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# Demo Cost -- a New Economic Model?

The past three weekends I've been demo-ing.... tennis rackets.  The brick-and-mortar store I go to charges \$3 per racket per day.  They have strongly urged me to take out more than one racket at a time so I can actually do a comparison.  They deduct up to \$40 in my accumulated demo fees from the list price (not MSRP) of a new racket.  After trying four different rackets in various paired combinations, I bought a racket from them this past weekend.  The one I chose was about \$15-20 more at this store compared to prices for the same racket on the internet, but after the demo deduction it cost me less, plus I didn't have to pay shipping cost.

Assume the average actual price of a good racket is around \$180 (mine had an MSRP of \$220, but the store's price -- before demo deduction -- was \$191).  Assume for the sake of discussion that the average retail price of skis is around \$900 (yes, I'm making a generalization, but stick with me).  Thus, a tennis racket is roughly 1/5 the price of skis.  By this model, the demo price for skis would be \$3 X 5 = \$15 per day, and the ski store would urge the customer to check out a couple pairs at the same time.  Plus, when purchasing skis, the customer could get his/her season's cumulative demo fees deducted from the list price, up to \$200 (\$40 X 5).

The idea behind this model is to sell the product -- not to make money from demo fees.  Why not do it for skis?

Many slopeside shops I know do this now. You're right; it's a reasonable business model; you tie in a potential customer to your store because they've already invested money in (a TBA) product. But having done it with both skis and tennis racquets, not sure it's automatically a deal for the customer. Yes, you get to demo whatever the store carries, but the money you "save" (apply toward the purchase) can still based on a higher retail price. Probably would work best for first time buyers who need to try a lot of demos, don't have a clear idea of what they want.

Jimski,

Most shops I know of do this already but your price comparison for demo skis doesn't take into consideration a few key points that drive the price of that demo ski up a bit.  The cost of insurance, tuning and waxing, wear and tear and resale value.  These factored into the skis over racquets and you can see why actual demo prices are a bit higher.  My shop keeps our demos tuned and waxed after every use, and the resale value on used demos drops drastically after one use unlike a tennis racquet.

Demoing a few pair on the same day in the same conditions is a wise decision that takes much of the gamble out of just ordering on line or buying a ski without any idea how it skis other than the brochure hype.  Many resorts offer a one time price for unlimited demos for the day.  Check around.  Beware though most resort demo centers don't keep up on the tuning and waxing that well.

The place I demo-ed from in Snowmass charged \$52.00 a day, with 20% off (down to \$41.60/day) if you reserved the skis online ahead of time.  That's pretty steep compared to the \$15 per day in my model based on tennis rackets.  And, true, this place did have some deduction of the demo fee if skis were purchased, the amount of which I can't remember, but: (a) I doubt that the allowable deduction was 22% of the price of the skis, like for the tennis rackets (40/180 = .22); and (b) the ski store's prices seemed to be closer to MSRP, relative to the tennis store (beyond's point).

Granted, the ski store was right in Snowmas Mall, virtually slopeside.  The tennis store is in downtown Bethesda, MD.  I suppose a better comparison would be to racket prices at a tennis store that is onsite at a tennis resort.  Also, Bud, I take your point that skis require relatively more ongoing maintenance: although demo rackets do get nicked and worn, just like skis, they don't have to be tuned and waxed.  When the customer brings back the racket, just check to make sure it's not cracked, check the strings, and maybe re-string it once during the season.

Also, the idea of checking out two pairs of demo skis at the same time is probably impractical, now that I think about it.  What would you do with the second pair while you were using the first?  Might as well start with one pair, then go back to the demo store and trade them in for the second.  I didn't do that at Snowmass -- the place allowed it, but I got attached to the first pair I tried (same thing happened to me with the first racket I demo-ed.... although I ended up getting racket #3).

So, OK, the model is not completely transferrable.  But, imagine if one of the half dozen demo places at Snowmass put up big signs all over: "Top Brand Ski Demos -- \$20/day -- Best Deal at Snowmass!"  My guess is they'd get most of the demo business and, perhaps, increased sales of skis.

Although the racket comparison is not quite accurate, the concept that the demos are for selling rackets/skis(which will generally be higher priced at a resort shop) still stands. However, most shops look at it as a financial opportunity because a relatively low percentage of demo users actually purchase from a resort shop and they are in business to make money. If they could be guaranteed that the user would purchase, it would change your model dramatically.

As addressed earlier, a good many shops(even higher end places) don't do daily maintenance on their demos(if even weekly.)This spring I demoed some "highly acclaimed" Kastle MX 78s(at a highly revered mountain shop) and was disappointed by the quality of the tune which failed to provide an accurate evaluation of the skis.They didn't ski nearly as well as my Nordica HR Pro Burners @ \$400 as opposed to \$1200 per pair for the Kastles. I also skied a pair of Salomon Tornadoes which skied quite well, in spite of not having the edges properly tuned, so again, I could not make an accurate judgment regarding the skis.

If the shops lowered the price of the demos to \$15, than people would start using the demos as rental skis, which is not what shops intend for their demo skis.

I'd like to be able to rent demo skis at your cost model, but I don't see how anyone could stay in business offering that service.  There are at least a few major differences:

1. liability (nobody has to adjust the bindings on the tennis racket for each rental, and try to sue the rental tennis rental shop anyway)
2. maintenance (unless the strings break, there's no maintenance on the racket)
3. seasonality (rackets can be demoed year round in most locations)

Still, I might pop \$50 if the shop is slope-side and I can demo several pairs in a day.  If the shop is in town, and at most I can try two pairs in a day, loosing a good chunk of the day on logistics, the price becomes prohibitive.  Very recently, I faced this problem, where I was very tempted to demo a pair of Stockli's for \$40 a day, and let two pairs of my own Volkls sit in my car.  As much as I wanted to try, I couldn't justify the cost.

I cannot see ski shops offering the demos any lower than the current prices.  But, I would like to see the manufacturer reps cruise the resorts, and offer demo days at the slope side.  They could offer the service and it might do more for their business than a few glossy ads in the industry mags.  I recently demoed the new Rossi Strato (for free) and I loved the ski, but if I had to pay \$10 I wouldn't have done it.  Still, I'll keep this in mind when I buy my next ski, so I think it was a good demo for Rossi.

I think the demo should be subsidized by the manufacturer, not by the ski shop.  Do you pay to test drive a car at the dealer?

Tricky -- good points.  With skis, often we're demo-ing the tune as much as the ski.  The analogy to tennis rackets is that often we demo how the racket is strung (choice of strings, string tension) as much as the racket.

ILOJ -- good point.  For tennis rackets, there is no non-demo rental business.  Maybe at some resorts, but not generally.  If your racket is in the shop getting restrung, you just borrow a racket from your spouse, kid, or neighbor -- or reschedule the match and go for a bike ride instead.

incog -- good points, especially liability.  Usually the worse that can happen with a tennis racket is you have a bad game.  Hard to sue for that.  I like your idea of having the ski manufacturer subsidize the demo.  Great point re car dealers: how can they offer free demos?  Car dealers have liability and maintenance issues too.  And there is a huge mark-down for a dealer demo car.  (OTOH, car dealers try to charge the customer for shipment and dealer prep costs.  ).

So, the tennis racket demo model is only hanging by a thread (or a synthetic gut string?).  Still, I wonder how many skis stores are happy with their daily volume of demos, the ratio of demos to sales, etc. under the current ski demo model.  As a customer, no surprise, I think the demo fee is too high:  4 days of demo = \$200, only some of which is deducted from the above-market ski price.  In other parts of the economy, sometimes businesses that take a chance at lower prices reap the rewards of higher volume, due to the magic of elasticity of demand (see, for example, Southwest Airlines).

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