell kites at much lower prices,
they tend to hurt local stores severely--and eventually drive them out of
business.  It is very bad for industry to not have established stores, since
it leaves no staying power to the retail presence.  Manufactures must deal
with a very precarious kind of channel since they are not dealing with
somebody that has anything to lose, and can simply "drive away" if they need
to skip town.  The established stores are what drive the industry and are
what will be responsible for its future growth.

+++++++++++++

I hope other people here can add to either of these two paragraphs...

Right now, the manufacturers are in control.  There are several manufacturers,
ToTL, SkyBurner, and others, that have a "sell to anybody with a resell permit"
policy.  Others, usually smaller manufacturers, generally have Exclusive-type
of arrangements with shops, and try to stay away from Van Dealer--they don't
generally do the volume that a well-located shop can generate.  Also, the
Exclusive is leverage for a smaller manufacturer against people like ToTL--
if you're a shop, you'll have a better mark-up for kites that only YOU sell.

Personally, I think there's room for both.  Most stores that are located in
high-traffic areas do just fine selling to people that are ready to buy.  Van
Dealers usually don't get in the way of stores.  The "usually" here is real
important, though.  As the "Against" paragraph points out, there's lots
of room for abuse in the realm of Van Dealers.

Here in the San Francisco Area, we have an example of a well-balance microcosm.
At Pier-39 ("tourist trap from hell"), there's Kite Flite, a store that has
very high overhead, and along with it a very high mark up (slightly higher
that Sug. Ret).  They have Exclusives with two Bay Area kite makers, and do
quite well with their products.  Since they are in a location where they
get tons of foot traffic from all over the world, they get their high prices
from their kite without any problem.  Also, local flyers will pay the extra
mark-up for the kites that have the Exclusive.  A short ride across the Bay
Bridge brings you to Tom McAllister at Highline Kite of Berkely.  Tom sells
kites at prices that are generally at least %20 less than Kite Flite.
Tom Locates his "Store" right next to the flying field at Berkely, and sells
kites to people interested/amazed at all the activity going on at the field.
He also has a yellow-pages add that brings people to the field.  Tom does
a reasonible amount of business, but no where near the volume of Kite Flite.
Tom pays no rent--what Kite Flite pays can be dicussed in alt.larceny.  Kite
Flite has a very large selection, and it is all very brilliantly displayed.
Tom has a smaller selection, and you need to ask him to pull out the kite
you want to see.  Etc.  Both have their advantages, and both peacefully
coexist.

The San Diego scene, on the other hand, is anarchy.  There are so many
dealers down there (Van and Store), and competition is wild.  Along with the
retailers, there's also several manufacturers there (ToTL, Rev, Hyperkites,
etc.).  If you want a ToTL kite, or a Rev, you can get it at almost wholesale
if you look around.  I don't see how the stores down there survive.  I don't
see how anybody selling kites down there survive.  From the manufacture's
and the flyer's standpoint, it's a much more difficult game, since there are
so many people to deal with down there, and there's so much competition.  As
a flyer, you often don't know who you're buying from, as a manufacturer, you'll
have trouble picking out who to sell to--who will both move a lot of your
kites, and will be a lasting presence.

I think everybody has their place here.  Again, some of the smaller
manufacturers I know have good ties with various shops due to exclusive
arrangment--and the shops start to hate the big manufactures because of their
"sell to anybody" ways.  On the other hand, the van dealers sell of a market
that probably wouldn't be sold to otherwise.

My advice to stores, van dealers, and anybody else in business for that matter
is to not compete on price alone, but compete on service and availibility.
This way, everybody wins.

_________
Steve Thomas
steveth@rossinc.com

Newsgroups: rec.kites