I realize that a lot of people are disappointed in both the lack of availability of the Skyscape X and now the sudden price increase. Let me say that it was never my desire for it to play out in this manner. So I hope you'll accept my apologies. I would like to address some of the issues raised so you'll know the backstory. Maybe it'll help with your understanding.
First off we were quite surprised, though overwhelmed might be a better description, of the response to the release of the Skyscape X. Both of our initial production batches sold out within days of becoming available. Unfortunately we were not able to respond to the demand. This was due, in part because our US production facility was already slammed with trying to keep up with demand from our normal items. Sales of the new model of Lunar Solo also took off beyond expectation. Plus our normal dealer sales and international sales also exceeded our expectations.
The second part of the delay was due to our own lack of internal resources. Our Cuben Fiber products are produced with a mixture of in house and out of house resources. With just two people on staff, myself and my son, we've been scrambling. In addition I've spent a significant portion of the last four months working on a new product line.
Going forward, we're in the process of making changes that will reduce the backlog. First, we've moved some more of our production offshore to free up our US production. This resulted in the reduction in price for the Lunar Solo. Second, we hope to be changing facilities sometime this year. This will provide us more space and make it much easier to bring in additional personal. After over 20 years working out of my home, transitioning to a new facility is no easy task, physically and emotionally.
Pricing is always a difficult issue. This is particularly true when it comes to Cuben Fiber. The extremely high cost of the material clashes with the desire to provide reasonably prices goods to service our customers. Knowing the cost for Cuben Fiber and silnylon, it's pretty clear that none of the cottage gear manufactures are marking up the price of Cuben Fiber in the same way that other fabrics are. In addition noone in the UL community is attempting to sale these products in a retail environment. The result for the end user is that you're able to procure these products at what would be less than wholesale cost.
Thus far, this has been a good deal for consumers. It's not clear if this is a long term winning strategy for producers of Cuben Fiber products. People complained about the high cost of Skyscape X with the new price increase. However, the X has over $200 in raw cost for the Cuben Fiber material alone. This is before we've cut the first panel, sewed the first stitch, or taped the first seam. In normal retail mark up, that $200 alone would account for between $700 and $800 dollars of a retail tent price. Add in the cost of labor and you're easily pushing $1,000 dollars.
Therefore it's not surprising when you see the Terra Nova Cuben Fiber tents priced at $1,000. The Sierra Designs CF Tent announced at Summer OR was $1,800. Easton also displayed a CF tent with price well over $1,000.
We raised the price of our CF products because of demand from our Retail channel. These small shops are always desperately looking for ways to differentiate themselves from the big box sporting goods stores. However, even with the price increase, they are still taking a big hit on margins.
No doubt, that many will still be upset with our price increases. I hope you'll also understand that I'm working seven days a week to try and bring out the best gear available. Tomorrow, we start cutting up $10,000 worth of Cuben Fiber for our next production run of X's. We hope they'll be available in early February.
Ron Moak
Six Moon Designs