Common Misconceptions about the Hockey Equipment Industry

Over the last 3 years of working in a hockey shop I've learned a lot about the industry and what shocks me is how little customers know about the hockey equipment industry. 

One of the biggest misconceptions about the equipment industry is that manufactures strictly control their pricing, like states regulate tobacco and alcohol products.  If a company sells below the MAP pricing routinly they can get their account discontinued by the manufacturer.  That being said a big company like Monkey Sports or Total Hockey can test the MAP policy a lot riskier than your local pro-shop.  However at the end of the day, all retailers are supposed to be playing on the same field, thus the only way a retail company makes a profit is by selling as much merchandise as possible. 

Another big misconception is the profit margins on pieces of equipment, especially sticks and skates.  On most pieces of gear there is a 30-35% bump between the cost of goods sold (a term used in my accounting course) and the MAP price that it is sold for at the store level.  Because of this many stores have to order exactly what they are going to sell to avoid selling clearance items at or below cost.  For example the $799.99 skates from Bauer and Reebok have a cost around $540-560 (after shipping) so in order to make up the cost on 1 skate the company has to sell 3 skates.  This plays a huge role when items go on clearance.

Sticks in my opinion however are the biggest misconception that customers just don't know about.  Of all pieces of hockey equipment, sticks are the least profitable items that a company sells.  Especially the high end composite hockey sticks.  Sticks are what manufactures like Bauer, Easton, and Warrior make the majority of their profits from, and they don't share it with the retailers.  Because of the nature of composite sticks and their durability or lack there of I should say, retailers will not handle warranty claims of sticks.  Unless you're a perfect customer (buying everything from only one shop and buying at least $100 of merchandise a month on top of sharpenings and tape), retailers will not help you out.  The exception of this rule is knock off sticks such as the Powertech brand.  It's not that retailers don't want to help you out, most of them would be more than happy to help out with broken sticks but they just can't afford to help. 

Really what makes money for a retail shop is services that they offer - sharpenings, equipment repair, ect.  Next time you go to buy gear keep this information in mind, and if you're shopping for gear remember you may find an item cheaper online but you're really doing your local shop a favor by purchasing from them.