Lessons in Inventory Management

When it comes to operating a gym, member satisfaction, engagement and retention are crucial, but so is earning revenue. Besides membership dues, there are a variety of other ways to make money within your club. For example, Gainesville Health and Fitness (GHF) in Gainesville, Florida, operates a dedicated smoothie bar and a retail space for clothing and miscellaneous items.

“At our smoothie bar we sell a variety of smoothie blends and mostly grab-and-go items which include: Gatorade, a small selection of sandwiches and salads, fruits, sodas, protein bars and coffee,” said Adrian Antigua, the general manager at GHF. “For the retail space, we currently have a partnership with Lululemon, and so we sell a good variety of their products throughout the clubs. We also sell a variety of GHF branded gear such as t-shirts, water bottles, sandals, and other things I categorize as the items most often forgotten, which include large and small towels, headphones, swim goggles and a few others.”

When it comes to deciding what products to sell, Antigua said that comes down to member feedback and industry trends. They keep a close eye on what members are wearing when they come into the club in order to determine what products they might like. “We also did a survey of our members to find out some of the things they were most interested in,” explained Antigua. “We keep an eye on what is new and trending in all different markets, not just in the fitness industry, to make sure we are staying up-to-date on what we are offering in the club.”

If you are struggling with deciding what to buy, how much to buy and how to regulate inventory, Antigua shared a few of his top lessons in inventory management.

Don’t Over Buy

While you might be tempted to provide everything from the moon and back to your members, it is important to scale back on what you offer. “We were offering so many different items and investing so much trying to make so many different things work, that there was never a central focus on what was actually producing the most bang for our buck,” recalled Antigua. “For example, in our café area, we used to sell a wide range of prepared food items, but found we were spending more on the preparation of those items and losing money on the items that weren’t selling on a daily basis. When we decided that our main revenue driver was in the smoothies, we shifted our focus to simply smoothies and grab-and-go items.”

Antigua explained they learned the same lesson with their retail space. After initially ordering too much and being left with excess inventory, they shifted their tactics. “The problem we had was we were ordering so much of an item that after the hype of the new product had passed, we were faced with the issue of extra inventory for extended periods of time,” said Antigua. “We used to sell gym bags, yoga mats and other vanity items that were great branding material, but rarely sold compared to the other clothing options we sell.”

Partner within the Club

Another great way to promote the ancillary services within the club is to partner with the other revenue-generating sources your facility offers. For example, whenever GHF gets a new shipment of clothing in, premier service members — those doing personal training, small group, etc. — get the first look and option to buy the products. “The personal training team will also work closely with the retail team to decide what products they can cross promote,” added Antigua. “For example, if a client uses a rolling stick, lacrosse ball, foam roller or other tools, we make sure we have those same products to sell as well so the clients can continue their trainings at home or on their own.”

Eliminate the Exchange of Money

The likelihood of your members carrying around cash at the gym is not high. In fact, some of your members might not even bring a wallet with them, which will decrease the chance of them buying any retail significantly. A great way to counter this and increase spending is to have members set up accounts with credit cards on file that can be charged automatically, eliminating the need to bring cash, or even a wallet. “One of the biggest things we have learned is the more you can eliminate the actual exchange of money, the better,” said Antigua. “If you have the ability to add something on a stored account, it immensely decreases the hurdles you face when trying to sell something.”

Keep Track of Inventory

Of course, the core of running a successful retail store, smoothie bar, spa or any other ancillary service is customer satisfaction. Just like with personal training, group exercise and various other services within the club, it is crucial to sell and stock products that members want and need, so they keep coming back for more. “Find a system of inventory management that updates in real time,” said Antigua. “The worst thing you can do is have someone be invested in a product and have absolutely no idea whether or not you have that specific item available for purchase. Keep storage of excess inventory low and organized. Things should be easy to find at all times to make sure that you are not having to take away from the buying experience.”

BONUS: Forming a Retail Partnership

Before we had the partnership with Lululemon, we had worked with them through several different events where they would come in and hold a trunk sale to showcase their products. We noticed how well their sales were during those time periods and thought a partnership would be a great way to drive more people to the club who may not usually come in the first place. My advice to other clubs would be to reach out to retailers like Lululemon, as they are usually always looking for ways to bridge strategic partnerships.” — Adrian Antigua