On March 11, SNEWS® broke a story highlighting serious problems with the pro deal system -- SNEWS View: Third-party pro-deal system in need of immediate repair. The outcry was immediate, as were calls for reform. While the outdoor industry works to take more control of what has become an out-of-control system, and outdoor specialty retailers ask for more involvement, we discovered that changes implemented in the snowsports market may be just what the entire pro deal industry needs. SNEWS reporter Peter Kray took a deeper dive to learn more.
With higher sell-through, better margins and a great snow season under their belts across most of the United States, snowsports retailers have even one more thing to smile about--pro form sales seem to be tightening up.
“It’s a never-ending subject, but it still feels like we are moving in the right direction as far as cleaning up the pro form market,” said Brad Nelson, owner of Hi Tempo Sports in St. Paul, Minn., and also the president of the National Ski & Snowboard Retailers Association (NSSRA). “I feel like the pro community is realizing how important it is to deal with the local shop, and we don’t have as much stuff being sold out of the back of a van that we used to see.”
While nobody expects questionable pro form sales to ever go away completely, Nelson said that the NSSRA has been actively working primarily with hardgoods manufacturers and reps to try to steer more of those certified ski instructor, ski patroller and race team sales to specialty shops. “I do think the cleaner inventory in the market has helped us more clearly identify what is being sold to whom.” said Nelson. “And not to toot our own horn, but I also credit the NSSRA, who for the past eight or 10 years has been making a very big deal about this.”
Most specialty retailers will admit that while pro form sales may have originally proliferated because they provided manufacturers with direct sales to active buyers, the fact that retailers didn’t want to deplete their in-house inventory for low to no-margin sales only exacerbated the issue. But when those “pro” sales started to include local bartenders, lifties and good ol' Eddie at the tire shop, retailers realized they were giving away a significant amount of business.
“We basically said that as retailers we need to take responsibility for supporting the process,” said Todd Brewer, president of Hoigaard’s, Inc., also in Minnesota. “Not only to keep a better track on who was actually buying on pro form, but also because we want to have that relationship with the pros who are on the slopes. We want them on the newest equipment, and we want them to help drive new equipment sales to us.”
“It doesn’t help any of us if a ski instructor is on a three-year-old pair of skis and says they work fine,” Brewer added. “But if an instructor is on something new and says it absolutely skis better than his old gear, then that is certainly great for us.”
For their part, snowsports manufacturers have been working more closely with retail shops that support pro form sales, either by working on in-shop buys to have product available for pros, or by processing gear orders via Shopatron and giving retailers the credit.
“We were the first company to drive all of our pro sales through our dealers,” said Tait Wardlaw, vice president of marketing for Dynastar/Rossignol. “We made that move to support our dealers, and lost a lot of pro sales in the process.”
Wardlaw said that by using Shopatron, an online service that helps both certify a pro sale and also match that sale up to the pro’s nearest shop, Rossignol and Dynastar are actually helping to create relationships between pros and their local retailers. But, he said, illicit pro form sales will remain a problem as long as there are companies looking to unload excess inventory--and maybe even gain a little market share--by selling off-price product.
“I’ll guarantee there still some companies still selling out of the back their van all day long right in the shadow of their dealers,” Wardlaw said. “The market is certainly tighter as the industry has cleaned up its production issues. But if we get stuck with over-supply again, it automatically shoots holes in the integrity of pricing for all of us.”
At Cole Sport in Park City, Utah, hardgoods buyer Scott Ford has pretty much turned pro sales into a second layer of business for the shop. Ford said that by ordering gear especially for pros, and having deep stock on hand when they show up, he has been able to create a healthy fall sell-through--something that’s almost unheard of at a destination resort shop.
“It’s not retail margins, but we do make some money on it,” Ford said, adding that being able to dial in their fit for boots, get the exact ski they want and drive it all home the same day is a major selling point. “We have our own pro forms specifically for those sales, and we charge exactly what the manufacturer would charge, plus the cost of freight for what it would take to ship it. We also spiff out our salespeople the same way we would for a regular retail sale, just so that this a sale that they want.”
While real numbers regarding pro form sales are all but impossible to gather--and Ford would not release his--Ford did say that when he first announced his plan to actively pursue pro sales, one company rep said to him, “Are you prepared to handle the amount of inventory that you are going to have to get?”
“It is absolutely astonishing what’s out there,” Ford said. “I even had some buying group guys say I was exaggerating the numbers, but then some suppliers said it was even higher than I thought.”
Along with building relationships with many of the hundreds of pros in the Park City area, Ford said he has also found that having dual inventory lets him be much more flexible in regards to any changes in the market. If a product is especially hot, he can move skis from his pro inventory to make sure he has it available for consumer sales. While “when the economy crashed, I stopped ordering pro product and just started selling off regular inventory, which freed things up a lot.”
Cole Sport’s pro program has become so popular, that Ford said instructors and patrollers are driving down from Jackson Hole in Wyoming and Schweitzer in Idaho just to buy gear in the fall. Yet he thinks that he’s still only denting the market, and is “barely reaching 50 percent of the pros in the Wasatch Front.”
“I think more shops should get involved in this. There is certainly business for everyone,” Ford said. “And I think the more shops that are involved, the cleaner pro form sales will get.”
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