Increasing Income from Martial Arts
Basic Merchandizing Rules
By Paul Reavlin
Often when I discuss merchandising with school owners they mention to me that they need help at a very basic level. In other articles, I will cover how to start a pro shop from scratch.
In the meantime, I have listed below some of the "Basic Rules for Successful Merchandising". These rules can be followed no matter what the size of your merchandising operation.
There are of course many other things you can implement, but here are some basics you can use to start with:
1) You must set goals. It is easy to set out down the merchandising trail without setting any goals. However, you must set some sort of goal to determine your merchandising plan. A common goal is to sell $20 worth of merchandise per student per month. A more aggressive goal is to sell $40 worth of merchandise per student per month. Once you have set this goal, you can determine how you want to reach it.
For example, you may decide that you may be able to reach your $20/head goal by selling additional colors of T-shirts rather than just the one style of shirt you currently offer. Or you may decide that you are going to reach your goal by selling more sparring gear, and thus offering a discount on headgear for every customer that purchases a pair of punches or kicks.
Many of you will have students that pay for class, but never show up. Do not include these students when setting your goals. It will be more realistic to do goal setting based on how many people walk in your door to train on a monthly basis.
2) Don't provide what you can be selling. I can't tell you how many times I have been to gyms where there are jump ropes hanging on the wall. Most gym owners tell me they provide them to their members as a part of good customer service.
However, whenever I ask the gym owner if they have to replace the jump ropes because of theft, the answer is ALWAYS yes. When a student puts YOUR jump rope in THEIR gym bag they don't feel like they are stealing it because...
a) They only want to use the jump rope when taking your class and
b) They are just trying to ensure that the jump rope that they like to use in your class is always available to them when they take that class.
The truth is that the student stole the jump rope, and you don't have the rope when you actually need them in different classes. Therefore you should be selling or making it compulsory for the students to buy items that the students can easily fit into their gym bags. Some examples of this type of item include jump ropes, focus targets, and resistance bands.
3) Always give out gift certificates. If you think that you are sacrificing margin as a result of giving out gift certificates, you should re-think this. A gift certificate is an "invitation" to spend money in your pro shop and therefore, you should give out gift certificates out very liberally in your gym. The denomination of the gift certificates should be small: $5 or $10. A good amount is one that does not cut into your margin substantially but is an incentive for the student to come see what is in the shop.
Further, when the student presents the gift certificate, the sales person should be trained to "up sell" or recommend a complimentary product. Good times to give out gift certificates are birthdays, belt tests, and holidays.
4) Always create a sense of urgency. If students think that they can just "pick up and buy the product any time" than they won't have any incentive to buy it now. You want them to buy it now AND buy something else next month. Make sure the students know that if they don't buy the product now, they might not be able to get it later.
This concept works better for seasonal items like shorts and tank tops and isn't as important for items that you will know will ALWAYS be available like cups or headgear. This concept also works well with monthly specials.
Remember that when you make the decision to start merchandising it is important to FOCUS. It is crucial that you set goals and stick to those goals by applying the rules I have listed here.
Paul Reavlin is the president of Revgear.com in Burbank, California. Revgear.com supplies martial arts equipment and products to over 3,000 schools across the U.S. Paul is a CPA and has a black belt in Krav Maga. He can be contacted with questions or comments at email@example.com or 800-767-8288.
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