Put Your Camp Store To Work

Open For Business

Almost everyone thinks it would be fun to “run a store” for awhile. The store manager orders some merchandise, stacks it in nice piles, and starts selling. But at the end of the summer, the money coming in is less than the money spent. That’s the story of 90 percent of the new businesses in this country, and probably an equal number of camps. Wouldn’t you rather be part of the 10 percent?

There are many reasons to have a store. The first is people expect it. When your campers’ parents were kids, they bought ice cream and some craft lacing at the camp store. Second, kids like the freedom of being able to make a choice like they do at home. As much as you may hate it, “shopping” is part of the culture.

And guests may actually need some things–toothpaste, a towel or some batteries. For many weekend family groups, the parents will be just as disappointed as the kids if the “Trading Post” or “Ice Cream Parlor” isn’t a part of the visit.

If you have a knee-jerk reaction against “retail at camp,” it will do some good to put it aside until you get to the end of this article. If so many people have camp stores, it’s important to know why and how they meet their goals.

The Long And Short Of The Money Trail

Making money (or less crassly, raising revenue to help offset the costs of running a camp) may be the most obvious reason to have a camp store, but it’s also the one camps achieve least often. If a store provides items valued by campers and their families, expenses should be covered with money to spare. By far, the biggest problems are misunderstanding pricing (most price too low), selling and expense control.

The economic truth about retailing is that price has more to do with what people are willing to pay than with the actual cost of the item. Take a look around at what consumers pay in other places, such as resorts, hotels and recreation areas. Take that price–say $15.99 for a nice T-shirt and $1.75 for a sports drink–and cut it in half. That identifies the highest price you can buy the item at wholesale and still cover expenses. In order to cover expenses, the wholesale price should be doubled.

Consider the list of expenses:

•Cost of goods sold–the price paid for T-shirts, plus the cost of shipping, which can be as much as 10 percent of the cost

•Staffing Costs–not just the hours the store is open, but also stocking, cleaning, bookkeeping, ordering (and often that’s your time… expensive time), staff benefits–FICA, workers’ compensation, etc.–usually adds another 50 percent to staff costs

•Occupancy–heat, lights, electricity (especially for coolers and air conditioning) and maintenance

•Shrinkage–items that can’t be sold because they are damaged, stolen by employees (number one in retail), shoplifted, or gifted to VIP visitors (number one in camping!)

•Mark down–stuff that won’t sell for various reasons–you ordered things people don’t want, you ordered too many, you’re left with odd sizes, etc. Keeping it too long creates “shrinkage,” so better to sell it off at a discount and increase it over time by 40 percent off, 60 percent off, etc.

That’s a lot to be covered by initial mark up. And in most retail, it amounts to 50 percent of the selling price. Don’t believe it? Like many camp people, I’m a member of REI, the outdoor co-op store. At the end of every year, I get the annual report with my dividend. This past year, REI reported its “cost of goods sold” was exactly half of “gross revenue.”

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