Blaine Budke uses bartering, car sales experience to succeed as a spa retailer
Photography by Iris Photography
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Blaine Budke decided to give hot tub retail another try when he opened Hot Tub Brokers.
He first entered the industry in 1999 as Tri-State Spas, which grew to four locations. From 2014 to 2015, he closed two stores and sold two, becoming a sales rep for spa dealers at state fairs and expos. He travelled all over the country and called himself The Hot Tub Broker.
In July 2017, Budke reclaimed ownership of one of his former retail locations in McCook, Nebraska. Because the previous owner was in financial trouble, Budke had to remove any association with the Tri-State Spas name. Hot Tub Brokers seemed a natural fit, he says.
In May 2019, Budke opened a second Hot Tub Brokers location in Grand Island, Nebraska — 150 miles away. Budke would travel that far for a hot tub install anyway, so he says it made sense to add the Grand Island location.
Budke has seven employees between the two stores and travels between the two about every 10 days. Budke says his bartering skills and experience as a car salesman make this second run at the industry successful, helping him meet his goal of 15 hot tub sales a month.
Bartering for Airwaves
At a recent home show, one of Budke’s competitors mentioned how often he heard about Hot Tub Brokers on the radio. The competitor was curious how Budke managed to afford so much radio advertising.
Budke’s trick is bartering. He’ll give the station a hot tub that he purchased from the manufacturer for about $4,000, and the station will use it in a giveaway in exchange for a $10,000 advertising credit. Budke will then pay an additional $500 to $900 a month to gain approximately $20,000 in radio advertising. With just one station group, Budke’s ads play on five radio stations, five times a day, for an entire year. Sometimes he’ll give away up to four hot tubs in a year to keep his radio ads going in several markets.
Since each radio station reaches a different demographic, Budke says it’s effective at getting his business name out there. “And when I run a promotion, I run 10 spots a day for about five days, and then I have that promotion [in the store] over the weekend,” he says. “The urgency of ‘Hey, come in now, we’ve got a great deal’ really works.”
He’ll even call the manufactures and ask them to challenge him to sell 50 hot tubs in a month. When they do, he makes certain to put that in his radio ads. “[We’ll say] ‘We’ve been challenged by Cal Spas to sell 50 hot tubs, so we’re lowering the price and blowing these things out,’ stuff like that,” Budke explains. “I’m a promoter. I’ve got $10,000 to $12,000 going out on my cost for the hot tubs, and I’m trading out $50,000 to $60,000 worth of ads. It really works well.”
Car Salesman Prowess
Budke also owns a small car dealership and brings many of his ideas from there to the Hot Tub Broker showrooms. For starters, he has no warehouse or storage for hot tubs; what customers see on the showroom floor is what is available, with 50 hot tubs in stock between the two locations at all times.
“If you’re walking into a shoe store and they’ve only got 30 or 40 pairs of shoes versus a shoe store that has 2,000 pairs of shoes, well, who are you going to buy your shoes from?” Budke says. “My theory is you walk in here and you look, you touch, you feel and you buy the hot tub that you’re standing in front of. The customer knows exactly what they’re getting.”
Taking advantage of the 20-foot ceilings in the showrooms, Budke installed industrial racks that store sold hot tubs stacked three high until it’s time for delivery.
“People walk in and see that all these tubs on the racks are sold,” he says. “I take some of the sold tags I use [at the car dealership] and slap them on the hot tubs with the name and date that we sold it. And some people say ‘Well I know him.’ And it helps close the sale.”
Hot Tub Brokers also provides extras with each purchase: Free installation and $150 worth of chemicals. And, while the store doesn’t offer upgrade options on hot tubs (trying to keep the cost down when ordering tubs from manufacturers, Budke says), the company occasionally throws in a $100 waterproof Bluetooth stereo.
Trade-ins are welcome too, with customers getting $500 or more in credit toward their new hot tub purchase when they bring in an old tub for refurbishing. During service calls, Budke encourages customers to upgrade when their hot tub isn’t worth fixing. When the customer agrees to trade, Budke will pick up the old spa and take it to the store to refurbish with things like a new Balboa power pack or motor. He’ll field test it for a week before putting it on the showroom floor with a price tag of $2,500. He makes sure to advertise that Hot Tub Broker sells pre-owned hot tubs, too.
“It’s just a fantastic way to get that customer you normally wouldn’t, whether it’s trade-in or buying a pre-owned tub,” Budke says. “We have some people who trade them in every two years because they don’t want to have to worry about warranty stuff. I take $700 off their new hot tub and they pay the difference.”
Budke also offers a referral program. He gives customers $100 of in-store credit when someone they know buys from Hot Tub Brokers. “That’s our way of saying thank you for sending a new customer in,” Budke says. “You treat the customer right, you make them a good deal and it’s just a big snowball that keeps rolling.”