#011: How to Increase Retail Sales at Your Gym w/ Jason Rule
This week on Gymwright LIVE, we interview Jason Rule of Driven Nutrition to talk about what he knows best – gym retail sales.
Jason’s specialization at Driven Nutrition is nutrition supplements, but rest assured that his advice applies across the fitness retail spectrum.
Many gym owners underestimate how important retail sales is. We often hear a variation of, “I don’t want to just hawk a bunch of products to my members. That’s not what we’re here for.” But more often than not, your members want to buy what you’d suggest and would be more than happy to support your gym with the purchase. Within their first 45 days of membership, new members reliably approach gym owners to ask what supplements they should buy. In the event that they don’t approach someone on staff about supplements, they go to GNC and proudly come back to show off the $200 box of garbage they just got sold.
If you can procure the good version of the supplements and swag that they’re going to go out and buy anyway, it not only benefits you as a business owner, but it helps the client see better results. Everyone is happier when you take retail seriously and handle it wisely.
TABLE OF CONTENTS
Use the links below to skip to the info you want to know:
- 2:50 “I’ve Tried Retail and It Didn’t Work”
- 6:01 How to Get Started In Retail: A step-by-step guide.
- 14:00 Once You’ve Placed the Order
- 22:00 Ordering to Stock the Right Amount of Product
- 29:30 If You’re Already Selling
- 33:15 Q&A
Retail is a game changer. It just comes down to intentionally focusing on it and making it part of your process. When we hear someone say, “I’ve tried retail and it didn’t work,” it sounds the same as if they’ve said, “I’ve tried nutrition and it didn’t work.”
One of the first things Markus observes when gym owners blow it is that they don’t pay attention to inventory management and shrinkage when giving free bags of the new gear away to staff on the first order. Not that you absolutely shouldn’t do that, but be aware that it will eat up your margin on the first small order. If free gear for staff is important to you, make sure you budget accordingly.
6:01 How to Get Started In Retail: A step-by-step guide.
Buy a few products and test your market. Don’t ask people what they think they want ahead of time. Put a little skin in the game right from the start. You can try these steps:
- Don’t go with big sales and samples to stock your store, because then you’re invested in that wholesaler’s marketing plan rather than in your own.
- Invite everyone in the gym to try it out at once. “Stop by next Wednesday at 1. We’ll give out free samples and all try it together.” Make it a genuine community experience, and you’ll know if it’s a product worth keeping. The process is transparent, and there’s no need to hype the product. Your members already trust your taste and the recommendation implicit in you bringing the product in.
- Make the rest of the day about buying that product in the retail store.
- Spread the word on social media that everyone tried the product and liked it, and that you’re going to place the big first order tomorrow at, say, 1pm. This gives one last urgent push for people to place their orders. By doing this, you’re treating the new product as a proper launch.
By onboarding the clients from the start:
- You’ve saved a tremendous amount of time. If you and your coaches order, test, and report back on new products and supplements before you take them to your membership, you’ll lose at least a week of sales.
- You’re not married to the product by the time it reaches your members. If it turns out everyone tastes it and hates it, great! You don’t order any more of it and move onto trying something else.
14:00 Once You’ve Placed the Order
Use the profit to order more product. It’s important for you as the gym owner not to put the profit right in your pocket. Keep it in the retail line, so that you always have more money to put back into retail. If you’ve got a good enough profit (50% or so), double up the order every time, so you’re not ever starting your retail budget over from zero. You have to start doing this early.
Post it on your social site, and tag everyone who ordered to let them know and to thank them for their support. When Jason makes these announcements, he’ll post it with a picture or screenshot of the order notice.
Once the product lands, take one more picture of it in the gym and send out one more post, tagging everyone who ordered. “It’s here. Come and get it. We’ll have it ready for you at the front desk.”
This is where you get an opportunity to sell again: “We do have a few more products available, so stop by the front desk if you didn’t get a chance to order.” It encourages people to come and talk to you about it.
How much should you buy, above and beyond customer orders? You’ll want to stock your retail space with the product, but what’s a good amount to have on hand? The answer depends on the size of your gym and what you can afford to invest. But the short answer is: Buy as many units as you can sell.
Under-order a little bit to create the mindset of scarcity. Reorder as soon as you run out, and make that part of your communication online: “Crew, I can’t believe how much of this we’ve gone through in two days. I have to place another order; who needs some product? Here’s a link to the website.”
Poor product choice is the biggest error Jason sees with new retailers. Make sure you’ve got a high enough profit margin. If there’s a product you believe in that you can’t get a good enough bulk rate on to make it worth your while, you may do better to just suggest to your members that they buy it themselves. It’s important to sell and endorse products you believe in, but make sure it’s worth your time and money.
Charging Staff for Product
Even as the owner of his gym, Markus paid cost plus $1 when he wanted to try something out personally. His team did the same, because it would otherwise have taken away the opportunity to invest in more product. Beyond that, you and your coaches need to put your money where your mouth is. If you’re not willing to pay for it, then it’s not a marketable enough product to put on sale to your members.
If you’re going to sample it out, great; just do it in person, together. For Markus, this method increased the average client value by about $20 per month when he incorporated it with his nutrition onboarding training.
29:30 If You’re Already Selling
Even if you’ve been in the retail game for years, you should still intentionally do a pre-sale. You can do this with a product that’s already been in your system for a while. Drive up pre-sale with an incentive, like a free shirt. That way, you get rid of some old inventory and get out some marketing for the box. “Drive hard with the first seven days of the month, have every coach talk about it before every session, post every day on social,” says Jason. It’s a shot in the arm for boxes whose retail is getting stagnant.
Question: I want to order some t-shirts and hoodies for members to purchase, but sizing is unknown. How do I go about placing that first order?\
Answer: Reach out to the company you’re going to order with and order some sizes of the style of shirt you want. There shouldn’t be too many variations. Too many variations will make people delay their decision.
You may be able to get a 2-for-1 deal or something like it if you talk to the apparel company; they tend to be good about that sort of thing. Our guy Fabricio at Forever Fierce sends out samples of products he tries. Don’t keep it a secret that you’re trying out samples — people will be excited.
Any good apparel wholesaler or retailer will be able to give you a good average and recommended size run, letting you know exactly how many of which sizes to order. Treat it just like a pre-sale.
You can create a little bit of scarcity by making one shirt design and doing a seasonal run. Markus used to order enough of a seasonal apparel item for himself and staff members to wear in the gym. It created buzz in advance of the pre-order, so people were excited to get in on the new seasonal hoodie. Plus, if you do a run seasonally, you don’t have to guess at how much product to buy. You’ve been there before.
When Jason runs apparel sales, he creates a Google form with all their products to make it easier to pre-order. That way, people don’t have to stop by the gym just to order.
Question: What would you recommend for somebody that doesn’t have very much capital who wants to get started selling basics?
Answer: Take whatever amount you’re willing to invest (Jason recommends $125), wave good-bye to it as a source of liquid cash, and order some supplements. You’ll triple your money pretty quickly. But remember, it’s not spending money. It stays in the retail line.
Question: Any ideas on how to offload items that didn’t sell?
Answer: Jason’s company has mapped pricing for supplements. They sell on their own site and on their Amazon at “manufacturer-adjusted pricing.” A lot of their affiliates will sell it below that price as an incentive. Being able to sell below MSRP is a good thing, because, if you advertise it as such, it’s a benefit to your members.
However, if you really want to just get rid of them, sell them on Ebay for $0.60 on the dollar. Don’t keep it in your own product offerings if it’s a sub-par product that you’re trying to get away from, otherwise you’re peeing in your own pool. Get rid of it and move on.
Markus likes the idea of giving away the unsellable products as freebies to new members — they’ll like it, because it’s free and it’s branded. But when it comes time to spend their own money, they’ll spend it on something in your shop that they like better. Whatever it takes to get rid of the product as quickly as possible — friends and family week, new signups, community day, or whatever. Don’t sell it; just eat the cost.
“Well,” you may say, “I need to get rid of these shirts before I get something else.”
Just hit reset right away, so that you can start moving inventory and making profit. These things happen in business. It’s okay. It’s part of working towards success. Just learn from it and make a better buy next time. A bad idea that’s been expensive gets more expensive the longer you wait to do something about it.
Question: “Thoughts on hosting educational seminars around supplement products?”
Answer: Jason says that they’re great, but hard to implement over time. The excitement wanes, so do it shortly after your sampling day, while there’s still enthusiasm. Each coach can do a seminar on something they’re excited about, and it can stretch over a period of time in order to keep the education piece both fresh and consistent. Seminars help, and they’re great with physical product, like a jump rope or a wrist wrap.
Question: What analytics do you use to track monthly and quarterly revenue, and how do you structure your retail budgets outside of pre-order format?
Just create a spreadsheet. How much product did you buy, how much cost went towards the sampling vs. what you got in orders, etc. Break it out monthly and quarterly. There’s no magic formula, beyond to make sure that you track it. A Google spreadsheet will do just fine. (You may have a billing system with a decent reporting feature, but most don’t.)
Question: What companies do you recommend for supplements and T-shirts at wholesale cost?
If you find something dirt cheap, just let your clients buy directly from them. Focus on something known in the Functional Fitness market. Jason likes NDI Apparel and Forever Fierce, and he knows of many gyms who print their gear locally. Markus likes Tagged Swag, which is run by an affiliate owner. Whoever you go with needs to understand your business. Get together with someone who wants to help you win, because if you win, they win.
Markus says to start with “what would I want to wear,” and then go to “does the math work?” You don’t want to end up with a shit shirt. If it were a shirt just for you, you’d pay a little extra for something high-quality. Don’t automatically think in terms of “who’s got the best prices?” It’s a red flag if the wholesaler seems like they’re just trying to sell you as high a quantity as possible, rather than matching you with great apparel for your members.
Jason wrote up his 7 Steps to Retail, so that you can have it all in one place. Enjoy!
Want more Jason Rule & Driven Nutrition?
- Instagram: @drivennutrition