Viberg
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Thanks Foxy, that actually makes a lot of sense. I guess it's just a matter of where the respective brands see the core of their custom developing. So if the majority of Vibergs custom is overseas, then it makes the pricing easier to apply, and even somewhat justified. I now feel a little sorry for the North American consumers of Viberg products though, it seems that they have been kind of forgotten about with their (relatively) new found popularity in the East
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Another thing to consider is the size of operations.
I get the feeling that White's might be the bigger company with higher turnover.Viberg might be smaller with higher overhead cost. They have relocated their workshop lately which can be costly. Maybe they are getting ready to expand and increase volume. They certainly have positioned themselves nicely for that.
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While I appreciate all that, and it is understandable, they are still selling a very similar product for double the price. I guess the consumer has to make a decision, and fortunately it appears to be paying off for Viberg. In a specialised market, it is easier to justify price increase, as your consumer is likely to be somewhat less "price conscious".
However, in any industry, increasing price to fund expansion is an extremely dangerous strategy surely? You risk alienating your consumer base, and leaving yourself with the cost of expansion, and no customers to help pay you out of it. In manufacturing having a healthy order book is key to expanding the business, and from the moves we have seen from Viberg their order book must be pretty strong.
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But in this case they aren't selling just a working boot. It is a luxury product which mainly transports an image!…of course they have to be functional but owners want to show what they have.
Luxury products will be kept bare to increase the demand.They don't have to compare (cost-benefit ratio) with working boots! -
In any case - I would be careful comparing with a product that competes in the domestic market in the US, especially if it is by a US domestic company.
take the Levi's or Nike's of this world - they won't sell their products at US domestic prices in most of their other markets. They can use the higher margins to subsidize their US operations. Some companies actually have to do this in order to stay healthy…
Trying to understand pricing and positioning in the US market is often fruitless and not always totally obvious.
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But in this case they aren't selling just a working boot. It is a luxury product which mainly transports an image!…of course they have to be functional but owners want to show what they have.
Luxury products will be kept bare to increase the demand.They don't have to compare (cost-benefit ratio) with working boots!But cant exactly the same statement be made about Whites?
Foxy, all your points make perfect sense, I guess my view of like for like is a little too pragmatic for a comparative debate.
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One story that I have heard was that Viberg changed their wholesale currency one day/night from CAN$ to US$ without adjusting the the actual amount. This must have happened a year or two ago…
This wouldn't explain much of the price difference- typically, the Canadian dollar has been about 75 cents against the US dollar, and currently is right at 1 to 1. Could certainly be part of it, though.
Another thing to consider is the size of operations.
I get the feeling that White's might be the bigger company with higher turnover.White's is definitely larger. Probably a lot larger, though I don't have numbers to back that up. That's going to give them economies of scale that Viberg can't match. I'm pretty sure White's boots use more automation in the production, which will lower costs, as well.
Most folks don't realize it, but White's really does still make boots worn for serious work use, not just the desk driving Semi Dress model most of us buy. When I lived in Arizona, the wildlands firefighters wore White's and nothing else. They were considered essential equipment. The Smoke Jumpers are actually worn by Smoke Jumpers. I think that knowledge, that their boots are truly used in the field and are regarded as as essential work gear, not a luxury fashion statement, drives White's and their pricing choices. While Viberg can focus on $1000 Japan only special edition limited runs, White's can't neglect their working class domestic market; not if they plan to stay in business long term.
Again, I don't have numbers to back this up, and I'm no expert on either company's business model, but that's my thinking.
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But in this case they aren't selling just a working boot. It is a luxury product which mainly transports an image!…of course they have to be functional but owners want to show what they have.
Luxury products will be kept bare to increase the demand.They don't have to compare (cost-benefit ratio) with working boots!But cant exactly the same statement be made about Whites?
As far as I know they were offered in workwear stores. That means they want to get serious as producer of working boots!
Just my expierenes! -
I always thought (maybe mistakenly it would appear) that origins and background of both Viberg and Whites (and Wesco) were all pretty similar. That they all made real workboots, used by guys who worked in real hardcore environments (firemen, loggers, ranchers etc..), guys for whom the boots were an essential piece of equipment rather than a fashion accessory.
I also was under the impression that all these brands had made similar concessions to fashion, due to their popularity in Asia, and with online communities who value authenticity from their brands. The concessions to which I refer being collaborations, rare leathers, and models like the semi dress, the oxfords, and other things that would get you laughed out of a forest fire, or ranch. Now we (I) appear to be digressing into a brand ethos debate, which is perhaps best served on a different thread…..
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viberg is proper workwear, they have two audiences they cater to, one is the fashion set & the other are working class folks mostly in canada. the prices reflect the audience. i mean they have two different websites:
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Looking at that, and kind of thinking of Viberg as two separate brands does make a lot of sense, but still does not fully explain my original question. This is the key example for me…..
A while ago I was agonising between the following two shoes..
They are both hand made (to the best of my knowledge), made mainly for the fashion crowd (me and you), and are made from Horween CXL leather with a Vibram sole. One is £220, one is £425. Why?
I take your point about the two different forces of Viberg, I take all Foxy's points about expansion, currencies, target markets etc… But still, why? Surely almost 100% price difference is just too much?
I think that I should again state that I am not making a personal criticism of Viberg, on the contrary I love their stuff and would love to own a pair. I just want to understand why?
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they charge that much cause they can. i know it's a simple answer & it is natural for us to over think things, but don't over think it.
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Well, I guess if that's it then that's it. I suppose in a way, because I like Viberg's products, I kind if hoped that wasn't the answer…because I don't like that answer. I don't like that companies and brands charge what they like simply because they can, makes me think of energy prices here in the UK and how much I hate the energy provider companies....a different argument entirely.
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maybe the price difference is an indication of what it costs to produce the products & give the employees an excellent standard of living for their skilled labor? crazy as it sounds, maybe the difference in the cost of living in the respective countries influences the cost of the product?
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Maybe so (nearly done derailing this thread honestly), I saw a similar kind of thing in Norway a few years ago, where a job that paid £20'000 per year in the UK paid £80'000 per year in Norway, but it was totally relative as it costs 4 times as much to live in Norway.
I will choose to prefer to believe that
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so you seem to be a romantic, glass half full kind of guy
interesting make-ups here:
http://www.wretch.cc/album/show.php?i=cherryjuice&b=23&f=1795206210&p=6
would of put images but you all know my story
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First, you have to look at the BOM (bill of materials). Depending on the quality of the materials, the sources and the volume. This could easily result in 20-50% difference for Viberg vs. White's.
Second, you have to look at the bill of labor. Depending on the quality, degree of automation, location (availability of skilled labor, US wages vs. CAN wages and also the possibility that Viberg or White's might produce some of their "pure" work/performance boots off-shore - I'm not saying they do, but if they do it would result in a mixed calculation) and the scale of operations - this could result in a similar impact as estimated for the BOM.
Landed cost and duties can be neglected in this discussion - profit and mark-up can not! If you sell higher quantities in a very competitive market your profit can be lower.Third, you set your whole sell or retail price point according to 2 criteria: market requirements and/or strategic segmentation. You ether have to sell it a certain price to compete or you put the price label on your product that you can.
I would expect that the resulting price difference is at least 25-50% (better/more expensive material cost, higher quality/higher labor cost for bench-made work vs. factory like work with a higher degree of separation of labor, higher output/efficiency, etc.). The rest of the retail price difference could be attributed to strategic positioning.
The fact that Viberg has a longer wait time for their regular custom made orders (3-4 months or more) than White's can be seen as an indication that Viberg is not compromising on quality or price.
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But there must be a point of diminishing return, the marginal utility of an additional dollar spent is not equal to the utility received.
