The big box retail model floods the store with inventory to give the customer options, leaving them to figure out what to buy. Without an in-store gear expert explaining the performance advantages of the more expensive products, inevitably lower priced gear out sells more expensive gear.
It’s the job of the big box retailer’s “Buyer” to buy gear that will sell, which tends to reward cheaper products. Retail buyers are graded by what sells and penalized on products that need to be discounted to be sold. The buyers then penalize brands if their products do not sell themselves. This model has driven quality out of the fabrics and construction of apparel and packs and strangled innovation, refocusing the drive towards hitting a price point that will sell quickly instead.
Most apparel and pack manufactures have a 50% margin in their pricing when selling to the Box retailer wholesale. The Box stores then add a 50% margin to the (wholesale) pricing at which they purchased the product from manufacture’s before selling it to the consumer. This quickly drives the price up and why less expensive fabrics and construction are chosen.
For example: BRAND X’s Jacket cost is $75.00 and is sold to the retailer by Brand X for $150.00. The retailer then marks it up again and sells it to you for $300.00. A jacket that costs $75.00 to make is sold to you for $300.00.
The big box retailer earn’s a 50% margin or $150.00 to hang it on the rack for you to try on.
Would you be better served by doing your own research and paying the $150.00 for the jacket and ordering it in a store?
Or even better, working directly with the company that made the jacket and pay $200.00 for better materials, design, fabrics, construction, lighter weight and higher performance?
This is why KUIU is a consumer direct brand. At Sitka I was restricted by price points. I was constantly considering the cost of fabrics, construction, design and how it would impact price and sell through at the retail level. I dreamed of a business model where I could make fabric, product design and manufacturing decisions that would maximize the performance of the product and not have to worry about price, answering the customer’s need, rather than the retailer’s.
This business model is the reason why our products are made only with the finest ingredients in the world such as Toray, The Merino Company, 3M, Dura-flex, Easton, Pittards Leather, Cordura and Polartec. It’s what allows us to produce the highest quality gear with no compromises in performance. It’s what will allow KUIU to continue to lead the industry with cutting edge innovations and push our market further than ever before.