Opinion Editorial: Rod Warranties...

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Via Angling Trade:

Opinion Editorial: Rod Warranties… It’s Time for Us to All Have a Real Discussion About This Matter

By David Leinweber, owner of Angler’s Covey, Colorado Springs, Colorado

When will the fly fishing industry mature and stop this absurd practice of giving away free rods for the lifetime of the consumer? Even if a model is discontinued, many consumers are offered replacements with new models for free.  I believe this practice is heavily damaging the profitability of our industry, and I think it is time to consider real change.

As so many discussions within this industry go, rod warranties have always seemed to be a “hot” topic.  I know few (retailers) who love them, and most hate them.  Yet the industry seems to be stuck in place with little to no interest in addressing or resolving this issue.  As a specialty retailer myself, I believe warranties are the number-one cause of premium rod sales decline.

Fly-fishing retailers are tired of this mess created by rod manufacturers. It is past time for manufacturers to address this issue, change their practices and develop warranties like those in other outdoor industries. This is an ongoing discussion between retailers throughout the world. We need manufacturers to step out, take a risk, and change this destructive business practice.

Warranty rod repairs are adding more and more rods to the secondhand market, most of which will be honored with the original manufacturer warranty.  The website eBay is full of rods that carry lifetime repairs free to second, third, fourth, etc., users.  Generational, unlimited rod repair, for free (or at minimal cost) is a senseless approach to business.  As retailers, we will benefit when it becomes widely known among our customers that used rods—including eBay purchases—do not carry a warranty. If the angler breaks it, the rod should either go in the trash, or it is going to be costly to get it repaired.  At that point, a new rod purchase will begin to look pretty appealing again.  At one time, many of us believed that warranties helped garner high-end rod sales.  But this argument has changed.

“Lifetime Warranty/Guarantee” has also hurt the fly rod industry by decimating individual rod building and all but eliminating blank and component sales.  For a consumer, there is too much to lose in comparison to a lifetime of unlimited rod repairs.  Unfortunately, the major rod builders won’t reverse their policies. The end result is a mess that lingers.

There’s no simple route to a solution, but one avenue strongly supported by retailers would be to charge two different prices—one for the rod itself, the second for the guarantee.  This is the same model through which we can insure our cars, appliances, and many other major purchases.  The rod sale would be at a margin and the “insurance” sale could be paid directly to the rod manufacturer.  Most manufacturers could take advantage of the Internet and develop an online registration process where the consumer could purchase a one-, five-, or 10-year warranty directly from the manufacturer. This would have a direct effect on pricing, reducing domestic rod costs, making it easier to compete with imported rods.

Other than fly rods, there are few things we can buy that carry lifetime warranties against anything beyond basic defects.  This business practice has driven the price up on premium domestic rods resulting in our customers purchasing less expensive imports, big box alternatives, or even quitting the sport altogether.  The lifetime warranty subtly encourages rod owners to stick with what they have.  It rewards second-hand buyers and takes away from new rod purchases.  For our industry to thrive, we must restore incentives and foster policies that encourage new retail purchases.

Over the past decade, fly shops across the country have seen premium rod purchases decline.  There are several factors pointing to the decline of premium rod sales compared to the “pre-warranty” era.  It may be competition, the economy, it may be the advent of the Web, it may be the increasing cost of repairs; it may be a lot of things.  My opinion is that there is little incentive for someone with a “lifetime warranty” to buy a new rod.  For the record, 25 years is more than double any standard warranty that I am aware of.  Why would anyone with this kind of warranty go out and buy a new rod? Our customers aren’t dumb.  There have, arguably, been no truly great leaps in contemporary fly rod performance in a decade.  Would you buy a new car if the old one was performing adequately and was guaranteed for life?  Maybe. More likely, you’d hold onto it a lot longer.  Stick the tip in a fan and bust it all to hell, and wait for UPS to ship a new one. Why spend more money?

As specialty retailers, we should let the major rod makers know how we feel.  More than that, we should ask for a reversal of the lifetime warranty practice.  Several of us are looking for manufacturers who will take the lead. We realize the risk and we will, in turn, support those manufacturers who have listened to us, and we will get behind those brands.

We believe selling the warranty independently from the sale would have a positive effect on our industry.  It would reduce the price of the initial sale and afford the customer the option of purchasing the insurance independently, even giving the consumer more options.  The extended warranty would have an expiration date; just the way it is with so many other retail products.  As it stands now, there is no realistic reason for someone to replace their old rod with a current model. Beyond the hype, the differences between rods are minimal in the hands of all but the expert.  It’s the Indian, not the arrow, that most often makes the difference, and most anglers know that.

Many of us were hoping that AFFTA would have placed this as a discussion item at IFTD, and that didn’t happen. We cannot wait another year to push this idea forward and change the retail suicide strategy our industry has adopted.

As a specialty fly shop retailer, I want to make the following recommendation to rod manufacturers:

1. Discontinue the lifetime warranty on fly rods and approach the warranty issue the same way every other industry handles it.

2. If consumers want a warranty beyond guaranteeing against defects, sell it separately, and for a limited, specified time.  Just like washing machines, computers, and every other warrantied product.

3. Figure out how much the current system is costing you and reduce the price of the rod models by that amount.

4. Sell the optional warranty for the difference, through dealers, for a modest commission (since we have no investment in inventory).

5. Make the warranty available only at the time of purchase and only to the original buyer.

6. Develop a policy, work out the procedures, communicate with your dealers, and make the change in the next buying season.

It is time to make big changes and support the health of our industry. If you agree please post your support here. If you have a better or different idea, or would like to modify the above recommendation, let’s hear it.

This letter is based on comments from retailers from throughout the world. Over the past decade, more than half of all specialty fly shops have gone out of business. You could point to a number of factors such as the Internet, distribution issues, or just bad business practices, but the practice of providing lifetime rod warranties must be included as the chief bad business decision our industry has made. It has hurt our ability to thrive for too long and it is time for change.

Rod Manufacturers, please step up, take the risk, we will take notice, and we will support you.  Angler’s Covey will give preference to any rod manufacturer that will take on this issue.

Boom...Morgan