Owen Wozniak
Mr. Reuter
Economics - A1
1 December 2015
Seasonal Sales by Snowboarding/Skiing Companies
This winter, plenty of us are gearing up for the snowboarding or skiing season by getting all the necessary equipment needed to do these sports. Whether it’s buying something small like new gloves, or something much larger like a new board, it makes the most sense to buy it right before the season starts.
There are just under 10 million people actively participating in downhill snow sports annually (“Snowboarding”), so there must be a market for equipment. Being one of the largest companies in the snowboarding industry, Burton has earned it’s reputation over the years. However, it’s greatest sales happen in the late fall and all throughout winter mainly because that is when most people are getting ready for their trips. On the other hand, in the summer the demand for people needing winter clothes is less because they wouldn’t be used. So how does this seasonal cycle affect the company? To start, it creates a decline in sales in warmer months, so the company needs to build new tactics like creating specials or sales. Also, redirecting sales locations can affect profits. For example, it doesn't make much sense to be trying to sell sub-zero jackets during winter in Florida where snow and such temperatures are rare, but instead to sell to more notorious snowsport states such as Colorado or Utah. Doing so would create a more constant annual sales graph.
According to the chart above, apparel is the largest portion of sales among snow gear for the past six years. The trend is moving at a very constant rate which shows that there is stability across the market and promise for the future. Burton, being a major retailer for apparel build the most profit during this time of year based off the seasonal demands. But as good as it sounds to have booming profits in the winter, there are significantly less in the summer when the company needs to find new ways to increase profits.
Works Cited
"Snowboarding Statistics." Statistic Brain. Web. 2 Dec. 2015.
Ferner, Matt. "Despite Numbers, Burton Still Bullish On Snowboarding." The Huffington Post.
TheHuffingtonPost.com. Web. 2 Dec. 2015.
Heine, Peter. "Burton Snowboards: Origins and Spectacular Growth." Web. 2 Dec. 2015.
Snow gear is one of the most seasonal items . When I first moved here, I was surprised to see how abundantly available the snow gear was in the winter months. This makes sense due to the increased demand for warm items during the colder weather, If more people are demanding such items, companies that supply the items will most likely boost the selling price, because people don't really have a choice on buying that product. As the weather warms up, you see a decrease in the amount of people buying winter gear. This being the case, the best time to buy winter gear is right after the winter season because companies are reducing sale prices to get rid of the winter stock.
ReplyDeleteBeing one who loves the winter sports and everything about them, I found this to be very interesting. While it makes sense that sales would go up in fall and winter, due to trips, necessity, and the holiday season, the smart thing to do would be to buy these items during the warmer times of the season. While they may not get used right away, there are always specials and sales going on, especially with big companies like Burton, So Gnar, and K2. Boards and skis will often drop to fifty or more percent off, this is due to the fact that these companies, while major players, aren’t doing well enough during the summer and spring seasons as far as sales go. Likewise some of these major companies will even release a line of summer wear as well, to compensate for the loss of revenue. Awesome topic!
ReplyDeleteIt makes sense that there would be seasonal changes for a company that only makes product for one season, I'd be willing to bet that there's also seasonal employment as the demand increases, businesses can afford to hire more people. Also, I'm curious to know if ski hills and resorts have the same problem, most convert the hills into concert venues or have summer attractions too, but they probably struggle to pay for their land and upkeep needs year round.
ReplyDeleteI agree with Sara that there is probably seasonal employment in the sails of snowboarding and skiing equipment. Additionally, I bet ski resorts face this same problem of seasonal demand. In the winter, their demand must significantly increase, however in the summer their demand must decrease to the point that their price is less than average variable cost, thus they must shut down in the summer. However, they reopen in the winter because demand increases again. Also, I know that location is a key factor in the demand of ski resorts. Ski resorts in the mountains in Colorado might be able to stay open most of the year, while ski resorts in Wisconsin cannot operate in the summer.
ReplyDeleteA seasonal change in sales is common sense since people can only use equipment in the winter. I also agree that this would mean seasonal employment for stores as well as a possibility for seasonal hours. A store would want to be open more in the winter than in the summer. They switch to only being open a few days during the week and just a couple hours a day.
ReplyDeleteI really like how relevant this topic was in December. Two things really stuck out at me though. First is how many people actually take part in these activities. With so many people in the US and a lot of snow I would think there would be more that 10 million people. Second, I thought it was interesting how many sales there are with equipment. Equipment can be used year after year but the sales still remain high. I wonder how they keep selling.
ReplyDeleteI'm surprised that equipment has such a steady sale, and that it has actually been growing because I know personally, I haven't needed a new board since I got mine about 6 years ago. It's great that it seems like more people are getting into the sports though, since they're really fun. I have to wonder how much profit they make from their equipment, accessories, and apparel since they sell them for fairly high prices.
ReplyDeleteI am also very surprised that equipment has remained pretty steady throughout the years because people don't necessary need a new snow board until after a couple years. I wasn't surprised though that apparel is what makes the most profit because even if you don't snowboard or ski I see people with snowboarding/skiing jaackets.
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