Why would you want to get into the retailing business? One reason would be to take some of the heat off of the membership department in driving revenues for the club. Also, adding convenience shopping helps you build stronger relationships with members while adding extra net profit on your monthly bottom line.
Most clubs today are still relying too heavily on new membership sales as their key source of revenue. Why not offer convenient items and items specific to sports your club offers? If you don't, your customers will spend that retail money elsewhere. You can provide your members with everything they need to get into shape, stay in shape, and stay motivated, and offer it to them in a convenient setting.
Let's take a “virtual tour” of a club and see where extra profit is waiting to be discovered.
Look closely at each department of the club and scope out all types of items that could retail for that particular area. Members rely on fitness clubs and their staff to know what equipment to purchase, so why not make money from that knowledge? Court sports offer the opportunity to sell high-ticket items such as racquets and shoes, which can easily make $30 to $50 per sale. A club can offer a variety of balls, gloves and eyewear too. In the fitness areas, it can consider selling heart rate monitors to all those cardio users; a heart rate monitor is another potentially high-ticket item ranging from $59 to $299. Weight-lifting gloves, belts and straps, and cycle seats are easy money-makers your members need. A look at the Pilates and yoga studios shows an opportunity to sell members yoga mats, blocks, and straps to carry their mats to and from class. Pilates and yoga students are primarily women so you can potentially sell a lot of apparel. If the club allows children, its got another huge market. This all works if you price your merchandise fairly and sell good quality.
What if that club had a small juice bar behind the front desk and sold smoothies to just 10 percent of the club's members? Smoothies are about $5 each, so 200 members at $5 each month (and that is just one smoothie a month!) brings another $12,000 annually, or $1,000 per month. And members usually will buy more than one smoothie a year.
Pro shops can be a convenient and practical investment if you consider that the overhead is low because the space does not require extra rent, payroll is running through the service desk, and commissions paid are factored into the costs.
How much can a club like this expect to net? If the management keeps a close eye on the inventory, makes smart purchases and turns the inventory continually, the club will likely keep 40 percent of the revenues as profit.
Pro Shops don't have to be big to be successful; they just need to offer the right mix of merchandise and price points, and someone to look after them.
Janis Royston-Brown has helped boost the Merritt Clubs' bottom lines through successful retail strategies. She can be reached at: jroystonbrown@merrittclubs.com