How We Deliver Radically-Priced Performance

How We Deliver Radically-Priced Performance

by Marc Dietz October 04, 2017 0 Comments

When we say SHRED DOG™ will offer “Radically-Priced Performance,” we aren’t just throwing words around. We mean a combination of quality and price point that is very unique in our industry. Affordable gear has typically meant cheap, low quality, clothes that don’t keep your kids warm and dry. Performance gear has typically meant good but often not great quality because of exorbitant prices, especially when the kid outgrows the stuff in 6 months or a year.

SHRED DOG is doing things differently.  Here’s why and how:

The last ski jacket I bought my son was a Spyder® insulated jacket. Spyder was my favorite brand as a kid (based in my hometown even), I still love the brand, and Ryker dug the jacket. But even late in the season and already marked down, it cost $130. When first released, it retailed for at least $150. I bought it big but my kid will still out-grow it in a year. The reason products like that one cost so much to consumers is, frankly, because businesses will go out of business if they don’t make a margin on what they sell. Brands need profits to invest in new products, they need to pay their people a fair wage, etc. And retailers have to pay their people, lease buildings, keep the lights on, etc, or they go out of business. And because a retail store can only hold so much merchandise, they change by season and have to mark down products that don’t sell in order to make room for new stuff. So prices start out very high because they’ll be marked down later.

But here’s where it results in an out-dated and frankly unfair model for consumers. Brands sell to retailers at one price (their wholesale price) and then the retailer markup (retail price) to the consumer is at least 100%. For example, a jacket that costs $25 to make is wholesaled to the retailer for $50-60 and ends up on the shelf or rack for us to buy for a whopping $100-$125. Historically, the retailers were the only way to get products to consumers, retail sales associates knew more than consumers, and you could argue the prices were fair.

Wholesale-to-Consumer Pricing Vs Traditional Retail and Brand Pricing

Today, though, I can shop from my couch and have products delivered in a couple days. I research products online, read reviews, compare brands, and like most of you, I walk into retail stores knowing far more than the sales associates do. So, what value are retailers providing? Yes, convenience and immediate gratification if you need something today and can drive to a store. Yes, the ability to touch-and-feel a product and try it on before buying. But given timely and inexpensive shipping and the ability to easily return online purchases that don’t work, is that retailer value-add really worth paying DOUBLE for the same product?  Not to me. 

 

With more and more shopping done online these days, many retailers are closing their doors. The brands have their own websites so effectively they are competing with the retailers. But here’s the rub… every brand that sells “direct to consumer” on their website but also sells through retail stores, does not charge the consumer a wholesale price… they charge the same retail price the retailers do. The reason they do that is because if they undercut the retailers, the retailers would stop carrying their stuff (and at least 75% of their sales still come from retailers). So when consumers buy online from a traditional brand, that means the brand is making a huge margin ($100 for a jacket that cost them $25 to make)… that’s great for them, unfair for us.

Our intent is not to criticize any brands or retailers. I still love Spyder, The North Face®, and many other brands. And some retailers like REI do a far better job than most (I’m a member, and I shop there regularly). I honestly wish them all well. But it’s just the pricing model that we believe is out of date and unfair to consumers.

So, how is SHRED DOG different? We will not sell through retailers (only on www.shreddog.com)  and we call our pricing Wholesale-to-Consumer because we will sell to the consumer for the same price we would sell to a retailer – before that 100% markup. Therefore, we can make the exact same quality jacket as another brand and sell it for ½ the price. 100% the performance for 50% the price.

That's Wholesale-to-Consumer pricing. That’s RADICALLY-PRICED PERFORMANCE.

If you have any comments or questions about this, we welcome your comments below!




Marc Dietz
Marc Dietz

Author




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