The Business of Snowboarding

What is really at stake when it comes to retail pricing?

A recent upset in the retail realm has opened the eyes of the masses as to the deeper issues behind product pricing, leaving some butt-hurt and many relieved...

Allegedly, Sierra Snowboards breached their contract with Burton when they discounted related products far too early and subsequently lost the business of one our industries most well-known manufacturers, plus all incorporated brands (close to ten).  

Now Sierra Snowboards, a heavy hitter in the world of online discounters, is without what are probably their top selling brands.  And how are they spinning the news to those interested? They blame it all on big bad Burton.

Let's look beyond the issue of who is right or wrong and think about what is best for snowboarding.  Here we have a huge online retailer discounting their products earlier than any other online or brick-and-mortar shop.

Snowboarding isn't cheap, and the average buyer would be stoked to get in on some early discounts; therein lies the problem.  If Burton and other companies take a relaxed stance on regulating discounts, the average consumer has no reason not to hold out and buy that $375 board for $199 instead, and in the bigger picture everybody suffers--the online company included.

Picture this:

An online discounter decides to sell their products at their highest discount far earlier than any other shop. 

A small shop is planning to offer the same discounts but much later, as they cannot afford to lose so much money early on and with that much stock. They have no choice but to discount regardless to stay competitive; now they will lose money, which small shops cannot afford to do.

A customer goes to the small shop and sees a board they really like.  They go online and find the board is much cheaper through the online discounter, even though the shop has it on sale as well. The customer buys from the online shop.

A snowboard manufacturer sees that boards are not selling anywhere near their retail price.  Unable to bring in the funds they anticipated, they are forced make cuts in production and ultimately their work force.

The small shop loses some money and places a smaller order the next time to avoid further loss.  Understocked and unable to compete, eventually the small shop closes.

The online discounter does incredibly well, but in placing their next order discovers that the snowboard manufacturer will not be able to match the quantity they want.

Continuing to fall under their projected income as online discounters sell their products far below retail, the snowboard manufacturer makes further cutbacks to stay in business.

One day, the online discounter calls to place an order and is told that the snowboard manufacturer can no longer afford to produce snowboards. Without a product to sell, the online shop is now also out of business.

The customer suddenly has nowhere to purchase snowboards from; in fact, snowboards no longer exist.

This takes it to the extreme, but it does make you think about why products cost what they cost; and for us avid internet shoppers (I admit, myself included), maybe now we will think twice as we type in those credit card numbers.

The business of snowboarding is a symbiotic relationship between manufacturers and distributors; each needs the other to thrive, and online discounters throw off that balance.  Without these pricing models and our willingness as consumers to support what we love, snowboarding hits a brick wall.

Thanks to The Angry Snowboarder for the heads up on this; I encourage you to weigh in your opinions, either down below or directly via the Snowboarding Forum or Sierra Snowboard's integrated forum.