About three years ago, Joseph Musnicki realized his customers couldn’t always drop into the store to stock up on spa chemicals.
So the owner of Ocean Spray Hot Tubs & Saunas in Westhampton Beach, N.Y., became an e-tailer. In addition to maintaining his storefront, Musnicki added shopping capabilities to his Website, and soon enough, he was shipping products all over.
“I like to get customers into the habit of going to our site and buying online,” Musnicki says. “It keeps them loyal to us. And while they’re there, they can also see what other items we’re offering.”
Online selling, according to the U.S. Census, has never been more robust. In the third quarter of 2010, retail e-commerce sales accounted for $38.8 billion nationwide, an increase of 14 percent over the previous year. By contrast, total retail sales in the U.S. rose less than 6 percent in the third quarter of 2010 vs. 2009.
In response, a small but growing number of traditional pool and spa retailers have embraced e-commerce by setting up Websites that run parallel to their brick and mortar businesses. The concept is simple enough: If homebound entrepreneurs can sell antique dolls on eBay, how difficult can it be to deliver a bottle of sanitizer?
That said, a few key logistical points — product mix, pricing and shipping — should be considered before launching any online selling venture. Here, veterans of the practice explain what works for them.
Products
In Grand Rapids, Mich., Jodi Tracey splits her days between purchasing and managing information technology for Pools Plus Inc. And today, IT takes up a sizeable percentage of her time.
Among her top-moving items, Tracey points to pool and especially spa chemicals, as well as spa parts such as pumps, heaters, filters and replacement covers, particularly manufacturers’ originals.
To keep the site fresh, Tracey updates it often — she tries to add new products weekly based on customer requests (usually received online) and items she sees on other sites as well as in the trade press.
A number of other retailers, such as Vince Davenport, typically refresh their e-commerce offerings quarterly or monthly. The vice president of Swim Things in Blue Springs, Mo., says products are updated every four weeks or so from October through March, and generally remain the same through the swim season.
His best sellers tend toward inflatables, toys and underwater diving games.
“It’s the flashier items the kids are more attracted to,” he says, “things that are more for the fun of it than the functionality. And most of them aren’t available everywhere.
“Plus, it’s harder to compete price-wise on the larger items,” he continues, “because someone’s always able to sell them for less.”
Toys and games also are a popular online category at Teddy Bear Pools & Spas in Chicopee, Mass., where e-commerce has been a part of the business for the last five years.
The store not long ago picked up the warranty for Esther Williams and Johnny Weissmuller pools and equipment, so aboveground pool parts such as slats, top caps, bottom caps and pump baskets have become sought-after items online, says store manager Stephen Otto.
Retailers also report heavy Web-shopping demand for nets, skimmers and spa accessories, as well as shock and chlorine treatments. However, it should be noted that shipping certain chemicals may require additional hazardous-materials certification, which in turn could add to the cost of shipping and handling the product.
And unlike new spas, which are subject to territorial restrictions (a retailer can’t sell into another dealer’s market), pre-owned hot tubs represent yet another e-selling opportunity. A number of merchants offer Internet specials on marked-down tubs they receive as trade-ins.
Pricing
At Black Pine Spa & Leisure near Seattle, most chemicals sell for up to 25 percent less on the Website than they do in-store.
“Margins are tighter online,” says general manager Khasha Mekanik. “Some of that [pricing] we just have to do to stay competitive.”
Other retailers do try to keep e-commerce and showroom prices consistent. Otto prefers it that way because, as he puts it, “I don’t have to argue with the customer who comes in and complains about it. Plus, we’re within the range of everyone else’s pricing anyway.”
Swim Things also tries to keep its online pricing as close to in-store as possible. However, the store will compare pricing on certain items with similar dealers, and set its own rates competitively, or lower, Davenport says. But, he adds, they will never go more than 10 percent below in-store.
Victor Castro, co-owner of Swimquip in San Diego, researches competitors’ sites to determine his e-commerce rates as well. His general rule of thumb: Online prices are strictly for online customers.
“They’re getting full service when they come in,” he says. “So I’ll charge them more for that in-store consultation — that’s why there’s the difference in price, and that’s how I justify it. It’s higher
because here we pay rent.”
Pools Plus follows a similar philosophy — namely eyeing similar sites while sticking to the 10 percent rule. Tracey, though, is usually willing to price-match her online rates when in-store customers request it, but only when it’s her online price. She’s much less apt to do it for other sites’ prices.
On promotions, some retailers offer the same specials online as in-store. Or, as Black Pine did recently, they may run an in-store special on spa covers in which the sale price was equal to the Internet price.
But in general, e-commerce pricing tends to fall anywhere between 3 to 25 percent below that of in-store. And retailers clearly monitor their online-only counterparts for cues.
Logistics
Most pool and spa merchants handle e-commerce transactions through secure online payment processing services like PayPal, Authorize.net or Google Checkout. And typically all major credit cards are accepted, though a few avoid American Express, citing costlier fees.
Shipping is done a few different ways, and may depend on the nature of the purchase, storage capabilities, customer distance and agreements with distributors.
For example, Swimquip might mail a smaller product from its store via the U.S. Postal Service, or purchase a larger product that the distributor simply drop-ships directly to the consumer. That’s particularly useful, Castro says, because the company’s two biggest e-commerce customers are commercial accounts in Cabo San Lucas, Mexico.
Other merchants use UPS or Federal Express — whichever offers the better deal.
One FedEx customer, Pools Plus, delivers products locally, nationwide and across the globe. Free shipping is provided for orders in excess of $50, Tracey adds.
Though not quite as international, some 75 percent of Teddy Bear’s e-commerce business comes from out-of-state, Otto says. In fact, he adds, such orders increased 150 percent in 2010 vs. the previous year.
What’s more, their UPS rates dropped twice in the last 12 months.
Meantime, online customers of Black Pine and Swim Things generally are found closer to home. The vast majority, Mekanik and Davenport say, fall within the local region. Because of this, both companies’ Websites are geared toward the Seattle and Kansas City markets, respectively.
“The bulk of our online shoppers are people we want to bring into the store too,” Davenport says.
