How To: Burton’s VP Clark Gundlach on Battling Gray Marketing
mike lewis
- June 27 2008
- 57 comments
The world is never black and white. Various shades of gray creep into all facets of our existence. Some aspects of these shades and hues keep life interesting, but on the retail landscape, gray markets cause untold headaches for both manufacturers and retailers. For brands, the size of the gray market is directly proportional to the demand for their products. There are currently nearly 80,000 Apple products on eBay, and the story behind that number is the brand’s strength. If you search for Burton on the online auctioneer you get 3,844 items. While this may pale in comparison to Apple, it seems a bit more noteworthy after searching for K2 Snowboards; which results in 61 items. Burton is a behemoth in our industry - the undisputed heavy weight, and defending that title is never easy. When you’re the 800-pound gorilla in the room, you’re in everyone’s sights, and they all want to take you down or make a buck. This is true of competitors, industry pundits, and consumers that believe large companies have sold out and lost their soul. It’s also true of the company’s dealers that want to improve their bottom line by riding on the strength of the brand.
Burton defines gray marketing as “when a Burton Authorized Dealer purchases goods from Burton with the sole intention to sell it via unauthorized distribution channels, including but not limited to mail-order catalogs, online retailers, wholesale retailers etc.” Gray marketing avenues are also, by definition, very gray. They take many shapes and sizes, and manufacturers in all industries have to keep on their toes to keep up with gray marketers wiley efforts. It’s like playing whack-a-mole on a five-acre board. In December of 2007, Burton implemented several new measures to prevent gray marketing throughout its distribution networks in North America, Europe and Japan to protect its brand integrity, and these policies were put to the test almost immediately when a slew of product showed up in Costcos around the West and on Overstock.com.
Transworld Business recently spent some time chatting with Clark Gundlach, Executive Vice President and General Manager, Burton Snowboards, about the company’s response to the Costco fiasco, it’s efforts to manage gray markets, especially in emerging regions like Russia and China, and ways to more effectively manage the distribution channel.
Clark Gundlach, Executive Vice President and General Manager, Burton Snowboards
Photo: Jeff CurtesD
Transworld Business:
How did you guys find those boards that were in Costco and on Overstock.com back in December?
Clark Gundlach:
Aw, dude, let me tell you – it wasn’t hard. The Costco thing really surprised us.
TWB:
That was down in Southern Cal right?
CG:
Costco has several regional buying offices and it was purchased out of the Northwest and distributed all the way to Denver locations. There was some in California. The bulk of it was in Utah, Idaho and Oregon and Washington. We got a panic phone call from one of our reps – ‘Hey, there’s Customs in a Costco here.’ ‘Are you kidding me? How’d that happen? Go in there and buy some of the product!’ So, step one – we immediately tried to identify the source, then we realized within a day, that this was more widespread then we hoped for. Costcos here, Costcos there, so we sent our sales force out on a mission to identify where they are, and immediately told our sales organization to go in there and buy all the product right now – pay full retail, get it out of there. We cannot have our product in Costco.
TWB:
What was it selling for?
CG:
I think Customs were selling for $400. (MSRP $499) These were in season boards. So we go in and we buy what we think were all of them. And then all of a sudden more show up and then they show up on Costco.com. So we go back in to the retail stores and buy out all of the retail product again. And then myself personally and a couple people internally go on to Costco.com and buy all the Burton product at retail. It’s a major six-figure number that we spent to clean that up.
TWB:
Can you give me a number of boards/figures?
CG:
I could if I knew it, I can tell you its hundreds of boards. There were some bindings and I believe some boots that were only on Costco.com. And the thing is, we’re also on the phone with Costco going ‘hey guys, what are we doing? Can we just arrange to buy all the stuff out from you, rather than tracking it down?’ And let’s just say they were uncooperative.
TWB:
And they were within their rights because they acquired the product legitimately?
CG:
Yep. So we do what we do when we trace product, and we trace it to a Southern California retailer.
TWB:
It was one?
CG:
It was actually two of our authorized dealers, and we immediately terminated those dealerships. In the meantime, we’ve got a few other things going on with that but I’m not at liberty to speak to it.
TWB:
You couldn’t share who that was?
CG:
I really can’t. I wish I could, I’d love to print it. The biggest challenge is that the biggest source for gray market products is retailers. They have an opportunity to profit, I’m not just saying in snowboarding, I’m saying in anything. The biggest challenge for any manufacturer is to identify sources and control their distribution and as long as you’ve got a strong brand it’s a strong challenge. Whether its Louie Vuitton or anything that’s in demand.
We sell a lot of product and there are a lot of individuals out there with product. In our dealer agreements, our dealers are prohibited from selling anywhere outside of their store locations without written consent from Burton and that includes every auction site. Not just eBay. And the hardest part for us is it’s a full time job policing the Internet channel.
TWB:
Do you actually have someone with that job description?
CG:
We have resources in both our legal and our sales departments that part of their job description and role is to go in and police that. One of the hardest things about eBay is that it gets really tough to identify who is one of our authorized dealers and who is not. If we get into a situation that looks suspicious we may just purchase product and try and trace it from that resource, but we have a relationship with eBay as well. We work diligently to control our distribution, and believe me we speak to a lot of our authorized dealers who may or may not be aware of their signed dealer agreement with us. It surprises a lot of our dealers and I think a lot of them just do it until they get caught. There’s a lot of ways on eBay to do things on the sly to make it grayer.
TWB:
Is your dealer agreement one strike and you’re out?
CG:
We have a no tolerance policy. If we find an authorized dealer that is trans-shipping or reselling our product we will terminate.
TWB:
What about out of season product, do you work with retailers that are trying to sell on an eBay store they’ve got to move excess product?
CG:
No. Even our authorized online retailers are prohibited from selling through auction sites. It’s constant, managing that channel is virtually a full time job.
TWB:
I heard you have professional investigative companies to look into this?
CG:
We use them if we need them. They’re a resource for us. If we need help identifying a situation globally, they’re one phone call away.
TWB:
What’s your take on what gray marketing does to a brand?
CG:
The biggest thing that the gray marketing channel does to a brand is to really hinder profitability for the company and for the retailer, and I think even more importantly it really has an effect on the brand’s presence and the presence of mind in the consumer. Think about this. You’re in another country and you buy a gray market product, you’re not getting a lot of what a brand can offer. Say for example, warranty service. You might not even be getting product that comes with all the customer service that a brand can offer. You’re buying product that’s outside of authorized distribution. So you take a risk.
TWB:
From a consumer standpoint, would you guys know if I bought a board in this channel? Say I buy a board and snap it and send it back, are you going to know how it was sold?
CG:
Yeah, we’d ask you for the proof of purchase. We stand behind all our product for sure, but we stand behind product that’s purchased through authorized distribution. Somebody that buys a product through some unauthorized distributor and has no proof of purchase, that’s a problem that’s going to challenge him to get any warranty service.
TWB:
Is this tracking done with serial numbers?
CG:
With serial numbers for us, there’s a couple things. Just like any other product, if you’ve got an issue with a particular product on the manufacturing side, a serial number helps you identify the source; the time you built it, where you built it, etc. The other component to serial numbers is to give us the ability to trace products back to where we sell them. Say for example, we send BC Surf & Sport in Denver product; we’ve got a log of those serial numbers so if one of those boards ends up somewhere we can actually trace that. Let’s say for example that board ends up in Beijing, China along with a hundred other boards at an unauthorized retailer, we have sources that will send us all those serial numbers and then we we’ll go into our system and trace that product.
TWB:
How does Burton work with retailers if they wind up with overstock at the end of the season?
CG:
They didn’t buy them with the intent to sell them through another channel. He bought that product for what he felt his needs were for that particular season at his authorized business. We always go to our dealers at preseason and say ‘buy what you feel you can sell.’ If they run into a situation where something happens in their marketplace, we don’t have a crystal ball and he doesn’t either. They buy looking in the rear view mirror, ‘here’s what I sold last year, here’s what I think I’ll do this year,’ and that’s exactly what we want them to do. For as long as I’ve been here at Burton, and I’ve been here a long time, I’ve always got the situation where someone runs into an unusual issue where things don’t sell. Maybe their store’s remodeling and doesn’t open on time, or there’s no snow, in those situations, we have good relationships with our dealers, and we generally help them find solutions. But I don’t want to say for every retailer out there that has a situation, we don’t go in and say we’re going to help you out. What I’m saying is those situations happen. We always go out there and tell our dealers to buy what they think they can sell. We’re not out there to encourage them to carry over. We don’t want that as much as they don’t. It really comes down to planning and how well the retailers are planning.
TWB:
I’ve been hearing from retailers that overstock is generated partly by poor management of the distribution chain by manufacturers and a lot of brands are signing too many shops in a saturated market, selling too much product. Would you agree with that?
CG:
I can’t speak for the other brands, but I can speak for Burton. We sell in the winter sports channel. That’s our channel of business. Where winter sports are being sold, that’s where we are.
TWB:
Have you seen SIA’s numbers that show that nearly 40,000 new boards were sold on eBay last season?
CG:
I’m just starting to see some of the preliminary data. I think it’s really hard to define what’s happening on eBay. We know that the Internet is a growing channel and we know that all manufacturers are really going to focus on change management and how they’re managing that channel. But if you click on Porsche on eBay, I’ll bet there will be over 2,000 Porsches (there was actually 16,039), so that means that eBay is the largest dealer of Porsches in the world. Does this really have a negative impact on the brand image? No, I don’t think so. I just think the Internet channel is a real channel and it’s really up to the brands and the manufacturers, not just snowboarding, not just Burton, to continue to develop and update their strategies about how they manage online channels and not really look at it as a threat, but look at it as an opportunity to manage their brand. You know as well as I do that eBay and the Internet is a constantly evolving channel. It’s growing and it’s not going to stop growing.
TWB:
What channel do you see as the biggest problem in gray marketing?
CG:
Really, there are two sides of the gray marketing issue, there’s unauthorized distribution and the Internet channel. Those are the two animals. It hasn’t changed that much really. One of the things that is most important for us, probably for many brands, is emerging markets. It’s important for us to maintain brand integrity and distribution there. We’ve been around for a long time and we went through the gray market period in Japan, and we really learned more and more about gray marketing through our experience there, and we can apply that to all our emerging markets. The Japanese distribution has evolved and matured, it was a huge, huge issue for us and many other snowsports manufacturers. We’re very focused on controlling gray marketing in emerging markets.
TWB:
Isn’t that partly a function of poor distribution channels? People couldn’t get the product so other people were stepping in to fill that void?
CG:
Some of it. Just like anywhere else we have authorized dealers and distributors there. If demand is outstripping supply, then they’re going to try and fill that void.
TWB:
In those cases are the prices on the gray market below what licensed distributors are selling them for, or are they actually higher?
CG:
It depends on where they’re sourcing product. If it’s a particular retailer who doesn’t have an authorized dealership and they’re in the same neighborhood as an authorized dealer, he may try to purchase product in another market and bring it in to his shop and offer it at a more aggressive price to attract business. It can vary, but the primary function that we see is to control our distribution and protect our authorized dealers, so we have to control our distribution in those markets.
TWB:
How do you see this gray channel developing in emerging markets? Obviously, people are going to continue to do it, how do you combat that?
CG:
I think as long as there’s demand, there will be opportunity for a gray marketer somewhere in the world and it’s our responsibility to manage that and find the sources and shut it down as quickly as we can.
TWB:
I guess that it’s kind of a good thing that you’re seeing this then since it means the demand’s there?
CG:
Ultimately, it is a good thing. If you didn’t have any demand for your product, gray marketing wouldn’t be an issue. That is a good thing. As long as there’s demand it will be there and it’s up to us to prevent it from happening.
TWB:
Anything you’d like to add?
CG:
This July, all of our North American dealers will be required to sign a new dealer agreement that includes additional, strengthened language regarding gray marketing. It outlines exactly what types of re-selling will be considered a violation of their dealer agreement and the consequences that will result. Our goal with this new dealer agreement was to make it very clear that we have zero tolerance for gray marketing and will terminate dealers who violate the agreement.
The following is from a statement that Burton sent us:
Results of Burton’s actions against gray marketers
• Burton has instituted a new dealer agreement in North American that outlines specific criteria that constitutes as gray marketing and the consequences that will result if a dealer violates the rules.
• Burton directly informed all of its North American dealers on the seriousness of this issue and how it will enforce its policies against gray marketing.
• The company is in discussion with professional investigative companies to track down gray marketers.
• Burton encourages its authorized dealer network to report any suspected gray marketers.
• Products found in unauthorized global distribution channels are traced back to the authorized dealerships outside of that market, and Burton reserves the right to terminate the dealer who violated its agreement.
• Burton’s new policies were put to the test in the 07/08 season when unauthorized products were uncovered in the U.S.-based Costco chain and at discount online retailer Overstock.com. In addition, unauthorized European dealers were found with product that originated in the U.S. Burton acted immediately to discover the sources of these sales and terminated two U.S. accounts.
• Burton spent hundreds of thousands of dollars to purchase snowboards back from Costco at its own expense.
• Burton had discussions with Overstock.com who agreed to pull the gray marketed boards from its website.
• Several dealers in California were involved with selling product to Costco and Overstock.com, and these dealer agreements with Burton were permanently terminated.
Stay tuned to Transworld Business’s print magazine for an in-depth analysis of the effects of gray marketing on the snow, skate, and surf industries.
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June 27th, 2008 at 8:43 am
“We always go out there and tell our dealers to buy what they think they can sell. We?re not out there to encourage them to carry over”
I got this one on lock. When My rep starts leaning on me to increase my prebook by x% or else he is going to open the new shop across the street, I am gonna bust out this article and say check out what the boss man says about over buying….
June 27th, 2008 at 1:20 pm
WOW! We had the same problem with Body Glove wetsuits, inflatables and wakeboards showing up on CostCo.com - we were mortified. We were even more horrified at the treatement we received from CostCo and its Century City attorneys.
They were completely uncooperative and had no respect for our established distribution strategy.
~HM~
June 27th, 2008 at 6:48 pm
How about Burton controlling all the off-site “tent” sales and ski-dazzles? About 80-85% of the product at those sales is Burton. That hurts all retailers in the biz, even if they don’t carry Burton…why go pay full retail in a shop when you can get gear off price in season at these horrible bullshit “sales”. They are over glorified garage sales with horrible customer service and lots of people being set up with and buying the wrong gear for themselves and they end up hating snowboarding and quit because they have the wrong setup because some half-assed sales guy, hired only to work the sale, sets them up incorrectly. That puts a bad taste in peoples’ mouths for snowboarding and you lose a customer/snowboarder. I think Burton manufactures extra product to sell at close-out prices for certain retailers to sell at those big off-site fairground sales. I have never, and will never support those “sales” and I believe all brands should feel the same way because that just hurts their loyal retailers that can’t afford to buy space at those sales and staff them. I know Burton is the biggest brand in snowboarding but it’s just ridiculous how saturated the industry is with wit that brand, I think they would open up my grandma’s house as a retailer, they aren’t very selective with their distribution. And don’t even get me started on them opening their own stores…as if they didn’t have enough shops carrying Burton, they open a shop in LA just a few blocks from a couple of their biggest accounts. Give me a fucking break Burton! Ever heard of a thing called loyalty? I’ve been doing my part for the past 6-7 years educating people that other brands exist and getting them out of their Burton Brainwash, so far so good. If more of us that love the sport and lifestyle of snowboarding do our part in knocking them down a few notches and hit them where it hurts, maybe they’ll be humbled and remember why we all do this…because we love snowboarding and not just the bottom line of PROFIT. I could go on for days on how much they blow it…
June 27th, 2008 at 8:48 pm
I saw Shaun White driving a white Lambo down 101 today? somebody has to take care of this kid so stop your whining?
June 28th, 2008 at 9:38 am
You forgot the fact that Burton sells directly to consumers also.
June 28th, 2008 at 9:57 am
I am sure that really cool specialty shop Target is taking care of him.
June 28th, 2008 at 9:59 am
how many shops exists solely because they can sell enough burton stuff to keep the lights on? saying burton doesn’t support the industry is assinine. if burton wasn’t around the industry would be half the size it is and k2 would be the only one making any money. could burton do better? yes of course, i bet you could change some things around for the better too
June 28th, 2008 at 8:02 pm
you need a life bro…. stop hating on burton for 2 seconds…. what you don’t realize is that they have done infinitely more for snowboarding than you have so what the beef…. i guess the fact that by opening a Burton only store they elevated the image of the brand which helps any existing dealer with their marketing power and brand awareness….. if the shops down the street can’t cut it it’s not the brand it’s the service… that’s what gives a customer a good reason to come back…. i would love to see your “customer service” skills… is hating on burton part of your speal about snowboarding? i mean sounds like somebody’s a little jealous! last have you ever ridden a burton? they aint bad dude… but just like 15 other top manufacturers…. but they gotta be doing something right….. you talk about bottom line and profit being their motivs, have you ever seen any of your precious brands at SIA? every single one of them is there to sell shit! not just burton….. righteous bitch
June 29th, 2008 at 4:47 am
Why is it that these big brands (and the people who support them) always feed us that same BS about how opening up a ‘Flagship Store’ helps “elevate the image” and get the brands message out in an effort to help existing dealers with with their marketing power and brand awareness? IT”S BURTON!!!! Exactly what part of their brands message isn’t being serviced by their core dealers? It seems to me that for the past 20 years, these dealers have done a pretty good job of getting Burton’s message out. I know that as a shop owner, opening up a Flagship Store in my area would not be the kind of ‘brand support’ that I would consider helpful! Perhaps a break on pressure tactics, or a more refined list of dealers, but a Burton store in my area?!?!
June 29th, 2008 at 6:41 am
Target yo! Mo money from da masses! Hells ye-ah!
June 29th, 2008 at 2:23 pm
BURTON IS NOT DOING ANYTHING ABOUT GREY MARKETING. iF THEY DID THEY WOULD HAVE TO TAKE A MAJOR LOSS OF SALES AND FIRE HALF THERE REP FORCE, AND A BUNCH OF EMPLOYEES. THEY WILL NEVER DO THAT. JUST CUT YOUR BUY BACK ON THEM AND HIT THEM WERE IT HURTS. THATS ALL YOU CAN DO. I HAVE WATCHED IT FOR 20 YEARS. THEY DON’T LISTEN, SO STOP WASTING YOUR BREATH.
SNOWBOARDING WOULD PROBABLY BE BETTER WITHOUT THEM, THEN MAYBE THERE WOULD’NT BE ALL THE BOX STORE BUSINESS
June 29th, 2008 at 8:49 pm
‘Louie Vuitton’ is actually Louis Vuitton
June 30th, 2008 at 5:29 am
Remember Burton is still privately held. There is a respect there that very few in the industry can hang with.
K2/Morrow/Ride/Planet Earth/ADIO = JARDEN CORP makers of your favorite kitchen appliances.
DC/Rossignol/Lib/Gnu/Dynastar/Lange/Bent Metal/Hawk/Cleveland Golf/Roxy = QUICKSILVER
All publicly traded companies……..Before your get into your corp speil take a look around. There are not too many indies left in the business. Hate Jake all you want, but he is a dude who took a thing he was passionate about and turned it into a very successful business. If only I could be so lucky to be able to do that.
June 30th, 2008 at 10:25 am
yeah, well things have changed for jake. He is not the same guy he was 15 to 20 years ago. He has been swallowed by the big corporate world. He might as well be public. They run the company just like quik. He snowboards, great, but he doesn’t give a rats ass about specialty, except his own stores. It has been proven.
Again, they will do nothing about grey market. Half those 40,000 boards on ebay were probably burton. If anyone thinks burton will take a 20,000 board loss, then you are mistaken. Not to mention boots, bindings, outerwear, accessories.
Pull your heads out, if you think burton corp cares.
It truly is a bummer. I wish it weren’t so
June 30th, 2008 at 3:43 pm
When Burton opened up its flag ship store in melrose (LA,CA) I am sure it left some So Cal dealers dead in the water with 07-08 prodcut. Not to mention that burton went into these So Cal dealers and hired thier staff to wokr the flag ship store. I can see why this prodcut was dumbed….
June 30th, 2008 at 4:44 pm
Snowboarding is a business, at least they are making an effort to clean up their gray market issue.
Respect to them for trying. Burton is the leader for a reason, something is working. Consumers are buying their shit.
I don’t know too many “bro” companies that actually turn a profit. It’s big business. Are there any companies that have a non-profit program like Burton’s Chill program? You have to take your hats off to them. It’s the nature of action sports, you succeed, and people call you out. Core is poor. That’s all there is to it.
June 30th, 2008 at 6:46 pm
The cleaning up grey market is an act. Open your eyes. They were doing a good job 10 years ago, but they let big biz take there soul. They make good product but they are not getting rid of grey market.
June 30th, 2008 at 6:56 pm
Whatever…get off burton’s nuts already, you’re either another brainwashed sheep or you work for them. Why has no one touched the subject about them having most(75-80%) of the product at off-site and off priced sales? Yeah they’ve done a lot for snowboarding in the past but now they are driving it into the ground, at least the specialty business. They don’t give 2 shits about the real core shops out there that helped build burton from day one. They only care about the big box stores that buy boards by the thousands and get ridiculous terms and pricing that the specialty shops can’t compete with, then the big box shops go off price around X-mas time and screw all the real shops who actually have employees who snowboard and give back, not some barney that they pulled from the scuba dept to work the snow dept. I understand they’re a business, but do you have to check your heart and loyalty at the door? They don’t do shit for snowboarding anymore, whatever burton does, they do it for themselves!
P.S. Hey F BOMB, I’ve been in the industry for over 15 years and I’ve done and still do quite a bit for snowboarding in my region by supporting local brands, riders and events. I started an inner-city program taking at-risk and low income kids to the mountains who have never even seen snow. Guess who I hit up to see if they wanted to help sponsor the program and they gave a big fat NO? Yes, your beloved burton. Oh, and my “customer service” skills are good enough for burton since they approached me back in October about managing their flagship store in LA…FYI.
June 30th, 2008 at 7:51 pm
Yo you saw my Lambo on the 101? It’s bad ass huh?
June 30th, 2008 at 10:29 pm
so many facts in this last post it frightens me
July 1st, 2008 at 10:13 am
Big American-Asian manufacturing company’s overbuild. Sales managers NEVER forecast correctly. Executive Management clearly understand that retailer- distributor are selling grey.
Why is this even a story.
July 1st, 2008 at 12:07 pm
you tell em’ little brother!
July 1st, 2008 at 5:02 pm
exactly nothing new , burton supports grey marketing, and ebay. It is a sales outlet for them
July 1st, 2008 at 6:20 pm
Most of the “offsite sales” are run and staffed by specialty shops. Have you ever attended Ski Dazzle? Last time I checked there were several “core shops” that had booths at this event. There are also many more reputable specialty retailers that have these sales and they dont put these events on to sell just Burton. The reality is that there is a certain portion of consumers that will never purchase products except gas at retail. They wait for sales whether it be furniture or snowboards. Also, these sales were around in the 70s and 80s and were primarily ski shows, so how bout some blame there. Lets be honest…… you are probably wearing Nike SBs, drinking a latte from Starbucks and writing this on your Macbook so get a Fucking life!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
July 2nd, 2008 at 6:01 am
there stuff isn’t even good. they only win good wood awards because they pay transworld so much in ad space.
July 2nd, 2008 at 2:33 pm
I thinks it’s funny that they-(Burton)are trying to reassure the dealer base that they are concerned. Just like 10 or 12 years ago, when they had to close a few of the big time retailers down because of gray sales. Were they actually closed down? Not for long. Never less,that just gave them time to figure out how to keep the gray dollars in house. Time passes, the dealers get re-opened, Everybody’s Happy.
Yea right, Too bad for the shops who has to turn down that sweet sale, Too bad for the rep. who lost that fat commission check.
Remember,Big Asian-American manufacturing company’s are always working for the retailers.
July 2nd, 2008 at 5:32 pm
I would like to know who the idiot is who would pass that sale. The reps would be backing you to do it, as would clark.
July 2nd, 2008 at 10:28 pm
hahaha….you need to get your facts straight miss know your facts, You get a fucking life, who the hell are you?! Obviously a Burton employee or even worse, another brainwashed burton brown nosed sheep. Don’t take it so personal, these are just people’s personal opinions and comments…and don’t hate cuz you don’t have Nikes and rock a lame PC drinking your folgers decaf. Love u…
July 3rd, 2008 at 5:27 am
Yeah Right you seam to be positioning two different issues as part of the one argument.
I think the fact that Burton are willing to introduce a serial number system to track product (amoung other methods) is a responsible move towards targeting the gray market. Because if you can track your product then you can create an evidence trail that then allows you to prosecute offending resellers. Do I think its the best method of combating a gray market… NO. I actually believe’if you can’t beat em join em’ - by that I mean large scale retail companies should invest in their own version knock off brands as an additional income stream and means of reverse brand promotion. A company can test experimental product in a’like’ market (market research) which can generate an income that covers off the new production costs (eg Quiksilver & Hang Ten).
The second position you raise (repeatedly) is the idea that Burton has traded off credibility for cash, and in many ways they have. But like the band that take the Pepsi commercial when their album sales are down, we all have to pay the rent. Really the bigger issue you raise, which has plauged sub-cultures for years, is ‘what happens when your sub-culture becomes mainstream’. How do you maintain the street image that built your brand and still charge $200 for a pair of trainers?
July 3rd, 2008 at 7:03 am
Ya I you didn’t see jake put out a press release like ride/k2 did after the earthquake in china saying, don’t worry shareholders our factories where not damaged and our product will ship on time…f***in gross.
July 3rd, 2008 at 7:38 am
THEY ACTUALLY DIDN’T GET ANY GOOD WOOD LAST SEASON.
July 3rd, 2008 at 9:49 am
“LOUD Noises!”
July 3rd, 2008 at 9:50 am
I like lamp!
July 3rd, 2008 at 9:59 am
Does anyone really care where the money ands up? Whether it may be in Jakes or share holders hands? I have friends that work At Ride and they are all snowboarders. Look at the retail of a Custom X verses a Zep. Then look at the construction and you tell me the better deal.
July 3rd, 2008 at 10:02 am
I am vegetarian!
I like long walks on the beach!
I snowboard and if it gets me down the hill then we are all good.
I heard GNU puts weed in the cores of the boards
July 3rd, 2008 at 10:03 am
I Like desk!
July 3rd, 2008 at 10:19 am
And when you buy a board why do you care if the money lands in Jakes pocket rather than some CEO at Jarden? Check out Malakye and look how many jobs are open at Burton on any given week. How do they have so many job openings? Well! Ask all the ex employees collecting unemployment.
July 3rd, 2008 at 10:53 am
Wow -so much hate for the Burton World.
It’s sad.
My first Burton was a Backhill in 1980 - and I have been in the industry ever since.
Burton and Jake have done more for the SPORT than any other snowboard company out there.
Thanks Burton!
July 4th, 2008 at 9:58 am
yeah, jake was doing it all for the sport, never for his own interest. Tom sims, demitri milovich, chuck barfoot, Those guys were there pushing it out there to. The bottom line is he did start out with good intentions a a young guy who did it for himself, and years ago he handed it over to some big corporate ceo, and washed his hands of all the decisions. They now struggle with the same corporate growth plague that most all of us get. We need to grow or we aren’t successful. I always thought if you are in the best shops in the world dominating, then that was successful, but thats not success for corporate america. So grey market is a need for burton.
July 4th, 2008 at 7:15 pm
Scoob, you talk about sheep but it sounds like you are just part of the heard. I do work for a snowboard manufacturer and I dont hate on Burton because it is the easiest target in the biz. If they didnt grow the sport to where it is then the industry wouldnt be able to support the amount of people it does. I actuall drink Dunkin Donuts coffee and wear Vans so eat a dick you fag
July 5th, 2008 at 7:39 am
Thats Some Ice t and Sulja boy ish right there!!!
July 5th, 2008 at 6:59 pm
Dunkin Donuts is for cops and fags…baaaahhhh
July 5th, 2008 at 7:12 pm
BURTON makes great product. They always have, and hopefully always will…in my opinion of course. I speak both as a Burton customer and from competing brand’s perspective.
The unfortunate part about Burton’s dominance is their forceful attitude to be the unrequited #1 seller, no matter how many stores they open or how much product they forcefeed to the dealers, especially if he wants the least bit of exclusivity in the neighborhood. They have outrageous buying minimums and they saturate with too much product, causing a need for these Ski Dazzle ’sales’….which I agree are shitty ways to unload inventory. It really affects the same shops that Burton bullies into carrying an exorbitant amount of their product….and then they expect to shop to maintain the highest price points and help keep the brand’s “integrity”. BS.
In my last trip to Tokyo (last October) I was blown away by how badly Burton saturated the district of Kanda. There are nearly 70 snowboard shops in a 3-mile radius (67 stores to be exact). How many of them carry Burton? ALL. Feels like a yard sale in Tijuana, and all I saw in every store was every kind of Burton product imaginable. Every board at every price point. Some competing stores had adjoining walls. Now I know it’s survival of the fittest but this was a bit much. The smart stores (like Murasaki Sports) merchandise all products well and have a healthy dose of competing brands in the mix, encouraging the consumer to decide for him/her self.
I don’t like when a brand like Burton has proven sales, then they drive stores to devote so much money and energy toward their brand and then bitchslap them on the back end by ending up in Costco and having seasonal “sales” events, and opening their own branded stores in the backyard of some of their oldest and most loyal dealers.
JG–Well put playa. I was suckered into buying gear at a Fresh Tracks like 7 years ago that was completely wrong for me….and was non-warranteed. And I think Burton would be a better brand if they let the product speak for itself and let consumers decide….by not monopolizing floor space in retail shops.
out.
July 7th, 2008 at 7:54 am
why do people always say a company has “done” something for the sport???? the moms and dads of the children that buy the ton of product have really done something!
all sports are only doing things for themselfs - same as companys do! accept it, there is no more friendly x-treme grunge underground sport anymore - maybe this crazy pogostick thing but NOTHING besides that.
July 8th, 2008 at 12:02 am
get BACk to the fact that they sell DIRECT to YOUR customers. And they sell AK to Zappos, how’s that for caring about your ‘core’ dealers. what’s this bullshit about “WARRANTY” clark? you really think the customer that bought it on Zappo’s is going to warranty it through Zappo’s? and it’s complete and utter bullshit that they only tell you to “order what you think you can sell”. check in on your Burton rep anytime between December and April, and the dude’s melting from the heat he gets every day from Clark&Company. they don’t want ALL of the market, but they won’t stop with 60% either. they will continue until they have 80%, through Special Blend and Forum/foursquare, and whomever else they buy that has the ‘cool’ factor this year. Of course they support the industry, they also reap the biggest rewards from it too. and when they want to flex, you all get flicked like so may flies on a horses’ ass. Jake will continue his reign of buy and ’synergize’ and co-brand and cross-market.(why stop with skateboards? buy a paint-ball company, too!) go Vertical because everyone else is and dabble in this and manipulate that and ohmygod it’s in Costco! (let’s protect those dealers names because we may need them next year again) and if you think it will be any different, you are kidding yourself. take everything you’ve seen in the last 2 years, the last 5 years, and speed it up and compound it by a factor of 10, and you will find yourself waking up in 2010 with a splitting headache and your shop treading water, and a big swelling knob on your head. Look down, and you’ll see a nice hand-turned club made of Vermont Hard-Sap Maple. and who’s to blame? YOU are, for sucking on their teat, and being too lazy to build the other brands in your store. For some it’s too late, for others, there is still time. but you MUST remember -they are NOT going to change. what you’ve seen is what you’ll get - in abundance. YOU must change, and get smart, and start planning NOW, before that teat becomes a dick.
July 11th, 2008 at 11:37 pm
wow dude, did you really mean everything you just said? cuz that’s really heavy, and if it’s true, like, whoooa! ya know?
July 28th, 2008 at 2:05 pm
?????????????????????????? Really. You might want to double fact check that one before posting to the world and looking like an uneducated DA.
September 5th, 2008 at 10:31 am
I hope this article and post stays up for a long time. I intend on using it as a teaching tool in class. Anyone know if there is a way to print out the article and all posts simultaneously?
September 27th, 2008 at 6:59 am
I have e few questions I really need to ask you,if you wouldent mind emailing me. roxy_girl319@yahoo.com
October 23rd, 2008 at 7:04 pm
roxy rady, what can it be?
November 5th, 2008 at 9:58 am
I don’t get whats with all the people saying that Burton is down withe gray area marketing. Why would they want to sell a board at an auction or ebay value when they can squash that and have customers come into a flagship store and buy it at retail or have a authorized dealer see crazy demand in their shops and buy up huge orders. Anyone who says have the burton boards on ebay are being sold by burton are just ignorant…Also, guy who said he tried to start a program for inner city youth to go snowboarding and burton wouldn’t sponsor you, NO SHIT!, they already have a program like that called chill. Next you’ll be asking them to sponsor your board manufacturing factory you were thinking about starting to ‘give back’ to riders.
November 5th, 2008 at 10:13 am
well I’m not sure anyone says burton is selling on ebay. They are turning the other way and allowing it though. Its about volume and total sales. Its one way to get growth. If they are serious about grey market and ebay then lets see it. Shut down 720 sports or 1 of the other big ebayers. It will never happen so don’t be ignorant
November 5th, 2008 at 10:40 am
To be honest I don’t know where a place like 720 sports gets it’s product but if they buy it out from burton dealer X that isn’t helping Burton’s growth. They would much rather see burton dealer X get stuck with overstock in their store and have 720 buy directly from them as well, getting 2 sales which is currently only 1.
November 5th, 2008 at 7:58 pm
720 is buying direct for sure, and it is helping burtons growth just like snowandskatesupply, and the great white and all those other ebay guys that sell mad amount of burton on ebay. I would not be surprised if one of them actually works for burton
December 26th, 2008 at 1:09 pm
to all of you in the industry - its time to get rid of these parasites!
please add here the names of persons, companies, reps, retailers that you know are in the business of global snowboard grey marketing ? lets take them down! They affect us all.
Here is a company that has brought grey products to our market for years.
RESHSET TRADING LTD. The persons name is EZRA REGEV.
It is an Isreelis company ? it turned out that most of the countries like Isreel are only a cover for gray activity.
Please add more names?.
November 23rd, 2009 at 4:21 pm
Ever heard of the Burton Chill Program? Why would they sponsor your efforts when they've been running the same program for the last 10 years?