Hello NINER_Boy, and readers, Christian here, managing director at Ikhambi Distribution/Wahoo Fitness South Africa. Thanks for starting the topic and it is a very important point to answer as the Wahoo distributor in SA. It was undoubtably the toughest month to make decisions for both myself and my sales management team... Our greatest concern was that we seem to be profiteering due to the demand for trainers. I would like to take this opportunity to give some background to the past couple of weeks: The week before lockdown we landed some stock at a reasonable exchange rate of R15/usd and with a healthy 150 trainers in the warehouse we were on par with our sales forecasting. Needless to say that as soon as the lockdown was announced these units evaporates into thing air in a single day. I estimate that if we had 3,000 trainers we would sell every single one in the week the announcement landed. During the lockdown our next shipment arrived early in April, and became payable in the last week. The assumption that distributors pay months earlier or always take forward cover does not apply to all brands, and with a fast moving product like Wahoo we did not have the luxury of either options. Cashflow is a challenge, many debtors has started to delay outstanding payments since end of March. We ended up paying at an average of R18,50/USD for our shipment. The compound effect hit us extra hard on shipping line charges and to add insult to injury SARS is not paying additional demurrage charges due to their instruction to not inspect non essential goods. These costs were mostly unplanned, but has to be absorbed by our business using our dwindling margins. Our planning the past couple of weeks revolved around how we implement price increases without making it seem like we are price gouging. The best way to view this is to take the US prices and do the conversions: KICKR 4 - $1,200 * R19 (spot rate average) + VAT = R26,220 This places South Africa below the international price. Even if you take the past 4 months of trade Wahoo South Africa has sold the KICKR 4 at a price in Rand below the direct conversion. A price increase is even harder since we are not blind to the fact that many cyclists, Hubbers and enthusiasts will not only lose a part of their income, but many will lose their jobs. If anyone has any questions pertaining to the Wahoo brand, our price increases or even criticism in general please do not hesitate to send me a direct message and I'm happy to answer. Your local Wahooligan Christian
