Pool and spa professionals seeking a new source of revenue might want to consider following in the footsteps of Jan Sotelo, owner of Modern Design and Build in Austin, Texas.
After constructing more than 150 pools over the course of 11 years, he and his wife, Keli, opened Modern Pools and Spas four months ago as an exclusive dealer of Marquis Spas and Master Spas’ Michael Phelps Signature Swim Spas.
Taken alone, this business move isn’t that unusual. Though he never stocked an inventory, he’s been working with hot tubs on a limited basis since 2000.
His strategic decision to open a stylish showroom this July in an exclusive, busy shopping mall, however, is a different story altogether.
“With the recent economy, we were looking for a new revenue stream. We wanted to fill in the gap and offer things at a different price point, so we decided to take on spa sales and do it in a big way,” Sotelo says. “Very few people know about swim spas, so we went to the highest end retail location to introduce them.”
The 7,200-square-foot showroom at The Domain in Austin sits between a Victoria’s Secret and Sur La Table, where a calm environment beckons shoppers away from the bustle of the mall. The clean lines, sleek lighting and open floor plan offer an appealing backdrop for the 15 models carefully placed throughout the floor. Serious buyers who don’t feel comfortable testing one of the four wet models in public can easily head over to his 4,200-square-foot warehouse a mile down the road to try out a unit in private.
Some experts suggest a spa’s features are what sell the product. While this may be partly true, Sotelo believes having an inviting place to display them is more effective, especially when catering to a sophisticated customer.
“I have been in the Austin market for a while. What sells product [here] is how it looks,” he says. “Your high-end buyer is not going to go to a warehouse facility. In order to reach the high-end clientele that is willing to pay [for the product], we put it in a different setting than what they are used to.”
He bases this philosophy on his personal experiences as a designer, as well as his trips to industry trade shows, where manufacturers typically set up elaborate displays using everything from pergolas to palm trees in hopes of enticing dealers into buying 10 or 20 units. “The manufacturers put a lot of money into showing their product. You go to the dealer and it’s not the same setting. We feel like it works the same way with consumers,” he explains. “It’s the same philosophy. Why not take it to the next level?”
Many shoppers are drawn to his showroom’s serene ambiance. Others stop in to look at the enlarged photographs of Sotelo’s pool projects lining the walls, much like in an art gallery. Either way, one thing’s for certain: The plan is working.
While most dealers agree that today’s shopper has previously owned a spa, the award-winning designer has effectively reached nearly all first-time buyers. So far, he and his staff of two are selling an average of three Marquis models and one swim spa per week. Originally the showroom was meant to be a temporary location to launch his new business, but he has had such a positive response and consistent sales that he is considering staying through the holidays and possibly into next year.
Sotelo also attributes his instant success to the average $100,000 price tag of his pool projects, claiming this actually has validated his authority to sell spas. Knowing that he usually produces a much more expensive product, he says, makes customers feel more confident in their spa purchases.
Although a slowdown in pool builds prompted Sotelo to turn to spa sales, opening the showroom may actually boost his firm. He has yet to seal any deals, but he has landed at least one new lead per week since the grand opening, and uses the heavy traffic area to reach homeowners who otherwise may have never heard of Modern Design and Build.
Manufacturers are expressing approval of Sotelo’s concept store as well. He says several spa makers have visited the space and voiced enthusiasm for his unique approach. Granted, the interior walls, floors and colors of the room already existed, but it lent perfectly to the mood Sotelo was hoping to capture. The permanent features also made designing the space slightly more cost effective.
Sotelo admits opening a retail store in a mall can be an expensive method of boosting business. Not only did he hire a commercial real estate broker, he also is paying some of the highest rent in Austin, which includes a percentage of his overall sales, as written in the lease. Luckily, however, he has a design background that helped him create a stellar space. If someone is interested in opening a showroom in a mall or redesigning an existing one, he suggests investing in the right help.
“I recommend that they get with a designer,” he says. “There is an expense with that, and in the short term it might not pay off, but in the long term it will.”