To generate additional revenue, many spa dealers have transitioned to selling outdoor living items alongside hot tubs. It goes beyond bringing in a handful of generic patio furniture pieces; carrying something different than what can be found in big-box stores is an important distinction. It takes research and planning to find quality products.
Expanding the Product Line
Billy Branch, vice president of Hollywood Pool & Spa in Vestavia Hills, Alabama, used a fresh start at a new location to transition to selling backyard pieces. He added outdoor living products to boost traffic outside the busy pool season.
For Tom Gervais, president of Caldera Spas, Billiards & Stoves in Albuquerque, New Mexico, a new location spurred product diversification. Gervais started selling above-ground pools and swing sets in 2018 because the company opened a store near a freeway. “The visibility,” he says, “spurred the expansion into these products. People see the outdoor display and come to look at them.”
Complementary Quality
Regardless of the reason for taking the plunge, quality and uniqueness are key factors in creating a successful combined hot tub and outdoor living showroom. Outdoor living products should meet the same high-quality standards as the hot tubs you’re already selling.
Jim Ornce, sales and training manager of Pettis Pools & Patio in Rochester, New York, says he believes standing behind your products should be foremost in a dealer’s mind. Pettis Pools handles all warranty issues and either services all of its products or sends customers to trusted contractor partners. This makes choosing high-quality products important from the start. For this reason, Ornce says the best option for Pettis Pools is choosing manufacturers who offer replacement parts.
Over the years, Ornce has developed a few other tricks for selecting showroom worthy outdoor living pieces. “We have buyers for each major product line who are charged with becoming experts in the product category,” Ornce says. “We have them travel to all the industry shows and conventions. We want them to be able to see, feel and touch the products. We want them to build relationships with their vendors. We look for unique products as well as products the big-box stores don’t carry. We also reach out to other retailers who have experience with the brand.”
For years, East Coast Leisure in Virginia Beach has been purchasing through industry buying groups. “This allows us to share containers so that we can limit the risk of being overstocked on an item that might end up being a dud, while still allowing us to buy at a lower price,” says owner Todd Glaser. “We have also learned what sells in our coastal mid-Atlantic market versus the Midwest or Northeast. We often target rental homes along the coast that prefer synthetic wood products, for instance. We also cater to the in-ground pool customer with higher quality chaise loungers, fire pits, outdoor kitchens, large umbrellas, etc.”
Try Before You Buy
Gervais is happy to use a “try and see” approach for adding outdoor living products. He often pulls product inspiration from trade shows, the internet, recommendations from other dealers and customer suggestions. “We are always looking for new products to sell,” Gervais says. “We find it interesting to learn about new products, and sometimes it increases our customer base and profits.”
For other dealers, the development of their outdoor living lineup is a selective process. Branch adds outdoor products only if he feels his store can be the best in their market at selling them. The vetting process, he says, involves looking to its current offerings and gauging how well the new possibilities fit in.
“There have been many product lines, such as coolers and saunas, that we have declined to offer on that basis,” Branch says. “We have decided not to be all things to everyone; we try to stick with the things we can do best.”
Everything in Its Place
Just because an outdoor product seems like a good fit for a store’s offerings doesn’t mean it will literally fit in the space. Showroom floor space is precious, and having the spas properly displayed is a must, so finding the ideal spots to add extras takes careful planning.
For Ornce, mapping out the showroom floor space is not only a necessary step, but also an opportunity to give students real-world business experience. “We have a scholarship program with a local university and work with various classes within the business department on projects like determining how much square footage to allot for each product line,” Ornce says of this time-saving strategy. “The amount of space given to a product line may change seasonally. Patio furniture space is expanded in the spring and summer, whereas the hot tub allotment is reduced. Then come fall, hot tubs take back space from the patio furniture.”
Glaser has a somewhat less technical approach. “With limited room, you always have to be creative,” he says. “We are fortunate to have a large warehouse so we can stock a product in multiple styles and just display one option with a POP stand showing other options.” Backyard products are regularly on the move, he says: The bestsellers are kept on the showroom floor, and slower-moving items are shuffled out to the lot, then heavily discounted.
Gervais keeps all of his backyard products on display outdoors, which helps conserve showroom space. “We display the swing sets, swim spas and above-ground pools outside because we are located on the freeway,” Gervais says. “We are trying to take advantage of the many cars driving by our business. We also do not have the room in the showroom to display them. Our entire half-acre lot is fenced, so we leave everything out at night.”
Bringing the customers’ outdoor aspirations to life (and generating additional revenue) appears to be a key motivator for spa dealers to offer outdoor living products. “We’ve never believed in one size fits all,” Ornce says. “A person’s home is a reflection of their personality, and we want to help them express themselves and love their home.”
Is that product worth it?
To make sure the new product you’re considering is worth bringing onto the showroom floor, take the total square feet you rent or own and divide that by your revenue. This gives you the revenue per square foot that you generate annually. Ideally, avoid bringing on products that reduce your revenue per square foot.
Gross revenue / square foot of selling space = revenue per square feet
Let’s say your store is 10,000 square feet and your total net sales are $8 million. Your revenue per square foot would be $800.
You want to bring on BBQs and devote 500 square feet to them. You are utilizing your space better and not taking away any other inventory. If you sell all of the BBQs, your total net sales will increase to $8.5 million, making your revenue per square foot $850.
But let’s say that to make room for your BBQs you had to reduce the number of hot tubs on your floor. Now you’ve lost some hot tub revenue to add the $500,000 worth of BBQs. Your net sales decrease to $7.9 million, making your revenue per square foot to $790.