With the number of annual entry-level scuba diving certifications continuing to go down in North America, and the average sale of scuba gear per diver also down, it sounds like a good idea to work on increasing revenues by expanding product assortment. By ‘product,’ we mean products and services.
In a post titled “Redesigning How We Sell Scuba Gear,” we discussed how to quickly increase sales of scuba diving equipment like dive computers, wetsuits, and accessories.
Here, we’ll discuss expanding your product assortment (the products and services you are selling), beyond scuba diving activities and dive gear. This is the type of move for which you need to take time to plan and implement correctly. Don’t try doing it overnight.
Ideally, you want to add new physical products to your inventory while reducing the stockpile of items you rarely sell, so that the value of your stock remains the same while sales increase. It will improve your inventory turnover ratio.
1. Expand product Assortment with Non-Diving Products
Without redesigning the dive industry business model, there are ways to add products and services to increase revenues in a dive store.
The thing to keep in mind is that you want to sell these new items without spending a fortune in advertising. You operate a small business. Your website probably ranks well for “scuba diving in town X,” and your store listing shows on Google Maps. Trying to rank for new search terms requires dedicated efforts. Therefore, ideally, you want these new products and services to be of interested to your current clients or their family and friends.
For instance, when the GoPro camera mania first started, I remember selling a ton of these square boxes in dive stores. Everybody wanted one then. It was an excellent add-on product and a great gift idea during the Holiday Season. But then, the frenzy cooled down. So what then?
The Yeti coolers came to our rescue, including the famous Yeti coffee mug. These Yeti products were expensive. Yet, they were selling like hot cake. My coffee was staying warm almost all day. And during the Holiday Season, sales of Yeti products went through the roof and brought us to a close of our fiscal year with excellent results.
GoPro cameras and Yeti coolers are just two examples of products of interest to your current clients and attractive as a gift for anybody. It’s a way to sell new stuff to the guy who’s already purchased every scuba diving gizmo you have in stock.
Now, how much apparel with a dive flag do you carry in your product assortment?
Scuba diving fanatics (much of the baby boomer crowd) tend to buy anything displaying a dive flag. For instance, at one point, our leading dive gear supplier came out with a pair of flip-flops with a dive flag on it. We got a small order in to test them. And they flew out the door. We had a hard time restocking fast enough for about a year and a half. All these types of apparel, gizmos, and accessories provide additional revenues and profits because they are additional products your clients buy even if they’ve already purchased a full set a dive gear.
So why are there so few dive stores carrying a deep line of apparel and accessories in their product assortment? It’s a mystery to me. Our supplier of the dive flag flip-flops discontinued the product. Our sales rep told us we were almost the only dive shop buying them. It means many dive centers are missing out on additional revenues and profits, simply because they are too focused on the core dive gear.
Focus on what your clients will buy, not on what you want to sell. It includes expensive products.
Selling these additional products will increase profitability out of your product assortment. And they are usually a lot easier to sell than hardcore scuba gear. Try it!
2. Expand Product Assortment with Other Activities Requiring Training, Gear, and Travel
You own or operate classrooms and a pool. You may also own or manage a dive site. What can you do with those? You are probably not using them 24/7.
In management, there’s a measure of success called “asset utilization.” You want your assets to be used as often and regularly as possible. The concept is simple: Imagine you have a beautiful Newton dive charter boat, and you only use it one day per year. There’s no way you can reach profitability that way. However, if your Newton goes out 363 days during the year, you are probably getting good financial results. So why are you leaving your classroom and pool empty so often?
There’s a lot you can do beyond scuba diving with your assets, store, pool, and dive site.
Let’s talk about expanding service & product assortment while increasing asset utilization.
The most obvious first step in increasing asset utilization is offering swimming lessons in your pool. On top of producing an increase in the use of your assets, it brings water lovers to your business. It’s a lot less complicated to teach than scuba diving. And you can expand product assortment by going into the sales of numerous swimming accessories. I know of a dive center who ended up making more profits out of swimming lessons than from scuba diving activities.
If you need to find ideas, look at cross participation of scuba divers in other activities. We’ve listed a few when studying the socio-demographic profile of a current scuba diver. Or look at activities with a growing rate of participation in the population. The SFIA reports are valuable in this exercise.
For instance, stand up paddling (SUP) is growing. The paddleboards may take too much room in your small store – but you find accessories and apparels for SUP participants. Otherwise, bring a few SUP boards to your dive site. It could serve two purposes:
- Provide a fun activity to do during the surface interval;
- Bring spouses of your student-divers to your site. They are more likely to come if they can do something while their significant other is scuba diving. And they’ll buy accessories, Yeti coolers, and GoPro cameras.
Otherwise, you could expand your assortment of courses as well. How about teaching how to SUP? Or teaching yoga on SUP?
There’s a lot you can do with your assets and your store, besides scuba diving.
If you want to increase your profits, work on inventory turnover and asset utilization.
Another distinct series of courses, if you are not already teaching them, are first-aid and CPR courses. You should already be running these courses for your scuba diving students. It’s required for rescue divers, divemasters and instructors. Since you’re already running these courses, adding a few more non-diver students to your classes barely costs you anything. It’s almost pure profits.
And if you want to make more sales and more profits with these first-aid and CPR courses, look around carefully before deciding which brand of courses you want to teach.
Look for a training organization that offers Swimming & Water Safety courses. This is an easy sell if you are providing regular swimming lessons.
There are many additional and complementary products and services you can offer with your current assets: store, classrooms, pools, and water activity site. Grab the money where you can. And who knows? You may have fun with these new activities.
3. What’s Next?
Before deciding how you will expand product assortment and start throwing money at it, you should take a step back to think and plan. If the planning is done right, the execution will be easier and less risky.
Here’s another post that can help you on this journey: Redefining The Way We Sell Dive Gear.
We can help you figure out the most profitable product assortment for your market.