How can I increase my business revenue with merchandise sales?
Selling merchandise as part of a business may seem like a simple task for any business owner. But when it comes down to it, how can we actually do so? It is unsurprising that most of your revenue comes from the services that you provide to your customers. Whether you are a martial arts studio that provides kickboxing classes or a personal training studio that offers private training. Due to this reason, most fitness studios owners tend to only focus on increasing revenue by attracting more members.
However, there is another way to increase revenue for your fitness studio! And that is through selling merchandise! In this blog, we will dive into this subject, giving you the factors to consider before unlocking this new revenue engine.
Type of item
Firstly, we need to consider the type of item that we are going to sell. Is it something that a customer would need? Or is it something that customers would want to buy? We need to consider the kind of merchandise suitable for your fitness studio. For instance, a boxing studio could sell handwraps in its studio as many first-timers do not have their own hand wraps. This is a simple case of supply and demand where the demand for a particular product is met and therefore allowing fitness studios to benefit from it.
For reference, Impact MMA is a martial arts studio that offers a variety of martial arts such as boxing and muay thai. As a MMA studio, it sells boxing wraps as well as boxing gloves to clients who have just started learning martial arts. This is an amazing example of an effective way of selling items that are needed by the customers.
Secondly, it is also important to consider the prices that you select. The key to gaining revenue through merchandise sales is by selling the items at a high price while keeping cost as low as possible. This can be done when buying items in bulk to lower the average cost per unit. For example, you could purchase a bunch of towels at $4.13 per piece on Meowprint. They allow you to customize your towel, having the option to place your logo on the towel. The link to the posting can be found here.
These items can be sold at an above market rate because most customers usually require the item immediately if they choose to purchase it at your fitness studio. Hence, being the only available and convenient option therefore allows you to mark up the prices. However, do not jack up the prices too much as your members may perceive the business to be making unfair profits. Make sure to add some value to the item to justify the price such as the branding of your fitness studio and the high quality of items sold.
Thirdly, the merchandise could also be used in conjunction with an ongoing promotion or marketing campaign. This is an indirect way of increasing revenue by promoting the studio through the use of merchandise. The merchandise could be part of a package or a bonus for signing up for a membership.
Take for instance, Elevate Fight Lab, a boxing gym in Singapore that offers group classes and personal training sessions for boxing as well classes such as Strength and Conditioning. They make use of their merchandise by providing you with a free shirt when you sign up. This not only acts as an added incentive for the customers, it also acts as free publicity for the gym as the act of wearing the shirt will increase their brand’s visibility. While you may not see the fruits of your labor in the short run, it could indirectly lead to higher revenue in the long run.
Thirdly, you could make use of merchandise to establish a brand identity. Similar to using merchandise for a marketing campaign, using merchandise to establish a brand image does not directly lead to an increase in revenue, but it has a more indirect positive effect on the revenue. Companies such as Apple have established such a strong brand image that many of its customers choose to use its products purely due to its excellent brand identity.
An example of this would be Rev Fight Club, a martial arts studio located in Clarke Quay that offers Muay Thai group and personal training. Their studio offers merchandise in the form of T-shirts in order to establish a brand identity. By creating their own merchandise, it allows their studio to become more appealing and credible within the community, which could indirectly contribute to an increase in revenue for the studio.
Lastly, you would also have the option of consignment. What this means is that you choose to sell items of other brands in your gym rather than your own branded equipment. This usually happens in the form of a partnership, where your studio partners with a brand or another studio to promote and sell their branded goods in your studio. While this may mean lower profit margins for your studio, it would also mean less effort is needed and no cost is involved, making the risk of procurement significantly lower than selling your own branded goods.
An example can be seen in Box Office Fitness, a boxing fitness studio that offers fun boxing classes as well as personal training. They have partnered with 12 brands and sell their merchandise in their studio. Brands they have partnered with include Flow Funkie, Mosanco cafe and many more! This is a clear example of consignment and how it can benefit your studio if done correctly.
vibefam’s new merchandise sales feature
After reading this article, you might be eager to start selling merchandise online and track your inventory. Well, vibefam recently rolled a new merchandise sale feature that allows you to do so. You can now sell your merchandise online and keep track of inventory through vibefam!
While there are many considerations to make when it comes to selling merchandise in the gym, we think it is a good way to unlock a new revenue engine for the gym. Hopefully this article has helped you gain a clearer understanding on merchandise sales and how it can help you increase your revenue. If you are interested in articles similar to this one, please check out our previous blog on how to market and grow your boutique gym in 2023 here.
This article was written by Jayden Ling.