At the risk of drawing Paul's ire by raising this topic again, I was curious to see how many on this board would favor major rod manufacturers abandoning unlimited lifetime rod warranties in favor of a limited (-or unlimited - say 2-3 year) warranty against manufacturer's defects, and supplying the option to buy an extended limited or unlimited lifetime breakage warranty.
After all, one doesn't get an unconditional lifetime warranty against breakage for cars, stereos, tv's, guitars, violins, watches, computers, baseball bats, basketballs, dogs, cats, etc. etc. etc. It boggles my mind that for as fine and delicate an instrument as a fly rod a consumer would expect such a warranty. With return rates between 5 and 15% for many models (perhaps the high end or more for stiffer, high performance, light rods), the overhead costs to maintain patterns, materials, and manpower on top of production to handle warranty repairs is non trivial.
Since the unconditional warranty thing started, I don't believe a single major manufacturer wants to be the first to break ranks, but if a sufficient groundswell of grass roots support is present in the consumer community, this may change... hopefully... possibly... maybe?
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Rod Warranties - At what price forever
Hi Way,
Seeing as pandoras box has already been opened with the unconditional warranties already being offered, I don't know if the rod manufacturers would be able to retract this without a substancial cost reduction to the consumer. If this would be part of the deal to pass the savings onto the consumer, I think that it would work, if not, their just wasting advertising space.
Regards,
Bob
Seeing as pandoras box has already been opened with the unconditional warranties already being offered, I don't know if the rod manufacturers would be able to retract this without a substancial cost reduction to the consumer. If this would be part of the deal to pass the savings onto the consumer, I think that it would work, if not, their just wasting advertising space.
Regards,
Bob
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Paul Arden
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Hi Way, this isn't going to work in my opinion, because there are anglers around who'll break the rod within 2-3 years to keep the warranty fresh. Greys offered all sorts of guarantees in the UK when the lifetime deal came out, and I don't think it helped them.
How about if the manufacturer(s) create a policy with an insurers under which the customer gets free cover for the first year of purchase and then pays a yearly premium. That way it covers rod and *all tackle* (to a capped limit) against theft/breakage - with an excess of course. The consumer is getting more, the manufacturer is off the hook, there's a hell of a lot of anglers getting a good discount, the insurers make money, etc.? Not an easy solution but a possible avenue and the angler can always opt out and get the stick cheaper.
Paul
How about if the manufacturer(s) create a policy with an insurers under which the customer gets free cover for the first year of purchase and then pays a yearly premium. That way it covers rod and *all tackle* (to a capped limit) against theft/breakage - with an excess of course. The consumer is getting more, the manufacturer is off the hook, there's a hell of a lot of anglers getting a good discount, the insurers make money, etc.? Not an easy solution but a possible avenue and the angler can always opt out and get the stick cheaper.
Paul
Paul,
Let me play devils advocate here. If the rod companies could get an insurer to cover their rods, wouldn't those same persons who break their rods after 2 or 3 years do it after 1 or later? An annual premium is a small price to pay towards a new rod. Insurance fraud here in the states seems to be the new welfare program, and the costs are directed back to us the consumer or public at large. I would like to think this wouldn't happen within our ranks, but if it did under such an insurance program, the costs it would incur would ultimately be absorbed by the consumer.
As you said, there is no easy solution.
Bob
Let me play devils advocate here. If the rod companies could get an insurer to cover their rods, wouldn't those same persons who break their rods after 2 or 3 years do it after 1 or later? An annual premium is a small price to pay towards a new rod. Insurance fraud here in the states seems to be the new welfare program, and the costs are directed back to us the consumer or public at large. I would like to think this wouldn't happen within our ranks, but if it did under such an insurance program, the costs it would incur would ultimately be absorbed by the consumer.
As you said, there is no easy solution.
Bob
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William
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Paul,
I agree that separate optional insurance is the way to go. But I don’t think the first year should be free - somehow I think it will unleash the 11-month snap factor that has been lurking in the graphite all along. And another thing is that the second year insurance contract and premium would need to be transacted at the time of initial purchase - otherwise the opportunity and relationship with the buyer is lost. Imagine receiving the little mail out reminder notice 11 months down the track that your first insurance premium on your rod is now due - the choice for many will be either quick snap followed by claim and no pay, or just simply no pay!
I believe the rod manufacturers would love to break out of the unconditional warranty trap - they must be scared shitless every time they try to estimate the unfunded unknown liability for their balance sheets. Any prospective buyer of the business would make their own calculations of the liability and it would substantially discount the goodwill of the brand - just the uncertainty factor would make the business quite unattractive in the mind of the buyer. I suspect most business entities offering these warranties will be backing them up to the grave - that's why they're called "lifetime" unconditional warranties.
But the most difficult issue for the rod companies trying to break out must be - by how much do they drop the price!? High price has become one of the main branding tools to signify quality. One option would be to only partially separate out the insurance cost - so the rod price still looks high and the extra insurance cost is low i.e. the marketing message being that we're so confident in the quality of our expensive product that the insurance is cheap. However, no specialist insurance company would take on such business so the rod company would still be left to face the music in the long run.
Perhaps GLoomis has got the best solution - they still charge a cheeky premium on the rod at initial purchase (price stays right up there with the best of them) which then entitles the owner to pay only a hundred-and-something dollars to get a new rod in the case of a breakage. I think it's called the "expedite" fee or something like that, which probably covers the basic variable cost of manufacture and the shipping. There is some built-in disincentive to voluntary rod upgrades and at least the company does not make a loss on each replacement. The shop owner gets nothing but at least the customer visits the shop twice to drop off and fetch so incidental sales are a possibility. I think this may be the best of all worlds and is a sustainable business model.
Cheers
William
I agree that separate optional insurance is the way to go. But I don’t think the first year should be free - somehow I think it will unleash the 11-month snap factor that has been lurking in the graphite all along. And another thing is that the second year insurance contract and premium would need to be transacted at the time of initial purchase - otherwise the opportunity and relationship with the buyer is lost. Imagine receiving the little mail out reminder notice 11 months down the track that your first insurance premium on your rod is now due - the choice for many will be either quick snap followed by claim and no pay, or just simply no pay!
I believe the rod manufacturers would love to break out of the unconditional warranty trap - they must be scared shitless every time they try to estimate the unfunded unknown liability for their balance sheets. Any prospective buyer of the business would make their own calculations of the liability and it would substantially discount the goodwill of the brand - just the uncertainty factor would make the business quite unattractive in the mind of the buyer. I suspect most business entities offering these warranties will be backing them up to the grave - that's why they're called "lifetime" unconditional warranties.
But the most difficult issue for the rod companies trying to break out must be - by how much do they drop the price!? High price has become one of the main branding tools to signify quality. One option would be to only partially separate out the insurance cost - so the rod price still looks high and the extra insurance cost is low i.e. the marketing message being that we're so confident in the quality of our expensive product that the insurance is cheap. However, no specialist insurance company would take on such business so the rod company would still be left to face the music in the long run.
Perhaps GLoomis has got the best solution - they still charge a cheeky premium on the rod at initial purchase (price stays right up there with the best of them) which then entitles the owner to pay only a hundred-and-something dollars to get a new rod in the case of a breakage. I think it's called the "expedite" fee or something like that, which probably covers the basic variable cost of manufacture and the shipping. There is some built-in disincentive to voluntary rod upgrades and at least the company does not make a loss on each replacement. The shop owner gets nothing but at least the customer visits the shop twice to drop off and fetch so incidental sales are a possibility. I think this may be the best of all worlds and is a sustainable business model.
Cheers
William
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Paul Arden
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Not if the excess was high enough. Of course that's not as attractive as a lifetime warranty. Anyway, that's not the point, the aim should be to get the warranty away from the manufacturers and then maybe it will disappear.
I don't see a real solution (I don't think anyone does), and I think the budget end at least, will have a lifetime warranty for some time to come.
Paul
I don't see a real solution (I don't think anyone does), and I think the budget end at least, will have a lifetime warranty for some time to come.
Paul
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Paul Arden
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William
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That's okay Paul,
the idea of a high excess is also good - not dissimilar to the GLoomis "expedite" fee.
One thing that we also should not overlook is the value of the relationship between the rod company and the owner of a rod covered by the unconditional lifetime warranty - it's like an invisible umbilical chord of brand loyalty. If there was no warranty (other than a sensible 12 month limited cover of manufacturing defects) and the rods were all significantly cheaper then consumers would be mentally and financially free to be more promiscuous with their rod preferences. :;):
Company X would like to ensure that the separate insurance policy you buy only permits you to buy a replacement rod from same Company X.
Cheers
William
the idea of a high excess is also good - not dissimilar to the GLoomis "expedite" fee.
One thing that we also should not overlook is the value of the relationship between the rod company and the owner of a rod covered by the unconditional lifetime warranty - it's like an invisible umbilical chord of brand loyalty. If there was no warranty (other than a sensible 12 month limited cover of manufacturing defects) and the rods were all significantly cheaper then consumers would be mentally and financially free to be more promiscuous with their rod preferences. :;):
Company X would like to ensure that the separate insurance policy you buy only permits you to buy a replacement rod from same Company X.
Cheers
William
The highest form of existence is play
Hi Guys,
There is a "grey" area here, if the rod makers stopped the warranty, would the price drop much? only the market would tell, if Loomis stopped their warranty deal here, would I then buy a Sage, yes I would!
I have noticed that sage and loomis owners in my part of the world are very carefull with their rods and would be upset if they broke one, I don't see too many people scratching their ferrari's either, even if money was not an option
Gary
There is a "grey" area here, if the rod makers stopped the warranty, would the price drop much? only the market would tell, if Loomis stopped their warranty deal here, would I then buy a Sage, yes I would!
I have noticed that sage and loomis owners in my part of the world are very carefull with their rods and would be upset if they broke one, I don't see too many people scratching their ferrari's either, even if money was not an option
Gary
Hi Guys
If I have read Bubba's post correctly then returns for his companies rods (Scott I believe) are between 5 and 15%.
If we take the worst case that it is 15% and a rod normally breaks in only one section, assuming that the average rod has 3 pieces, that makes 5%. Ignoring the profit margins and shipping costs etc. This means for the rod manufacturer to stop the warranty he cannot reduce his price by more than 5% to still break even.
I don't think that is enough to worry about it.
If the real costs of replacing or repairing rods were significant, bearing in mind that most manufacturers charge a handling fee, then it would be worth it but with the numbers quoted it is not worth getting out of bed for.
Pete
If I have read Bubba's post correctly then returns for his companies rods (Scott I believe) are between 5 and 15%.
If we take the worst case that it is 15% and a rod normally breaks in only one section, assuming that the average rod has 3 pieces, that makes 5%. Ignoring the profit margins and shipping costs etc. This means for the rod manufacturer to stop the warranty he cannot reduce his price by more than 5% to still break even.
I don't think that is enough to worry about it.
If the real costs of replacing or repairing rods were significant, bearing in mind that most manufacturers charge a handling fee, then it would be worth it but with the numbers quoted it is not worth getting out of bed for.
Pete
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Gilgamesh
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Hi Pete
I won't bother posting a link to Steve's article again, but I think you have the maths wrong ..........the 5% added cost (for the manufacturer) is hidden inside an additional 40% margin that's excused by a lifetime waranty :p
So in fact the price should drop by 40% if they ditch the waranty :look:
OK, my figures might be a bit high
I'm just bitching because I can't afford it.
I just think the Global Village SUCKS, and we all have way too much information to bother us when we (try to) sleep.
Give me the days where you could make a good, honest 80% profit and everybody was happy. Unlimited lifetime waranties came in just after the demise of GOD (good old days) (which is probably before my time) :p
Today's choices are High Volume or High Profit......like, Sage vs. Airflop :p
I might be bitching (and contradicting myself big time), but looking at it that way I would prefer things to stay the way they are............one of these days I might be able to afford a Sage, and then I want it to be a bloody GOOD Sage!!
Cheers
Gerhard
PS: Since I didn't start this thread, or the similar one in the Beginners section, I'm free to contradict myself :O
I won't bother posting a link to Steve's article again, but I think you have the maths wrong
..........the 5% added cost (for the manufacturer) is hidden inside an additional 40% margin that's excused by a lifetime waranty :p So in fact the price should drop by 40% if they ditch the waranty :look:
OK, my figures might be a bit high
I'm just bitching because I can't afford it.
I just think the Global Village SUCKS, and we all have way too much information to bother us when we (try to) sleep.
Give me the days where you could make a good, honest 80% profit and everybody was happy. Unlimited lifetime waranties came in just after the demise of GOD (good old days)
(which is probably before my time) :p Today's choices are High Volume or High Profit......like, Sage vs. Airflop :p
I might be bitching (and contradicting myself big time), but looking at it that way I would prefer things to stay the way they are............one of these days I might be able to afford a Sage, and then I want it to be a bloody GOOD Sage!!
Cheers
Gerhard
PS: Since I didn't start this thread, or the similar one in the Beginners section, I'm free to contradict myself :O
There is magic in it. Let the most absent-minded of men be plunged in his deepest reveries - stand that man on his legs, set his feet a-going, and he will infallibly lead you to water, if water there be in all that region.
OK Gerhard
If you are correct then manufacturers will never reduce their prices by 40% to eliminate something that costs them 5%.
It would make them look extremely foolish. In fact if this is correct then I must congratulate the manufacturers for the great scam to make a lot of profit. But now that I am on the recieving end all I can say is they are a bunch of barstools.
Maybe some of the newer manufacturers in the market have the right idea by not charging so high prices in the first place.
But what is the correct price for a few pieces of carbon, with some cork and a few metal bits attached?
$600 - don't think so.
Pete
If you are correct then manufacturers will never reduce their prices by 40% to eliminate something that costs them 5%.
It would make them look extremely foolish. In fact if this is correct then I must congratulate the manufacturers for the great scam to make a lot of profit. But now that I am on the recieving end all I can say is they are a bunch of barstools.
Maybe some of the newer manufacturers in the market have the right idea by not charging so high prices in the first place.
But what is the correct price for a few pieces of carbon, with some cork and a few metal bits attached?
$600 - don't think so.
Pete
Let's take a look at a Sage that retails here in the US at $600. Actual Material costs only account for $75 or less on that entire rod and that's figuring in some labor such as the production of the blank itself. The rest is construction labor, marketing, R & D, distribution and other more minor business expenses. If the tip is broken which I have to believe is the case most of the time then they only have less than $20 to replace it and if you pay the shipping both ways, they're out very little. That's a whole lot of margin to play with. Most businesses would love that type of margin to work with. That's the cost of doing business and a very minor part of the big picture.
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William
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petevicar wrote:Hi Guys
If I have read Bubba's post correctly then returns for his companies rods (Scott I believe) are between 5 and 15%.
If we take the worst case that it is 15% and a rod normally breaks in only one section, assuming that the average rod has 3 pieces, that makes 5%.
Are the figures Bubba quoted 5- 15% a lifetime estimate or annual returns? If it's annual then the figure is frightening. If it's a “lifetime” estimate then does it include some sort of escalation towards the end of "lifetime" - say 20 + years out. Rods then will be a quantum leap better than what we have now, and the more R&D they put into them the bigger the temptation to upgrade will be. There is no precedent for this situation in current return rates. In future one can see a situation where accident replacements will begin to cannibalise new sales big-time. When current rods are ancient and there are no more spares - you will get a full replacement of equivalnet status in the range at that time. We could see double- and triple-dipping into the scheme for both honest and dishonest breakages in the lifetime of the average angler. I think it's crazy and in no way sustainable. So I'm looking to increase the number of "rods for life" in my quiver ASAP – the current deal is just too good to be true but it is true.
The highest form of existence is play
William, you know you're right, this lifetime thing is crazy when looking into the future that far. I mean if it were just let's say 5 years, and you paid $600 for the rod, then that's only $120 year for a whole lotta fun and you still have given the customer a warranty that will more than cover any defects in material.
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