The following was posted on backcountryworld.com by the BD rep who signed the letter below. I, personally, won't pay retail for BD stuff b/c of their heavyhandedness with various media and retailers. I think if they want to use globalism and "free trade" for their own benefit I'm going to do it too. Any effort by a company to limit my access to the markets where I find an advantage is hypocritical.-Zenolith
Dear Black Diamond,I've just heard the newsthat BD has pressured Scarpa andFritschi into not permitting the goodfolks at Telemark-Pyreness to sell thosebrands. I understand some of yourmotivation for protecting your turf inthe states. However, I had toplop down over US$1300 hard cashthis past fall to purchase myLazer/Diamir/Mito setup through BD-Idaho Mtn ouringand, in hind sight, don't feelwe Yankee's should have to payover 40% more for gear thanour European brethren. I will nowmake it a point to putBD at the bottom and T-Pat the top of my listwhen its time for my nextmajor gear expenditures. I guess thisall comes down to economics, butthere are your economics and thereare mine. I understand yours butI must live with mine andthose are that I can't affordto throw away hundreds of extradollars on AT/Tele gear. I stillappreciate the concept of the valueadded by purchasing through local shopswho get their gear through distributorslike BD, but not at +40%.Idon't appreciate your aggressive Microsoft likemanipulation here. I just hope otherssit up and take note ofwhat you've done. T-P's worldwide businessmodel represents are new paradigm (sorryI had to use it here)in the ski industry which isoverdue for an overhaul to ridthe purchasing public of the monopolisticpricing strategies it has suffered withover the years. O.K. I'll stepdown of my soapbox now.You've clearly stepped over the line herein my mind.
A former BD customer,
Steve Durnal
[ It is Black Diamond?s policy to refrain from using the Internet (outside of our own website) as a vehicle for publishing our position or point of view. However, in this case, we felt it was worthwhile to post our response to this email as an attempt to clarify certain aspects of this situation. ]
Dear Steve,
Thanks for your post/email. Though it?s upsetting to have you referring to yourself as a ?former BD customer?, the exchange of different points of view is always a good thing in my opinion. Your dissatisfaction seems to be rooted in what things cost in our/your marketplace as compared to what things cost in other marketplaces. The Internet is certainly playing a significant role in making consumers aware of what various products cost in other markets as well as speeding up the process of moving to a ?global? pricing scenario for consumer goods. This is a sticky issue that everybody, especially those who are involved in the making or selling of any consumer good or service that is sold internationally, is wrestling with.
Everyone wants the best value and price that they can get when it comes to spending their hard-earned dough. We feel exactly the same way so we understand where you?re coming from! I?d like to respond to a few of your points and make a few of my own.
First, let me assure you that no one at Scarpa, Fritschi, Black Diamond or Idaho Mountain Touring (or any BD dealer for that matter) is parking a Mercedes in their garage with the wild profits being made selling telemark or AT gear! Frankly, this is a tough business to be in (granted, no business is easy) but what makes it a very rewarding business to be in is the fact that we all, just like you, share a love for skiing in the backcountry. Any business needs profit to survive, grow and invest the millions (yes, millions!) of dollars it takes to develop killer new product, but counting the money is not the motivating factor for any of us.
It seems there are two issues here. The first is the difference in price from one market to another and the second is Telemark-Pyrenees being asked to limit their sales to their marketplace.
What goes into the cost and pricing of these products in the U.S. market and why is this different than the cost and pricing of the same products in the French market? First, there are big differences in the costs of sales and promotion between these two markets and this certainly affects retail pricing. Another factor affecting retail pricing is the cost of product development. Unlike most distributors BD is a co-developer of all our ski-line product, even if we are not the manufacturers. I?m not talking about sitting at a sales meeting and offering our opinions, I?m talking about design, engineering, field-testing and travel costs.
The biggest factor affecting retail pricing differences is the actual landed cost of the product. This obviously is a combination of the price the product is sold to Black Diamond for along with freight and duty. All of these are different for both the French and U.S. markets. The transatlantic freight is included in the U.S. retail price and obviously is not in the French retail price. You also are beating the U.S. duty, which again is included in the U.S. retail price, unless you are unlucky enough to have customs notice your package!
But honestly, the biggest difference is due to how the product is priced from the manufacturer for the different markets. In other words Black Diamond and the French distributor do not have the same basic product cost. This happens for a variety of reasons. Different economies, the fact that a manufacturer may be making a price play for market-share, currency factors, etc. all factor into it.
If Black Diamond and our Dealers were to try and match French retail prices on telemark and AT gear we would go out of business. Not because we are crappy business people but because our marketplace costs are different, simple as that. Can BD and our dealers become more efficient? Sure, we are working hard to do exactly that because our survival depends on it as we move towards ?one world, one price?. Steve, you state in your email that you understand and appreciate the concept of ?value added? and that you believe that good distributors and local dealers bring that to the table but that your not willing to pay ?+40%? for it. You?re not paying that, not even close.
I?m sure that the folks at Telemark-Pyrenees are great people. I don?t know, but I would bet that they share the same passions that drive Black Diamond and our Dealers. That said, their ?business model? is not a ?new paradigm?. It?s simply a different cost structure. If they wish to compete with Black Diamond?s Dealers that?s fine with me as long as they compete on a level playing field on the basis of product assortment and service, not on the fact that they are buying product at prices designed for one market and selling it in this one.
Black Diamond has invested aggressively in order to develop Tele and AT products for our market. Black Diamond and our Dealers have worked hard and invested aggressively in building and servicing this market. Do you think it?s fair to then let a dealer from another market who has contributed no ?value added? to this market and who pays a different price for the product sell in this market?
One last thing I would like to address is your reference to the ?monopolistic price fixing strategies? of the ski industry. I just want to point out that this ?monopolistic? strategy has been anything but and the end result has been the collapse and consolidation of the manufacturing end of the ski industry over the last decade.
Steve, whether or not you?re a BD customer is your choice to make. Clearly, we seem to disagree on some basic philosophy and where the balance lies. My hope is that this response will effect that decision or at the very least explain our point of view.
Sincerely,The Employee Owners of Black Diamond Equipment LTD.
Chris Grover,Sales Manager
