Last week we discussed the direct-sales model emerging in our industry and promised you that we would be talking to the brands involved in more detail. Well this week it is the turn of Switch Kites to have the floor and answering their question on their behalf is the world renowned kite designer and Switch team member Bill Hansen.
KSm: Tell us a little bit more about the company history and how it started out?
produce the highest quality kites at the lowest possible prices
SwitchKites was founded by a small group of dedicated water sports enthusiasts. Talented both on and off the water the group set out on a mission to revolutionize the kiteboarding world by making the sport ‘accessible to all’. They saw the need for reasonably priced high quality kiting equipment available direct to riders around the world and after analysing and theorizing they come up with a plan to manufacture their own kites, and then sell those kites direct online.
By eliminating the middleman (retailer) and selling direct they could produce the highest quality kites at the lowest possible prices hence making kitesurfing affordable to many. Kiwi (New Zealand) based, the group embraced the worlds’ best, teaming up with myself (KSm: Bill Hansen a renowned kitesurfing designer from San Francisco), professional wave rider Felix Pivec (Hawaii) and showcasing their gear through sponsoring World class kitesurfer Marc Jacobs (New Zealand) and attracting a talented group of Team Riders.
KSm: Was it always a clear path from the beginning to sell directly to your customers?
sales via the internet, are becoming more prevalent in many markets
Yes. There was never any doubt as to the business plan. The market was over saturated with brands and under distributed so finding shelf space in an already fragmented retail market was near impossible. A highly risky and tremendously expensive worldwide advertising and promotional effort would be required with doubtful returns for a number of years. Direct sales via the internet, are becoming more prevalent in many markets and as the technology improves, becoming more efficient and convenient to the consumer. We firmly believe, if done properly, our business model is the correct one for this market.
KSm: Have you faced pressure or other difficulties from the industry for pursuing this path which goes against the accepted model of how things should be done?
Yes. The market, like many, is very competitive and really did not need another brand. What was lacking was a distribution model that actually made access to the product easy on a global scale. The typical method in the industry was a national distributor and local stockists. But, in wind-driven sports, the distribution model is geographically challenged resulting in poor access to complete product inventories. The inherent inefficiency of a multi-level distribution model that does not have sufficient coverage ultimately causes high prices and delays to the consumer along with poor margins for the local stockist. The Switch direct model eliminates both the higher prices and lack of inventory and has an immediate and direct impact on the competing stockists and their brand distributors.
They obviously do not appreciate this outside competition and have done their best to encumber it. The tactic is to question everything from the purity of design to the quality of manufacture and on a local basis apply peer pressure against early adopters who may have once been their customer. They have also used their advertising budgets to limit Switch from promoting on internet forums and magazines. While some of these tactics have had an early impact, as time passes and more Switch product reaches the consumer, they are beginning to prove ineffective.
KSm: How do you feel this business model and direct contact with customers has helped you grow and form your identity?
The direct model seems simple and easy but actually, it requires an enormous commitment in resources
Because this business model involves a direct relationship, with no middle man to increase the price or drop the communication/service ball, a bond is formed that is more akin to real human interactions in daily life. We are the ones designing, building, shipping and servicing the product and we therefore have more ‘skin in the game’ and more incentive to ‘get it right’ with each customer. The direct contact Switch has with its customers has given our company an edge in a highly competitive market.
Unfortunately, this did not help us early on because we had no infrastructure to build such an identity. The direct model seems simple and easy but actually, it requires an enormous commitment in resources to build an efficient structure that facilitates ‘personal’ interaction with customers on a global basis. With the launch of our new website, Switch now has the capacity to fully employ a more direct business model and use this to create a unique experience with customers.
KSm: What do you have coming up on the horizon for us to get excited about?
when given the power of true knowledge, will make wise decisions
We are doing a number of things to establish Switch as a major brand. Clearly, continuing to develop, improve and release new products is one of them, although not particularly unusual. But, behind the scenes we have established a sophisticated testing laboratory and instituted several other highly technical investigations on an academic level.
Our intent is to replace the hypothetical promotion commonly used in recreation product marketing with true technology. By raising the knowledge of consumers to a more thorough understanding of the structural and dynamic qualities of our products, we believe Switch will become known as the absolute leader in the market. Consumers, when given the power of true knowledge, will make wise decisions and we believe that is very exciting.
We would like to thank Bill Hansen, Susie Mitchell and all of the Switch Kites team for talking to us and we wish you all of the best for the future. Next week we talk to Clash Boards founder Alvaro Onieva about starting a brand, selling out and never giving up on your dreams in the final interview of our look at direct sales.