I received this email from the Hong Kong Addi distributor yesterday:
“Dear Ingrid,
Thank you for your payment and the previous orders. Unfortunately, I am sorry to tell you that I cannot supply you anymore the Addi Needle.
The Manufacturer of Addi Needle receives a lot of complaints from US distributors that there is online sale of the Addi Needle in USA. They have traced out the source and found that you are the supplier. Your online sale activity has ruined the market in US. As a responsible distributor in Hong Kong, I would take the responsibility to protect the market not only in Hong Kong but also in other countries. I am asked to stop supplying you the needles with immediate effect.
I would supply you again the Addi needles once your online sale activity stops. Thank you for your understanding and I am looking forward to doing business with you soon in the near future.
Very best rgds
Adrian Pong
Winsome Wool & Craft Co. Ltd”
There has been a lot of talk recently in the online knitting world about the exploitation of knitting designers inspired by this post by Annie Modesitt. I agree with Annie’s contentions, and after participating in the knitting industry for a couple of years, have noticed the inefficient archaic business practices throughout the industry that do not benefit knitting consumers.
It is absurd to suggest that my little online business has “ruined the market in the US” for Addi needles. We literally store our Addi needles in drawers under our bed. The existence of my business highlights the way in which Skacel has exploited their monopoly in the North American markets. It seems that US wholesale prices for Addi needles are higher than the retail prices in Hong Kong. All the products are produced in the same factory in Germany. There is a huge profit being made by Skacel, and they are adopting any means necessary to protect their market. Their price maintenance practices mean that many consumers worldwide are losing the opportunity to purchase good quality needles at reasonable prices.
Our family is fortunate, we weren’t relying on the Addi needle income to pay our rent. We are planning to relocate to Australia in the new year (along with the yarn side of Yarn Workshop), and I had been approached by a potential buyer of the Hong Kong based needle business. Unfortunately, the value of the needle business has been destroyed by this predatory behaviour. Instead of selling that portion of my business, I am instead going to sell all the remaining stock of knitting needles at very significant discount.
The Hong Kong distributor was careful enough to send me their email immediately after I had received delivery of a large expensive order of new needles including Addi Click sets and Addi Lace needles. My decision to make this email public was motivated by my outrage at the facade of politeness that many in the knitting industry maintain while they engage in uncompetitive conduct. I strongly believe in fair competition, and have not worked in any other industry where this style of conduct would be considered acceptable. If you look at this post by Steve Elkins of Webs (scroll down the page), you will see that in the knitting needle market, this kind of behaviour is not isolated, and I believe that a lot of other participants have remained silent about their intimidation.
The whole knitting market, not just the pattern industry requires a shake up – so that profit is not stored solely in the hands of the yarn and knitting needle distributors. At present, companies like Skacel exploit inefficiencies in the model of distribution to their benefit. Its a real shame, because many consumers have been priced out using good tools that really enhance their knitting experience. I’m interested to try Hiya Hiya needles – they are a new entrant in the market, and seem interested in offering quality at a reasonable price.
The old business model will inevitably be overcome by the forces of the market in an e-commerce world, and the demise of part of my business will be a hiccup along the way. If you think that Skacel need a nudge along the way into the modern world, or you feel that you don’t want to pay an unnecessary premium on your Addi needles, try emailing karin@skacelknitting.com.
