Europes Largest Metal Detector Distributor Gives Minelab The Boot

[phrunt]

The reason Minelab got so far ahead with gold detectors is because the competition didn't put the effort in, didn't put the $ into R&D and allowed it to happen which was a big mistake.  Where they did always remain competitive was with the VLF's and we can still see that now, Minelab doesn't dominate, they had a boost with the Equinox while others played catch up but it's a neck and neck competition with no clear winner.  So do we blame Minelab for their sky high detector prices or do we blame the lazy competitors that didn't take on the challenge? ?

Australia was naturally a country where making gold detectors would be something of interest with the large amounts of detectable gold in the country, a country with little to no gold or not as much interest in finding the gold with detectors is unlikely to be the determined one to make such detectors so that maybe why some manufacturers were more motivated than others in the early days of detectors.

Now these other companies are looking to play catch up after decades of Minelab having dominance.    QED in a way showed it's possible for even a small business run in a garage to make a viable detector to sell to give the market another option with reasonable performance so the jump isn't all that high to get something to market that people will buy if one man with some electronics knowledge and a 3D printer at his disposal can make a detector.

Garrett now have their very competitive detector on the market, Fisher are still working towards theirs, Nokta doing what they do best and getting onboard making a Gold Prospecting PI too.   Will Minelab always have this dominance? I don't know if they will.  Garrett's first real attempt at fighting back isn't being left in the dust so who knows, if they have a second attempt in the future they may overtake, it's possible.

It sounds to me Nokta may have some home grown motivation to make gold detectors too, Turkey is the world's nineteenth-largest producer of gold, with output of 1,594koz in 2022, up by 11% on 2021.

Turkey, which in the early 2000s was unable to produce even one gram of gold, In 2020 produced 42 tons of gold in 18 active mines despite the pandemic.

https://www.businesstoday.in/latest/world/story/gold-worth-6-billion-discovered-in-turkey-mining-to-start-within-two-years-282413-2020-12-24

[GR Guy]

Very interesting time ahead Codan/Minelab has diversified their assets across a number of areas and will be more flexible to the challenges of the global recession vs the straight detecting companies. Also given the lack of competition in gold could spell troubles for other competitors. I’m glad I live in Oz where even a top end detector can be paid off pretty quickly @$A100 a gram.

[Aureous]

6 hours ago, phrunt said:

The reason Minelab got so far ahead with gold detectors is because the competition didn't put the effort in, didn't put the $ into R&D and allowed it to happen which was a big mistake.

Minelab's big safeguard was their ravenous appetite for patents, including obtaining Govt grants to keep them running well beyond normal time limits. Their PI ground tracking, MPS and DVT patents kept all of the opposition out of the field for 2 decades. But now all of these patents have expired, the major players are slowly expanding on new designs, with Garrett and Nokta being the only ones likely to shake up Minelab in any reasonable time-frame. Fisher have a viable design to work with but FTP are (quite frankly) pathetic in their efforts to bring anything timely to market. The big player to watch for is Nokta. Their ability to produce quality at a lower price than Oz or US products will become a major nuisance for all manufacturers.....but a boon for us consumers. The next few years are gonna be interesting.... 

[cudamark]

I seriously doubt losing IDC is a major concern for Minelab in the long run. There's bound to be any number of smaller dealers willing to take the leap to expand their business. They're probably already talking behind the scenes as I type this. If not, setting up a direct mail distributor for Europe wouldn't take much, and probably make them even more money than being simply a manufacturer. In this global market, I'm actually surprised cutting out the middleman hasn't happened already.

[Past Member]

49 minutes ago, cudamark said:

 In this global market, I'm actually surprised cutting out the middleman hasn't happened already.

Me too.

I can't see how it makes financial sense for a manufacturer to pay distributers in a global market, for a very niche product.

When Minelab used to dominate the global market, they could maintain a very high mark up without having any concern of profit loss due to a distribution network. However, Minelab no longer has that dominance since the likes of Nokta, XP, and probably Quest. Further to that, is Amazon selling a plethora of cheap detectors made in China.

It's cut throat time in this industry, so it wouldn't surprise me in the least if the manufacturers start to eliminate the distributers and ship directly from their manufacturing site.

 

[phrunt]

They are taking those steps already selling direct in some part of the world and experimenting with cutting out the middle men, baby steps to get it right I guess.   They would need large local warehouses staffed to ship goods which takes time, and sales have to be viable in the region to make it happen. Europe would be one of those regions you would think however other brands seem more popular there.  Spend many millions setting up and you would want to have good strong continuous sales, that's where distributors help, you piggyback off their business so you don't have all that expense yourself and they can survive as they do multiple brands to keep them busy.

When sales are good right after a new model for example staff would be run off their feet and you'd possibly need more staff, it times between models and sales slow to a crawl staff are sitting around twiddling their thumbs with nothing to do yet you're still paying their wages and paying the expenses of having the active distribution center.

In house warranty repair is something that could be done from the same location, likely needing different staff to do the repairs than package the parcels though and unless they have a crazy amount of faulty stuff they often wouldn't have enough to do either which is why often service agents also service other products and brands too.  In saying that with Minelab's quality lately they maybe extremely busy full time.

Customers wouldn't put up with ordering a detector and waiting weeks for it to arrive from an international destination, they need local warehouses to do it.  

It sounds all nice and easy until you think about it a bit more and would possibly only be viable in some markets.

They could distribute to dealers from overseas, dealers would have to be very organized with stock though as if it takes weeks to arrive they'll run out and have no stock to sell often, you never know when you'll be busy so it would cause sales interruptions and loss of sales often.  Now they just contact the local distributor and have stock quickly if the stock exists, again with Minelab it often doesn't ?  

They'll never want to get rid of the retail dealers and sell only direct as the retail stores give them a different type of exposure to online and they would lose a lot of sales if they did so, so all they can cut out is distributors which for the points above is not as easy as it sounds.

[Past Member]

15 minutes ago, phrunt said:

 

They'll never want to get rid of the retail dealers and sell only direct as the retail stores give them a different type of exposure to online and they would lose a lot of sales if they did so, so all they can cut out is distributors which for the points above is not as easy as it sounds.

I'm not so sure about that Phrunt.

I mean, when someone is researching detectors, they might look at retail shops and distributors for pricing, but they'll quickly move to the forums, Facebook, and You Tubers, to get user information on detectors. As such, I don't think distributers play a role in increasing detector sales. Social media does all that, and does so at no cost to the manufacturers.

Shipping time is of course a factor, but when one has decided what detector to buy, I don't think waiting a little longer to receive it, would be a deterrent to the buyer. Although, the manufacturers could go with just one distributor in North America, and one distributer in Europe for everyone else. 

 

[phrunt]

Well other countries exist that are very large for sales such as Africa and Asia that couldn't rely on Europe for distribution, Africa has long been their biggest market for detectors, here is their 2020 sales from different parts of the world, I couldn't find a 2022 version without a lot of effort and can't be bothered ?  Sales in Africa have slowed though with their gold rush appearing to slow right down as gold gets harder to find and political turmoil.

At the moment they mostly do only have one distributor they partner with in many countries and the dealers feed off them, I can't see this changing in a hurry, to deal direct with little dealers for them would be nothing but a hassle, and it's better to let a distributor/wholesaler do it.  They would certainly have to cull off a lot of the dealers especially the ones with low sales volumes as they'd be more hassle than they're worth when shipping to them internationally direct.

Selling direct from Minelab along with keeping distributors and dealers seems the more logical approach and that's what they've done in Indonesia where you can buy direct off Minelab at Minelab's Indonesia website here https://minelab.co.id/, or you can go to your usual places to purchase where they buy it off the distributor that buy it off Minelab.

 

[MSC]

I still appreciate the Dealers I buy from and look down at direct-from-the -manufacturer purchase. Dealers are people we can meet or call and talk to, willing to help with problems, offer training, offer many other detecting products that you would have a hard time finding on your own or even knowing they exist. No, often manufacturers seem to be non-caring about individuals but look at us as numbers, it will be a shame if we loose our dealers and a big mistake for the manufacturers to ruin a good working relationship as it is now.