How a Brand Makes Money In the Snowboard Business
Don’t get too comfortable. This is a short article that won’t take long to read. It’s a direct result of that moment in Vegas when I finally decided I wasn’t dreaming and that there actually were a bunch of new snowboard brands and new factory capacity. What makes it even worse is that some of these companies appear to be backed by financially solid parent companies, and can afford to lose money for a really, really long time.
I had thought maybe we were making some progress in getting through the consolidation, but now it looks like we’ve got some new fodder for the irresistible business cycle and we can all be miserable a little longer.
To make money, do these things:
· Realize that all you have is your brand name and do everything you can to build and protect it. If you don’t have a recognized one, you probably can’t expect to make any sort of reasonable return by starting to build it now.
· Base your product orders on your preseason. Don’t kid yourself about reorders. Business people I respect are ordering no more than 10% above their preseason bookings, and some are 5% below. If you have to count on reorders to break even, you might want to ask yourself if your company has a future in snowboarding.
· Be clean at the end of the year. You’re better off agonizing over sales you lost than inventory you have left. Leave your retailers sold through at full margins and anxious to increase their orders next year. You aren’t giving up sales; you are just delaying them a year.
· Don’t chase market share right now. I’m beginning to think market share is a code word for losing money.
· Respect the fact that closed out, brand name product may be among your toughest competitors this year.
· Sharpen your pencil when formulating your advertising and promotional budgets. If you’re ordering product based only on what’s already booked and you aren’t fighting for an increase in market share, aren’t there some things you can do without?
That’s it.
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