Eley: Masters of marketing

dankillough said:
Jeff Miller is correct, it is just coincidence. At the World Championships in SC, Andrew Lane and Daniel Olley attended. Andrew Lane is Eley's Managing Director or what we would call the "President" and Daniel Olley is the Sr. Business Development Manager. Daniel takes care of the U.S. market as well as many others. They both answered many questions from all of the competitors. Here are a few of the questions that I heard them answer over and over.

1. "Why was this latest shipment of ammo so much faster than previous shipments"
It mainly has to do with the priming mixture. Eley produces its own primer and they closely monitor it. They try to keep the mixture the same all of the time, but it is extremely difficult to achieve that. They monitor the accuracy of the ammo produced and if the speed starts getting too fast or too slow for optimum accuracy, then they adjust accordingly. The last shipment of ammo just happened to be slightly faster than what we are accustomed to, but the accuracy at the Eley factory is still within their guidelines.

2. "China gets all of the good ammo, and the U.S. gets all of the leftovers." Right after I asked them this question, an Australian competitor comes and asks why the U.S. gets all of the good ammo and Australia gets the leftovers. Andrew and Daniel both assured all of the competitors that "All of the ammo is available to all of the competitors all of the time" If the U.S. puts in an order for 500 cases of Match, then they go to the warehouse and pull out 500 cases. What they get is what they get. They do not pick and choose. The same goes for any other country with an order.

3. "The speed of the ammo is manipulated for marketing purposes"
The folks at Eley go to work everyday to produce Tenex which is arguably the most accurate .22 ammunition in the world. They are concerned with accuracy, and the velocity falls where it may. They do not care if it is 1040 or 1080, as long as it meets their accuracy standards. They just print the velocity and lot number on the box as a courtesy to the customers.

I hope this helps explain some of the rumors around Eley.
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Dan : Ok Dan: I will accept your exsplaination about what you are talking about above but you or no one eles has exsplained why ELEY has a price increase every six months or so and will not justify the increase other than to say there is a cost rise in the price of lead or brass. I can see brass increaseing in price but not lead. It is one of the most abuntant metals on earth. Russia is sitting on top of one of the biggist deposits in the world and the U S is right behind them. I know you to be an honest man and we have been friends for a long time. If anyone could truthfully exsplain the whys of all this crap I would listen to you more than anyone eles. I just want to know why Eley keeps uping the price which makes it difficult for the average person to enjoy shooting. your friend garrisone.
 
here we go

garrisone said:
Dan : Ok Dan: I will accept your exsplaination about what you are talking about above but you or no one eles has exsplained why ELEY has a price increase every six months or so and will not justify the increase other than to say there is a cost rise in the price of lead or brass.


I just want to know why Eley keeps uping the price which makes it difficult for the average person to enjoy shooting. your friend garrisone.
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Hell. that's a easy one to explain.

Eley incur certain operational costs, as do all businesses. Material, man power, logistical and financial.In broad terms material and financial costs can and do fluctuate, manpower and logistical generally increase. In addition there is the desire for the company to increase profitability for the benefit of its share holders, directors, owners and employees.

Eley regularly increase they prices in order to negate their increase operational costs and to increase they profitability. A reasonably sensible business practise. They are able to do this due to the lack of direct competition. As the other leading manufactures all do the same. Where Eley are concerned they have an added bonus as they are perceived as being the leading brand in the .22 target shooting arena by the majority of market. Which is largely down to the excellent job Eley have done in regards to their marketing over the years. Combined with their product development investments and the results of that product development investment. They are producing a more consistent product.

Any manufacture will charge what they think the market will stand. Regular price increases are simply a mean of extending the markets toleration factor whilst ensuring you maintain and or increase your nett gross margins. After all value for money is an entirely individualistic perception. A good business manipulates those perceptions to their advantage to their maximum at every opportunity.

The fact that you might loose a proportion of your customer base by increasing your prices is balanced by the decreased operational costs and the increased nett gross margins, You just need to get the balance right.

Eley can afford to see the BR market turn its back on their premium product. As the volumes are low when compared to the position shooting market and their profit margin is sufficiently high on their other products for it not to be a major concern. As they will sell all that they produce with out the need for discounts. Call that exploitation of the customer if you want. Eley will simply call it good business!

I've offered a fairly simplistic explanation. But I hope it helps clarify why Eley regularly stick it to us.
 
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Thanks for the words Dan, it is interesting to hear. I for one don't like how much the stuff costs but, having the seen the way the ammo effects the accuracy, you pay to play well. I suppose I will get to a point where I can't afford to feed my guns, I just hope it doesn't happen soon.
Isaac
 
They have no true competition. That is why it keeps going up in cost, they can continue to rack the prices up and nobody is going to bring anything to the table that can hang with it. This is what I have decided.
 
Eric,
This is my opinion.
The price is going up because costs to produce are going up, dollar is going down, and they are selling it faster than they can make it. They are in the business to make money, so they are going to get all they can for their product. If demand keeps increasing for your product, then you raise price.
 
Question I have is quality of ammo keeping up with price. The last time I tested 9 lots bought none. Missing bullets in boxes,Labels direct on shells no plastic tops. My opinion eley does not give a crap, send it to the US and they will buy it,the last shipment about the time of the worlds proves that.........Chief
 
John Kielly said:
One reason might be that over the last year, the US dollar has bought 10% less British pounds.
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Funny thing is you never see the price go down when the exchange rate improves. Its like gas prices never go down when the cost of crude goes down.
 
think of this...

2004....eley red box 5.00+ a box......laupa midas 4.80 a box 480.00 a case

2011...eley red box 17.00+ a box.....laupa x act 20.00 a box

that a 250+% increase in ammo over 7 year......

2004 the british pound was 1.7902 to 1.00 us......2011 the british pound was 1.55858 to 1.00 us...that a decrease of about .25

2004 I was the 27 person on the waiting list for the national.....and i did get to shoot

2011 we can barely get 100 people at the national.....and yes the economy has something to do with it...

nothing in my life has gone up 250+%....gas....food...insurance....ect.......expect the price of ammo...and gold

final thought...how do we realy know if the red box is any diiferent then the black...all the black box that came in-- was high speed....and all the red box that came in--- were low speed...

did they put red lables on all the low speed just to sell it at a bigger profit margin?????
 
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edgerat said:
Thanks for the words Dan, it is interesting to hear. I for one don't like how much the stuff costs but, having the seen the way the ammo effects the accuracy, you pay to play well. I suppose I will get to a point where I can't afford to feed my guns, I just hope it doesn't happen soon.
Isaac
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There's always the importers mark up % to be considered as well of course. When demand out strips supply everyone in the chain gets a slice of the action. The wholesalers/importrs get an easy out as they can blame the manufacturers. As who really knows the price at the factory gate?
 
dankillough said:
Eric,
This is my opinion.
The price is going up because costs to produce are going up, dollar is going down, and they are selling it faster than they can make it. They are in the business to make money, so they are going to get all they can for their product. If demand keeps increasing for your product, then you raise price.
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Or you take the opportunity to increase production............its always easy to lay the blame at the door of exchange rates.

The $-V-€ excahange rate over the last 6 months has been $1: €0.71865 in March to $1:€0.742974 right now with a low of $1:€0.672853 in early May. Other than a drop in late April and a hike in late Aug the exchange rate has been relatively static only moving 1 or 2% either way.

Freight costs have increased true. But they only affect individual consignment costs. Globally production costs have been relatively static, with labour and raw material costs actually decreasing slightly. Interest rates are low. Gold prices have steadied. Most large corporations are now leaner, meaner and more profitable than they were when the recession hit, and Eley are a good example of that.

They have adopted the best policy, survive, be proactive rather than reactive, investing your product, invest in your marketing, dominate the competition, increase your prices regularly.

Tell the customer what they want, and charge them as much as you dare for the privilege of buying your product. i.e. push the concept of VFM until your sales drop off.
 
chris peet said:
think of this...

2004....eley red box 5.00+ a box......laupa midas 4.80 a box 480.00 a case

2011...eley red box 17.00+ a box.....laupa x act 20.00 a box

that a 250+% increase in ammo over 7 year......

2004 the british pound was 1.7902 to 1.00 us......2011 the british pound was 1.55858 to 1.00 us...that a decrease of about .25

2004 I was the 27 person on the waiting list for the national.....and i did get to shoot

2011 we can barely get 100 people at the national.....and yes the economy has something to do with it...

nothing in my life has gone up 250+%....gas....food...insurance....ect.......expect the price of ammo...and gold

final thought...how do we realy know if the red box is any diiferent then the black...all the black box that came in-- was high speed....and all the red box that came in--- were low speed...

did they put red lables on all the low speed just to sell it at a bigger profit margin?????
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Chris

Your getting there mate!

Eley set their standards. They keep those standards to themselves as any one would. The new liquid primer production process has improved product consistency, metering technology has been enhanced, final production processes have been improved, there by increasing productivity of their top end product. Batches are larger, down time is less , and cost pre unit are reduced.

Yet retail prices have increased by as you point out 250%+

Dang I wish my costs had reduced and my prices had increased that much in that same time period.
 
WOW

Looks like Hambone knows what he's talking about and Ammo makers may just be putting one to us. There again we go back to the title of this thread Eley: Masters of marketing and maybe money makers. I think Eley sats the standard and the other just follow suit because they came.
 
seems to me, if my memory ain't failed, that our UK brothers pay more for Eley than we do. It's been a couple years since I saw the figures, so may not be the case today. i think the Aussies pay more too. thankd, douglas
 
Eleys UK Retail prices per 1000 are as follows

Tenex £205 (Red Box) $317.00
Match £140 (Black Box) $216.54
Team £120 (Blue Box) $185.60
Club £90 (Orange Box) $139.20
Sport £70 (Green Box) $108.26

you get a -5% discount for orders over 5000

For comparison

Lapua Midas+ £183 $283.00
RWS R50 £166 $256.73
Lapua X-Act £261 $403.66

So even as a domestically produce ammunition they still stick it to their home land shooters.
 
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do you call that dumping, like the Japs were dumpin' plywood a few years ago? whay are we paying so much less then the good folks in the UK? seems to me something don't add up, ..........or we're getting a bargain. thanks, douglas
 
I think much of the price in Australia, is due to the transportation and import duties. I remember seeing a 1 ounce bottle of Tabasco Sauce, selling for $9.00 in 2000.
 
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