German paraglider manufacturer Freex has dropped its prices and is selling paragliders direct to customers in Germany and Austria
A Freex advertisement in September’s DHV-info, the German association magazine, announced a price cut of over 20% for the entire range of gliders, including the Mission, Oxygen and Stereo, and on the 7th September 1999 a letter was circulated announcing newer lower prices and sharply reduced margins for schools.
The tactic has stunned German and Austrian paragliding centres, whose margins on Freex products have cut back overnight, without warning. Many paragliding schools rely on equipment sales to supplement tuition, without which few would be profitable.
Knut Jäger, an instructor from Harzer Gleitschirmschule, said: “Freex claims it will bring more young people into the sport because of the cheaper product prices. But if someone buys a glider direct from a factory, then who is going to teach him to fly it, who is going to advise him if it is a suitable wing? It is bad for safety.”
At the St Hilaire festival, Christoph Kirsch, managing director at Freex, said: “I know it is an unpopular decision with dealers, but the majority of ordinary pilots are behind us.”
Some manufacturers have tried selling direct in the past but most as a last-ditch effort to stay solvent. However, Freex’s action has proved to the boldest yet, when you consider the size of their home market (Germany holds more paraglider pilots than any other country) and their central geographical position in the wider European arena.
Kirsch’s reasoning behind his decisions is that schools are getting unfairly high margins, which make more and more manufacturers struggle. It is wrong for schools to rely on equipment sales to make profit; they should increase their tuition revenue by attracting more pilots into the sport from their local region.
At the time of going to press, Kirsch said that certain legal actions by former Freex dealers prevented him from clarifying which dealers would continue to sell Freex.
Many of the members of Germany’s pro paragliding lobby group, the Free Flight Pool, which comprises of the national association (the DHV), as well as paragliding schools and German manufacturers, have voiced strong concerns over Freexs action.
The Free Flight Pool organises the Free Flight Expo in Garmisch, and promotes paragliding and hang gliding through TV and the press in Germany. The Pool’s chairman, Thomas Neff, said that Freex’s action came as a shock but, given the technological and structural changes in global product distribution, was not inconceivable.
Neff said, “Think about the internet, where even big companies like Bennetton and Dell have online stores selling direct. The trouble is, flying schools need the money from selling equipment.
”We can’t stop Freex doing this, and the company is still a member of the Pool. The market alone will decide if Freex is making a big mistake or not.”
Mail-order paragliding sales has a potential impact on pilot safety, as a fresh customer can buy a new wing before making contact with a flying school, getting professional training and being enveloped into the paragliding community. And if qualified pilots buy direct, they miss out on the often all-important advice of their local instructor and mentors.
But Freex say they will be taking care to make sure the right gliders go out to the right people. Kirsch said, “We have two instructors working at Freex to make sure licensed pilots get the right level of glider.”
However, Burkhart Martens, a sponsored Freex competition pilot and instructor for Adventure Sports, was adamant: ”For schools in Germany it spells big trouble. My customers are cross too, they feel as if they have wasted money buying a new glider only to find it for sale considerably less only a week later.”
Kirsch says Freex’s policy in Austria and Germany will not affect their distribution in other countries, and that customers wanting to buy from overseas will be firmly steered back towards their national importer.
Published in October 1999
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