Economics teach us that if supply goes way up and demand doesn’t keep pace, prices can be negatively impacted. This could happen in the snowboard market in the coming year if manufacturers oversupply the market.

Trying to estimate the size of the snowboard market and its rate of growth is an inexact science. With so little hard information available, it’s tough to do with any confidence. But many of us attempt it anyway because the answers will affect how we run our business and how successful we are.

Looking back at the 1994¿95 season, it appears there were more boards produced than sold to retailers. In an attempt to estimate just how many were produced, the following information is based on what I’ve read, third-hand conversations, rumors, insights gained while working with snowboard companies, and some educated guessing. The numbers are not precise.

If I were to guess how many boards were sold to retailers during the 1994¿95 season in the United States, I might reason 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 worldwide.

I would personally estimate that the number is probably closer to 800,000. Using that number for discussion purposes, let’s talk about how many boards were produced. If the Pale and Elan manufacturing plants together produced around 400,000 boards, and Burton, Morrow, K2, Lamar, Mervin (Gnu/Lib Tech), and Rossignol together made 450,000 in factories they own or control for their own brands and others, then the total is 850,000. This would be close if I wasn’t ignoring Atomic, Spaulding, Blizzard, Thermal, Surf Politix, ASM, Nidecker, Volkl, and a host of others that make their own and/or other brands.

At a minimum, production for the 1994¿95 season was 1.1 million snowboards. One knowledgeable source said the number was closer to 1.5 million. That means that 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.

Perhaps they’ve all gone to Japan. That’s actually the opinion of some people, and if you accept the conventional wisdom that there’s enough pairs of skis in the Japanese warehouses to satisfy the market in 1995¿96 if not a single additional pair was imported, it at least seems plausible. Certainly Japanese distributors have the balance sheets to manage it.

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 40 percent less?

Think about it. What do you need to do differently when the market starts to mature?

Jeff Harbaugh has fifteen years’ experience working with privately held businesses growing quickly, in financial distress, and in rapidly changing markets. He spent three years as president of a snowboard distributor. Reach him at (206) 232-3138 or on the Internet at jah@invall.com.

Other OpinionsHow Many Snowboards Are Being Made And Sold?

Ask five different people and they probably all give different answers on how many snowboards are being produced and sold.

For instance, the International Snowboard Federation (ISF), recently published in their monthly newsletter that snowboard sales rose 30 percent in 1994¿95. Their breakdown was as follows:Europe

208,000Japan

145,000North America190,000World Total543,000

While these totals look reasonable, most agree they are a bit low, particularly after reading the previous article.

The Ski Industries America 1994¿95 Retail Audit estimates the total number of snowboards sold in the United States at 163,000, with a leftovver inventory of about twenty percent at the end of last March. That would put the total number of snowboards delivered to U.S. retailers at almost 200,000.

Noting the excess inventory levels, the SIA Retail Audit cautions: “Snowboard is now a category to watch in the fall months to see if the rapid pace picks up again or if we have hit the first threshold of growth. The selling frenzy may not pick up again until 1997, when new entrants plus trade-up business begin to compound sales. Growth will still depend on how many teens are attracted to the sport, and the teenage population is growing.”

The SIA’s 1995¿96 Orders Survey had not been released at press time, but all indicators point to continued growth in the market. Estimates of total number of boards produced for the 1995¿96 season range from 1.5 million to more than two-million boards. Will all these boards be produced? Probably not. Some industry insiders cite worldwide shortages in raw materials that might cut production back a bit.

But what if there are too many boards available? Be ready for a shakeout. Monitor sales more closely and reconsider reorders before you make them. Watch the weather. And do everything you can to promote the consumer growth of the sport. As long as the number of buyers equals the number of boards available, everyone should be safe.