Most profit / biggest rip off in gear?

there is a tremendous amount of overcapacity in the ski industry...in terms of capacity, the industry could make about 6 million pair of skis a year...a few years ago sales were in 4.8 million range...now its hovering in the mid 3 million range. Many of these factories are in Europe...with very strict labor laws...so, basically it takes a long time for them to adjust capacity downward to match the current global demand. So they keep more workers on than necessary and they need something to do...so they build skis. While European ski companies have laid off hundreds of workers in the past few years..they are still bearing some cost of those employees. Ski factories that used to operate on 2 or 3 shifts are down to one, mergers like Atomic and Salomon under Amer group are leading to Salomon ski production being shifted to Atomic and Atomic boot production to Salomon facilities...Volkl is making more and more skis in K2s Chinese factories and less in Germany...all in the name of adjusting the overcapacity and also trying to lower the overall cost structure. The dollar's weakness against the Euro is putting price pressure on skis, this year's models were hit with some very high raw materials costs (ie petroleum prices)...but, as the capacity is adjusted and costs are contained you're going to see an improvement in the performance/value ratio from many companies. You may also see less product at 50% off at the end of the season...as the manufacturers build less and the retailers buy less, there will be less product left at 50% off...it just takes a while for the system to adjust. Several years ago you couldn't find the "hot" model ski in Feb...Vollkl 5 stars, K2 Recons, they sold out early in the season and didn't end up at 50% off...but the last few years you've been able to find them in the summer..AC50s, Recons, even Mantras and Gotamas the last two years. The last few years have been very good years for consumers looking for a deal...but they've come at the expense of retailers, distributors, and manufacturers. You may start to see some graphics "roll over" from one year to another...2 year cycles will lower the "closeout" pressure at retail. The current trend of overproduction and no margin sales is unsustainable and needs to be addressed for the health of the industry.

eastcoastpowderhound said:

there is a tremendous amount of overcapacity in the ski industry...in terms of capacity, the industry could make about 6 million pair of skis a year...a few years ago sales were in 4.8 million range...now its hovering in the mid 3 million range. Many of these factories are in Europe...with very strict labor laws...so, basically it takes a long time for them to adjust capacity downward to match the current global demand. So they keep more workers on than necessary and they need something to do...so they build skis. While European ski companies have laid off hundreds of workers in the past few years..they are still bearing some cost of those employees. Ski factories that used to operate on 2 or 3 shifts are down to one, mergers like Atomic and Salomon under Amer group are leading to Salomon ski production being shifted to Atomic and Atomic boot production to Salomon facilities...Volkl is making more and more skis in K2s Chinese factories and less in Germany...all in the name of adjusting the overcapacity and also trying to lower the overall cost structure. The dollar's weakness against the Euro is putting price pressure on skis, this year's models were hit with some very high raw materials costs (ie petroleum prices)...but, as the capacity is adjusted and costs are contained you're going to see an improvement in the performance/value ratio from many companies. You may also see less product at 50% off at the end of the season...as the manufacturers build less and the retailers buy less, there will be less product left at 50% off...it just takes a while for the system to adjust. Several years ago you couldn't find the "hot" model ski in Feb...Vollkl 5 stars, K2 Recons, they sold out early in the season and didn't end up at 50% off...but the last few years you've been able to find them in the summer..AC50s, Recons, even Mantras and Gotamas the last two years. The last few years have been very good years for consumers looking for a deal...but they've come at the expense of retailers, distributors, and manufacturers. You may start to see some graphics "roll over" from one year to another...2 year cycles will lower the "closeout" pressure at retail. The current trend of overproduction and no margin sales is unsustainable and needs to be addressed for the health of the industry.

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So you're saying we should stock up on skis while we still can.

Sounds like a good excuse to buy a couple pairs to me.

mondeo said:

My guess is it's planned overproduction. Manufacturers are basically making the call that it's better to make 10% extra and sell it at cost than make 10% less and just miss out on those sales.

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Makes you wonder if they realize they are shooting themselves in the foot for long term profit by going for the short term profit? What ends up happening in a saturated market place is people do buy more skis, at first, at discounted pricing. So the manufacturers make a killing while they are saturating the marketplace. But eventually, everyone has all the skis they need and in the long term, if the market continuously gets flooded by substantially more skis than demand, the long term sales have to decrease unless the manufacturers can convince the marketplace that they need to continuously upgrade. Perhaps that is what is happening with skis getting fatter and fatter. If it was only an extra 10% production, that would make sense as it is better to produce a little too much than leave sales on the table. But it has to come back to bite them in the butt eventually, I would think.

eastcoastpowderhound, thanks for your thoughts and input on this thread. Makes complete sense the process you are describing and I am not surprised that the industry is moving that way. Good points about the early 2000s having shortages of "hot" skis whereas the mid-2000s these last few years had tons of overages. Circa 2001-2002, I remember searching high and low for a Volkl P40 Platinum and every retailer I contacted had sold out by March. No deals at all. Finally found a pair but had to drive 3 hours to get it. Now I just hope online, setup an eBay daily search email, and any ski I could want is at 50% retail within a short period of time delivered to my door. While I appreciate that system, I understand that it is unsustainable for the retailer or the manufacturer.

I have a bigger problem with the constant changing of graphics. There is no reason to change graphics every season. It used to be graphics would stay in the line for 3 and 4 years, now just one. There is no reason to change them so often.

Philpug said:

I have a bigger problem with the constant changing of graphics. There is no reason to change graphics every season. It used to be graphics would stay in the line for 3 and 4 years, now just one. There is no reason to change them so often.

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The industry has a problem with it...but its sort of a classic prisoners dilema, if brand A goes to 2 year cycles but the other brands stick to every year, then brand As stuff looks dated in year two...and retailers can get away with just filling in sizes from brand A while they need to stock a full load of the other brands who have changed. So there's a fear of losing sales and market share by switching back to a multi year cycle. The f'd up part is that its the every year change of graphics that has led to the downward spiral of closeouts, very conservative pre-season buys and declining margins for the retailer and the distributors. Its a topic of conversation in more than one product planning meeting with the euros. In nordic though its pretty much the rule...they change about half the line each season and alternate. Fischer is doing it with their boot line...new sport performance line for 0910 but the performance boots carried through...next year the performance boots will be all new. I'd like to see it go to a two year cycle...I agree, there's nothing worse than seeing a "new" line that only has minor cosmetic changes...barely enough to notice, but just enough to force you to dump the "old" model at little to no margin.

eastcoastpowderhound said:

The last few years have been very good years for consumers looking for a deal...but they've come at the expense of retailers, distributors, and manufacturers. .

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music to my ears....the most I ever paid for a pair of skis was in 1998 for my K2 El Caminos..with the Marker M51 Bindings they were about $550..My Atomic LT11s with Neox binders came close along with my Elan S12s with bindings but all my other skis have been less..:beer::beer::beer:to 200 dollar skis that retail for 700 on tramdock..I heart the internet..so good for the consumer..:beer:

Philpug said:

I have a bigger problem with the constant changing of graphics. There is no reason to change graphics every season. It used to be graphics would stay in the line for 3 and 4 years, now just one. There is no reason to change them so often.

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I like seeing new graphics..it's mad steezy..I stare at my skis alot riding the lift so it's nice if they look cool..

eastcoastpowderhound said:

The industry has a problem with it...but its sort of a classic prisoners dilema, if brand A goes to 2 year cycles but the other brands stick to every year, then brand As stuff looks dated in year two...and retailers can get away with just filling in sizes from brand A while they need to stock a full load of the other brands who have changed. So there's a fear of losing sales and market share by switching back to a multi year cycle. The f'd up part is that its the every year change of graphics that has led to the downward spiral of closeouts, very conservative pre-season buys and declining margins for the retailer and the distributors. Its a topic of conversation in more than one product planning meeting with the euros. In nordic though its pretty much the rule...they change about half the line each season and alternate. Fischer is doing it with their boot line...new sport performance line for 0910 but the performance boots carried through...next year the performance boots will be all new. I'd like to see it go to a two year cycle...I agree, there's nothing worse than seeing a "new" line that only has minor cosmetic changes...barely enough to notice, but just enough to force you to dump the "old" model at little to no margin.

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Elan & Dalbello have been keeping some graphics for two years, last was the 888 & 999's and the Krypton series. I think some manufacturers are trying to get back to this. I know from a retailers standpoint, they would rather go back to 2 year graphics. Kastle is going 3 years. When I was with Hart, this was one thing I was pushing for was graphics that stayed for two years. It would lower production costs it showed that we had more faith in the product and showed that we had more respect for the consumer that the the investment they made in the skis held up for more than a fleeting couple of months.

As far as something to look at on the lift, IMHO a sharp "timeless" graphic will look good for more than one season. But I can understand your delimma, GSS, you spend more time at Blue riding the lifts than you do skiing so new skis do give you something to look at. j/k :lol::lol::wink:

Philpug said:

. But I can understand your delimma, GSS, you spend more time at Blue riding the lifts than you do skiing so new skis do give you something to look at. j/k :lol::lol::wink:

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It's the truth..5 minutes up and 1-2 minutes down..8 times an hour..

A few points:

- There are currently virtually no desireable skis from last year out in the retail market, they were all dumped between March and July.

- Some retailers are offering pre-buys of new gear at reasonably good prices. I suppose this is a way to lock in early profit from hardgoods sales, instaid of being stuck with it at the end of the season. They're getting people who would normally buy closeouts to pay 6 months earlier, at more margin. But this may eat into normal retail sales....?

Highway Star said:

- There are currently virtually no desireable skis from last year out in the retail market, they were all dumped between March and July.

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by retail, I assume you mean bricks and mortar stores yes? :???:

If I had it, I could dump thousands a day with the deals I see online for last years gear everyday.

deadheadskier said:

by retail, I assume you mean bricks and mortar stores yes? :???:

If I had it, I could dump thousands a day with the deals I see online for last years gear everyday.

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Maybe my idea of desireable is different than yours, but all the best powder skis in proper length have sold out in the past month, if not 4 months ago. Online.

GrilledSteezeSandwich said:

K2 El Caminos..

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I've got a pair of those. I loved those skis when they first came out.

$6.00 pints apres ski

$7 burgers

SKIQUATTRO said:

$6.00 pints apres ski

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especially at an actual brew pub. Friends of mine were head brewers at the Shed for years. I was told that after the initial investment, it cost them roughly 16 cents a pint to make.

SKIQUATTRO said:

$6.00 pints apres ski

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better than $6 pints on Long Island..

Glenn said:

I've got a pair of those. I loved those skis when they first came out.

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The El Caminos were great..I had them in a 198 and then got the K2 Kreitlers(the skis with the Eagle on the tip) in a 193..I think they were about 99mm in the tip and 63mm at the waist..skinny mo-fos but shaped skis..the first time I demoed the K2 4's back in early 1998 it was like a turbo boost to my skiing..as I didn't really carve on straight skis..more the old style of skiing...

Puck it said:

$7 burgers

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Win!!! But even with such high markups, the ski business is anything but thriving. That is what boggles my mind the most. In almost every industry, prices are high not because the bean counters are going for max profit but rather because businesses need those high margins to survive. The bean counters set the highest price that the market will bear without loosing so much business that high margin does not off set decreased purchases. Tough balance. If enough people brought food from home, prices might actually decrease. But that is not going to happen with a captive audience, especially families with crying kids that are hungry and cold and want a hot pizza.