Although Sierra Trading Post (STP) is a well-known, retailer-accepted destination for manufacturers seeking to unload blems, overstocks, and close-outs, the appearance of numerous models of Perception and Dagger boats became a call to arms for numerous specialty paddlesport dealers last week.
What began a week ago as a trickle of emails asking SNEWSÂ® to look into a "few" boats from Watermark appearing on STP became a flood of increasingly concerned emails and calls by the middle of last week.
Naturally, we went to Sierra Trading Post's site -- www.sierratradingpost.com -- and took a peek ourselves. The lineup of Perception and Dagger boats was indeed visually impressive.
A number of the boats were discontinued models, like the Dagger G-Force or the Perception Swifty II 13.5 model, but quite a few others looked to be identical to ones retailers currently had on their floors, for prices that were at least 30 percent higher than those on STP. Granted, a consumer would have to spend $100 in shipping, but the disparity in price is hard to ignore.
As we investigated further, we learned that many of the boats on STP's site had been put on an inventory closeout list reportedly provided to dealers on Oct. 1, 2003. However, three of six major paddlesport dealers we contacted in the Midwest, West and East told us they had never seen the list, or certainly did not remember seeing it. Of the three who had seen it, all told us that they chose not to order from it.
Further digging revealed that while the boats on STP look identical to boats retailers were selling currently, they were really old model boats made with the old resin, and not the newer Exolar. Not that this news placated retailers since even we couldn't tell the difference online between an old model and the new one, nor would we be able to likely tell the difference even if the boats were laid side-by-side. And that was the point retailers were trying to make.
We contacted Watermark CEO Jim Clark on the evening of Feb. 25, who told us that he was not aware of the boats appearing on STP. He also said the news concerned him and that he would immediately look into it.
By Monday, March 1, Clark told us:
- "Our standard operating procedure is to create a closeout list and offer that to our specialty paddlesport dealers first. They get 30 to 60 days to digest that and we have the list in the hands of our sales directors and reps during that time. After that, we take the remaining list to our specialty chains, but frankly they typically have little interest. Finally, we take the list to our international customers and to other points of distribution, including Sierra Trading Post.
- "We have had a good relationship with Sierra Trading Post since 1992 with Yakima products. With Harmony, we have sold overstock and blems to them since 2001. The first time Watermark sold boats to STP was in mid-2003.
- "Our approach is very consistent. Typically, what is on the overstock list and offered to distribution points such as STP are last year's styles and models -- items that are old and require a refresh to keep them from becoming stale, in other words -- as well as blems.
- "We are rethinking our strategies and we absolutely do not aspire to have overstock. As a result of the call from SNEWSÂ® as well as from our own processes that were in place, we have already put into place programs that will allow us to more accurately forecast and better manage demand versus supply. We are also going to refine how we manage our closeouts. Ultimately, we do not want to be in the business of selling discounted product at all.
- "Also, as a result of the call from SNEWS and because of calls from our retailers, we have asked Sierra Trading Post to more accurately position the product they are carrying as discontinued or blemished product to make it less confusing for our retailer partners and for the consumer. They have indicated that they will respond quickly to our request."
Clark concluded with his position, which is one he stated is the mandate under which Watermark now operates, "The better job that we can do in working with our dealers, the healthier the boat business will be and that is absolutely our overall objective. Our specialty dealers are our bread and butter and it is our absolute intention to find ways to better support the specialty dealer. As a member of the OIA board, I am a big believer in the value of the specialty experience."
When the SNEWS team checked the STP site late Monday, all boats were carrying tags in bold identifying them as discontinued or cosmetic blem models as requested by Watermark.
SNEWSÂ® View: Manufacturers need to remember only one thing: No surprises! It really is that simple. Even venerable retailers, such as Keith Miller at California Canoe & Kayak, were caught unaware by the sudden appearance of boats on Sierra Trading Post. "That sucks," was Miller's first reaction when we contacted him. However, the deeper he looked into it, he arrived at the same conclusion we did -- there was very little stock and the impact was insignificant to non-existent. We even tried to buy a number of the boats in stealth mode and, in all cases but one, were told they were out of stock. Darren Bush of Rutabaga was very matter of fact in his observation: "Manufacturers are welcome to distribute any way they want, and I am welcome not to buy them. The biggest problem that I see is they are polluting their brand. Now the market price for a Perception sea kayak is $600 and suddenly they will have to keep doing it. It's a standard that gets set and then the company has to live down to it."
Short term, little damage was done in our view. In many ways, this was a tempest in a tea pot. However, the message that retailers are beginning to send is very clear and should be heeded by all manufacturers -- take care of specialty or they won't take care of you.
Miller, for example, told us he simply chose not to preseason Confluence boats at all this year. He's also slashed his Necky preseason. In both cases, that is a financial hit for the companies and the moves were made in response to distribution issues according to Miller.(ed note: Since this story was posted we have learned that there is more to the Miller dropping Confluence story than originally met the eye. Although Bob Sharp of ACS has put a gag order on Confluence people talking to the media, sales reps and folks inside Confluence have taken strong exception to Miller alleging he didn't preseason this year over distribution issues. Confluence states that Miller chose not to preseason their boats simply because the company was protecting one of their very best and very loyal Wilderness Systems dealers based in Sacramento -- Adventure Sports -- by denying Miller the right to carry the entire line of Wilderness Systems boats in his Sacramento store. Miller has one store in Oakland and one in Sacramento. Miller was able to sell the full Wave Sport and Mad River lines in both stores.
Other retailers, however, are following a similar path. We have dozens of emails from retailers around the country who have told us they are deciding not to place significant preseasons, or are deciding to buy a brand, but not support it (and there is a big difference between "buy" and "support") if a brand starts to dump product or begin to distribute product in a manner that is damaging to specialty business.
Interestingly, very few complaints from retailers came from the West Coast for this story, which is a huge pat on the back for Watermark sales wizard Larry Hewett. Retailers in the West seem to feel well-informed.
Remember that "no surprises" motto? We don't care how you do it, but if you are a vendor, a rep for a vendor, or a sales director for a vendor, tattoo that message onto your forehead so you see it every time you look in the mirror. Somehow, retailers got surprised by the STP deal, and the reaction that resulted was swift and deserved.
Understand that this is no slam on Sierra Trading Post. It deserves to sell any product that a manufacturer will sell to it, under the terms agreed to by the manufacturer. We've mystery shopped STP on several occasions and can verify that the retailer provided some of the best customer service support we've experienced.
Finally, kudos to Jim Clark for the manner in which he handled this. Swift and direct. His communication was open, honest and genuine, and the message he provided is clear -- Watermark does care about specialty. Now the company just has to demonstrate that consistently.
Speak up and sound off on how overstocks, discontinued products, and blems are sold by vendors by clicking here and going to the SNEWS Community Forum.
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