This letter was sent to skateshops from SOP (the distributor of New School and ATM) It is dated September 8, 1994. Thanks to Rick Valenzuela for transcribing and submitting this letter.
Dear Retailer-
Due to the past year's growth in skateboard sales, I (along with many of
my colleagues) have taken a long look at our industry and the direction it is
going. Unfortunately, many of us are very concerned about the path that the
skateboard market seems to be taking.
At present time, we have approximately 60-80 skateboard companies
selling skateboards. Of these companies, only a few (including myself) own
a woodshop and physically manufacture products; the rest are basically
"marketing" companies buying their products from the same woodshops as their
competitors. While this, on the surface seems somewhat unimportant, the use
of sub-contractors to create product helps to initiate artificially high
prices in the market. Beacause of these "job shops" shipping to not only
the marketing companies, but also manufacturing blank, low priced boards,
we now have skateboard decks wholesaling anywhere from $19.00 to $35.00.
How can anyone justify this vast price difference to the consumer.
Unfortunately, the pricing on the low end boards leaves no room for financing
pro teams, videos, tours, contests, magazines, etc. (Incidentally, these
are the things that attract kids to skateboarding in the first place.)
I (along with several other manufacturers) feel that it is time to bring
skateboard pricing back in line. I'm prepared to offer you pro-endorsed
wood decks at $26.95 and pro endorsed slicks at $29.95. (Wood Logo decks
will be $25.00 and the ATM Logo and Signature models will cost $23.00) If
you mark your products up 33%, my pro wood boards will retail for $35.84
compared to a retail of $45.15. (This figure was calculated on the average
cost of a pro wood deck today.) I feel that by offering your customer this
$10.00 price difference for the same pro endorsed, American made, quality
product can only help to lengthen the life span of the skateboard market,
and create happier customers. (Although I would never dictate pricing,
I would strongly urge you to pass these savings on to your customers in
order to help strengthen and unify our market.)
By several of us mapping out and offering you this type of program,
we are hoping to:
1) Help stabalize [sic] pricing in the industry.
2) Create a smaller, stronger core of skateboard manufacturers
(and hopefully deplete the excess merchandise in the market.)
3) Get back to a more tight knit industry with a little more control
of its growth.
I feel that the time to do this is now, so all prices are effective
immediately. I have no doubt that you will be receiving similar letters
from other manufacturers. Please read them, and evaluate for yourself what
we are saying. (I'd be happy to hear your thoughts on these ideas.) I
think you'll agree, we all want to enjoy success and prosperity in an industry
that we enjoy, and the time is now to put us back on track.
Best Regards,
John Falahee
S.O.P.
1140 Calle Cordillera, Ste 100
San Clemente CA 92673
ph: 714/3610119
fax: 714/3613550