We have had this discussion before, but Doc and I were having fun with the idea of doing a series on Surf Shop owner ship and the potential, pitfalls and etc.
Here is my my first entry:
If you have decided to open a surf shop, it is my opinion the first thing to remember is you are in a real business world where you can lose alot of money if you make a very small mistake and the chances of making alot of money is almost nill. However, you are for the most part not going to deal with people who act in a business like manner or think in Business terms.
This certainly does not mean some have not made a mint owning a surf shop nor that true business people do not exist in the Surf shop business and surf industry in general, but…
The first real question you might ask yourself is “Why in the world do I want to own a surf shop”? Take your time on this one, because you can save yourself alot of money, if the reason is because you want to go surfing and enjoy the surfing lifestyle. You will not do much of either in the early years. It can be enjoyable if you have a true love for the art and are willing to simply get by for awhile.
The thing to decide is what type of surf shop you want to own. One type is one that predominately sells surfboards and related items, with small amounts of non name brand or your own name brand clothing. This type is out of the question unless you live in an area where the interest in surfing and population of surfers is high. Also; unless your pretty well known and respected as a shaper or surfer and been around awhile, this type will be hard.
The other type and most common is a surf shop that is heavy on name brand clothing such as Quiksilver, Volcom, or Billibong and sells mostly advertised surfboards seen in magazine ads along with possibly carrying a local shaper or your own label made in China. More than likely you will carry popouts from surftech or the like.
If you go the second route, expect to drop a minimum of $40,000. You can start cheaper if you find a small location with cheap rent, but your asking for problems if it does not take right away.
Your going to have to deal with something completely unprofessional called Surf industry politics. This is where the older more established shop thinks he has the rights to all the surf business in your area and tells all of the majors (Quik, Volcom, Billibong, Hurley, Oneill ) not to sell to you or he will drop or seriously cut back on orders. There may be a great deal of yelling and screamin at the rep. with you in mind. What this will mean is if you are too close (like the same city sometimes) these companies will give you a hard time about opening you up with their clothing. (Sounds stupid huh) If they do open you, it will be with the demand or expectation that you must give them a minimum order (usually between $2500 and $4000 depending on how much they feel like discouraging you). This is the one business in the world, where companies turn away good business because of ridiculous and boneheaded ego trips and lack of vision. It only works because it is still a fairly new industry. You will now find out first hand what it is like to deal with 45 year old 15 year olds. These are people who are middle age with the critical thought ability of a 15 year old. Remember one thing about those in the industry. They will never forget a slight to their ego.
How to deal with surf industry politics: Don’t buy into it at all. Don’t talk about our competitors regardless of the bad things they say about your shop or you peronsally (and they will) Don’t dare give some company Rep. a minimum order. If thats the only way to get the line. Pass and go to another line. Take my word for it, you can’t afford minimums in the early years.
Never ever trust or believe what a Rep. tells you. There are really good Reps. out there, but most of them are starving and will sell their young to simply stay in the surf business so they can remain a teenager for life. Even the good ones, will push items on your store that you either don’t need or cannot afford. Keep it very basic in the begining. If a major opens you, go deep with this line and use your own line to add flavor. Two solid lines, will be about all you can afford and not look watered down. keep it simple. Tee shirts, Sandles, Boardshorts. Some hats. Do not go into other areas right away. Stay clear of shoes until you have learned the business well. There is no in between with shoes. You either go big or it’s best to leave it alone. Big means at least $10,000 just in shoe inventory. In which you will get a whopping 35% if your lucky.
If you cannot get a major line and you plan or being a surf clothing department store that carries boards (type two) then you may want to reconsider opening. Trying it with only the B lines and worse will waste your money, your time and eventually put you out. I know some that hang in there because they have a huge skateboard or surfboard business to keep the bills paid (barely) but most are simply living week to week and not paying taxes. Which brings up another point. If you think you can fool the department of revenue and not pay all of your sales tax. Think again. They are smarter than you are and you will get caught. Render unto Ceasar what is Ceasar’s. Or you will regret it. Do not believe what any tells you if they say different.
Stay clear of doing team guys. You will be tempted if you surf, but fight it off. Even a good loyal team guy is rarely worth the discounts on clothing and boards he obtains and 95% will jump ship at a dimes better deal. If it goes sour, they will run their mouth about you to anyone that will listen. Most go sour, so why bother. Let the other shops deal with this area. If what you have is worth it’s mettle, you will have real paying customers.
Discounts: Don’t give them unless something is put on sale or even better have a sale rack and point. Once you start giving discounts you can never go back. Same with selling cheap surfboards.
Doc,
Take it from here and I will ad another later.