As first reported by Josh Hunter of Transworld Business.
On September 26, Firewire Surfboards announced to its retail partners that it will no longer be including fins with its boards. The company says this move will enable it to offer a lower MSRP to its customers as well as a better margin for retailers. This decision is sure to spark discussion as it’s a departure from the traditional way that boards are sold. Stay tuned to Transworld Business as this story unfolds for interviews with Firewire CEO Mark Price and key players from the surf accessory/ fin market.
Here’s the letter from Firewire Surfboards:
Hello Firewire Retailers,
We’re constantly striving to improve the performance of our surfboards and the
quality of our business practices. With this in mind we’re going to take the
unprecedented step of delivering our boards without fins. We realize this is a radical
departure from the traditional way boards are sold, but we firmly believe it is in the
best interests of our retailers (more margin), our customers (a lower MSRP) and
most importantly the planet!
In addition, we believe if adopted by others it will spur innovation and interest in fin
design and performance.
The right move for the environment:
• We believe that the positive environmental impact of not forcing surfers to
purchase fins they may not need and thereby reducing waste is important. In
fact, we’ve actually reduced the Firewire wholesale margin on every surfboard
sold because of our belief in this change. Of course we’re counting on surfers
recognizing we’ve lowered our environmental footprint and the $50.00 MSRP
reduction will increases sales, a win for everyone if we’re right. But we’re
willing to take the hit without penalizing our retailers if we’re wrong because
we believe in this.
We’ve put our money where our mouth is:
• Our manufacturing margin has shrunk because we have lowered our
wholesale by a greater dollar amount than the fin cost saving and the margin
we add to that component. We felt this was important to ensure that there
was no financial penalty to our retail partners if a surfer purchased a Firewire
and decided to use an existing fin set. In fact, with a bundled sale (new board
and upgraded fin together), our retailers stand to increase their Firewire
margin by 2% on each sale. Something sorely needed in surfboards right
There will be no change in the existing fin compatibility of our model mix with both
Futures (Direct Drive) and FCS. We also have a fairly simple program to transition your existing inventory to the new business
Information Attached To Letter:
1). Many retailers offer discounts on fin upgrades and surfers routinely request credits for plastic fin trade ins when upgrading fins for a new surfboard.
2). In such cases with a bundled sale (new board and fin purchase), our retailers increase their total margin by 2%. This is effectively the fin margin transfer that Firewire has passed along to our retailers.
3). Retailers no longer have to pay for, or stock a set of fins for every Firewire surfboard in inventory = a lower carrying cost of Firewire inventory. And retailers avoid the hassle of accounting for the exact fins shipped with a particular board.
4). Many surfers already have fins and will elect to purchase the surfboard for a $50.00 discount and use their own fins. Our retailers make the same dollar margin as before, and surfers get a BETTER price to value equation. Boards are a more attractive proposition = increased turn.
5). All boards will come with a detailed ‘FACTORY SPEC’ Fin Specification sticker – see below
Summary of Benefits for our Retailers:
1). Lower cost of Firewire inventory
2). Faster turnover due to lower MSRP.
3). Increased margin on sale without fins.
4). Extra margin for add on sale with fins.
5). The Fin category becomes more important at retail.
6). More fin options for surfers will push fin innovation.
7). Doing the right thing for the environment.
Summary of Benefit for the Surfers:
1). Lower cost if a surfer chooses to buy a board without fins.
2). Choice as to whether or not they need fins.
3). Increased fin selection and price point, as surfers are not tied to one fin or price point.
4). Doing the right thing for the environment.