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Recent Inflation in the Price of Boreal Climbing Shoes

If you're a rock climber you may have noticed that in the last two months the price of Boreal climbing shoes ordered from online retailers overseas like Sport Extreme or Barrabes have sky-rocketed: shoes like the Ace, which used to cost $70-80 USD now cost $135-150. In the US, these shoes have always cost between $135-150, so myself and a lot of other people were just paying $10 shipping to buy them from our friends in Europe. (Boreal is based out of Spain).

I speculated over email with a budy of mine, Evan, as to why we've seen the drastic inflation:

I think what's going on is when Boreal brought their shoes to the US, they
guaranteed retailers a "suggested retail value" on their Aces of $150.
They probably sell the Ace to retailers for $50/pair so the retails can
make a typical 150-200% markup.

Where Boreal screwed up is they made the shoes available in Europe for a
lot less, probably around $20-$25/pair, suggested retail value of $70-80.

What Boreal and the retailers are afraid of is, if Boreal drops the price
of their shoe to a lot less, the retailers will loose a lot of money on
their current inventory. The only way companies can get around this is to
offer a rebate, which is expensive to operate, and pretty unpractical and
such a low-volume product like rock climbing shoes.

I think what happened with the recent inflation of Boreal shoes overseas
is the US retailers got wise and complained to Boreal. Boreal then
changed their contract with their European dealers to prevent them from
exporting the shoes overseas themselves."

I think this is a great tragedy for American consumers. If you or someone you know is an Economist that can offer a better explanation, please let me know! :-)

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This page contains a single entry by Robert W. Rose published on January 17, 2003 1:21 PM.

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