Where Have All the Snowboards Gone? The Apparent Imbalance Between Production and Sales

I seem to remember from my first economics class that if supply goes way up and demand doesn’t keep pace, prices can be, well, negatively impacted. When I look back at the 1994-95 season, I am disturbed because it appears that there were more boards produced than were sold to retailers; maybe a lot more.

Below, I try and estimate just how many more. With so little hard information out there, that’s a tough thing to do with any confidence. But because the answers will affect how we run our businesses and how successful we are, it’s worth the effort.
 
My information is based on what I’ve read, some third hand conversations, rumors, insights gained working with snowboard companies, and some educated guessing. My numbers are not precise, and I’d like nothing better than for somebody to prove me wrong. 
 
If I were to guess how many boards were sold to retailers during the 1994-1995 season in the United States, I might estimate 225,000. Conventional wisdom says that the U.S. is one third of the total market. If that’s accurate, there were approximately 675,000 boards sold to retailers world wide.
 
My instinct is that the number is over 800,000. Using that number for discussion purposes, let’s talk about how many boards were produced.
 
I’m pretty confident that Pale and Elan together produced over 400,000 boards. Let’s say that Burton, Morrow, K2, Lamar, Gnu/Libtech and Rossignol together made 450,000 in factories they own or control for their own brands or others.
 
That’s a total of 850,000, which would be consistent with my estimated sales number if I wasn’t ignoring Atomic, Spaulding, Blizzard, Carnival, Thermal, Surf Politix, ASM, Niedecker, Volkl, Dynastar and a host of others that make their own and/or other brands.
 
At a minimum, I think production for the 1994-95 season was 1,100,000 snowboards. One knowledgeable source said the number was closer to 1,500,000. That means there would be between 300,000 and 700,000 unsold boards out there, not counting what retailers still have.
 
That raises some interesting questions. Like, for example, where are all these boards?
 
Maybe a distributor has them all in a warehouse somewhere, waiting for a good time to unload them.
 
Japan. They got to be in Japan. That’s actually the opinion of some people, and if you accept the conventional wisdom that there’s enough pairs of skis in Japanese warehouses to satisfy the market in 1995-96 if not a single additional pair was imported, it at least seems plausible. Certainly the Japanese have the balance sheets to support holding that much inventory.
 
Maybe it doesn’t matter where they are if they exist. At some point in time, they will appear on the market. Are your brands so well positioned that customers will still pay full price rather than buy a new, one year old board with essentially the same construction for a huge discount?
 
Think on it. What do you need to do differently as the market changes?

 

 

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