Investment in sites to attract new customers ,I'm not saying this is viable (although Im yet to hear an argument against ) ,is it ?. You suggest that this is the realm of forward thinking site owners and later add .
"The field owners already garner more margin that anyone else in the industry. If they want to make more money, they should improve their product. Even through this economic downturn, the fields have done fine, 'well' even. "
So the feld owners are sucking up the extra money the industry needs to reverse it's downturn they are also the people in the position to sell more product given the right help/direction, yet investment in this area is not where we should be looking.
Personally I think change from the bottom up is more difficult than from the top down, and takes longer. Field owners are the one section of the industry that already make margin. For them to make more margin is not a bad thing, but I don't see that it helps the industry recover, unless all that money is re-invested. Some fields do a good job of re-investing, most do not, so the extra margin generally leaves the industry, which is not healthy.
If manufacturers make extra margin, we can expect to see more new products, and more R&D, also a possibility of more factory sponsorships, and an upturn in press advertising.
If distributors make more margin, they can expand, go national, or even global. they can also branch into some manufacturing, carry deeper and wider inventory, advertise in the press, sponsor local events/teams.
If the stores make more margin, they can get better more upscale locations, sponsor local teams/events, possibly open 2nd stores, and thus increase their exposure.
All the above is good for the industry.
I was referring to this thread only..
I still don't get it, but no big deal.
Sure I understand the need to stabilise what already exists and I feel I'm now flogging the point but surely the idea of variable margins in the first place is to attract more customers ,if you don't attract the customers ...
The issue as I see it is that the manufacturers are making product with 2 prices in mind. The price they can make it for, and the price it could retail for. Typically, the cheaper it retails, the better it sells, so the idea is to price it as aggressively as possible.
Unfortunately the downside of this is that to get to the aggressive price, the margin is being cut out for the distributor and dealer.
The customer see's the final price. They don't care about margins,. I personally believe that the same amount of product would get sold if everything was 10% more expensive across the board, and if that 10% was going to the store owner, they would not be in the mess that they are in now.
Your idea of attracting more customers at a crappy margin is a better situation than the status quo, but comes with the increased overhead of attracting those customers, so the margins could even be less rather than more. A well run company can operate with a 12% overhead. Therefore if there's a 20% margin on a product, that represents 8% profit. Anyone here be happy with 8% profit on items sold from their paintball store?