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Are Sporting Goods Stores Profitable?

Are Sporting Goods Stores Profitable?

Part of the profitability of certain industries is dictated by the state of the economy most of the time, which means that economic recession and crisis can impact all industries. Aside from that, the profit produced from a retail store or chain is dependent on its competitors and business plan. The sportswear industry alone is currently worth around $62 billion, and it has been increasing in value steadily since 2015, having an expected value of $100 billion by the year 2025. The market forecast reveals that 60% of the value is generated from footwear alone, while apparel generated 40%. Even though a good portion of the sporting good industry’s value is generated by sportswear, it’s still not all the industry has to offer. The behemoths of the industry can generate huge profits due to their sheer mass and share of the market, so we’ll try to assess the situation through the eyes of independent or retail sporting goods stores.

Costs and Expenses of Sporting Goods Stores

One of the main problems that many entrepreneurs face when starting their sporting goods stores is obtaining a big enough retail space within their budget. Sporting goods stores are known for having products that range from shoes to kayaks and fitness machinery. This difficulty has put off many entrepreneurs from starting their own store because the initial cost is too much to bear. Various costs like the initial inventory, employees, insurance, software, and other expenses only add to the difficulty of opening a physical sporting goods store.

A dramatic shift in the sporting goods industry came with the rise of e-commerce and digital services. People started depending on online shops to fulfill the majority of their athletic needs as it became more efficient and convenient compared to regular shopping. Entrepreneurs are taking advantage of the ease of operating an online sporting goods store because it allows them to circumvent the high costs of renting space and hiring employees.

Multiple Cash Streams

Unlike the already established and popular sporting goods retail stores, new stores may face the initial problem of gathering a sizable customer base necessary for the growth of the business. Depending on the market and niche, sporting goods stores alone can take more time to grow a customer base and brand awareness. Many entrepreneurs are starting to offer sport instructing lessons to their customers to help them improve their visibility at any particular sport the store supports.

Choosing sports that are within a niche market will help you target demographics who are not able to find the services anywhere else. A lot of stores choose to cater to golf courses with their services and equipment since the sport is often overlooked at most major brands’ stores. According to pro golfers at, slicing tee shots properly requires selecting the right driver in addition to following the proper technique. The high specificity of golfing needs is what makes golfing a profitable niche for sporting goods stores. As stores begin to expand on what they offer to their customers, whether it’s golf or other sports, they become more profitable.

Niche Markets

While major sports like football and basketball are dominated by big-name brands, new sporting goods stores can focus on targeting a niche sport to make finer profits. Small stores can remain in the game and achieve sustainable growth by avoiding direct competition with major brands and by focusing on supplying their target demographic with what they need. While the vast selection of sporting goods can turn a lot of profit for big established businesses, stretching a small store thin with this huge variety of selections will cause the small store to lose its advantage of targeting niche audiences.

Instead of trying to sell equipment for all sports, focusing on a niche market will allow you to grow your brand without having to allocate most of your budget for obtaining equipment. Some stores often turn to selling amateur and youth sports goods, depending on the competition in their area and market. Memorabilia, collectibles, and apparel can also prove to be a very profitable initial inventory that doesn’t cost a lot of upfront money, while still allowing for a decent profit every month.

Used Equipment

Entrepreneurs are also creating consumer-to-consumer dynamic by purchasing used equipment from customers and reselling it to others to create a sizable profit by acting as restorers and a marketplace. Be cautious of accepting used equipment in any state or shape, though, because it can be a recipe for disaster if operations do not play out well because the quality of the products you sell is directly linked to the reputation of your store. To stay profitable, stores should maintain a standard of deep inspection of all the items they purchase from customers to make sure that the equipment can fetch a higher price after being refurbished.

The decision of opening a sporting goods store should be based on the potential profitability, the business plan, and current market affairs surrounding the establishment of the business, but the future looks objectively good for sporting goods as people are becoming more health-conscious. Online stores are proving to be a good and profitable option for startups and entrepreneurs when it comes to sporting goods.

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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.