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.”
The 100-percent mark up doesn’t apply to all items equally. Pre-packaged food items are often marked up less if the store is likely to sell every one in the case (high turnover) with little theft or damage, like breakfast cereals or packaged snacks. But the price of items with a high rate of spoilage--like produce, or those hot dogs rolling on the grill at the gas station at midnight--need to cover a lot of product that never sells. It’s the same with “fashion” items, like clothing. There will always be sizes or styles left that nobody wants, and they’ll have to be marked down before they are finally shipped off to Marshalls at pennies on the dollar.
Feel badly about charging so much? Look at it this way--if the people who actually buy your shirts, snacks and knick-knacks don’t pay what it actually costs you to sell them (see all the expenses above), then all of your campers and donors will have to subsidize those purchases through your budget. And I’m guessing they don’t know they’re doing that.
Don’t like to nickel-and-dime camper parents? Yeah, that’s why Disney World includes T-shirts, snacks, drinks and souvenirs in the price of admission, right? No, because a park ticket costing $120 per person seems outrageous. People think it should cost $50 to get into a theme park, and they want the freedom to choose how much they add on or not. “But doesn’t Disney want people wearing Mickey Mouse shirts? That’s the reason we give shirts to every kid.” Let’s follow that idea.
“It’s Good Advertising To Have Our Camp’s Name Out There”
It’s good advertising to have people actually wearing your camp shirts in front of other people who can make the decision about which camp to go to. There’s no value having your T-shirt in the bottom of a kid’s drawer because he or she won’t wear it, or in the rag bin because it ripped the first time it was used. And that’s often the case with really inexpensive “give-away” shirts. “But we only pay $2.50 each for them.” And if half of those kids ever wear them to school, then you’ve actually paid $5 each. And if one out of 10 of those kids is ever asked “What’s that camp?” it becomes $50 each, and if one out of 10 of those kids ever tells a parent about seeing that shirt, then it’s a $500 a shirt. Hmm.
Most resorts create shirts that are so nice in quality and design that you’re willing to pay for them. And because you choose one you really like, you’re inclined to wear it. And the biggest score is getting Mom or Dad to wear your shirts or jackets. Then real decision-makers will see them.
Now, if they feel good about seeing your attractive shirt, what do you think they’ll say about a cheap, plastic flashlight that breaks before it gets home? That flashlight might be something that a kid needs if it costs you a buck and you sell it for two. But if you have it “custom imprinted” and have to sell it for $6, then a parent (or camper) will have reason to be concerned. So the lesson here is that some things—high-quality items that will last as souvenirs--are appropriate to have your name on them. But utilitarian things—like bottles of water and cheap fans--may be better off “anonymous” and less expensive as a result. You’ll make a better margin, and campers will be happier.
Where, Oh Where, Did My Merchandise Go?
After pricing, the most difficult issue to tackle is shrinkage. Ensure a safe way to store shirts and other items that are prone to damage from water, dirt, mice, etc. For the cost of one ruined shirt, you can buy a big, clear, tightly covered bin to store a stack. A shirt that gets dropped on a dirty floor or chewed by mice is just like burning money. Clothing stores have carpeted floors because clothes are less likely to pick up dirt if they are dropped. Try it at home, it’s true.
Theft is wasteful expense that must be considered. Some things are easy to walk off with or grab in a hurry, like pens with the camp name. I’ve never heard anyone say, “I signed my kid up for a $700 camp because I got this pen with a phone number on it.” Buy a big box of inexpensive pens at the office supply store.
Sodas and candy are stolen or “given to friends” if store staff feel they aren’t being treated fairly. A director who drops in and shows she cares about her workers and notices their efforts will generate more loyalty than a closed-circuit TV.
Cash is the easiest thing to steal, so if you have a register for cash sales, displaying a sign that says "Always request your receipt," and having a printed register tally submitted with the cash drawer after each shift helps keep people honest. Have a two-step accounting system--always have someone verify the numbers and sign off to leave a "trail." Most camps do finances on a “cash accounting” basis, which means counting merchandise as an expense when the bill is paid and counting revenue when people pay you. That gets tricky when running a store (or a kitchen), because of the inventory carried over between financial periods.
The only good way to know if you’ve done well is to inventory everything in the store and place a value on it at year-end and the New Year. The difference between the inventory that started the year vs. what you finished with will be either positive (you bought more than you sold) or negative (you sold more than you bought). It’s an easy place to make mistakes or hide them, so let everyone know the goals.
Keep Inventory As Lean As Possible
Merchandise that hasn’t sold in a year is tying up money that could be used to purchase items that do sell well. When a mistake is obvious (what was I thinking with those cammo tube socks?), don’t wait to unload the item. Hold a big sale. Getting 50 or 25 cents on the dollar is better than nothing, and it will free up space and cash for items that will sell. And don’t get enticed to buy too much of anything because “they’re so much cheaper if I buy two years’ worth.” What is saved is less than the profit that would have been made if a variety of products were purchased to sell this year instead of next.
Remember when I asked those anti-store folks to stick with me to the end? Here are a couple things they want us to know--kids will eat any junk food we lay in front of them. Just because they like it doesn’t mean we should sell it. Take a serious look at how to substitute healthier choices. This society is so focused on food as instant gratification that we adults need to set some limits like our moms used to do for us. Low-fat milk and warm oatmeal cookies are a much healthier alternative than Snickers bars. Cold watermelon and slices of oranges can be a substitute for sugary treats. Get creative.
Buying souvenirs is OK, but making them is even better. Teach counselors how to braid lanyards (craft lacing) during staff orientation, and every kid will be doing it during rest hour. Silly? Not when they’re sitting on their counselors’ bunks asking to learn a new design. Not when they give their “gifts” to Mom and Dad when they get home. These are some good reasons to have camp stores, and even better reasons to run a camp.
Gary Forster is the camping specialist for the YMCA of the USA. Contact him at email@example.com.