HikeArizona.COM

High Adventure. I have a Optimus 8H stove that was $ 12.95. M 1956 Surplus gear Load Bearing Equipment from Laradas. All canvas but I switch to a nylon one for the alleged wet weather. Yellow Front, WW II canteens, mess kits and a lot of Levi pants. Popular, every thing else including White Sierra Jackets and Columbia clothing which the dtore in Scottsdale had my size in stock.

@Nighthiker
Don't forget Yates. :-)

There's a Big 5 not far from where I live and every time I drive by I wonder how they're still in business. It's rare I see more than one or two vehicles in the parking lot. Competing with the big box retailers with strong online components like Ralphie's Red Ryder, Bass, Scheels, and REI has to be a challenge.

The one thing that I wonder about is guns. Big 5 sells them. I'm guessing that there's higher margins in that market than there is for footwear. Firearms are one sporting product that may be somewhat insulated from online competition since even though you can technically purchase them online, still requires you to go to a local dealer/store to pick up. It might be the key product to keep them in business.

Did all the little guys that have closed sell guns, or just clothes?

@chumley
Unlike antique (pre 1898), and collectable historic pieces there is a very low profit margin in modern and new firearm sales. However, prices have doubled and sometimes tripled in recent years so a dealer doing high volume can bank some good money. Same with ammunition.

@LosDosSloFolks I wouldn't want to run a store and deal with all the regulations, security and liability issues for a product like that if there wasn't really good margins on it. I guess this is why I don't own a sporting goods store!

@chumley
The unannounced visits by ATF to "audit" your logbooks are extra special.

@chumley
A friend of ours was at the gun dept. at Cabelas. Very small profit margin on guns and ammo. It was all the accessories plus those places also sold fishing gear. So kind of one group eating their camping experience and the other watching it. The demographic difference between Sportsmans Warehouse and REI is interesting. Something one can see the moment they enter the parking lot.

That's interesting; I would've thought guns would have a decent margin on them, too. Most people, even gun people, aren't buying a new one every 6 months or even 2 years, really, so you're not getting a ton of repeat buyers like with clothing. I own a couple but I think it's been 9-10 years since I bought a new one and likely won't buy another as my "needs" are met. Maybe it's similar to alcohol and so many other things where it's the 20% of gun nuts who reeeeeeeealllly love buying guns prop up the whole thing.

Any idea on the margin %% average? Grocery stores get away with low margins of 3-5% but that's because everyone has to eat, so they get repeat business everyday.

@xsproutx
I don't know the margin, but they are almost a loss leader for everything else in the store, like ammo, lots of ammo. For many years I wouldn't shop at REI because an "outdoor" store sold guns and fishing stuff. Then an REI opened by us and we shifted our clothing needs to there. We stopped by the REI on wed., walked out with nothing but sticker shock. My wife and I will be saving up for the $19.00 titanium plates.

@xsproutx
Between 8 and 15% depending on specific product demand at any given time.

@xsproutx I think you settled on one of the primary problems with the outdoor gear industry. Tents, sleeping bags, backpacks, bikes, canoes, etc. are big purchases that generally only happen one time over a span of years. Shoes and socks are regular purchases.

Reminds me of an ancient SNL skit about a bank that makes change. (Four quarters for a dollar? Five dimes, six nickels and a quarter? We can do that!) — How do you make money doing that?: — Volume!
[ youtube video ]

@xsproutx
A lot of people buy guns pretty regularly, more than one or two a year, and not from hokey big box outdoor retailers. They’re just not advertising their purchases.

Thread degredation warning-- you want sticker shock most of the online cottage gear sellers must be having supply or worker issues. I did a major purge of some of my gear that wasn't cutting it and replacing with some that will--- at a high cost. Just took delivery of a dyneema tent 2P that I can lift with my little finger. Fine workmanship looks like, obscene money. But it was my choice. Will be taking delivery soon of a backpack made by Seek Outside, Colorado; mostly hunting retailer. Now only waiting on the bivy made by MLD, should be getting a notice from them soon.

@LosDosSloFolks
I would assume that's net vs gross and, assuming that's correct, that actually is a pretty high profit margin by most people's standards. I would expect gross to be 3-4x of that typically.

@chumley
I think I've mentioned before that I work in supply chain software. It's public that REI is a customer of ours and I can tell you for sure that the reason they've brought in the people they have with the backgrounds they have in the last few years is just that. In the outdoor space, quality has gotten quite good (generally speaking) so purchases are less frequent. Customers who are frequent outdoors enthusiasts will often now buy from "cottage" brands online because they provide a better product for cheaper, typically. So, in store, you get people who are "new" and they either will try it out and not like it (so not come back) or become enthusiasts who learn you can get better products from smaller companies online (with a warm and fuzzy because you're not only getting something better, but you're supporting a small business).

So thus, the move to apparel that everyone here kind of hates. But clothing wears out, trends change, so people come back to buy more. REI had other issues as well like spending waaaaaaaaaay too much on real estate expansion during covid without thinking long term but yeh.

@RedRoxx44
Hah! You responded while I was typing my response but it supplements/proves the point so well!

@xsproutx
As you know, retail profit margin is not determined by how much you mark something up, but by what percentage of the total sale is profit.

@chumley
I’m also surprised Big 5 has managed to survive. They’re junky, and don’t have a great selection of anything. It does seem like their stores in smaller cities tend to have more foot traffic than the more urban locations.

@LindaAnn
That's exactly HOW they survive. It's sort of the dollar general approach; focus on smaller towns/poorer markets that will buy the low quality stuff because that's what they can afford/it's the only option (IE, Payson [for big 5, specifically, not the DG comparison). In larger metros like Phoenix, if you have the tools to pull up average income heat maps and you overlay Big 5 locations... you'll find a 5 mile trend.

I worked at The Sportsman on 7th Ave/Camelback for a couple of years in the early 80's. Guns, Fishing, Archery and some general camping stuff. It had been around for about a decade and when I was there, it was competing with Yellow Fronts, Popular and some other small retailers. Then Sportsman's Warehouse opened, followed by Cabela's and Bass Pro, and it pretty much was the funeral for the smaller guys.

Believe it or not, I do shop at Big 5 occasionally, mostly for tennis shoes, but occasionally for cheap backpacks or fanny packs. Bought my Coleman Stove there years ago. Their prices are pretty comparable to Walmart depending on the product.