Aqua Quip adds products/services to help in downturn/offseason
Photography by James Kullmann
When we featured Seattle-based Aqua Quip as a Retail Star in 2009, the company had just opened two new locations. The timing was tenuous, to say the least.
To keep its nine locations and 65 employees working, the company got creative during the downturn, finding excess cash where it could and adding product categories to generate new revenue.
That sounds like a lot of hot tub companies in those days. But what makes Aqua Quip stand apart is it went all in. Not everything it tried worked, but much of what it did to stay afloat has become an integral part of its business.
“When we add all those [new] segments of our business up that amounts to over 20 percent of our volume today,” says Brian Quint, president and CEO at Aqua Quip.
Aqua Quip added hearth and fireplace products and services, BBQs and services, electrical contracting and expanded its swim spa business. Most of these products and services are counter-seasonal to hot tubs.
“As all of us in the industry understand, we became so attached to seasonality and we really had to find a leveling,” says John Antilla, vice president and general manager at Aqua Quip. “We began to take control of the downside/offseason of our business and making it less forceful than we’ve had to deal with in the past.”
Quint says that now, instead of looking at those months as the “offseason,” they just view it as an “other” season.
Since Seattle is one of the tech capitols of the United States — second only to Silicon Valley — and home to Amazon’s headquarters, Quint says it looks for products and services that not only were counter-seasonal to hot tubs but also weren’t vulnerable to online shoppers — like electrical contracting.
“The beauty of electrical contracting is we have more control over when the hot tub is delivered,” Quint says. “We are able to maintain the quality with the customer, rather than the customer having to find their own electrician or refer an electrician to them. It becomes more turn-key. It also increased the average transaction size.”
Electrical is not a simple business. It requires licensing, education and permits unlike anything you see in the hot tub or swimming pool industries. To get up to speed quickly, Aqua Quip acquired an existing electrical business.
“Our full intention was to take care of our own customers and try to take them out of the general contracting mode,” Antilla says. “And deliver not only better customer service, but also a revenue opportunity.”
And it’s worked. Currently it doesn’t have the capacity on the electrical side to keep up with its own customers and installations. Now if it goes to service or install a hot tub and the electrical connections aren’t up to code, it can potentially fix the problem instead of telling the customer to go somewhere else or wait longer to get their new spa.
Like a lot of trades, it can be hard to find new electricians to hire, so Aqua Quip is working to train employees from within, potentially providing a lifelong career track.
Many hot tub retailers carry, or have tried to carry, grills. It makes sense: While the market penetration of hot tubs is relatively low, 75 percent of U.S. adults own a grill, according to the Hearth, Patio & Barbecue Association. But the grill margins are lower than a hot tub, and it takes different expertise.
“Instead of just looking at the [grill] brand we really focused on learning the different forms of fuel,” Antilla says. “We pride ourselves on our presentation versus a Lowes or a Home Depot. We’ll take you through what you like to eat, what you cook the most, how often do you entertain and then take you through the grill lineup to see which one matches. In that grill category, it’s not unusual for a lot of our customers to take two.”
Aqua Quip carries a grill line in all four fuel-categories — gas, infrared gas, charcoal and pellet. “Then the ultimate customer has a gas grill, a Big Green Egg and a pellet smoker,” Quint says. “And that’s not uncommon. It’s a way to make the grill category really a big category unto its own.”
Antilla adds that it takes passion among the staff to make grills profitable. Aqua Quip has spent time teaching employees not only about the products, but also about cooking techniques that help them connect with customers. The stores will usually grill on the weekends for employees and customers, and occasionally there are location versus location cook-offs.
One tip the company has learned selling grills: Have backup stock at your store. “The customer isn’t going to wait to get it,” Quint says. “It’s an immediate sale.” Having a model in-stock and ready to take home right away also helps avoid having to find the time and space to assemble the grill for customers. “[Assembly] is disruptive,” Quint says. “We’re trying to streamline the process and we have learned that if you have unassembled boxed units in the back room ready to go the customer will opt for speed and deal with assembly themselves.”
The beauty of some of the product categories the company has added is that it provided unintended service opportunities. “In reality, a fireplace insert has the same components as a gas pool heater,” Quint says. In the winter they busy their service department with installing, troubleshooting and cleaning fireplaces. “So we’ve taken all the seasonality out of our service business.” People can have them come out and “refresh” an old grill, cleaning and polishing it to look like new.
“These are all things you would be able to learn about on the internet, but you’re not going to be able to shop, necessarily, and have it delivered to your doorstep on the internet,” Quint says.
In this time period, Aqua Quip has also moved several locations, closed one and remodeled a few.
“The thing we know for sure is that 10 years from now we’re going to be doing something very different in addition to what we’re doing today,” Quint says. “You’ve got to be willing to think creatively, take some chances. Not all of them are going to be home runs, but in 10 years when we have this conversation again, we’re going to be looking at our business and we’re going to say, ‘There’s 20 to 25 percent of what we’re doing now that 10 years ago wasn’t even on our radar.’ ”
Owners: Brian Quint, Kathleen and Erik Carlson
Locations: Nine in the Seattle metro