Custom Bats Cricket Forum
Equipment => Bats => Topic started by: Sitonit on April 24, 2015, 10:34:14 PM
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So there used to be L&W Signature that was £600 odd, this was a jaw dropping price for a piece of wood.
While many other bat makers would not cross the £250 odd price mark for their top end bats.
But now, almost every other bat maker has bats up to £400 to £500.
Matter of fact, Cenkos was priced for £1000.
And these bats are not even designed to last for long.
So what is it? Inflated prices? Severe shortage of timber or a tweak in craftsman-ship where raw clefts are simply not pressed hard enough or sometimes over dried to keep them swelled?
Obviously, the quality of trees and the wood they produce is the same as it was 15 years ago.
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Not an expert but severe shortage of timbers sound more like a ploy to me. You hear about shortage and then some Indian factory will churn out grainy beauties at fraction of prices. Also if there was such shortage, why would we get so many labels cropping up.
The main reason is because price of living has gone up, cost of sponsorship has gone up, number of punters willing to spend money has gone up.
This has been debated many times in various topics so be careful with what you post else risk losing the thread.
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Some of the prices seem ridiculous nowadays .
Especially when you can get a ton master for 50 quid ish delivered, , ,
But maybe that's the answer, ,the Asian companies are buying the majority of English willow stocks?
Obviously labour charges and overheads are a fraction of uk costs, but you would have thought shipping back to the uk would cancel that out?
I remember going to ACE cricket bats and paying 100 pounds for a grade two bat , many moons ago, that was on a par with today's grade one plus performance pro or whatever it's called.
I suppose as long as we are prepared to pay these prices, the manufacturers and retailers will continue to charge the prices they can.
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I suppose as long as we are prepared to pay these prices, the manufacturers and retailers will continue to charge the prices they can.
Business is no longer there to earn a living wage, it's there to make maximum profit for the owner and shareholders. To that end, they simply charge max price they can and while people keep paying it, they'll just raise the price each year. Add some marketing fluff around it to dress it up and boom... That bat that cost them 60 in materials and say 60 in time/elec can be sold for 300+ .
There is big money in retail still, especially in these markets where the isn't competition driving prices down
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There is big money in retail still, especially in these markets where the isn't competition driving prices down
having gone through this in detail with the mongoose guys when I was checking out the possibility of crowd funding, this is just not true. Sports retail is massively knackered by sports direct. Very low margins.
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having gone through this in detail with the mongoose guys when I was checking out the possibility of crowd funding, this is just not true. Sports retail is massively knackered by sports direct. Very low margins.
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i dunno, maybe you're right if you have to have big over heads. If you can actually cut the over heads and take a wage (so not mega bucks just because you own it), I suspect prices would and could fall a fair bit. Obviously to those it's not in their interests to compete and force prices and so profit down
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Discussed this with an establised batmaker earlier this year he told me that there was a shortage of premium willow.
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Business is no longer there to earn a living wage, it's there to make maximum profit for the owner and shareholders. To that end, they simply charge max price they can and while people keep paying it, they'll just raise the price each year. Add some marketing fluff around it to dress it up and boom... That bat that cost them 60 in materials and say 60 in time/elec can be sold for 300+ .
There is big money in retail still, especially in these markets where the isn't competition driving prices down
Another award coming your way Adie.
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i dunno, maybe you're right if you have to have big over heads. If you can actually cut the over heads and take a wage (so not mega bucks just because you own it), I suspect prices would and could fall a fair bit. Obviously to those it's not in their interests to compete and force prices and so profit down
I don't know where you get this impression that the cricket equipment industry is a mega bucks industry from. I know what the accounts looked like for mongoose. It's not even about big overheads. Running a business in this industry is hard work and not massively lucrative.
In order to earn a living wage you have to make a profit. If you want to make £30k per year (average UK wage) you need to be able to sell enough items with a mark up that gives you that. As an independent retailer you are very unlikely to sell 30,000 items of cricket gear a year so you have to mark up to a reasonable number.
Then you include your costs, and all of a sudden those prices don't look inflated. And given that most businesses start with an investment from somewhere that is either a loan or a capital injection, both of which require a return, whether interest or a percentage return on capital, everything you charge is accounted for. It's not looking for huge profits. It's simply making sure that everyone who has contributed to the business existing, whether that is local business rates, bank loans, goods or people, gets paid their fair amount.
There simply isn't much left after that. Cricket equipment is not a mega bucks industry. Cricket in general is not a mega bucks industry. Just look at the number of counties under water, the number of national cricket boards unable to pay players, etc. IPL (and maybe BBL) is where the big bucks are thanks to TV rights. That's about it.
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I don't know where you get this impression that the cricket equipment industry is a mega bucks industry from. I know what the accounts looked like for mongoose. It's not even about big overheads. Running a business in this industry is hard work and not massively lucrative.
In order to earn a living wage you have to make a profit. If you want to make £30k per year (average UK wage) you need to be able to sell enough items with a mark up that gives you that. As an independent retailer you are very unlikely to sell 30,000 items of cricket gear a year so you have to mark up to a reasonable number.
Then you include your costs, and all of a sudden those prices don't look inflated. And given that most businesses start with an investment from somewhere that is either a loan or a capital injection, both of which require a return, whether interest or a percentage return on capital, everything you charge is accounted for. It's not looking for huge profits. It's simply making sure that everyone who has contributed to the business existing, whether that is local business rates, bank loans, goods or people, gets paid their fair amount.
There simply isn't much left after that. Cricket equipment is not a mega bucks industry. Cricket in general is not a mega bucks industry. Just look at the number of counties under water, the number of national cricket boards unable to pay players, etc. IPL (and maybe BBL) is where the big bucks are thanks to TV rights. That's about it.
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This is actually a very, very good post.
And I guess the scenario is true for many, many other small business owners.
The outsiders may get an impression that a certain business is a gold mine, but the owner actually lives on the edge with a huge and hidden cost of business that outsiders sometimes can't see. Everyday is a quest of survival where the owner sees his time and investments vulnerable of taking a hit from big competitors who come up with new marketing ploys every other day. A big fish always on the hunt for small fish.
On a separate note though, Tim, sometimes I do wonder, and perhaps you may have an input.
Hypothetically, if someone plans to start a business of growing his own willow from the scratch, will it be true that he has to wait a good 5 to 10 odd years before harvesting the first crop?
I mean, how stressful and painful of an investment this could be? Perhaps it's one of those deals where one generation plants and the next generation eats the fruit?
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Trees can't be harvested for a min of 10 years.
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Trees can't be harvested for a min of 10 years.
Willow trees should not be harvested for 10 years but they are.
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There have been numerous changes in the past 10-20 years which have affected the market, and have increased bat prices.
Player sponsorship values have gone up in the last 20 years. Adidas/Nike/Reebok coming into all the markets, and the internationalisation of cricket with the IPL, meant that you have to pay tens of thousands to get a good player. Adidas don't make their money selling bats, so will fork out whatever is necessary to secure the real superstars like KP and ST. Mongooses yearly sponsorship retainers were at £340,000 a year at its peak with Symonds and Hayden. It's a lot of bats you have to sell to cover those costs, but if you want to supercharge your business and get into the UK's top retailers you need to sponsor cricketers. Look how Hunts County and Fearnley have dropped off since they stopped.
Secondly - whilst the raw materials may only cost £60, someone needs to make them and there's the shipping/import taxes if that's going on in India rather than the UK. Retailers take roughly a 50% cut of any sales, so the profit margins on the majority of your bats you sell (mid grade mens, or kashmir/low grade jnr bats) can be as slim as £5-10 a bat. Retailers have also felt the squeeze of Sports Direct, and the increase in rents on the high street - that leads to them wanting discounts from the manufacturer. The internet has also changed the way manufacturers work. A manufacturer carries a lot more stock now than they did previously, as shops have a tendency to order in 1/2 bats at a time to fulfill orders rather than placing a large October and March order, like they did previously. This makes the market harder to predict, and leads to wastage.
Thirdly - It's correct in saying willow has gotten more expensive. So bat prices naturally increase. For every £5 extra you spend on willow, the end user will probably see a cost increase of £20.
Everyone is correct in saying £400 is a hell of a lot for a bat. The gross margin on these is quite good, but manufacturers do not sell tonnes of these. The majority of their sales happen in the mid-ranges, where margins are significantly tighter. If everyone was making a fortune out of cricket why would we see Woodworm and Mongoose going bust in the last 5 years? Smaller brands such as Smasher or Phoenix, have also gone to the wall. Puma have scaled back cricketing operations. Even the podfather, Julian Millichamp, has given up batmaking
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Excellent informative post Tom.
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The outsiders may get an impression that a certain business is a gold mine, but the owner actually lives on the edge with a huge and hidden cost of business that outsiders sometimes can't see. Everyday is a quest of survival where the owner sees his time and investments vulnerable of taking a hit from big competitors who come up with new marketing ploys every other day. A big fish always on the hunt for small fish.
My late father ran a glass, china and cookware business for closed on thirty years. He once told a loyal customer that his profit margin post generous discount was 50% - the response was such that he never ever told another soul.
People assume that the cost at which something is ought is the only expense some businesses have and that is patently not true.
Are there some vastly overpriced cricket bats out there? Sure - but the overall market is probably not that inflated.
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I was going through some of our old catalogues at work the other day, dating back about 15 years. The increases in products like shoes, softs, bags etc is quite minimal, in fact with the advancements in materials they offer better value now, especially lower to mid range pads and gloves. Premium bats have increased markidly because of the lack of pretty willow, but still always sell. There is still a price point to suit most cricketers with bats starting at $90, around the $250 - $350 mark the largest volume range. To the guy stating how much money is in cricket retail you are clueless, you are entitled to your bizarre opinions on the game but you're basically calling all retailers greedy which is utter garbage.
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I was going through some of our old catalogues at work the other day, dating back about 15 years. The increases in products like shoes, softs, bags etc is quite minimal, in fact with the advancements in materials they offer better value now, especially lower to mid range pads and gloves. Premium bats have increased markidly because of the lack of pretty willow, but still always sell. There is still a price point to suit most cricketers with bats starting at $90, around the $250 - $350 mark the largest volume range. To the guy stating how much money is in cricket retail you are clueless, you are entitled to your bizarre opinions on the game but you're basically calling all retailers greedy which is utter garbage.
Have no fear, I'll prove you very wrong in the coming years. I'll stick my money where my mouth is
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Doesn't Toms post say retailers take roughly 50 percent of any sales.
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Doesn't Toms post say retailers take roughly 50 percent of any sales.
Do you mean 50% margin?
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It is slightly confusing as the post states retailers take a 50 percent cut but then states margins can be small I interpreted it to mean profit margins.
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Margin is not profit, all your business expensieses such as wages etc need to come out of your margin. There is more margin in some products over others but in cricket 50% is not a realistic figure in my experience.
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Retailers will charge whatever they decide is needed to support how they want to function. My thoughts are that it could be done cheaper and benefit the customer. That's not necessarily saying they are greedy, just depends how you want to run a business. Not every business needs to make big profit after all.
If you only want to earn enough to live, have little over heads and are not fussed on flash cars, houses etc., then you really don't need to earn as much etc. makes the difference to the consumer after all.
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Retailers will charge whatever they decide is needed to support how they want to function. My thoughts are that it could be done cheaper and benefit the customer. That's not necessarily saying they are greedy, just depends how you want to run a business. Not every business needs to make big profit after all.
If you only want to earn enough to live, have little over heads and are not fussed on flash cars, houses etc., then you really don't need to earn as much etc. makes the difference to the consumer after all.
Good luck finding suppliers if you are going to try and devalue their products. Might opt out of this convo now and go for a flight in my private jet all us retailers get around in!
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Adie, what do you consider to be a fair salary for a business owner and for their other employees? How many hours do you expect to put into the business on a weekly basis to set it up and run it?
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Don't forget rent, electricity, phone, security, insurance, marketing/advertising
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Sorry my post may have confused a few; I was trying to focus on the manufacturer side. But financially the life a retailer is equally if not more so difficult.
If a retailer buys a bat at trade price for £100 (ex Vat) from the supplier, the RRP will be roughly £200 (inc Vat). They may discount this down from RRP.
The margins on cheap or mid range bats are tiny for both manufacturers and retailers.
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Having worked in the industry for quite a few years now. I know there isn't a huge profit to made in bats. The sports industry is in my opinion a very tough market to make alot of money in with the likes of Sports direct and other internet companies knockng stuff out at discount. I think people are under the misconception that somehow we as reatailers are out to rip them off when all we are doing is trying to earn a decent living and no that doesn't mean driving flash cars and living in mansions!!
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Sorry my post may have confused a few; I was trying to focus on the manufacturer side. But financially the life a retailer is equally if not more so difficult.
If a retailer buys a bat at trade price for £100 (ex Vat) from the supplier, the RRP will be roughly £200 (inc Vat). They may discount this down from RRP.
The margins on cheap or mid range bats are tiny for both manufacturers and retailers.
And also the returns as well totally agree Tom.
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There is plenty of options in every price bracket. Those who can't afford UK prices can always shop from the likes of OLS etc. Business is there to make money and prices are only going to go one way. No business is easy and while it may be difficult to grow in cricket retailing, getting in does seem easy. There are way too many start ups/garage/bedroom labels when you compare it to any other sports.
What we need is consistency in the market and be done with 1++++ performance pro performance mallarkey.
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Well said Tom, really good information. I think the bulk of money goes into sponsorship more than ever now..
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If a retailer takes a 2 - 2.25 or 50-60% mark up, they'll be clearing roughly £150 on a £300 bat, less a small VAT deduction, they won't sell such bats all the time I'm sure.
That may seem a lot but you have to factor in costs - they need to pay for premises, heating, lighting, IT, financing costs and of course wages out of their cut. If you prefer as I do to have hand picked bats wherever possible, you need to factor in petrol costs and time to acheive that.
I'm not saying I always want topay whats on the ticket and won't haggle, but lets not pretend that the market is a panacea.
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From a consumers perspective the cricket business is a very difficult market to navigate, much like the car market. The amount of information is overwhelming yet none of it is an 'authority'. Similarly, prices vary wildly for seemingly the same product and then factor in different grading systems from different companies and comparing like for like is nye on impossible. This means there is scope for some people to utilise this asymmetric information exchange for their personal gain, however it also allows for decent people to play fair. When you factor in that the industry is fairly secretive in terms of who makes what and when, thereby further muddying the waters and not allowing the consumer to make and informed choice.
I think it's pretty fair to say that most small companies offer great value for money, due to the lower overhead and the larger companies need/want to charge more because they have more to pay for and because they can. It is really up to the consumer to decide where they feel their money is best spent, and if people want to over pay through lack of research then natural selection, it shouldn't be up to the retailer/producer to do or saying anything to the contrary.
There is no way you could 'fix' the market without heavy regulation. Could you imagine having a centralised bat maker in the uk, churning out thousands of bats an hour to the exact specifications. Then there would be like black market underground movement of bat makers cutting down trees at night and making there own bats. I think we should try that for a bit!
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If a retailer takes a 2 - 2.25 or 50-60% mark up, they'll be clearing roughly £150 on a £300 bat, less a small VAT deduction, they won't sell such bats all the time I'm sure.
That may seem a lot but you have to factor in costs - they need to pay for premises, heating, lighting, IT, financing costs and of course wages out of their cut. If you prefer as I do to have hand picked bats wherever possible, you need to factor in petrol costs and time to acheive that.
I'm not saying I always want topay whats on the ticket and won't haggle, but lets not pretend that the market is a panacea.
Just to clarify, a 2 x markup is 100% markup. I don't think many retailers will be taking as much as £150 on a £300 selling price bat. VAT is not a small percentage, it comes to £50 out of a £300 selling price. Selling price is likely to be £270 or less. Agree that the costs of running a legitimate business are high.
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Sports direct doc on C4 now...