Hot Tub Forum
Original => Hot Tub Forum => Topic started by: Gomboman on March 11, 2007, 03:09:30 am
-
Is owning a HotSpring dealership as safe as owning McDonald's franchise restaurant? I'm not saying that HotSpring spas are the best, but it seems like a very safe profitable spa dealership to own. Most of the HS dealerships in my area have been around for awhile and appear to be financially successful.
Is it possible to own a HotSpring dealership in a decent area and not be able to make a reasonable living? This is assuming you are running your store in an ethical manner with a good staff. I haven't heard of too many HS dealerships closing their doors or switching brands like some other dealerships. No offense intended to the dealers out there selling other brands. Just curious.
-
Is someone thinking of opening a dealership?
Is owning a HotSpring dealership as safe as owning McDonald's franchise restaurant? I'm not saying that HotSpring spas are the best, but it seems like a very safe profitable spa dealership to own. Most of the HS dealerships in my area have been around for awhile and appear to be financially successful.
Is it possible to own a HotSpring dealership in a decent area and not be able to make a reasonable living? This is assuming you are running your store in an ethical manner with a good staff. I haven't heard of too many HS dealerships closing their doors or switching brands like some other dealerships. No offense intended to the dealers out there selling other brands. Just curious.
-
There is nothing "safe" about owning your own business. There are calculated risks, but safe, no. If you have the capability to establish a dealership with a major brand name it will increase your chances, for sure. You want to make a small fortune ni the spa business, start with a large fortune.
-
That's a good question Gombo. Here's my thoughts on opening a HS dealership. God, I don't even know where to begin.
Personally, I'd find it extremely difficult to survive. Especially if it was truly a NEW dealership in an undeveloped area(by undeveloped, I mean developed for spa/ hot tub ownership by other dealers, etc.) You would probably expect to lose money the first few years, if lucky to break even. Have a dynamic marketing plan with enough capital to renovate a space, stock it with $75,000 worth of spas, $15,000 worth of chemicals and accessories "to go." Let's not forget monthly expenses and salaries easily topping $10,000 a month without even sneezing. Best to figure an easy 5-10- years before really getting rolling, if at all.
I recently made a move and opened another location. My second. I had a choice of two areas. One, a major city, well for CT, "undeveloped for spas." Or a more rural, larger area with smaller city where another HS dealer just lost his\her dealership. We picked the area where 1,000 to 1,200 HS have been sold over the past 10-15 years along with being a "developed" bioguard area. Choosing the area was, I think, and I hope, a no brainer.
It is an extreme risk. Stick your neck out and see if it gets cut off. Take some risk. I feel it will make a great story if it doesn't work out. There's much to address on such a topic.
It is a fun business. The RETAIL part can be trying. Nothing beats deliverying one of these, or doing a orientation with a new spa owner to see the excitement and know the joy you will be bringing to that household. Knowing you're delivering a product that will "RUN" when you power it up, helps an awful lot. You don't and won't hear from the dealers who've switched brands three, four, five, eight times. We do everything we can to make it "EASY" to own. Everyone's happy then.
Upon thinking some more, it would probably help to know where we started selling spas.
From our home page.....
"Scarritt & HotSpring Spas--- It all started with our lumber / home center business. In 1946, Grampa Dave opened Scarritt Lumber. Building the lumber/ home center business with his wife and children until his retirement in the late 70’s. In the early 80's, Jim Scarritt, his brother and sister all wanted spas. They did the research and they found a company which was doing some unique things at the time. The company was Watkins Manufacturing, founded by two brothers in California. They made HotSpring Spas. The unique things for the times were- Full-foam insulation, a massaging, up-and-down jet for your back, a spa with a no-maintenance exterior, and a warranty which really backed the consumer. All of these things were important as they planned to sell the spas at their home centers/ lumber yards. The rest is history. Scarritt's feels lucky to have found an industry leader so long ago. Today, Watkins Manufacturing based in Vista, California produces HotSpring, Tiger River, Solana, and HotSpot spas. Backed by a Fortune500 company, Masco Corp., ensures a bright future. We, at Scarritt's, wouldn't sell anything else. We were sold on the product over 20 years ago!!!!! If you do the research, and you want to buy the best spa you can, you will buy a HotSpring from Scarritt."
-
Gomboman what you need to check into in the IN-N-OUT Franchise. I tried to get some food at my local IN N Out the other night on a weekday and couldnt even get into the parking lot!!!
-
Gombo, move to Bismarck ND and buy out the Sundance dealer, Mr. Sleepy! This guy needs a wake up call! Sundance is on a even playing field with HS and in this market the aggressive spa dealer sells Coleman spas. The way to compete with the Coleman folks is simple. Do what they do, offer great customer service and a nice enviroment or showroom. The other two dealers here (Mr. Sleepy and HS) would do well to learn about customer service and an aggressive marketing plan.
-
The Coleman dealer also has a BIG advantage over the competition with their sales force. If you were spa shopping in North Dakota, it would take a better man than most to not fall for spahappy's sales pitch:
(http://i20.photobucket.com/albums/b206/EastTexasSpa/spasaleslady.jpg)
Termy
-
Gombo-
Being a small business owner, I thought I would chime in.
My advice is in-general due to the fact I do not own a spa shop....just a spa.
10 tips on picking a buisness model:
1) Have Money....quickest way to go out of business is to run out of cash
2) sell items that people re-use, one of the issues with spas is that people who buy them don't buy again for a long time.
3) keep out of the service business as your only business...If service is the only thing you sell two things happen...your company can only grow by the number of hours you have by your rate....or by hiring more and more tech/service people....(always a bad plan...seee next rule)
4)Hire as few as people as possible...biggest expense with the biggest headaches
5) Don't sell fruit......if your shelf life on your product is short...you will need to eat the inventory or discount it to get rid of it.... an ultimate waste of time and money. Find a product that does not change much.
6) Do not sell unprofitable "stuff" sounds simple.....but take a look at all the people that sell comput4er monitors.....no margin but it sucks up your cash.
7)Do it on the internet....fastest growing segment of the purchasing supply chain
8) do everything on the cheap...but with quality.
9) Everyday...get out of doing the buisness detail business and into the growth strategy issues...if you do not plan for the growth...you will not grow
10) do not get emotional attached to a business. If your utlimate goal is greenbacks then who cares what you sell. If your dream id to sell Hottubs....then sell them.....
Well, I finished my lunch....gotta go back to sellin stuff!
-
Gombo,
I don't own my own business but I'm thinking in terms combining of what hottbpete & hottub.pool_boy said.
In these economic times, things are tough. Today the stock market lost about 2% due to sub prime mortages. People will be losing their houses due to this, people need to eat, not soak. Hopefully most people who read this bought their tubs with either high quality credit or cash.
What does this have to do to tubs ... well IMO a lot of people don't have a clue about handling money. They overextend themselves and buy on impulse with hopes they will be able to pay for it. I knew a person who got a home equity loan a few years back and it was at 15%. Tubs are luxury items that people who don't make a lot of money (whatever that is) will not be able to afford if these lenders call in their loan or have to refi (if they can) at a higher loan rate. The anyalsts are forecasting that anoher 500,000 houses will be on the market soon due to this problem. They also forecast that lenders will be tightening up their standards ... less people to qualify. I do realize that once people buy a house they can start spending a little more freely but unless a tub store is in an upscale area I don't think it'll survive.
I also thought of starting a hot tub business but this was and still is my concern. I believe you can make a small business successful but as I said maybe the business should be something that people really need in order to survive.
Just my $0.02.
-
I would give her what ever she wants, as a matter of fact, I think she already ownes half of all my stuff. GREAT pic, Term! I'll be back in about 3 minutes.
The Coleman dealer also has a BIG advantage over the competition with their sales force. If you were spa shopping in North Dakota, it would take a better man than most to not fall for spahappy's sales pitch:
(http://i20.photobucket.com/albums/b206/EastTexasSpa/spasaleslady.jpg)
Termy
-
Whew, I'm back... OK, So I agreee with every single thing Vinny has said here, except for the "luxury" aspect of hot tubs. Evewryon can afford one and every one should own one. beyond that, I think Vinny was DEAD NUTS!
Gombo,
I don't own my own business but I'm thinking in terms combining of what hottbpete & hottub.pool_boy said.
In these economic times, things are tough. Today the stock market lost about 2% due to sub prime mortages. People will be losing their houses due to this, people need to eat, not soak. Hopefully most people who read this bought their tubs with either high quality credit or cash.
What does this have to do to tubs ... well IMO a lot of people don't have a clue about handling money. They overextend themselves and buy on impulse with hopes they will be able to pay for it. I knew a person who got a home equity loan a few years back and it was at 15%. Tubs are luxury items that people who don't make a lot of money (whatever that is) will not be able to afford if these lenders call in their loan or have to refi (if they can) at a higher loan rate. The anyalsts are forecasting that anoher 500,000 houses will be on the market soon due to this problem. They also forecast that lenders will be tightening up their standards ... less people to qualify. I do realize that once people buy a house they can start spending a little more freely but unless a tub store is in an upscale area I don't think it'll survive.
I also thought of starting a hot tub business but this was and still is my concern. I believe you can make a small business successful but as I said maybe the business should be something that people really need in order to survive.
Just my $0.02.
-
Whew, I'm back... OK, So I agreee with every single thing Vinny has said here, except for the "luxury" aspect of hot tubs. Evewryon can afford one and every one should own one. beyond that, I think Vinny was DEAD NUTS!
If a tub was $2,000 then yes everyone MIGHT be able to aford it. With tubs at $6,000 it eliminates some people; at $8,000 it is out of reach for most people. Considering everything else that needs to be done to prepare for a tub .... I still consider it a luxury item. My project approched $30,000 for everything I did .... Thankfully I wasn't paying 15% interest.
-
If a tub was $2,000 then yes everyone MIGHT be able to aford it. With tubs at $6,000 it eliminates some people; at $8,000 it is out of reach for most people. Considering everything else that needs to be done to prepare for a tub .... I still consider it a luxury item. My project approched $30,000 for everything I did .... Thankfully I wasn't paying 15% interest.
What amazes me about our area in upper Michigan is how many people will buy jet skis, power boats, snowmobiles, pools etc. because you can only use these "toys" for a few months out of the year. We really only have two hot months here, July and August. June usually stays in the 60
s.
We use our hot tub everyday. And the people who buy the other "toys" are working class people, they don't have a million dollars to throw around. They use their jet skis maybe two months (longer with wet suits) out of the year, but make payments on them for the other 9 or 10 months while they're sitting in their garage or storage facility.
I know it's different strokes for different folks, but it still amazes me how these other businesses seem to do pretty well with products that have limited usable time per year. Hot tubs, IMO are like any of those other products and you make payments to pay for them.
-
...
I know it's different strokes for different folks, but it still amazes me how these other businesses seem to do pretty well with products that have limited usable time per year. Hot tubs, IMO are like any of those other products and you make payments to pay for them.
I think sometimes people get too toyed out. You can make payments and a ton of people do. The problem comes from people overextending themselves on whatever. Car payments are an evil necessity but some working class people have tremendous payments for the amount of money they make.
The dealer can sell anything to anybody and once that item is delivered it's the loaning institution's problem. 500,000 houses is an awful lot of houses. All those people who default will not be able to buy another home for a few years. People who overextended themselves won't be able to get homes either.
How far does a paycheck go? $60,000 a year is $5000 per month if no taxes are taken out ... Uncle Sam wants his first so you're not clearing $5K a month. Put a mortgage, utilities, car payment, gas, insurance .... it adds up and all those toys are going to be a problem. Add children ... Holy S***, you need 3 jobs!
Personally, I think the working class person has gotten the wrong idea about "living" based on who knows what. Unless you make a hefty salary or have unlimited funds you can't live "the lifestyle of the rich and famous". It will come back and bite them in the butt. Once you work 24 hours a day, there's not too much more you can do!
-
Whew, I'm back... OK, So I agreee with every single thing Vinny has said here, except for the "luxury" aspect of hot tubs. Evewryon can afford one and every one should own one. beyond that, I think Vinny was DEAD NUTS!
I'm totally with Vinny on this one. Hot tubs are most certainly a luxury. Far from everyone can afford one. I feel pretty darned lucky.
-
I'm totally with Vinny on this one. Hot tubs are most certainly a luxury. Far from everyone can afford one. I feel pretty darned lucky.
OK. If hot tubs are a luxury so is everything beyond the basics, that millions of Amricans pay for every day. RVs, Jet Skis, HD TVs (seen the display at Costco?), vacations, the types of cars and trucks we drive, etc.
So, if hot tubs are a luxury, then, with some rethinnking, they are an affordable luxury.
-
OK. If hot tubs are a luxury so is everything beyond the basics, that millions of Amricans pay for every day. RVs, Jet Skis, HD TVs (seen the display at Costco?), vacations, the types of cars and trucks we drive, etc.
So, if hot tubs are a luxury, then, with some rethinnking, they are an affordable luxury.
I have this discussion many times with my friends. Some who love my hot tub and want one, others that love USING my hot tub, but would never buy one, and others that couldn't give a rat's behind for one at all. In my sphere of friends, while we are all working folks, $$ is secondary to 1) would I really enjoy it, 2) do I have a place for it 3) of my spendable money for luxary toys, do I want to invest my money into this? (Think, we can have ANYTHING we want, but we cant have EVERYTHING we want).
-
OK. If hot tubs are a luxury so is everything beyond the basics, that millions of Amricans pay for every day. RVs, Jet Skis, HD TVs (seen the display at Costco?), vacations, the types of cars and trucks we drive, etc.
So, if hot tubs are a luxury, then, with some rethinnking, they are an affordable luxury.
Since you sell spas, you think this way.
I've said it before, there are automobiles and then there are luxury automobiles. My Sonata has almost everything a higher end car has. I paid $17,000 for it not $60,000 for it, talk to a high end dealer - you can't live without one of their cars. It also came with a longer warranty than most cars. If it lasts 8 years (and I'm sure it will) and I buy another Sonata for $25,000 (then price) I paid a total of $42,000 and in 16 years I have an 8 YO car.
By calling something "affordable" - who is doing the calculation. To someone making $35,000 a tub is NOT affordable if their bills are too high. A $200K house with 20% down has a PITI payment of approx $1600 a month ... how affordable is an $8K spa - not at all. I will state that most people making $35K will not be in a $200K house. If you're here in Jersey - you're not buying a house unless it's in a really depressed area. No House ... No tub.
This is the BS that has gotten people into hot water financially. I once went to a mortgage broker who told me at my salary I could afford another $150,000 in a house and that bankers are too conservative ... that's why houses are being foreclosed. Dirtbag sales people doing what they're paid to do - sell. If you can't afford it, no problem we have payments. Hey dirtbag got his commission and the poor family now has to figure out how they can afford their luxury item. I am not picking on hot tubs ... all aspects of luxury are culprits.
Yeah, I do go to a Circuit City and see the 46" LCD 1080p television that I want ... I have a 27" regular TV that's just fine for now. Let someone else take the payments on it ... $2000 for a TV. I will get it one day but for now, I'll admire it in Circuit City.
-
Vinny,
Believe it or not, you make my case. You chose to buy a Sonata, and you have a hot tub.
Even if there are 500,000 foreclosures there are millions of homeowners staying current with their mortgages.
The toys continue to be bought.
The household with a $35000 annual income is not going to be in the spa market. But, they might live in an apartment and have a $2000 TV.
-
I was only able to afford my tub and the deck project through an inheritance.
My wife and I make good money and I couldn't afford the tub, even at $6500, let alone averything else associated with it. There are times we live paycheck to paycheck sometimes even dipping into savings ... my only debt at this point - my house.
If it wasn't for my parents and them leaving money for their children I would not own a spa. I would not be able to buy a spa at all at our current salary level. To me a spa is not an affordable luxury - being willed money and having a luxury from that is different IMO than being able to go out and buy a spa because you have extra money available from your paycheck
-
always live below your means. Have emergency cash on hand. Just because the banker says you can afford it, doesn't mean you really can.
I love the home improvement shows where they evaluate the equity of peoples homes; tony bought this house for 200K 7 years ago and today it's worth 300K.
Tony: Horray! I just made 100K!!! I'm taking out an equity loan!
Uh, tony, I don't think you understand. You haven't increased you income to pay off the additional liablity, it's equity., not real money as bankers would have you belive.
-
always live below your means. Have emergency cash on hand. Just because the banker says you can afford it, doesn't mean you really can.
I love the home improvement shows where they evaluate the equity of peoples homes; tony bought this house for 200K 7 years ago and today it's worth 300K.
Tony: Horray! I just made 100K!!! I'm taking out an equity loan!
Uh, tony, I don't think you understand. You haven't increased you income to pay off the additional liablity, it's equity., not real money as bankers would have you belive.
You hit it it dead on!
I believe I live at our means. My wife dives a '99 Plymouth Voyager and we recently had a bunch of repairs ... she wanted a new car but we can't afford the payments at this time - I do have the money and can pay cash but can't make the $350/month payments every month for 5 years. My oldest will hopefully be going to college in 2 years and it would be nice to have as much money as possible to pay as much as we can for his education.
My kids come first! My oldest went to Disney last year with the Marching Unit - minimum $1,000. He's going to Boston on Friday with the Jazz Band - minimum $400. He wanted a new drum set, he worked around the house saved $300 of "his own" (actually mom & dad's) money and we kicked in another $400 for it. I have 2 boys ... multiply all this by 1.5 (so far the youngest hasn't hit the more expensive items yet but he will).
I worked with a guy who had to buy all sorts of toys. His idea was he'll work more overtime to afford it all. He would work 12 hour days and some weekends to be able to afford it. I, being older and more wiser (?), and having gone through having kids with my wife staying home a few years before explained how he needed to stop buying stuff. I explained that affording things doesn't mean to make more money, it also means to live with what you have ... he told me to stay out of his business! Not a problem as I left on time every day and didn't work weekends!
-
I totally agree that living below your means is the only way to get ahead. You really have to cap your lifestyle and then from that point on no matter how much more money you might make you don't spend it but instead invest it or use it to pay off all of your debt including your mortgage.
I also agree that hottubs are a major luxury. My wife and I make enough money to be able to afford a hottub but my goal was to pay for as much of our hottub as possible without taking any money out of our incomes from our jobs.
Thanks to the popularity of the nintendo wii this past Christmas I was able to pay for almost 90% of our hottub. That means our 2006 Vanguard is only costing us about $1500 out of pocket. Sure I froze my butt off numerous times in front of bestbuy camping out for systems to resell but to me it was worth it! We probably would not have bought a hottub if we had to pay for all of it out of our regular income.
-
OK. If hot tubs are a luxury so is everything beyond the basics, that millions of Amricans pay for every day. RVs, Jet Skis, HD TVs (seen the display at Costco?), vacations, the types of cars and trucks we drive, etc.
So, if hot tubs are a luxury, then, with some rethinnking, they are an affordable luxury.
Hotubdaan,
I have to agree with Vinny also that a hottub is a luxury item. Just because you can buy them doesn't mean you can afford them. 500,000 new foreclosures predicted isn't peanuts and your talking about someone's house that is going to be repossessed. If people are going to let there houses go back to the bank don't you think this is indictative of people making bad choices about some of life's basic needs. I believe like Vinny that we are programed to think we can have it all by just signing on the dotted line and wonder later how we are going to pay for it. However I also believe that most have the ability to buy a hottub if they so deem it a priority and are willing to sacrifice something else. Living within your means is easy to say but difficult to do IMO.
-
OK. If hot tubs are a luxury so is everything beyond the basics, that millions of Amricans pay for every day. RVs, Jet Skis, HD TVs (seen the display at Costco?), vacations, the types of cars and trucks we drive, etc.
So, if hot tubs are a luxury, then, with some rethinnking, they are an affordable luxury.
Yeah, all those things are luxuries. I do consider anything beyond the basics of paying mortgage, *saving money*, not stressing about what to wear or eat and basic fun like a movie here and there, to be a luxury. For a few people, I can see that a hot tub would be so critical to physical comfort to be more of a necessity, but for most of us, that is not the case. "Affordable" is relative- a hot tub is no more or less "affordable" than any of those other things that cost 8-11K, it is just a matter of choice. Most people can afford a little luxury here and there, if they are careful about day to day spending, but a tub or other big item is a BIG luxury that I feel very lucky to have. I drive a honda, shop conservatively and cook rather than eat out. Because of that, and a raise, I was able to choose to get a tub. I guess I could have picked a home theater, or jet skiis, or whatever, but not more than one! (I *do* get a home theater, though, since that's my boyfriend's *choice* of a luxury, so I guess I get both!!! :)
-
I find most people are living beyond their means. Credit card debt in the US is higher then ever.....that is just stupide debt. Then again we are an IPOD christmas society....I am not sure about you, but my parnets were not spending $300 plus on just one of many gifts they gave me. The keep up with the jones's is unbelivable.
By the way, I bought my kid a Sansa 250...at $69 dollars witha $30 reabte at office max...it was a great buy at $39. My kid loves it....it does more then an IPOD....and it stiffenss my kid's backbone!
If you look at a Hottub...it's probably the 3rd or 4th most expensive item people buy. House, Car then toys
I say live cheap early on and make some dough....then you can spend it....when you have it. Don't owe anybody but the bank on your house.....and make sure you own at least 25% of the original equity. That's a safe strategy. :)
-
I find most people are living beyond their means. Credit card debt in the US is higher then ever.....that is just stupide debt. Then again we are an IPOD christmas society....I am not sure about you, but my parnets were not spending $300 plus on just one of many gifts they gave me. The keep up with the jones's is unbelivable.
By the way, I bought my kid a Sansa 250...at $69 dollars witha $30 reabte at office max...it was a great buy at $39. My kid loves it....it does more then an IPOD....and it stiffenss my kid's backbone!
If you look at a Hottub...it's probably the 3rd or 4th most expensive item people buy. House, Car then toys
I say live cheap early on and make some dough....then you can spend it....when you have it. Don't owe anybody but the bank on your house.....and make sure you own at least 25% of the original equity. That's a safe strategy. :)
My oldest needed an IPOD, at 16 it's all about name brand (it's also seems for older people too) and he got one this Christmas. The Christmas before he got a Sandisk 512 MB. I think the IPOD is nice but you do get more features in a Sandisk. He's a kid and I'm hoping he'll outgrow it, I already warned hi to plan on making a lot of money as his tastes are expensive.
I think how to live is dictated by your situation in life. If you're 25 and live at home ... bank as much as you can and spoil yourself a little too. If you're 25 and have 2 kids then buckle down and forget the toys. Having money and possibly a house are the 2 most important items to me. My wife and I decided that we were not going to strap ourselves just for a house ... the bankers model of 28% housing payment is fine by us. We made mistakes along the way but they were never too bad.
-
My oldest needed an IPOD,
Are you sure he needed it? I have to disagree with this statement as thinking like this can lead to big trouble down the road. EG: I need to live in a 6000sf home, I need to drive a 50,000.00 SUV, I need to have all the latest gadgets and toys. There is a very large gap between NEEDS and WANTS. For the most part I believe as Americans we are very blessed with what we have and don't realize the high standard of living most of us are enjoying.
-
My oldest needed an IPOD,
Are you sure he needed it? I have to disagree with this statement as thinking like this can lead to big trouble down the road. EG: I need to live in a 6000sf home, I need to drive a 50,000.00 SUV, I need to have all the latest gadgets and toys. There is a very large gap between NEEDS and WANTS. For the most part I believe as Americans we are very blessed with what we have and don't realize the high standard of living most of us are enjoying.
I should have put it in quotes ... my sarcasm didn't come through!!!
-
I need my iPOD so I can drown out those voices in my head that keep talking to me. :-/
-
By the way, I bought my kid a Sansa 250...at $69 dollars witha $30 reabte at office max...it was a great buy at $39. My kid loves it....it does more then an IPOD....and it stiffenss my kid's backbone!
That may work in the short term, but a few years from now, who will stand behind your Sansa with warranty work and service calls? The only way to buy an MP3 player is to buy an iPod through an authorized Apple dealer!
-
By the way, I bought my kid a Sansa 250...at $69 dollars witha $30 reabte at office max...it was a great buy at $39. My kid loves it....it does more then an IPOD....and it stiffenss my kid's backbone!
Wait, no - don't buy an iPod! Get a Sansa from Costco- they're just as good as iPods, only iPod sales people will tell you otherwise! And, Sansas are cheaper because they don't have to play for all those salespeople like Apple does! Plus, with Costco's generous refund policy, you can take it back if it doesn't work!!
-
Sansa ...Sandisk...Vinny, another stock to watch..
My kids have both, and I prefer the sansa players..