As I walked into the Carlsbad Costco last weekend, I saw something that I’d never thought possible. Amongst the jumbo packs of tube socks, tubs of licorice, and triple packs of sugar cereal was a crate of hand-crafted Aloha surfboards. And get this: they were selling for $199.99.
As shoppers rummaged through the three dozen boards that were crammed into the wooden box like toothpicks, I nearly dove in — how could I pass on a new board for 200 bucks?
But then it hit me: who buys boards from Costco, land of the five-pound block of cheese? And, more importantly, how did these boards get there in the first place? Did these surfboard companies sell out?
I grabbed a sample of Aidell’s smoked chicken and apple sausage and chewed on it — not the breakfast meat, the thought. Who’s behind all of this?
According to Aloha Surfboards Shaper/Owner Mauricio Gil, the boards ended up in Costco as a result of a distribution arrangement gone awry–Aloha did not sell its boards directly to Costco.
Last September a Miami, Florida-based distributor, who Gil identified as Larry Chaij, ordered 200 boards from Gil. Chaij told Gil he was going to sell the boards to another distributor in Central America.
“He signed a purchase order confirming that he was going to sell the boards in Central America and he paid for the boards and everything,” recalls Gil. “Then all of the sudden he told me he had a problem with his distributor in Central America and he had to sell the boards.”
Gil says Chaij offered to sell him back the surfboards at 250 dollars a piece — twenty dollars above wholesale. “I thought it was a joke,” says Gil. “Why would we have to pay more than it costs for our boards?” Gil declined, so he says Chaij sold the boards to Costco.
Chaij could not be reached for comment. He was “out of the country,” according to a representative from his company.
“I feel that I was violated,” says Gil. “It’s crazy. When somebody does that to us it just kills us — it kills the whole industry.”
A call into Costco Carlsbad and was redirected to a Costco buyer in San Diego. The buyer could not comment, but she directed me to Costco’s corporate headquarters in Seattle. No one was available for comment.
An anonymous employee from Costco was willing to talk, however. The employee said that during mid July, at least five different Costcos in California received up to 54 boards each — including outlets in Oxnard, Laguna Niguel, Mission Valley, Pacific Beach, and Carlsbad.
The employee estimated that Costco paid 180 dollars for each board. Some stores sold boards for $289.99, but the store in Carlsbad sold them from $199.99.
Gil says there were at least four other surfboard manufacturers whose boards ended up in Costco after the flopped deal, including HIC.
The first batch of boards appeared in Costco last spring and got a lot of attention on the message boards on surfing Web sites. Rumors flew around that the boards were being produced cheaply in China and shipped directly to Costco. Just as the dust had settled, a second wave of surfboards popped up mid July. Gil says there could’ve been 1,000 boards involved in all from spring through July.
Surfboards and rashguards from HIC showed up in the initial wave, but HIC Account Manager Terence McNulty says he hasn’t heard of any of the brand’s boards or Lycra at Costco this time around. Though McNulty was disappointed the boards were at Costco, he says that’s just part of doing business.
“Sometimes things happen that you can’t control,” says McNulty, “so you’ve just got to roll with the punches. In the overall big picture it didn’t hurt it at all.”
But for Gil, who’s still establishing the Aloha brand in the States, the impact is heavier. “We’re pretty bummed out,” he says. The experience has changed Gil’s attitude toward distribution.
“We’ll no longer do any business with any distributor,” says Gil. “We don’t do big numbers with anybody anymore. We just go shoop to shop–grassroots–and we really apologize for any inconvenience that it brought to the surf industry.”
So my fears have been quelled. These companies did not sell out. Their boards appeared in Costco after a soured distribution deal. And no, I didn’t buy a board.
* * * * * * * *
For fun, we wanted to see if just how much a random Costco employee knew about surfboards. I posed as a new surfer and tried to get Patrick to sell me a board. This is how it went down:
TransWorld SURF Business: I just moved down here from the Bay Area and I want to surf and I saw those surfboards back there. Could you tell me which one I should get?
Costco: We don’t have a lot of sizes back there.
TransWorld SURF Business: I saw a six-one, a six-two, and a six-three.
Costco: What do you weigh?
TransWorld SURF Business: 175.
Costco: You should probably get the biggest one we have.
TransWorld SURF Business: The bottom of the board was flat. Aren’t they supposed to have fins?
Costco: They come with FCS fins. You just screw them in with an Allen wrench.
TransWorld SURF Business: Oh.
Costco: Have you ever surfed before?
TransWorld SURF Business: No.
Costco: You should get a longboard.
TransWorld SURF Business: But those boards are pretty cheap back there. Aren’t they usually like 400 bucks?
Costco: Yeah, they’re usually like 350 at a surf shop.
TransWorld SURF Business: Well shouldn’t I just get that one then?
Costco:Well maybe as an investment and just save it for later until you get better. I recommend maybe a buying used longboard at a surf shop.
Score one for Costco.