If you're thinking of selling outdoor equipment you'll need to decide on your product ranges, like climbing equipment and clothing. Read our in-depth practical guide to starting up and running your outdoor equipment retailing business.
- Research your target market
- Selling on eBay and Amazon
- Decide what to sell
- Establish your customer profiles
- Price your products
- Promoting your business
- Equipment hire
- Offering finance
- Buy an existing business
Research your target market
You'll want to make sure that there's enough local demand for your planned outdoor equipment shop. There are many different types of outlet that supply the outdoor equipment market and you may find it useful to make a count of the number of competitors in your area to establish the level of competition that your business will face. There are different ways of doing this, such as looking on Yell.com or by making a physical count of relevant businesses in your local area.
Your competitors will include:
- multiple outdoor retailers, such as Blacks, Go Outdoors, Decathlon, Up and Running and so on (Blacks and Go Outdoors are both owned by JD Sports, as is Millets and Ultimate Outdoors)
- independent specialists
- high street clothing and footwear retailers
- sports shops
- online and mail order specialists
Some of these are likely to have a more significant impact on your business than others. For example, retailers like Go Outdoors focus mainly on lower end equipment and may not be a genuine competitor to a high end independent specialist.
Before making an assessment of the level of demand locally for your business, you may find it useful to carry out some research into the sector as a whole. The Outdoor Industries Association produces a number of helpful resources that give details of the size of the market in the UK, participation figures for outdoor activities and so on.
It's also very important to make your best possible estimate of the level of demand in your local area. A good starting point would be to visit existing outdoor equipment retailers at different times of the day and week to get a feel for how busy they are and an idea of the volume of sales they make. It will also be helpful if you make a note of:
- what products they sell and the prices they charge. It is important that you are aware of the range that your competitors stock and their prices as customers tend to shop around for the best deals
- who their target market is
- which, if any, services they offer
- how knowledgeable and helpful their staff are
- whether the premises and fittings are modern and smart
By identifying these aspects of your competitors' businesses you will be able to tailor your shop to exploit any weaknesses that they may have and target as yet untapped markets. It may be that you are an active participant in a particular outdoor activity in your area and already have a good idea about what products and services will be in demand.
Why will customers choose your shop
You'll want to make sure that enough customers will choose your shop rather than existing outlets. Your market research might indicate that there is a gap in the market that your shop can fill.
Some of the reasons why customers will choose your shop over your competitors include:
- your location. Your premises may be located in a busy shopping centre with lots of passing trade, within an outdoor activity centre or close to a natural feature that would bring in large numbers of outdoor enthusiasts
- your product range. You may decide to stock only the very best equipment or you may aim to offer products that aren't sold by many of your competitors (high-end inflatable kayaks or packrafts, for example)
- your prices
- your staff. The people you employ are likely to be outdoor enthusiasts themselves and will ideally have an in-depth knowledge of the equipment you sell so they can provide customers with sound advice
- the level of service you offer. You could consider offering services such as equipment hire, servicing and repair
- your opening hours
Check out future developments
Try as far as possible to make sure that there are no immediate plans:
- for one of the specialist chains to open a new outlet near to your planned location
- to build new road systems which mean that local traffic will bypass your shop
- to impose parking restrictions nearby
Research current trends, plus legal and tax issues
- Shopping in outdoor equipment shops
- Legal issues for outdoor equipment shops
- VAT rules concerning outdoor equipment shops
Selling on eBay and Amazon
Selling online can be an excellent way of reaching new customers and boosting your sales. But setting up your own ecommerce website can be expensive and you may not be sure at the beginning whether the value of the sales you'll make online will justify the set-up costs.
As an alternative, trading on eBay or Amazon lets you get a feel for selling online but with much lower start up costs. And you may decide to keep on selling through eBay and Amazon even when you have your own online shop - for example, you might use eBay to sell off secondhand equipment that you take in part exchange.
You might already have your own personal eBay account that you use to buy items for yourself and to sell things that you don't need any more. But if you're trading as a business on eBay you're legally obliged to make it clear in your listings that you're a business seller. This means that you'll either need to register a new business account or upgrade your personal account to a business one. There's guidance in the eBay Seller Centre on the definition of 'trading' if you're not sure whether you need to register as a business seller.
Similarly, with Amazon you can use an existing account or create a new one when you register as a business seller.
If you're not already running a business and you intend to start selling things on eBay or Amazon - perhaps just in a small way to begin with - then you'll need to notify HM Revenue & Customs (HMRC) that you're trading. There's guidance on the Gov.uk website that gives an overview of what counts as trading and what counts as self employment. It also gives details of your tax and record keeping obligations.
Decide whether to have your own virtual 'shop'
Having your own virtual storefront will give your business a valuable online presence and will allow you to display all your products together in one place.
When you sign up to sell on eBay, you have the option of setting up an eBay Shop. This allows you to create your shop using an existing template or to customise it to your own design. You don't have to choose the eBay Shop option straight away - you may decide it's best to wait until your monthly sales build up to a certain level and then upgrade.
With Amazon, you'll automatically create your own storefront regardless of the package you choose. You won't be able to customise it very much but you will be able to add your name and logo and provide some information about your business.
How much does selling on Amazon and eBay cost?
Before you start selling on Amazon and eBay it's a good idea to find out how much you'll have to pay in fees. Depending on the items you sell and the method you choose for selling them, your total fees can be quite substantial. And while some of the fees you pay will be linked to the number of items you sell each month, others are likely to be fixed costs which you incur even if you don't sell anything.
Both eBay and Amazon give you the option of selling as a business seller without paying any fixed monthly fees, although it's usually more cost-effective to choose a subscription-based package unless you're only selling a small number of items each month.
The eBay website has a fee illustrator tool and a fee calculator that will help you compare the fees for different selling methods and get a good idea of how much your actual per-item selling fees are likely to be.
The Amazon website gives detailed fee guidance, including some examples of pricing for their subscription and non-subscription packages.
Managing your listings
Uploading your inventory to eBay or Amazon and managing your listings can be a time consuming task, particularly if you're planning to sell a large number of items.
Both eBay and Amazon offer useful listing tools, some of which are free and others that you'll have to pay for.
Promoting your items
Because there's such a huge number of items for sale on eBay and Amazon at any one time, it's very important that you do everything you can to stand out from the crowd.
Always make sure that your listings include accurate, spell-checked descriptions and that your photos and other images show the items that you're selling in the best possible light.
You might want to take it a step further and use the various marketing tools provided by eBay and Amazon such as search optimisation, cross-promotions and paid-for advertisements.
As an eBay or Amazon seller your online reputation is extremely important. All sellers have a feedback score based on actual customer feedback and this is the main measure that future customers will use to check that you are trustworthy and reliable.
So you'll want to keep your rating as high as possible by providing an excellent level of customer service and fast delivery at reasonable prices. Make sure you always respond promptly to customer queries, deal with returns efficiently and keep an eye on your stock levels to avoid your listings showing an item as being in stock when it has sold out.
Be aware that packing up orders and sending them out can be time consuming, but it's important to stay on top of the job to make sure that the right items get delivered in good time to the right people. Very many parcel delivery services now offer bulk shipping tools that integrate with your eBay or Amazon account and these can greatly simplify the process of arranging and tracking your deliveries.
If you're selling on Amazon you might also consider using the Fulfilment by Amazon service, where you send Amazon your inventory and they do all of the picking, packing and shipping as well as providing customer service.
The eBay and Amazon websites have a great deal of useful guidance to help you get started as a business seller and to expand your business as demand for your products grows. Both also have lively seller community forums where experienced sellers are often happy to answer questions.
Decide what to sell
The range of outdoor products is enormous, so what you actually decide to stock will be influenced by the size of your outlet, your own preferences as well as the particular market that you are planning to target, such as walkers, climbers, skiers and so on. You may be planning to sell items for a particular outdoor activity that you're a keen participant in, which will put you in an excellent position to be able to offer customers expert advice. The multiple chains like Go Outdoors and Decathlon serve the lower end of the market very well, so you may decide to reduce their influence on your business by focussing more on high end, specialist clothing and equipment. Some of the broad product areas you may be looking to stock include:
- clothing, including jackets, fleeces, trousers, gloves, hats, jumpers and so on
- footwear, including walking boots, leisure shoes, climbing shoes and so on
- snow sports hardware, such as skis, snowboards and boots
- tents and sleeping bags
- rucksacks and other luggage
- climbing equipment, such as ropes, harnesses, helmets and so on
- water sports equipment, such as canoes and kayaks (rigid, folding or inflatable), wetsuits, kayaking cagoules and so on
- accessories and gadgets, including watches, sunglasses, knives, cooking equipment, torches, GPS instruments and so on.
Clothing and footwear is the largest segment of the market and includes sales of sweatshirts, shorts, t-shirts and various types of footwear specific to certain sports. You can expect these to account for around 40% of your sales. Having the correct footwear to prevent injury and growing health consciousness have led to the rise in sales of athletic clothing and footwear.
The sector sells a wide range of products for outdoor activities, including sports goods and clothing, camping equipment, bicycles and fishing equipment. The most popular activities, in order, are:
While the majority of the products you sell will be new, you may also sell some second-hand items, such as:
- equipment purchased from outdoor activity centres
- ex-hire equipment
- equipment taken in part exchange
- occasional pieces of equipment that you sell on behalf of friends
You are likely to find that there are fluctuations in the sales income from certain product lines, depending on the time of year. (For example, snow sports equipment will sell best during the winter months whereas water sports equipment may be more popular in the summer when it is warmest.) However, if you plan your stock buying well and start to discount old stock in good time, you should be able to maintain a regular turnover throughout the year. You are likely to find that your sales increase over the Christmas period. The January sales period may also be busy.
Make sure that you have enough stock to cater for demand during peak periods.
Establish your customer profiles
While it's likely that most of your customers will be members of the public, you may also have some trade custom from local businesses and organisations.
Members of the public might include:
- outdoor enthusiasts. Depending on the range of products that you stock, these may be walkers and hikers, campers, skiers, snowboarders, canoeists and so on
- people who do not participate in outdoor activities but like the look and performance of outdoor clothing and footwear - the mid 2010s saw a very strong trend for buying sporting clothes as leisure wear, referred to as 'athleisure wear'
- members of local outdoor activity clubs
- people buying gifts
The Outdoor Industries Association (OIA) publication 'Getting Active Outdoors: A study of Demography, Motivation, Participation and Provision in Outdoor Sport and Recreation in England' includes a detailed analysis of the typical outdoor activity enthusiast in eight participation segments. You can download this publication from the OIA website.
Your trade customers might include:
- outdoor activity centres and equipment hire businesses
- schools and colleges
These organisations might buy items from you on a regular basis as old equipment becomes obsolete or too worn out to continue to use.
You might also make occasional bulk sales to groups such as Scouts, Guides or local youth clubs.
You may decide to offer credit facilities to certain trade and bulk customers.
Special offers and discounts
Unless you are very lucky, you are likely to find that when a season ends, you still have some of that season's stock left to sell, so you will have to discount it in order to get rid of it. Many shops will offer significant discounts of up to 50% on these sale items.
You may also offer regular discounts to certain groups of people, such as:
- members of local outdoor activity clubs
- Scouts and Guides
- customers that spend over a certain amount of money
If you have trade customers, you may decide to offer them a discount from the retail price as a matter of course.
Many shops also give discounts to staff, family and friends. Keep a close eye on any special offers you do make to be sure that they're working for you. After all, these kinds of promotion might encourage extra sales, but they'll also affect the amount of profit you make on each sale.
Price your products
Getting the price right is very important. You must make sure that the difference between the cost price and the selling price is enough to cover all of your operating costs, including your own drawings. You may find that you will have to price broadly in line with your immediate competitors unless you are targeting a niche market that your competitors do not cater for.
Suppliers to the outdoor equipment sector may include suggested retail prices in their catalogues and price lists. If you decide to price your goods below suggested retail prices you should keep details of your tariff - this will be helpful should HM Revenue & Customs ever investigate your business.
If you offer equipment hire, make sure that the prices you charge are set at a level that results in you covering the initial purchase of the equipment in a reasonably short amount of time. Remember that customers will rarely treat the equipment they hire with the respect they would treat their own so it will generally last less long and may need expenditure on repairs. If the customer is to be responsible for the cost of repairs, make sure that your terms are clearly set out at the start of the hire period and have been acknowledged and accepted by the customer. You might also want to ensure that your liability for injury or loss as a result of using the equipment is limited. You could consider encouraging the customer to arrange insurance to cover loss or damage. It would be a good idea to discuss with your solicitor the standard terms of your hire contracts.
If equipment repair or servicing is offered, you may choose to charge the same price as your competitors. If you are confident that you can do a better job than them (for example, you may be better trained, have more sophisticated machinery or official repairer status from a manufacturer) you may be able to charge more.
Promoting your business
The right image
It's important that your shop projects the right image to customers. Everything about the way the shop looks and feels needs to be designed to attract new customers and to encourage existing customers to keep coming back regularly.
It's important to make the outside of the shop as bright and attractive as possible. Try to make sure that signs are professionally made, clean and in good condition. Bear in mind that things like the condition of paintwork can make the difference between a shop that looks like it's up and coming and one that looks old and run-down. Keep your windows clean and well lit.
Make sure that your window displays are attractively laid out and changed regularly. They should show off the most up to date equipment, clothing and footwear - think about what would make you stop and look if you were a passer-by. If you offer other services like repairs or equipment hire, then it's probably worth advertising these in your window or on a sign outside the outlet.
Think about the different ways of displaying stock, such as shelves, hangers, racks, stands, island displays and dump-bins. You're likely to stock many different items including equipment, footwear and clothing, so try to make sure that goods are arranged neatly to help customers find what they're looking for. Look into ways of encouraging customers to buy as much as possible. For example, you could put a rack of attractive but inexpensive small accessories on the counter top next to the till. Talk to your suppliers about the availability of attractive point-of-sale materials like merchandisers, brochures and signs.
Don't forget that you and your staff will play a key role in the image of the business. Customers will expect staff to be friendly, helpful and enthusiastic. Ideally, they'll also be knowledgeable about the products you stock and about the types of outdoor activity that your customers participate in.
Advertising your shop
You need to make sure that as many potential customers as possible know about the products and services you offer.
There are a number of things you could consider doing to promote your business, for example:
- launch your own website, showing off all the features that will attract customers to the shop. You could also sell goods through your website if it's ecommerce enabled
- send out a regular email newsletter for customers who agree to receive it, telling them about the latest new products and special offers
- have leaflets printed and distribute them to local outdoor activity centres and outdoor pursuits clubs such as local ramblers associations, climbers clubs and so on, perhaps offering their members a small discount
- sponsor local events
- advertise in your local newspaper and any local directories
- take out a display advert in the Yellow Pages and other telephone directories
- do a targeted mail-shot or leaflet drop
Almost all types of advertising and marketing have a cost, whether it's financial or your own time and effort - or both. You need to make sure that the beneficial effects of your advertising efforts are worth the time and money spent on them. It's up to you to decide which types of advertising work best for you - sometimes this is down to trial and error.
Your market research may suggest that there's local demand for outdoor equipment hire such as:
- outdoor pursuits equipment like skis, snowboards and boots, winter sports clothing, climbing equipment, fishing tackle and so on
- water sports equipment, such as windsurfers, canoes, surfboards, stand-up paddleboards, wetsuits and so on
Actual demand for hire equipment is likely to depend on what type of facilities there are locally. For example, there would be not much point trying to hire out water sports equipment if you were nowhere near the sea or other stretch of water (although the opposite is true of snowsports equipment, which customers quite often hire in this country rather than in the resort).
Most hire businesses structure their charges in a way that results in it being better value for the customer the longer the hire period is. For example, ski hire may be offered at £50.00 for a 6-10 day period or £70.00 for a 10-15 day period (figures used for illustrative purposes only). If you are going to provide an equipment hire service, make sure when you set your hire prices that the pricing structure you use doesn't make one set of charges look unreasonable by comparison.
As an incentive to encourage customers to both hire and buy from your shop, you may decide to allow people to purchase equipment that they have hired from you for the full retail price minus the hire fee that they have paid.
Remember - customers often don't treat hire equipment with a great deal of respect and it is likely that some equipment will need frequent repairs. If you do not have the expertise to carry out the repairs then you will have to incur the cost of having them done by a specialist.
If the customer is to be responsible for the cost of repairs, make sure that your terms are clearly set out at the start of the hire period and have been acknowledged and accepted by the customer. You might also want to ensure that your liability for injury or loss as a result of using the equipment is limited. You could consider encouraging the customer to arrange insurance to cover loss or damage. It would be a good idea to discuss with your solicitor the standard terms of your hire contracts.
You may consider offering equipment repair or servicing to individuals and to trade customers. Aside from generating useful extra income, the benefits of offering such a service are:
- it encourages customer loyalty
- it brings people into the shop who may not otherwise have come in. Once inside the shop they may make impulse purchases as well as having the repair done
- it may encourage customers to purchase new items of equipment from you after their old ones get beyond repair
You could carry out the repairs yourself or send them out to a specialist repairer. If you are planning on doing the repairs in-house, bear in mind that you will have to spend a certain amount of money fitting out a workshop area. Also, you have to consider the time that the repairs will take, plus the expense of training for either you or an employee. It may be practical for you to do them in quiet periods during the day or you may have to do them outside of normal opening hours.
Many items of outdoor equipment are very expensive and some customers may be unwilling or unable to pay for their purchases all in one go and would prefer to pay a deposit and spread the balancing payment over several months.
You may want to offer credit to these customers through a specialist finance company. Several such companies exist and, between them, they offer a range of different finance packages. Some of the finance packages available which you might use to attract customers include:
- card-based credit accounts
- standard interest bearing credit
- subsidised interest rate credit (a very low interest rate)
- interest free credit (0% interest)
- deferred payment (buy now pay later) credit
- high risk credit (ie for customers who might normally be turned down by a finance company)
When you sell goods on finance you will have to fill in a credit application with the customer. Your finance company will then give a decision on whether to accept the application. All being well, the transaction will be completed quite quickly and you will receive payment from the finance company within a few days. Usually, the customer will pay a certain amount as a deposit. You will usually also be paid commission by the finance company. This is normally based on a percentage of the value of the sale and paid to you separately at the end of the month.
Most finance companies will expect you to meet certain requirements and standards before agreeing to do business with you. Some will only deal with businesses that have been trading for a certain minimum length of time, often two years.
Shop around when it comes to choosing which finance company you will deal with. Their terms and working practices vary. When choosing which one is best suited to your business, consider the following:
- what type of finance packages are most likely to appeal to your customers
- how promptly will you receive payment from the finance company
- how much commission are you offered
- how quickly will your customers' credit applications be turned around
- what level of back-up and support is available to you
You will need consumer credit authorisation if you want to offer finance to your customers. This is obtained from the Financial Conduct Authority (FCA). For more details visit the FCA website.
Buy an existing business
You might decide to buy an existing outdoor equipment shop rather than start your own venture from scratch. Buying a going concern can mean that:
- the premises, business equipment and shop fittings are already in place
- there are established customers
- the business can generate income immediately
- suppliers have been identified and relationships established with them
- the business has a track record, which can help if you are looking for finance
- staff are already in place
- a business website (possibly ecommerce enabled) has already been set up
However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.
Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.
Other matters to consider include:
- the state of the premises, fittings, equipment and so on. Will you have to spend money refurbishing or replacing assets
- if the shop is located in a unit within a leisure facility - for example a climbing wall or a dry ski slope - it makes sense to try to find out how well the facility is currently performing and estimate the impact on your own business if it were to suddenly close
- the condition and value of any stock you are buying. Check this over carefully before agreeing a price
- is the existing owner prepared to give you some training after you take over
- existing staff rights
- how to retain key personnel once you've taken over
- does the business owe money that you will be responsible for
- if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller
Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.