Navigating the waters of chemical sales can be more hazardous than a leaky barrel of gas chlorine.
Look at the options: Lower retail prices to compete with
Internet sellers, and margins could shrink to unmanageable levels.
And on the other flank, big boxes always have the benefit of longer
buys and purchasing in bulk. (To see a price comparison, click
So how does a pool and/or spa supply store compete in a market
that’s seen chemical prices rise by an estimated 30 percent
in the last year?
First, it’s important to understand the competitive forces
at work and the impact they have on profits. Next, we’ll
delve into the differences geography makes in marketing, even for
the same commodity. And finally, we’ll look at a few tips and
words of advice from those in the know.
Retailers face a number of threats to their profits from chemical
sales. B&L Pools in Phoenix has seen chlorine prices
climb 80 percent over the past three years.
Owner Dale Howard used to run a 40 percent mark-up on a 25-lb.
bucket of chlorine, but it’s now less than half that, he
“Margins have really deteriorated,” Howard explains.
“The big boxes are buying under contract, a year out or
longer, so they’ll always have the advantage. Costco is now
getting up toward a reasonable market cost, but Sam’s Club is
only about 10 percent above wholesale prices.”
Just south of Sacramento in Elk Grove, Calif., All Clear Pool
& Spa Supply has little choice but to keep chemical prices
low, particularly on tablets, shock and liquid chlorine products.
Assistant manager Jimmy Jordan says margins now hover between 10
and 20 percent.
This is necessary in an environment where selling against the
Internet has become key to a retailer’s ability to
“A lot of our customers shop online,” Jordan says,
“and when they come into the store, they say we’re
The Internet has impacted pricing at WCI Pools and Spas’
two stores in Iowa as well. Chemical business remains strong, but
it hasn’t been easy, reports owner Marshall Jurgens.
“We’ve tried not to make drastic changes…and
we’re doing what we can to retain margins,” he says.
“But we don’t radically mark up our chemicals either.
Instead, we try to cushion it over several years.”
His manufacturer prices are up around 30 to 35 percent across
the board, Jurgens says. And his customers may only see an increase
on chlorine, for instance, from $25 to $35 over a 12-month
“The bottom line is we may have to absorb some of those
costs,” he adds, “but hopefully it’ll settle down
Down South, Jack Willard contends with the big boxes as well.
His main competitors are Sam’s Club and Lowe’s. But
Willard also battles another foe.
“A lot of times we’re the same price or
cheaper,” says the co-owner of Splash Pools &
Spas in Daphne, Ala. “But the perception is big store,
better price. And we’re a specialty store.
“We can educate the customers that come in,” he
adds, “but it doesn’t really work to advertise [our
prices] because they wouldn’t believe it. There’s not
much we can do until we get them one-on-one.”
On average, Willard’s chlorine mark-ups only run 15 to 20
percent – the minimum needed to help cover overhead like
rent, employees and equipment. Until this year, salt was a great
seller for Willard and his wife Debbie, also co-owner. Margins
typically ran 200 percent; now it’s about half that.
Much of the South has become a golfer’s paradise. Alabama
alone is home to more than 250 public and private courses, and
upkeep is an almost year-round endeavor.
An abundance of fertilizers and other compounds means algae
often thrives across the region. As a result, phosphate removal
systems have become reliable products for the Willards.
“We’re always looking at what levels those
phosphates are at,” Jack says.
Climate is yet another factor. Much of Alabama has suffered
drought-like conditions this summer. And every chemist knows that
rainwater raises acidity. Calcium is a good stabilizer, but with
less rain there’s less call for it.
Nearly 2,800 miles to the northwest, Orca Spa & Pool
sales manager Jean McManigle caters to mostly (90 percent) hot tub
owners. Among her leading chemicals — “our bread and
butter,” she says — is bromine.
Along with being perceived as “more natural,”
bromine also is an alkalinity increaser. And because the water in
Seattle is largely acidic, hot tubs there can rust more easily. So
owners are steered toward the product with an alkaline base.
Not far away in Elk Grove, Jordan says the high metallic content
of municipal water can be problematic. He’s found a similar
alternative to bromine in a pair of brand-name biguanides —
Still farther south, in Phoenix, trichlor tablets are standard
fare, Howard says.
Lasting seven-to-eight times longer than some popular
alternatives, trichlor offers greater protection from his
region’s arid heat, he adds.
“We have good-sized business for liquid chlorine and cal
hypo,” he says. “But the [trichlor] tablet really is
our major price point chemical in this market.”
Strong customer service — and the future business, referrals
and goodwill it brings — has never been more important for
McManigle at Orca has gotten creative with chlorine. At a 50
percent mark-up, it remains a good performer, she says.
So she’s begun buying in smaller volumes and marketing
smaller quantities. It’s allowed her to sell more product
— three of the 2-lb. variety vs. one 5-lb. container.
Other retailers may cross-promote chemicals with certain spa
brands, or offer a discount with each pool opening.
Jack Willard, meantime, still must contend with his
customers’ own preconceptions. A small percentage understands
the difference between chemicals, he says, but for others, the
explanation can be an exercise in futility.
“People may just buy chlorine because that’s all
they’ve used for 100 years,” he says. “Nothing
you can say is going to convince them otherwise. If the
water’s clear, they’re good. That’s the
Still, Willard tries to impress upon his bigger customers the
importance of distinction.
“The ones we build for and do major repairs for, we make sure
they know,” he says. “A big part of what we do is still
educating the customers.”