The Failure Of The Sporting Goods Supply Chain
Here we are in month 367 (or so it feels) of the pandemic, and as luck would have it, I am living in the “epicenter of Covid around the world.” While this feels just a tad hyperbolic, regardless, social distancing is extremely important, and there are just so many times I can stretch in the pool and go nowhere else for months on end. There has to be some other sport I can do that doesn’t involve a ton of walking.
Enter the (for me) new world of inflatable kayaks. And for all of us, welcome to a new world of chronic shortages and a touch of price gouging to go with. As the Buffalo News so aptly put it, “Toilet paper shortage? That’s so last month. Think bikes, kayaks and pools.” Oy. They’re not kidding.
A month or so ago, I bought an inflatable kayak because I realized it was a great way to socially distance and see other things besides my back yard. Heck, maybe I could even take photographs of wildlife. Product supply was already starting to run down. I didn’t like the paddles that came with my model and ventured into a sporting goods “superstore” to buy better ones. The store had THREE. Not three models. Three paddles, two of the same style. I bought a set but I still don’t much like them. This got me thinking about the paddle supply chain. Yes, it’s worrisome that this is the first thing to come to my mind.
Last weekend, I realized the kayak I’d bought wasn’t much more than a float. It flipped over in some light current for no really good reason, and decided “Girl, you’d better buy something a little higher quality.”
Partner Steve Rowen and I talked about it, and he got juiced by the concept of an inflatable kayak as well. You don’t need a roof rack (I own a convertible, so there’s not even a roof to put it on!), and as long as you’re not out on the ocean in big swells, generally they work well. I won’t get too detailed, but they can be really good.
So, we found a good model: great reviews (between us, we must’ve watched ten of them), sounds really stable, with a reasonable MSRP of $249 according to the company’s web site. Okay, great. But they show as “out of stock” on the site. So we set about looking for one on the web. Apart from a few bogus sites that were not really selling them (I got caught, but got my money refunded immediately when I realized I’d been scammed), there was nothing. Amazon had a few, but the price was double and triple the MSRP.
Here's where it gets kinda sorta interesting. We later actually found what looked like a “two-pack” of these kayaks on Amazon for “only” $118 above list. Seemed worth it. Yeah, the reviews are that good. So, we went ahead and ordered a pair. Who orders a two-pack of kayaks? Well, we did! And somehow, we could have ordered a three-pack. But it turns out the seller was - wait for it… the manufacturer. In other words, the manufacturer is selling its remaining inventory on Amazon for far above list price (heaven knows what the cost of goods for the things actually was!). It doesn’t sound like it should be legal, but there was no attempt at dishonesty. Just good old ingenuity, I guess.
So here’s my point. I would argue that any shortage of outdoor sporting goods supplies is inexcusable. Back in February we might not have been able to predict that people would be staying home for long periods of time and using a lot of toilet paper, but it wouldn’t have been rocket science to figure out by May: summer is coming, people will want to go out (forget about me, what about those people in the Northeast?) and some sports are more conducive to social distancing than others. By May, it should have been clear which items would just blow through and there was plenty of time to get it here from China (of course that’s where these things are made!).
A lot of money is being left on the table. I suppose I should applaud the manufacturer for cleverly selling the “best reviewed one-to-two person inflatable kayak” far over list price. But the name of this game is gross margin dollars.
While we probably couldn’t have forecast the apparel shortfalls, or the long-term run on toilet paper, this one should have been easy for any forecast engine or even human to figure out. “What are people going to want when summer comes? What’s the best buy for our stores or web sites?” Golf clubs, kayaks and equipment, bikes (my bike story can be left for another day), and barbells (though those have probably been selling all along). This is just an #epicfail.
I probably have told this story on these pages before, but it’s still instructive. Back in 1999 I was working for a party supply superstore. The seasonal buyer had the enviable job of buying Y2K themed party supplies. By the middle of the day, we’d sold everything out to the walls, including cheaper, non-Y2K themed plates and tablecloths.
The seasonal buyer was ecstatic. 100% sell-thru!! A dream come true!! And then someone asked the magic question: How much money did we leave on the table? The answer? Too much.
And so it is with kayaks. Too much money is being left on the table. And while it’s likely too late to get these products here from China to help the northern states, those states still at the epicenter of the virus will have months of use for outdoor sporting goods: Texas, Florida and California.
Our supply chain just isn’t smart enough. I’ll kinda sorta accept the toilet paper shortage. Maybe. Hard to forecast but should have been easier to fix. But sporting goods buys don’t feel like rocket science. It feels like laziness, or just missing the boat (hah!). Anyway, my new kayak is coming from Boston on Wednesday, and I’m going to spend this weekend with the old one learning how to get back into one in deep water. I gave myself quite a scare last weekend, and want to be better prepared next time.
But retailers and your ecosystem. IT IS TIME TO GET MORE AGILE. MORE FLEXIBLE. SMARTER. AI will help, but so will simple logic. We must respond. Times are tough enough.
By the way, after reading that article in the Buffalo News, I’m glad I didn’t even try to fix my bike. That would have been an unsocially distanced exercise in frustration for sure.