As the golf season draws to a close focus now turns to 2014 and many PGA Professionals will be drawing up their forward buying plans.
As PGA Professionals, retailers and most importantly business owners there is one thing that is essential…profit margin – that should be at the forefront of everyone’s thinking, ahead of turnover.
Turnover could be into the £100,000s, but if there is not a decent margin there, then that pales into insignificance, after all 45% of £100k is far more appealing than 25% of £150k. As the old saying goes ‘turnover is vanity, profit is sanity.’
There are people who talk about how high their turnover is, but it’s what you’re making out of it that’s the most important thing to you and your business.
When drawing up your plan for the year there are a number of things to take into consideration to ensure you realise your margin opportunity.
Working in the golf industry your retail margin is driven by so many variables. The type of outlet/club you are working at, the social and economic standing of your members, the club’s policy on membership and visitors etc. It is critically important you take all of this data into consideration when you set your margin targets.
Take a look at your target audience, what are your club members or customers likely to buy from you? Is it a predominantly young persons’ club where they’ll want to buy all the ‘hot’ products seen on the Tour? If so then you’ll need to spend more and sell a lot to make a decent margin.
However, if you don’t have the money to invest in stock you should focus on the margin making products or stock more apparel and accessories which will make more money.
You also need to be smarter in the way you sell things. If someone comes in looking for a new driver, take them down the practice ground with one of your high margin makers and let them try it out.
Alternatively customers are often influenced by what their PGA Pro uses themselves. Be bold, put one of your margin makers in your own bag or your assistant’s and use a ‘These are so good, I use them myself’ sales tag.
Of course the best solution is to have a good ‘margin mix’ of popular ‘hot’ products and margin makers.
Senior Retail Consultant