why are rooftop tents so expensive?

[dcg141]

As a rule in retail as the price goes up the margins come down. That starts to happen at the $1000 level. Once you get into $3000 and up pricing becomes more fluid and discounts start to happen. This of course is not a hard and fast rule as always prices are dictated by demand. The retail market in general is self policing. No one can make big ticket items in high demand that are bringing in large margins without someone seeing that and moving to get into the market themselves. High margins are always short lived if the demand is there. I have lived this reality for all of my adult life. When I sell you something for $10 or less my margins are 200-300%. When I sell you something in the $1000-$4000 range we are now below 20%. Above that and for sure above $10,000 we are operating on single digit margins and depending on how much I need to move a big ticket item to get it off the books sometimes at a loss. My business has to maintain at least high 20's overall to keep the lights on. I strive for low 30's but its difficult to get there. Retail business fail all the time over 5% points overall. Retail at every level is highly competitive. I will say this, outdoor gear is very disciplined when it comes to pricing in my observation. My personal belief is that its still a small market in the overall economy and for sure the RTT market is tiny. There may be larger than usual margins in RTT's or not. Its such a small market the usual rules do not apply.

 

[The Artisan]

So, and this is the real question...do you think that the person or business that is selling you an RTT bought and imported for 2K deserves the extra 1.8K markup that they are collecting

But out that $1800 the business owner knows what he or she wants to make per unit. Then he or she might have employees, mortgage/rent, utilities, might have a sales person or team, travel expenses to shows and taxes. All this comes out of $1800 profit per unit. At the end of the day he or she is lucky to make 25 to 30%
Kevin

 

[jaxyaks]

Looking at the RTT business, and pricing and having experience in other products with the same business model, it appears on the surface that if someone wanted to start a company and import them you could sell at close to half the going prices and make a sustainable profit. The simple outdoors products seem to be attempting to disrupt it with their products but quality may not be there. Most of them appear to be made in the same group of asian factories, so an in person visit and a little work on your specs etc, someone could disrupt this market.

Yakima looks like they are attempting to do this with their pricing. For the RTT market to grow further, it actually needs to be upset a little in order to push further mainstream demand. If someone put them in the hands of the masses at an entry level price that the masses would purchase, the industry would grow even bigger.

I realize this is easier said than done, but If I owned a mid/upper tier RTT business that was healthy, I would actually be looking at bringing that lower priced product to the masses even if my projected profit would suffer in the short term in order to increase it in the long term when demand increased.

This may or may not happen with a "big box" offering. I am actually suprised that REI has not made a REI branded RTT. I feel like that may occur depending on the level of interest they get with the Yakima offerings. If you see this, you will soon see prices plummet, and the existing high margin companies would either have to adjust or add more features to separate themselves in the market.

 

[dcg141]

None of us know what they are paying for tents and so to do so is pure speculation. None of us know what kind of numbers they are moving. So trying to understand their business without a spreadsheet is impossible. You make think you know but really, you don't know. I have run a retail business for decades and I know enough to tell you without hard accurate numbers there is no way to know. I do know this. There are what, at least 20 guys across the US selling RTT's and probably more. That's enough competition for prices to drop if the margins were totally out of order. It only takes the one guy who's overhead is significantly less to start the process.

 

[jaxyaks]

While you may not know exactly what costs are, I think there are enough of them listed on Ali baba to come up with a reasonable price on the Asia sourced units. In my experience with Asia sourced product in the outdoor industry, you can get pretty close to cost if you have an idea of general shipping cost, import duties and general business costs. Roof nest for instance, seems to be trying to price a little more for the masses for the hard shell model, their ease of finance and social media push is also consistent with the Asia sourced brand cult following etc business model. If you look close in most industries you can find this repeated over and over...

 

[Utah KJ]

Amen brother. Any person that has ever worked in retail knows this (except those that are paid to mop floors...maybe).

So, and this is the real question...do you think that the person or business that is selling you an RTT bought and imported for 2K deserves the extra 1.8K markup that they are collecting in the U.S.? What are you getting for that markup? It had better be EXEMPLARY customer service. Say, about $1800.00 worth of customer service. Think about it. Just how much customer service is that? Do they answer your calls? Do they return your messages immediately? Do they send you a card at Christmas? Do they know your middle name? Have they asked about your kids? Or dogs?

So much socialism in this statement :shivers:

 

[Bayou Boy]

So much socialism in this statement :shivers:

Agreed. It's really simple. If YOU feel something is overpriced, don't buy it. The business owner set the price based on what his real costs are plus his reasonable markup for the PITA of being in business. There is a lot more that goes into that equation than the straight cost of goods and "customer service."

 

[ttengineer]

For what it’s worth, prices are dropping.

23 zero for example has decreased their prices by what appears to be 30% or more over the last year.

Hardshells will be next with companies like HiViz and CVT now making a competitive alternative to a JB or Autohome.

Pair that with companies like Yakima really trying to break in and I think we are about to see a major price adjustment across the board.





Sent from my iPad using Tapatalk

 

[ducktapeguy]

While you may not know exactly what costs are, I think there are enough of them listed on Ali baba to come up with a reasonable price on the Asia sourced units. In my experience with Asia sourced product in the outdoor industry, you can get pretty close to cost if you have an idea of general shipping cost, import duties and general business costs. Roof nest for instance, seems to be trying to price a little more for the masses for the hard shell model, their ease of finance and social media push is also consistent with the Asia sourced brand cult following etc business model. If you look close in most industries you can find this repeated over and over...

I've looked at the tents on Alibaba and have followed numerous attempts at people trying to organize group buys on them. It seemed like a good deal at first, but once you start calculating the shipping and import costs, plus all the other associated costs, you're really not saving much. Maybe the higher priced tents would have a better savings, but for the standard soft shell tents the savings don't amount to much, maybe 20%-30%. You can usually find name brand RTT's on sale that come close to those prices. And that's assuming someone is willing to take the risk and order a large quantity up front with committed buyers who aren't going to flake out at the last minute and leave them stuck with the inventory. And if something does go wrong, you're basically screwed and on your own.

I usually don't factor in customer service into a purchase because I rarely have a need to use it, but on a large, easily damaged item like this it could be invaluable. When I had an issue with my Tepui telescoping ladder, I sent a quick e-mail to Tepui looking for some suggestions on how to fix it. In 2 days a new ladder showed up at my door, no questions asked. That alone easily made up for the additional cost of buying from a reputable vendor. If/when i need replacement parts, it's nice to know they're available and i don't have to throw away my entire tent when something goes wrong.

 

[Mike S]

@Mike S It seems like you do not remember the interaction that I went through with Autohome USA some years ago. After chasing you and your staff around for several weeks I purchased an RTT from a competitor. You and yours just couldn't be bothered with me. I had too many questions. I requested too many details. I wanted answers. It might be suggested that I expected $1.8K worth of customer service.

Though it is impressive that you've purportedly spent 1/2 million to accommodate the masses....let me know when you & your ilk can figure out how to return emails and VMs in a timely manner. I might be willing to hand over 1.8K to you for your trouble if all that happens to pass.

Well, no, I won't. That ship has sailed. While I don't feel confident in offering any public opinion as to your "****************** status", let's just say that I know where Autohome USA sits in my list of priorities. It's somewhere south of hemorrhoid surgery. Vasectomy would be a close second.

jacobconroy No, I do not remember this or exactly when it might have happened. The company is small and when I encountered some severe family challenges several years ago, I could not devote much time to the businessand it suffered. These issues have been resolved and since that time we have done much to provide better service... larger warehouse, significantly improved inventory and service levels, improved the website experience, reduced shipping costs dramatically and added significant representation on the East Coast by partnering with OK4WD. Of course, our 5 year warranty and guarantee of satisfaction have not changed. I am sorry that you had such a bad experience that you feel the need to post negative comments on this forum without actually having experience with our products. Thanks for your comments.

 

[Lownomore]

There is still one thing that has not been directly pointed out. That is the exchange rate of products that are imported into the U.S. form other countries. The exchange rate can be up or down from order to order for the same product.

Then you have the import taxes to the product. That is just the reality of doing business.

If you go back and read post #18 in this thread you will get some of the other cost of doing business.

With the people who think that all of this will make you a millionaire over night then why do some of you get together pool your money and start your own business. You will get a lesson of the businessperson of the real world. Be sure and keep the group here on the forum updated of your progress. When you make your first million then we will know as you invite us to a drink on you. We will expect fine wine if you make your million, if you make less then we will know if we get a soda and water if you are a bust!

I hope that this topic has made some people aware of the cost of doing business and why the pricing is set as it is. If you do not believe that these are justifiable the do as the paragraph above suggest.

Da Frenchman

It is definitely something people that don't own or deal with purchasing in a business don't understand. Working for a business that sells and installs all manner of overlanding and off road equipment I can say that most people in this thread are absolutely clueless about what the actual margins on products are.

There is also a huge difference between the cost of running a brick and mortar storefront and a drop shipping Ali-Baba warehouse business that again, unless you understand overhead people just can't grasp.

 

[JaSAn]

A RTT is a luxury item, it is not a necessity for living. All this discussion about cost of doing business is interesting and informative but irrelevant.

A seller decides what price he is willing to sell for. The buyer can pay the asking price, try to negotiate a lower price, find another seller at a price point he is willing to buy at, manufacture his own, or do without. No-ones life or health has been harmed.

A seller need not justify the price asked; his RTT either sells or does not.

 

[plh]

A RTT is a luxury item, it is not a necessity for living.

As is all overlanding equipment, unless you are living in it full time (no home, condo, apartment etc)

 

[Photobug]

Here is a video of making a rooftop box, to see what is involved. It looks like a lot of work.

 

[NatersXJ6]

That was impressive. I’m guessing that dude is on something working that fast! ?

Not only is the amount of labor impressive, the amount of floor space consumed for 3 or 4 days is more impressive. That space was at least the size of my entire garage. Probably 800 sq ft or more.