If you’re reading this right now, you’re probably wanting a few (or 10) tips on how to improve your fitness retail space. We’ll get to that, I promise.
But first let’s go over what retail should & should not mean for your fitness business.
In our opinion, your retail space is an add-on. It should never be your primary concern or revenue focus. I always remind clients, when you’re thinking about retail, it should amount to about 5% of your effort for the overall business. The primary revenue generator (and your primary focus) should always be memberships and recurring revenues.
That’s not to say retail can’t be an important add-on revenue to your gym or fitness studio. On average, it can add another $1,000 to $10,000 to your monthly income. But it should never be the be-all and end-all focus for your company.
So, if you barely have enough square footage for your fitness equipment – nix the retail. If you find it’s taking time away from growing your memberships or interfering a positive experience for your members – pause the retail.
That being said, if you can offer retail products without detriment to your fitness business, there are a few things you can do to enhance your margins & profit.
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Here are our ten odd tips to get you started:
- Sell Branded Gear Make gear (t-shirts, hoodies, protein shakers, etc.) with your logo & name on it, and sell it at little to no profit. Yes, we said little to no profit – what a first tip! However, it’s a great marketing exercise. Members love wearing apparel from a gym they love, and it’s a really great way to spread your studio concept throughout the community. Let your members be a walking billboard for you! Branded gear is a great way for members to become enthusiastic about your business and spread that enthusiasm to others.
- Keep Inventory Fresh Keeping inventory fresh plays a very big part in having a successful retail strategy. If you have old or stagnant items on the shelves, your customers are going to know that they are old and stagnant. It’s important to shift slow-selling inventory out and continuously bring fresh items in. Not doing so is a quick way to make your retail floor the dead space in your gym – and not many owners can afford for that to happen.
- Have a Discount Rack We recommend having a discount shelf or a discount rack where you can reduce slow-moving items down to cost to get them off the shelves. Discounting items isn’t a terrible thing. In a retail space, merchandise pricing is typically double the cost meaning, if it costs $50 for you, you’re going to sell it for $100. So, if an item fails to sell for whatever reason such as awkward pattern or strange size, mark the price down and move it to the sale rack to make room for more profitable retail items.
- Buy the Right Retail To sell the right retail, you have to buy the right retail. For that reason, we recommend paying attention to what members are wearing. If you observe a trend in leggings & high socks, for example, these might be good items to stock in your retail space. Likewise, if you find your members usually dress more conservatively – crop tops may not be the way to go. Pay attention to what your members like and try to stock similarly styled items.
- Stock What Members Can’t Find Locally As a fitness business, you should have access to many vendors and retailers. This puts you in a unique position to bring in products, patterns & items that your customers can’t easily access for themselves. Is there a new trendy label that is only available online? Try reaching out to that vendor and set yourself as the exclusive reseller in your area. This can go a long way in impressing existing members & even attracting new ones.
- Build Relationships With Vendors Building relationships with your vendors is a great way to improve the margins on your retail items. Once you’ve established a personal relationship with your vendors, it will become much easier to ask for things such as special pricing or free shipping on your orders. 1%, 2%, or even 3% off of a product order can make the difference between being successful, and having retail that doesn’t make all that much profit.
- Offer Special Discounts Everybody loves special discounts… except maybe the accountant. Special discounts for retail items are a great perk to offer your employees and existing monthly members. They can even be used as a differentiating factor to draw prospective members or one-off visitors in. When used sparingly, exclusive discounts are a great way to say ‘thank you’ to your recurring membership base for their loyalty and continuing support of your business.
- Don’t Offer Special Discounts However, don’t over-offer special discounts. This is where many fitness businesses go wrong. Once we start offering discounts to everyone, we fall under the trap of moving more and more volume while having less and less profit. In fact, this happened recently. We currently work with a fitness business that doubled their retail revenue within the last year. They are now selling $50,000 of retail instead of $25,000. Unfortunately, their profit margin is exactly the same as it was before. When we dug into the problem, we found they were discounting retail items for so many individuals that even though they were selling more products, they weren’t increasing their bottom line profit. This is why we recommend using special discounts in limited circumstances only.
- Limit Your Employee Discount When it comes to employee discounts, a small but limited discount is appropriate. We do not recommend selling retail to employees at cost. It takes your studio time and effort – and a solid vendor relationship – to bring those products in. Factor these intangible expenses in, and leave the majority of your retail items for full paying customers. You can show your employee appreciation in many other ways.
- Partner Up With Someone With Retail Experience Last but not least, we recommend partnering with someone who has prior retail experience to help manage this side of the business. This could be someone that already works in your studio, fellow teachers or members, or people from the outside community, but find someone willing and able to manage the retail process for your business. This will free up your time to focus efforts on growing the most important part of your business – your recurring membership base.
We hope you enjoyed our 10 tips for increasing the success of your fitness retail space. If you enjoyed this article, you might want to check out a similar article on finding the perfect space for your business.
If you’d like for someone to point you in the right direction regarding the retail side of your fitness business, you can always get in touch with us here.
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