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There are certain people on this board complaining that they can no longer get a deal on Penn products through certain retailers. I am not sure why these people think they deserve a discount, what do they give Penn in return besides a rude gesture?
The manufacturers have been forced to implement Minimum Advertised Pricing becuase certain retailers will discount the products so much that it takes out any profitability in the product. This discounting destroys the market for these items for the manufacturer and for all the rest of the retailers. You wonder why You often hear about the local tackle shop going out of business. It is simple, if you can't make a profit, you can't pay the bills and you go out of business.
Penn's hand was forced by discount retailers who were happy making $10 profit on a $100 reel. At the end, the discounter made little to no profit, violated all sales agreements, hurt all the other retailers, negatively effected the overall market and pricing for these products, and hurt the consumer's ability to find and buy the products. It is understood that everybody wants to get a deal, but I suspect that everybody also wants a high quality, nearby tackle shop available to them, too. The independent tackle dealer simply must make a certain reasonable profit on its sales to keep the doors open. The manufacturer must profit, too.
Penn is a great American Company and it deserves the support and respect of the American fishing community. With the recent acquisition of Penn by a strong publicly traded company called K2, it is my belief that an already great company will see an infusion of investment, new products, and an overall improvement in all areas.
Because one is unable to get a "deal" on a high end Penn Gold Label product, it does not mean the company "sucks". Sometimes you simply have to pay to play. There are countless other competing products available on the marketplace that you are free to choose from where you can get a deal. No one is forcing you to buy Penn, but it seems that many anglers want their products.
Please remember that there are people behind the Penn name. These people are Americans. When someone rudely says Penn sucks, you are saying the American people behind the name suck. I can tell you first hand that they are good people with a good products. From Brent Kane, the National Sales Mgr, to Betty the parts department lady, they are good quality people.
If you want one of the elite fishing reel companies, you have to consider Penn.
Keith, if I want to buy a new 750 spinner , where is it made now .
Not trying to be a smart azz but I heard a rumor.
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Keith, if I want to buy a new 750 spinner , where is it made now .
Not trying to be a smart azz but I heard a rumor.
There is simply this fact, every current model Penn spinning reel made is imported.
You will not find an American made spinning reel under $700. Why? It takes 17 man hours to build an average spinning reel. Let's use $10 per hour as the rate (which we know is below skilled labor rates). Manufacturing cost alone on a spinner is $170 at this rate. This does not include overhead, marketing, etc. It simply cannot be done in the U.S. anymore. If you use Chinese labor at $4 per week, you can do it.
You can't blame Penn. They lost money on every spinner reel sold for years.
I think the higher end stuff is still made in the US.....the lower end stuff is from china?....I have 2 older SS reels that I got tired of repairing the anti-reverse mechanisms....now I use shimanos with no issues....the new 320's certainly look and feel like walmart specials....tld's are sweet....my 2 cents.....
I think the higher end stuff is still made in the US.....the lower end stuff is from china?....I have 2 older SS reels that I got tired of repairing the anti-reverse mechanisms....now I use shimanos with no issues....the new 320's certainly look and feel like walmart specials....tld's are sweet....my 2 cents.....
All the gold machined reels are made in the U.S. as are some of the high end graphite reels. I am not saying that Penn is perfect, just much better than what some have been saying. Shimano makes some very nice reels, too. I personally use both brands on my charter boats.
Shouldnt Penn set the cost to their dealers and the dealers set the prices to their customers??
Just wondering. I own a lot of penn stuff (12 x330gti's, 2x310gti's, 1x965, 2x940 -nothing expensive) and am a fan but I am not for price fixing in any market place. I would hate my suppliers telling me how much to sell my stuff for (different industry).
Good points Greg. Price fixing is adversarial to a free market economy. If a US company wants to participate in fixed pricing, maybe that company should move to France (or any other Socialist country).
If the tackle dealers can't make it in the changing market place, then the problem is with the dealers, not the consumer. If the manufacturer and/or dealers can not figure out how to stay price competitive then there is no reason to place the burden of their inefficiencies upon the backs of the consumer.
I know what you are going to say Keith (Alltackle) "well then don't buy Penn", to which I respond "thanks, I won't". Of the 50+/- reels that I own, about a dozen are Penn products but I quit buying Penn about 3 years ago due to poor reliability, not because of price fixing..... but I'll certainly not buy another Gold series Penn again.
I own 3 retail stores and we deal with alot of the same issues. Many customers simply dont understand anything other than bottom line pricing!!There is much more to the retail story.....
The fact is Bottom line pricing will usually get you Bottom line service.
Shouldnt Penn set the cost to their dealers and the dealers set the prices to their customers??
Just wondering. I own a lot of penn stuff (12 x330gti's, 2x310gti's, 1x965, 2x940 -nothing expensive) and am a fan but I am not for price fixing in any market place. I would hate my suppliers telling me how much to sell my stuff for (different industry).
Thats the way it used to work but now with the internet only stores can sell stuff @ 5% over cost and have it drop shipped.With no overhead and no inventory they just become a pivot man and offer no service to the customer.This is not fair to tackle stores who have inventory pay rent and utilities and employee's.People need to take off their pink panties and support local stores they are the ones with local knowledge and help when you need those last minute items.Believe me these guy's are not making millions here.Most don't have boats nearly as nice as alot of the people complaining about price.If it's a good store with good people they get my buisiness.
Great post Keith. Penn like most other tackle manufacturers set the price for their dealers with the MAP pricing. When other retailers blatantly go lower than the price they want you to sell it for it really kills other dealers who are doing the right thing. I get calls almost everyday for guys wanting price on Penn reels says IE 80vsw. I tell them $799.99 and they laugh and say "oh I just called so and so dealer and they told me $650". Which is absolutely RIDICULOUS!
Penns new products are really really good and will only continue to get better with the k2 deal.
animal mother, well said. One good thing about Penn is you have to have a PHYSICAL RETAIL STORE to get their Gold label product...i.e. 80vsws, 50vsws, etc.
Many other manufacturers have the same policy and I believe it is a great one. There already is small overall margins in the tackle business, its hard to survive when guys are underselling them.
John, clearly you are biased on this issue. You are so vocal because, bottom line, this practice protects your profit. This practice makes YOU extra money. Price fixing is against the law and unfortunately it is not vigorously enforced. Apply your logic to Air travel, fuel prices, and the auto industry and the argument is ridiculous. A big part of our country's success is based on free enterprise which flies into the face price protection. When we become a socialist country and reject capitalism I'll listen to your argument. Until then it's darwin's theory. And Penn ain't bad, but to continuously raise prices when they are so far behind the curve on innovation isn't right either. They are no longer in my own 'gold label' club. I've moved on, others will too.
Quote:
John @ TackleDirect - 4/7/2007 4:04 PM
Great post Keith. Penn like most other tackle manufacturers set the price for their dealers with the MAP pricing. When other retailers blatantly go lower than the price they want you to sell it for it really kills other dealers who are doing the right thing. I get calls almost everyday for guys wanting price on Penn reels says IE 80vsw. I tell them $799.99 and they laugh and say "oh I just called so and so dealer and they told me $650". Which is absolutely RIDICULOUS!
Penns new products are really really good and will only continue to get better with the k2 deal.
I believe requiring dealers to STOCK Your reels and fix the price does suck! While "Minimum Advertised Price " is OK stretching it to "minimum sale price" isn't. MSP is what these programs have turned in to. If a dealer wants to give his loyal customer a discount or match a Internet price he should be able to. In many cases he can be shut down for it. A lot of the programs wont even allow the dealer to give away line with reels any longer. While some of the written wording may not spell out these rules in detail it is certainly implied. Do it and you will be cut off.
Ironically most of the tackle store owners/manager as well as the Reel company employees are normal consumers who want control of their market to suit themselves. These are normal people that will try to buy cars at invoice, download music free, buy their electronics online and use the Internet for many other items at great savings. But their store/product deserves a full 20%. Well, in a perfect world they would get 20% but because of the competition and the Internet you have to earn it. This is done by offering a quality product backed by service. Retail is not one dimensional. So they make $10 on a reel! If they are good they will also sell a rod, braided line, terminal tackle and another set up down the road. They will build a customer relationship and earn the business. Instead they want Penn to fix all the prices so the customer has to buy the reel based on convenience alone. "Our Gold Standard dealer has it in stock and if you want it you will pay this amount!" This causes one dealer to keep an eye on the other and ask Penn to shut them down for offering a discount. He cannot even offer free line any longer according to some MAP guidelines. The reality is if you don't have it for less most people will go somewhere else.. This is the way it is and to think a company can counter act that by implementing pricing programs is a joke. It only keeps the big tackle stores and sporting good stores happy knowing "little Joe's tackle" isn't under selling them. Yet ask Penn to stop selling to Bass pro when they have their annual storewide sale or when you get 10% off for applying for a credit card. The same goes for Sport Authority who has a 20% off coupon in their ad regularly (Used them a few times.) Sure some will say it excludes Penn or Shimano but in reality it doesn't. Its small print designed to give the perception that they are protecting the value of their product. The truth is the manufacturer wants to move as much product as possible while keeping the big dealers happy and loyal. These big stores say they are being hurt by the Internet or the ebayer yet they have ebay stores themselves.
MAP pricing doesn't work. It is price fixing and should be considered illegal. If the gold program was the best way to go I don't think Penn would have changed ownership again. They have lost a lot of market share to other quality brands (because of price/gold program) and lost the small dealer support that helped build the customer base they had for many years.
Let free enterprise run itself. A customer is very valuable whether you make 100.00 or 10.00.
Yes, Penn sucks! I am sure there are nice people working for them but the corporate side Sucks!
Many companies have this same "Minimum Advertised Price" policy.....some even take it further to the MSP as stated above. Bose, Shimano and Garmin are just a few of the companies that set "minimum sale price". Get a $ off coupon from any marine retailer and there is usually an exclusion for these three printed right on the coupon. Being in retail myself, I believe it should be the retailers right to set his/her price (and profit margin).
I've used Penn products for 30+ yrs I bought a 975 5 or 6 years ago that reel sucked with a capital S. Nothing but problems and I had it serviced every year. Two friends had them also with problems. I still love my 50's and 4/0 6/0 and 9/0's all work horses. For bay fishing I switched to shimano tekota Smoooth drag nice reel.
Keith, if I want to buy a new 750 spinner , where is it made now .
Not trying to be a smart azz but I heard a rumor.
There is simply this fact, every current model Penn spinning reel made is imported.
You will not find an American made spinning reel under $700. Why? It takes 17 man hours to build an average spinning reel. Let's use $10 per hour as the rate (which we know is below skilled labor rates). Manufacturing cost alone on a spinner is $170 at this rate. This does not include overhead, marketing, etc. It simply cannot be done in the U.S. anymore. If you use Chinese labor at $4 per week, you can do it.
You can't blame Penn. They lost money on every spinner reel sold for years.
These numbers are a way off. 17 hours is a horendous amount of time. It takes 30 hours to assemble a car for goodness sakes.
And chinese labor is not $4 a week, its about $25 for street sweepers+ another $50 in state run benefits. Any one with any basic manufacturing skills make 3-4 times that.
Penn Does Not Suck 
