In 2010, Rick Colosimo had a problem. The recession had cut his spa business to a fraction of what it had been a few years previously.
But he also had a number of hot tubs he had picked up from bankrupt retailers, so he put those on the sales floor and “… all of a sudden, the engine started up again and people were buying,” says Colosimo, owner of Rick’s Pool & Spa in Corona, Calif.
“Although they were new spas, we were telling people they were used spa prices, and they started flying off the shelves.”
Colosimo had a solution to his problem, but now he had to get more spas that he could sell at similar prices. So he started refurbishing used models.
Today, Colosimo has a big refurbishing center located a couple towns away from his retail store. At any one time, he has five or six spas being refurbished by a crew of four, and perhaps 40 more units waiting their turn. So far this year, he’s sold more than 100 refurbished spas.
The same is true for John Voss, owner of Back Yard Delights in Blairsville, Ga. His company is located in a resort area in north Georgia. About half the spas he sells go into vacation rentals. Their owners believe their houses need spas, but they don’t want to invest too much in them.
To supply their needs, Voss has set up an extensive operation, complete with special racks to make it easier for his technicians to work on the spas. “We can turn these around in one or two days,” Voss says.
Prescott Spas does about 25 percent of its business in used spas. And it’s a lucrative business. “Most of the time, we make more, or at least as much, as selling a new spa,” explains Steve Kasten, general manager of the Prescott Valley, Ariz.-based company.
Indeed, the growth of the refurbishing market stands as a bright spot in a segment still struggling to regain volume lost in the recession. But before jumping into this field, there are a number of things professionals need to know.
Getting inventory
Refurbishers come upon used spas in different ways. Some are trade-ins; others are purchased through classified ads. Sometimes, a spa owner who no longer has room for his tub will call a dealer and offer the unit to him for the effort of removing it from the customer’s yard.
“We get them from consumers that no longer want them. … I don’t think I’ve ever paid for a spa,” admits Doug Dinkins, owner of Houston’s Spa Inspectors. “Being in business 27 years, I have a huge list of customers.” Dinkins adds that he gets 12 to 20 spas a year in this manner.
Those who do pay for spas usually don’t pay much, and sometimes have to adjust what they’ll spend when a unit’s in bad condition.
“If it’s been sitting for a while, it’s a total crapshoot,” Kasten explains. “In that case, we’ll say, ‘We’ll bring it back to the shop and fill it. If it holds water, we’ll give you this much. If it doesn’t, we’ll give you less.’ ”
Sometimes a dealer ends up with spas in trade, fixes them up and sells them. Often, these models will sell as quickly as they are made available.
Holding water
Once the spa is in-house, a refurbisher will first see if it holds water. Many used spas have some sort of leak, often in the plumbing.
Next, it’s important to check the equipment. “We’ll put new seals and bearings in most of the motors,” says Mike Bednarowicz, owner of Presque Isle Hot Tubs in Erie, Pa. “They’re inexpensive enough and it gives the customer a better product. And I don’t have to go into their backyard in six or eight months and do it,” he adds.
At that point, a check is also made of the spa’s safety devices. “We upgrade anything necessary for safety, including any flow switches, safety suction devices, filter baskets and filter covers,” Colosimo says. His crew then tests the jets and electronics to ensure they’re working.
Kasten puts his spas through a 32-point inspection to see what might need replacing. “We go through everything in the spa,” he confirms. “We almost always put a new ozonator in it.”
Cosmetic surgery
Used spas need to look as good as possible if they’re going to compete with their newer counterparts for attention on a sales floor. To that end, most refurbishers will polish the tubs and replace the pillows and jets as a matter of routine. Other fixes can include new control panels lenses for the lights and even a stereo.
“In most stereo spas, we’ve just been replacing the stereos,” says Colosimo. “It’s nice to have a brand new stereo with an auxiliary for the iPods and MP3 players. It goes over well with the customers.”
One cosmetic feature that can require more work is the cabinet. Some refurbishers will build a new one, while others will order fresh wood panels from the manufacturer. “If it’s a Hot Spring brand, the wood is available. We’ll repair it and re-stain it, usually with a heavy stain,” Kasten says.
The result can be impressive. “Customers sometimes can’t tell they’re used, they just ask ‘Why are your spas so inexpensive?’” Colosimo says. “At that point, we tell them that they’re previously-owned spas. Ninety-five percent of the buyers don’t care that they’re previously-owned spas because they’re pretty, they’re priced right, and they’ve got a decent warranty.”
Most dealers back their work with warranties, ranging from 30 days to a year.
Odds and ends
Although the sale of used spas can cannibalize the new spa market, retailers aren’t getting too much pushback from manufacturers.
“They know what the score is,” asserts Kasten. “It’s better than going out of business. I would say the ability to [refurbish spas] has gotten us through the rough part of the economy. And it’s a great value for people.” And of course, those fixing up used spas often buy parts from the manufacturer.
But refurbishing spas can present unexpected challenges. Sometimes the units come with tenants that must be evicted before work can begin. “There are all kinds of animals that live in them,” Dinkins warns. “It’s just like a great little condo.”
Some refurbishers do a lot of their work in the winter to keep their techs busy when they’re not servicing accounts.
“If it’s a rainy day, and we can’t do work in the field, we’ll start refurbishing the spas,” Dinkins says.
Voss has now branched out into swim spas. “If it holds water, we’ll refurbish it,” he declares.
