Here are the 10 products you should be selling in your gym
- Wraps and Straps
- Protein Shaker
- Duffel Bag
- Water Bottle
- Nutritional Supplements (Protein Powder, Pre-Workout, Creatine, etc.)
- Pre/ Post-workout snacks (Protein Bars, Protein Shakes, Energy Bars).
- Security Access Cards
- Club Merchandise (Hats, Shirts, etc.)
Though gym memberships should always remain as the core offering for fitness businesses, introducing new products to sell can be an extremely efficient way of maximising and diversifying revenue streams. In addition, selling products within your gym also has the potential to enhance the customer experience by offering an added sense of convenience for members. Whether it be through the sale of headphones after a member left theirs behind or a post-workout snack to get them ready for the day ahead – the value of add-on products should never be underestimated.
Wouldn’t people get frustrated that you are trying to take even more money from them? Well, no. The point here is that you not only sell these products to generate more revenue, but to also fulfil a need that leaves members feeling more satisfied. What you’ll find is that while the item being sold is no different to something they can purchase somewhere else; the convenience or value you provide is. The ‘pain’ of having to workout without music, commute to a supermarket for snacks or foregoing 24/7 access is more than enough to justify your potential mark-up.
Creating an effective pricing strategy
Finding the right products to sell is quite easy. All you do is decide what items could potentially fulfil a need or bring value to your members. Deciding how much to sell them for though… Well that can be a different story.
To have a successful range of product offerings you need to analyse profit-margins and evaluate how to quantify the value you are providing. So, what better way to decide on a pricing strategy than with some old-fashioned marketing theory (Woo!). Here are a few theory-based pricing strategies, made simple!
Demand-Based Pricing Strategy
Demand-based pricing is the process of adjusting a product’s price based on demand, taking a range of factors into account such as increased sales periods in accordance with both internal and external environments. Sound confusing? Let’s break it down with an example that is relevant to your fitness business. The easiest way to explain this strategy is actually using gym memberships as an example.
The Case: According to the Fitness Industry Association, around 12% of members sign up in January when demand is at its peak.
The Outcome: During this time, businesses who adopt a demand-based approach to pricing would typically choose to minimise discounts offered – charging a higher amount for memberships. Why? The same reason hotels cost more on the weekend… Demand!
Cost-plus pricing is the process of adjusting a product’s price based on a desired profit margin. As such, businesses who use this strategy simply add a fixed percentage onto the top of the cost it takes to produce an item. Though this one is quite straight forward, here is another industry-relevant example.
The Case: As a business, you decide to start selling protein bars to your gym members. These bars cost you $2.00 each. You want to make 50% Profit to cover miscellaneous costs associated such as time, holding inventory, and potential product waste (due to lack of demand.
The Outcome: Based on the above circumstances, a business who adopts a cost-plus pricing strategy would sell their protein bars for $3.00, making $1.00 (50%) per bar.
Psychological Pricing Strategy
Psychological-based pricing is the process of adjusting a product’s price based on a desired consumer effect. Such a strategy looks at what pricing says about a product and the implications of that message in relevance to purchase potential. This one requires a bit of explaining. So, here are two examples.
Charm Pricing: The methodology of ‘charm-pricing’ revolves around what actual numbers suggest about the price of a product. Ever wondered why you’ll buy your cheeky chocolate bar for $1.99 instead of $2? It’s part of the charm! Simply put, it makes your brain associate the product with $1 instead of $2 – creating value that really isn’t there.
Popcorn Pricing: The methodology of ‘Popcorn Pricing’ revolves around the concept of a person’s natural likelihood to compare prices and maximise transactional value. This is most notably used at theatres to sell, well… popcorn. What does this look like in terms of pricing? It essentially means making the middle-tier offering only slightly cheaper than the top-tier so that you are encouraged to spend slightly more so that the cost-to-value ratio justifies the small expense. Here’s a visual example:
Why product merchandising displays are essential in your gym
Though you may not think twice about product merchandising or strategic product positioning at your gym, the impact it can have is quite substantial. This is why leading supermarkets or retail stores put so much consideration into where and how items are displayed. Your fitness business should be no exception.
Here is how merchandising can have a huge effect across two different contexts.
Convenience goods will often have less to do with the actual position of a product within your gym and more to do with the benefit associated with you having that product easily available. Simply, these goods are items that can be purchased with minimal effort. So, what might be classified as convenience goods?
- Cheap Headphones
- Protein Bars
- Bottle of Water
- Gym Towels
Providing access to some of these low-cost goods can help increase gym revenue because of the tangible benefits associated with convenience. This is often referred to as opportunity cost. Here’s how members use this logic with convenience goods.
- Sure this protein bar is $1.00 more than the supermarket, however, the time and energy it takes to go and purchase this product elsewhere is not worth it.
- Yes, I rocked up to the gym without headphones today, however, having music can maximise the results from this workout and $5.00 is worth the time saved from going home and coming back.
As you can see, by simply having products that are easily accessible – you can drive more profits than you may think.
The concept of ‘impulse goods’ is a phenomenon used by all leading supermarkets, retail stores, gas stations, and well… anybody who is looking to take advantage of consumer behaviour as a means to maximise sales. Impulse merchandising is simply the process of placing useful and sought after products throughout high traffic areas of a store so that people purchase on impulse. There is a reason why stores have gum packets, chocolate and mints next to the cash register…
How is this applicable to the fitness industry? Quite easily actually! In fact, it could be as simple as setting up a pyramid of protein tubs next to the door with a sales promotion of ‘2 For 1’.
Does your member necessarily need protein? Probably not… Will they see the sale, identify the benefit of saving money, and convince themselves that they should stock up anyway? Absolutely!
What do you have to lose? While you’re at it, even put some snacks at the front counter!
How you can take advantage of promotional strategies
While selling products within your gym is typically an afterthought, should you decide to really focus on maximising retail sales as a means to drive revenue – promotional strategies can be incredibly valuable. Here’s a simple explanation of two core processes that you can use to sell more products.
Sales promotion is really… what it sounds like. Put simply, it is the process applying a promotion to items to increase consumer demand and stimulate more sales. Whether this be through limited time offers, free gifts, or discounts – the idea remains the same. Here are some examples:
- Buy One, Get One Free
- 20% Off
- Free Samples
- Buy Protein, Get a shaker free
Personal selling is again quite a simple form of promotion. It’s the process of directly communicating with customers as a means to sell. This method typically includes the provision of advice or professional recommendations. As such, it can be incredibly powerful when used within a fitness business. Here is an example:
Product: Protein Powder
Selling Example: A member may approach a personal trainer during a session and ask for recommendations regarding increased muscle recovery. You recommend a particular protein powder should it be suited to their needs and lifestyle. You may then proceed to explain alternate types of protein powder and which one is best suited.
Why does this work? When you offer advice, you build trust and rapport. People are much more likely to engage in purchase behaviour and even spend more money when such factors are present in a transaction. It’s basically just providing good customer service as a means to drive revenue.
Implementing detailed inventory management processes
So, you have decided to sell products at your gym? Congratulations! You have taken the first step to developing a complementary revenue stream for your business. The next step… Managing your stock.
While it may sound simple, inventory management can actually play an essential role in maximising profits and ensuring that items are kept well stocked. What’s included in an efficient inventory management system? Here are some must haves:
- Automated stock adjustment
- Quantity Records
- Supplier Information
- Pricing Information
- Reordering processes
As an example, here’s an image of the product maintenance facility within our VIGYR Gym Management Software. It comes as a free resource with all partnership packages that start at $0 Per Month! That’s right… You could access everything you will ever need to build a fitter business at no-cost! Read More.
Looking for other ways to build a fitter business
Deciding to sell products at your gym and knowing what items to actually sell, is just one step toward building a fitter business. Need more help?
Partner with VIGYR Today and say hello to complete process optimisation across an innovative suite of powerful features, personal support and business growth resources that redefine what to expect from a gym management software. Starting at just $0 per month for Enterprise+ Partners and equipped with the ability to replace all costly software integrations, VIGYR truly is the only software package your fitness business needs.