Quote:
Originally Posted by CBorders
I think I'm going to have two kinds of customers:
Customer #1: The college student, teenager, preteen who thinks longboarding is cool and wants to give it a try. They or their parents come to the shop or go online, buy a complete board that is ready to ride out of the box, and they ride it for a while. Some make it a primary mode of transportation, some make it into a regular hobby and accumulate more equipment, but the majority prop the board up in the closet and take it out once or twice a year, usually to put it on Craigslist or move it to the closet of their new dorm next semester. For these people, I need to get them to completely pimp themselves out one time with a complete board, safety gear, and some apparel and accessories because that's likely the only shot I'll get with them -- it's just the nature of our consumption patterns. To make the most from these customers I think I need their average transaction to be in the ~$300 range, which is about what it costs to get into the sport. There are no fewer than 2500 of these kinds of people within 10 miles of my prospective storefront, probably 5000-8000 within a 25 mile radius at least. These types of people will continuously flow into the area through the university which is located a stones throw from my target location. Our area has a lot of younger families aged 30-45 and these people have pre teen and teenage children as well, and I think as those children get older there will be further interest in the sport. Online, there are at least a few million according to the data I've compiled.
Customer #2: This is the serious hobbyist shown in the video above. He skates multiple times per week, usually with large groups of friends. He shreds wheels at least once per month, and because he likes to participate in all forms of longboarding he'll be more apt to buy different styles of decks, wheels, trucks, bushings, grip tape, etc. to find the perfect setup. He's typically strapped for cash so when he buys gear that he doesn't like, he puts it up for sale second hand for about half the price he paid. This customer will probably spend $60/month on average in my store, with the most commonly purchases being wheels ($30-$60), decks ($85-300) and bushing kits ($7-$20). I know of at least 300 people within 25 miles of me who fit this profile, and this number keeps increasing as 12-17 year olds continue to get involved in the sport. There are a few hundred outside of my metro area, and tens of thousands online.
If I had to guess I'd say between 25% and 40% would be repeat customers, but this is just a gut figure and I wouldn't use it for a calculation.... I need to look into these kinds of metrics a lot more.
If the serious hobbyist sells for 50% of the price he paid for an item and there is a lot of churn, have you considered the GameStop model of selling "preowned" stuff at around 80% of full price (and buying dirt cheap)? If you pay the hobbyists 35% (or 50% in store credit i.e. 25% real money) you can make a really solid margin.
It seems tacky/ pawn storeish but it's the largest driver of revenue for GameStop (more than new game sales) and they seem to be doing pretty well.
Not just that, but by offering to buy items on the spot, you ensure that your repeat customers routinely come in to your store. Even if their plan is to sell something, they may well wind up buying something else in the process.
