Opening your own LHS

[JR Boucicaut 3805]

This is a pretty interesting topic. I think we have all dreamed of hanging around the shop all day sharpening a few skates and shooting the shit about gear but few have actually thought about what actually goes into building a sucessful shop and the actual amount of capital needed.

I am not famaliar with the industry but am curious so maybe one of the shop guys could enlighten me. With high cost to stock new product and keep inventory in stock how do shops afford this? I don't see many shops having tons of readily avail cash, so is it bought on credit from the manufacturer or is it all financed from a bank or investors?

Also, for web vendors do they actually carry a lot of inventory or do they take an order and then immediatley place the order with say Bauer?

Mark -

When you open with a manufacturer you fill out a credit application. If you're approved, you're good to go. Never been in that situation, but a restriction can be put if you have bad credit, like you'd have to pay with a credit card.

Anyway, when you order something, you get terms and dating. You are billed either 30, 60, 90 or 120 days after it is shipped, giving you time to sell it.

Pretty much legit web shops have storefronts and just pluck it out of the store and/or warehouse and ship it. Taking web orders then ordering is a risky move because you would have to be sure that the manufacturer has it. That's what some of the fly-by-night guys do - take orders then order or buy it from a distributor.

[hockeysc23 0]

This is a pretty interesting topic. I think we have all dreamed of hanging around the shop all day sharpening a few skates and shooting the shit about gear but few have actually thought about what actually goes into building a sucessful shop and the actual amount of capital needed.

I am not famaliar with the industry but am curious so maybe one of the shop guys could enlighten me. With high cost to stock new product and keep inventory in stock how do shops afford this? I don't see many shops having tons of readily avail cash, so is it bought on credit from the manufacturer or is it all financed from a bank or investors?

Also, for web vendors do they actually carry a lot of inventory or do they take an order and then immediatley place the order with say Bauer?

Mark -

When you open with a manufacturer you fill out a credit application. If you're approved, you're good to go. Never been in that situation, but a restriction can be put if you have bad credit, like you'd have to pay with a credit card.

Anyway, when you order something, you get terms and dating. You are billed either 30, 60, 90 or 120 days after it is shipped, giving you time to sell it.

Pretty much legit web shops have storefronts and just pluck it out of the store and/or warehouse and ship it. Taking web orders then ordering is a risky move because you would have to be sure that the manufacturer has it. That's what some of the fly-by-night guys do - take orders then order or buy it from a distributor.

My parents use to own their own photography store. My mother would have credit with most companies and for ones she didn't she would use her American Express. She got tons of cash back due to the high volume of purchases but it is risky.

[boganz45 0]

Vakar where do you work? PM me. Later,

[boganz45 0]

Also, I will get you guys' the shop's contact number later tonight. If you call or visit him let him know Jeff sent you and he will make sure you are taken care of. Check out a PM I already got from a member here:

"Thanks man, I acutally read it down the page after I saw your first post. Gave XXXXXX a call and you are absolutely right... the lowest prices anywhere. Will be placing an order with him in the next couple weeks."

Like I said, just sharing my knowledge of savings and selections with you, from a guy who is a class act. Later,

[boganz45 0]

One Stop Hockey Shop

(516) 867-0170

[iron Ghost 0]

I didn't see anyone mention this, but the profit margins in retail hockey equipment are pretty God awful. This is one of the biggest hurdles of all. Everyone thinks that the shops are making a killing on one piece composite sticks and $600 skates but the truth of the matter is that the overhead to stock all sizes/widths,curves/flexes/grip/standard is horrendous for the small guys. It's really tough to compete with the big dogs because you want to have the new stuff when it's available however, you also need to flip your inventory by the time the bill is due (which is tough considering that the product is released typically in Spring and your prime selling time is in the fall/winter. With internet blowouts and other intangibes (no tax, free shipping, etc), it's a really tough game to be in. Not to mention that you are trying to cut cost by hiring younger employees at minimum wages, you often don't get the "Knowledgeable, expert staff" that you hope for AND is necessary to service your customer to the point that no matter how cheap the deals are on line, that customer is compelled to buy from you on the spot instead of going home and ordering on line. Typically, as an owner, you have to be there all day everyday to make it run properly (and to avoid shrink).It's not a gamorous life. All of the stuff mentioned (customers complaining/using you, ect) are all true. Start up cost are crazy too if you want to try it on your own. And unfortunately, there are typically not a lot of room for upward mobility in smaller mom/pop shops. Just my 2 cents.

[jimmy 194]

Iron Ghost, you hit everything right on the money. The margins for hockey equipment suck. Plus for every OPS you sell at regular price, you prob have one you will be selling at a loss when the manufacturer screws you by announcing the new model, or launches an "October Surprise". I sold 5 pairs of skates today, made 0 profit, they all were closeouts. We can compete with the online stores for pricing no problem, where we can't is when they can blow out items at prices less than we paid wholesale. They get the larger discounts up front and can use that advantage when they close out items.

You can make an average income as a LHS owner, but you are not going to get rich. Just look at Pure Hockey, they were $5mil in debt when they went under, and they had the lions share of the market it our area. Honestly, I think I could make more money operating a hot dog cart near a busy park. But, why do I do it? Well, first, I have a great retirement income from my previous job and that pays all the household bills. If I didn't have that, I'd probably would have closed years ago. Second, I love hockey and have been playing the game for 45 yrs. Plus, I've always been a gear-whore. Man, there is nothing better than when UPS comes and drops off boxes of new gear. :D