On The Edge

Surfboard Overload

By Peter Pan

          There is an interesting story coming out in the January issue of one of the major surfing publications, concerning probably the most successful surfboard manufacturer in the world.  The company boasts that it produced over 100,000 surfboards in 2007, which makes it the largest surfboard producer in the world.  They produce probably the most complete line of wave riding vehicles ever assembled, including soft boards, epoxy, and fiberglass models in every conceivable size and shape.  They are proud of the fact that they have made the margin level high, so that all their dealers can make a decent profit on board sales.

          This story is just a small part of a serious problem that is rapidly developing in the surfing world.  That is the over production of mass produced surfboards that are flooding retail outlets world wide.  It all began with American manufacturers seeking cheap labor in Southeast Asia, for production of surfboards. 

          One big company after another has either hired or built factories in these foreign countries, and assembled workers that will do the labor intensive job of manufacturing quality surfboards for very low wages.  Often times, environmental issues are not considered, since there is little or no regulation of health standards in these third world countries.

          To make matters worse, the larger surf shop retailers have joined in the game, bypassing the U.S. based manufacturer and having their own low priced surfboard brands made in these overseas facilities.  Southern California has suddenly been upstaged as the surfboard manufacturing center of the world, by Vietnam, China, and Thailand.

          The problem with this picture is easy to see.  If you now walk into many surf shop retail operations, you will see gluttony of new fiberglass surfboards stacked up on the floor, sagging off the racks, or piled up in the back room in unopened boxes.  The reason for this is that in order to get the lowest price from the overseas surfboard manufacturers, shops must buy entire containers of surfboards.  Depending on the size of the boards, this could mean up to 300 surfboards per container.

          In order to get deep dish discounts from the big distributors, retailers must accept larger quantities of surfboards than they can handle.  Once they get the discounted boards, and cannot move them, they will even call rival surf shop owners to take them off their hands, in order to pay the note that is coming due.  Just recently, one big manufacturer was dumping off high quality fiberglass surfboards that wholesaled for over $300.00, for a mere $100.00 to East Coast dealers.

          This same scenario took place with both the body board and snow board industry, which effectively hurt retailers and the sport, permanently.  In the late 70’s and 80’s, snow boarding became huge, fueled by small surf shop and snow board shop sales, and a small but strong manufacturing segment that produced quality and innovative equipment. 

          Some of the bigger snow board producers outsourced to Asia and over produced.  For two straight seasons, poor snow conditions both here and abroad left hundreds of thousands of unsold snowboards and accessories sitting on retailer’s shelves.  All of these products ended up in discount stores such as Job Lot and Building #19, all across the country.  The core of the market, the beginners, scrambled to buy the cheap stuff, and left the small shops with unsold inventory.  When they could not afford to reorder from the big manufacturers the following season, the big discount sporting goods chains got the orders.  Consequently, many of the original snow board retailers went out of business.

          To a lesser degree, the same story occurred with the body board industry.  Production went to Asia and prices dropped so low, that every discount store in the country began to carry body boards.  There was no reason to shop at the surf shop, when you could buy the same board for less at Benny’s or Job Lot.  All the body boarding magazines and specialty shops went out of business years ago.

          While this mass production was attempted with the skateboard market, it did not succeed.  Manufacturers that tried to over produce equipment and accessories have failed repeatedly over the years.  The skaters who buy the products, beginner or otherwise, are subject to sudden trends that change by the week.  This makes it almost impossible to guess a trend and mass produce in anticipation.

          The problem with current surfing market is similar to the Wal Mart takeovers that drive local mom and pop retailers out of town. While a few big discount surfboard manufacturers reap the profits made from production in third world countries, the smaller, grass roots surfboard factories in the U.S. lose more of the market share.  Since there is no room on the racks for the custom made product, already over stocked with the China brands, the U.S. surfboard industry suffers.  Surf shop owners back off even more, to stock up on other U.S. made surf related accessories, because they owe so much for the foreign inventories.         

          That is really great that a manufacturer pumped out 100,000 surfboards this past year.  But what about for the rest of us in the surfing world?