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Discussion Starter · #1 ·
Hi guys

after reading all the great reviews you get on your rods , reels and customer service i thought i would look into maybe trying to snap up a few deals from ebay ,no disrespect to you guys but i just cant afford to buy stuff direct from penn for personal reasons.anyway a little disappointed with ebay because what limited peen fishing gear shown on ebay is snapped up very quickly,dissapointed but more determined because there is no better review you can get for a product than demand .

so my question for you guys is when you price a rod reel for fishing what are the limits of design ?as in do you base how good a rod/ reel you can make on a set price that you think most anglers can afford ?

e.g if the average fisherman could afford to pay 1 grand for a reel how much better would it be than the 525 5x ,10x, 15x, ?

lol ihope you can understand my daft question :)

mark:)
 

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Not quite sure if I follow your question, but let me try.

Firstly, Penn do NOT sell direct to the public.

Secondly, we only set guideline Recommended Retail Prices - the shops decide what price to sell the products at. For us to do otherwise would be Retail Price Maintenance, and would be illegal.

Obviously, as more expensive material & technology is put into a product, our costs rise, so the selling price to the shop rises, and usually, unless the shop decides otherwise, the selling price to the customer rises.

Other than above, don't know what to say.
:unsure:
 

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Marcus

I think Penn already do have a range of different priced/spec'd reels. Just look at the range of boat reels right up to the big metal International reels. Their cheaper reels are made of carbon fibre composite, but as you go up in price point to the International series, then Penn can afford to use more exotic/more expensive materials and design in their construction.

Most manufacturers do that already anyway.

Steinbeisser
 

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Not quite sure if I follow your question, but let me try.

Firstly, Penn do NOT sell direct to the public.

Secondly, we only set guideline Recommended Retail Prices - the shops decide what price to sell the products at. For us to do otherwise would be Retail Price Maintenance, and would be illegal.
Not pointing any fingers... but if Penn have no say in the shop selling prices, can you explain why every single tackle shop advert I have seen, either online or in the magazines etc has the new Mag Xtra priced exactly the same at £115?

These reels have been available for several months now, so I would expect normal market forces should be in operation i.e. in slight variation in pricing. I am yet to see this reel advertised for anything other than £115, not even a single penny under! Or is it just me....
 

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Competition between shops perhaps? From a friend who owns a tackle shop i know that there is the price shops buy for, the RRP, and then an expected profit margin. However shops realise that if the overprice items they will loose sales to cheaper rivals who offer the same goods at a reduced price. This is why many tackle shops offer price match deals, and how many smaller companies who buy smaller quantities cant afford to have such low prices due to higher initial outlay (cheaper in bulk) and the need for bigger profit margins. Hopefully this helps you, as this is my understanding of how the prices are actually set.
 

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Discussion Starter · #6 ·
so what is the real price of a reel ,as in how much more do we pay {rrp}than the shops buy them for ?and another question for one of the penn guys is why dont you sell direct to the public ?

Mark
 

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I can give an example, note I am only using this (names removed) as it is one i know about. Reel 'x' costs £45 plus VAT, or £40 plus VAT if you buy five or more. This works out at about £53 for one reel or £47 for five or more. The RRP of the reel is £79.99 as suggested by the manufacurer, however other shops are selling at between £59.99 and £69.99 as an introductory offer to attract customers. This means that the shop selling at £59.99 will sell more, forcing other shops to sell for a price of £59.99 due to competiton. The projected income on the reel is actually £32.99ea for orders of five or more, however being sold at £59.99 instead the actual profit is only £12.99 per reel. I hope that explains it for you.
 

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so what is the real price of a reel ,as in how much more do we pay {rrp}than the shops buy them for ?and another question for one of the penn guys is why dont you sell direct to the public ?

Mark

Put simply Penn are a manufacturer and wholesale distributor. They do not want the hassle of selling their product to thousands of individuals, as then they would be a retailer with all the consequent costs of becoming so.

They make agreements with the retailers to sell their products, in varying quantities to the retailers, who in turn incur their costs setting the displays and employing the assistants who serve you the individual customer. Penn by law has to allow the retailers to set their own price.

If a retailer wants to undercut the market, by selling cheaper than cost, that is their choice, they may feel that by doing so they will be able to sell other products at a higher margin than their competitors and thereby cover the costs.

Also stock, reels etc, is money in another form, it either costs the retailer interest, if they have borrowed to pay for the stock, or lost interest that their cash could be earning in a bank deposit account, if they have not.

Either way they have to cover their own overheads, shop rent, heating, light, etc staff, insurance, bank fees, transport etc, this they recover by marking up the price at which they buy their stock from the whole-saler, which in turn make their margins by selling in bulk. The more you buy of something, usually the cheaper the price, except in the case of commodities, oil, copper etc, which I won't go into
now.

If you want a cheap Penn Reel, open a shop and order 100 off, then sell 99 and keep 1 for your self, and the profits from the sale of the other 99, but don't forget, you will have to set up in an area where you can guarantee to buy minimum quantities for a long time, and if you don't have the cash, or can't obtain the finance, you won't be able to get started. Don't forget however as well, that within your margin has also to be 17.5% VAT. This tax you as the customer pay at the time of purchase and in turn is paid into Gordon Brown's back pocket to give to Bambi to pay for the Iraq War.

Penn will not say what they sell to their retailers for, as their rivals will be able to
use the information to undercut or attack them in someway.

Here endeth the Business Studies Lesson.
 

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Competition between shops perhaps? From a friend who owns a tackle shop i know that there is the price shops buy for, the RRP, and then an expected profit margin. However shops realise that if the overprice items they will loose sales to cheaper rivals who offer the same goods at a reduced price. This is why many tackle shops offer price match deals, and how many smaller companies who buy smaller quantities cant afford to have such low prices due to higher initial outlay (cheaper in bulk) and the need for bigger profit margins. Hopefully this helps you, as this is my understanding of how the prices are actually set.
This is all true.... but it actually confirms what I am saying, not the opposite! Competition results in varying prices, as each seller tries to attract custom away from others. Any normal market has price variation and fluctuation, different deals etc, but this variation appears to be completely non-existant at the moment with this particular product. Why is this?

If this reel was advertised by one seller at £110, even for a short period until stocks ran out, they would sell like hot cakes! There would still be a profit margin, albeit not as big (which wouldn't matter as the increase in sales would almost certainly cover that loss). Having said that, if they cannot then replenish their stocks, for whatever reason, then they may be shooting themselves in the foot...

Just look at other items of tackle in the magazines or online and you will see slight variation in advertised prices, which any normal market naturally has. I have been biting my tongue on this for a while... but I am afraid to say it appears something fishy is going on here, if you excuse the pun!:g:
 

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Discussion Starter · #11 ·
thanks for all the replies guys ,i am not sure i follow it all but it makes very interesting reading .


before i make this next comment i just want to say this next comment is no way aimed at penn .

so let me get this right if i bought 100 reels from a supplier i would get them cheaper than the guy buying 10 ? am i right ?

so me being the bigger of the 2 dealers i could offer potential customers a reduced price without losing profit ,yes ?

once i get the other dealer out the way because they will no doht go out of business ,leaving me the run of the market .

is this in a way not price fixing ?

obviously the supplier wants to do best for its self but in the interest of fair trade shouldn't all dealers pay the same regardless of amount ordered .

Mark
 

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Good question. A point to remember though is that postage is always cheaper in bulk than in single. Another flaw in your plan is that if you buy 100 reels you need somewhere to store then. A bigger premises will increase overheads, eating up your profit margins. Now theres one for you to ponder over?
 

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WOW - You really know how to open a can of worms.

We could fill pages of this thread with further business studies lessons etc. (and the one listed was a real cracker), but suffice to say, dealers set the selling prices, we publish Recommended Retail Prices.

If dealers choose to sell at less, then it is from their profit margin. For example, a dealer CAN sell a 525 Supermag Xtra at any price, say for a crazy example £10, instead of £150. Would he sell more - in this case yes; would he lose money, yes, so why sell them at all when he can certainly sell them at £150. He would be better NOT buying any, so he has none to sell.

No manufacturer of ANYTHING will publish either the cost prices (ie. what it costs to manufacture the item), not will any manufacturer who sells via a distribution chain, publish selling prices to that chain - as someone else indicated, this would be commercial suicide, as it would let the competition know EXACTLY what they had to beat.

Don't know if all the above makes the muddy waters any clearer, or even worse...
 

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Back to the original question.
A more expensive reel will not necessarily be a better reel, in my opinion, the 525 is 'the' fishing reel for the west coast of scotland, some of the east coast, welsh and irish coasts; basicaly any rough ground mark where a reasonable cast may be required. Incredibly I have a total of eight 525's, that how much I rate them; its a fitness for purpose thing and the 525 is the current benchmark of fast retrieve robust small/medium casting reels. Same applies to casting reels, I only use Abu's but there are more expensive reels on the market, Shimano calcutta for example, is it a better casting reel?; I would say no. Abu 55/65 is probably the benchmark here.
 

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Discussion Starter · #15 ·
Good question. A point to remember though is that postage is always cheaper in bulk than in single. Another flaw in your plan is that if you buy 100 reels you need somewhere to store then. A bigger premises will increase overheads, eating up your profit margins. Now theres one for you to ponder over?

he he he lol its not really a plan just insane ramblings lol

good point about the postage :)


and i can see what you mean about storage and the cost involved BUT!!!! (LOL not an angry but ) because your making money on selling products at a reduced price does that not effectively cover the cost of storage .

Mark
 

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Discussion Starter · #16 ·
just to clarify something my original questions was about reel design ,and what were the barriers in making the ultimate reel ,thats why i mentioned cost .e.g is the ultimate reel design hampered by what suppliers think an angler can afford ?


another of shoot from the design part of the question is to do with alvey beachcasting reels,somebody can quote me if i am wrong but is the world casting record not held by someone using this reel ? if so why dont we see more of that type of reel here because it clearly works .

also the reason for asking the penn guys is the have made one of the most popular reels i think ever in the 525 range :)


Mark
 

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he he he lol its not really a plan just insane ramblings lol

good point about the postage :)


and i can see what you mean about storage and the cost involved BUT!!!! (LOL not an angry but ) because your making money on selling products at a reduced price does that not effectively cover the cost of storage .

Mark
Is it though? Think about it again. Reduced postage yes. Storage cost? No I don't think so. Storage is a non starter.
You could safely tuck a hundred reels behind your sofa with no problem or extra storage cost?:)
 

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Danny Moeskops holds all of the current recognised world casting records:
100gm/0.28mm - 262.26m
125gm/0.28mm - 270.64m
150gm/0.31mm - 278.96m
175gm/0.35mm - 276.58m
He uses Abu's in the main.

Info from UKSF - http://uksf.sea-angler.org/records.html
Thing is that is a little like saying that because Michael Shumacher drives a Ferrari, we should all buy one. LOL. I find generally that it is the person, or in my case the idiot (lol) at the blunt end of the rod that matters and how we manage according to our abilities.
 
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