Skate Retailers, Brands, and Margins

Just today, I had occasion to listen to a conversation among skate retailers and skate brand executives. It was a positive exchange where they discussed issues of mutual concern and ways the industry could address them. Lurking behind the whole discussion, of course, was the issue of better margins on skate hard goods for retailers. One gentlemen, known for inconveniently speaking up and stating simple truths that are somewhat uncomfortable to hear (not me for a change) stood up and said, "You know, this is all about getting better margins. How do we do that?" There was a bit of a pause, and then the group went back to issues like team riders and distribution and how the industry could cooperate in these areas.



The problem, of course, is that margins are not an area where cooperation, at least at this point in the industry's evolution, is very likely. As far as I know, higher margins (in both percentage and dollar terms) can come from only three things; controlling distribution, desirable product features that distinguish the product from its competitors, or marketing that leads to strong branding. Successful companies have to do all three I was correctly reminded.



But the snag, as you may have figured out, is that industries don't do these things as industries. Companies do them as part of the normal and continuing competition that occurred among companies. So naturally the discussion was somewhat out of place in a discussion of how various industry companies could cooperate.



I've been in meetings in the skate industry where this has happened before and I'm pretty sure I'll be in another one. Next time I'm going to stand up and ask why we're framing as issues of industry cooperation things that companies have to do individually. That will probably be the last meeting I'm invited to.