As the title is literal, not metaphorical, dumbbell business is a market with great potential at present.
Dumbbells – cast iron in a specific shape, set a specific weight and made for simple up and down movements – have become one of the most coveted sports items in 2021. Like kitchenware, cars or electronics, dumbbells have a range of qualities that may not be obvious at first glance.
Some dumbbells are worth every penny. However, in the resale market, on websites such as eBay, Facebook marketplace and Craigslist, the price of dumbbells is twice to six or seven times that before the coronavirus pandemic. Because of the epidemic, many people choose to exercise at home, so it is very important to establish their own backyard gym. Dumbbells are an inseparable topic.
Price increases and profits are the result of dumbbell shortages coupled with rapidly growing demand. But something else is happening: new greedy consumers basically know nothing about the market, and dealers are eager to take advantage of this perfect storm.
“Of course, you know, the question for millions of dollars is: will this thing correct itself? What will happen when it corrects? Will the market shrink? In the final analysis, we don’t think this will happen soon, so the potential to create this market is far more than we see.
There is a shortage of dumbbells and a surplus of dealers in the United States
Understanding the lucrative dumbbell resale market means understanding the shortage. The epidemic led to the closure of gyms across the country in March. Because the fitness plan is pending, people begin to order weight from retailers, which consume their inventory, And placed the most likely order through China (according to my sources, China accounts for 95% of the weight of cast iron). At the same time, China’s winter and spring blockade has put the supply chain into trouble. Retailers’ inventories are still sporadic, sometimes taking months to deliver, and the recent international transportation congestion has intensified. This shortage has put dealers in a favorable position, with advance orders on hand reaching an all-time high.
Our client, home fitness equipment wholesaler Evan, told me, “I never wanted to sell everything I had. I had everything I wanted.”. “Once I put it on paper, I see the market telling me how much money I can make from my gym, which tells me, ‘go ahead, you’ll get three times the return on your investment in this area.'”
Doyle said he had worked in his home gym for five or six years before selling everything during the flu pandemic. Then he used the money to buy back a larger family gym and tried to start his own fitness brand in the wholesale business.
The weight and dumbbells he saw two years ago were less than $1 a pound, sometimes as low as 50 cents a pound. The same weight is now on the resale market at $2.50 to $3 per pound (or more).
If you want to buy a 10 pound dumbbell for 50 cents a pound, it will cost $5. In the current resale market, the weight of 10 pounds may be $30 (if not more). This is a 600% difference. Get and sell enough weight, or sell anything at 600% price, and you have a very profitable business model.
“When I sold all my purchases here, my dumbbells sold for $1.20 a pound,” he told me. Later, “I saw that my four pairs of dumbbells were priced at $2 per pound. They went online two days after I sold them. So I saw that this happened immediately. I sold them at what I thought was a very reasonable price.”
He earns about 30% of the weight he buys from retail stores. His strategy is to go directly to the retail store, ask when the goods arrive, and then flip the weight of his purchase.
Another of our customers, Bara, said, “we receive goods almost once a week, while Wal Mart receives goods almost every day, but they are different.”. “Usually the staff will tell me when to arrive, and I will make sure to get there in the morning when everything is ready.”
When Bara started selling on eBay, he learned that selling locally was a better choice because he could avoid freight and eBay’s price reduction. I asked him what a buyer would say if he and other dealers were bidding up prices.
“I think this should be the motivation to produce goods in short supply,” he said. “Not only fitness equipment, but also many things will raise the price. But some people like to know that people like me have something to buy and can spend a little more money instead of going to the store. There is nothing they want in the store. They are just wasting time.”
Dumbbells are not considered “essential” items like disinfectants and other items during an influenza pandemic. There are no laws or even Amazon directives that prohibit you from hypothetically buying dumbbells from a seller who wants to make an exponential profit. And vice versa: nothing on Amazon, Craigslist or Facebook marketplace can stop sellers. It is worth noting that although these extreme price increases are rare, they are common in commodities such as sports shoes and watches.
These transactions are as simple as clicking on Wenmo and are usually unregulated.
It is not difficult to find dealers on websites such as eBay or Facebook marketplace, which is characterized by multiple sellers offering dumbbells at $2 to $2.50 per pound. On R / flipping subreddit, the seller shared the story of how the buyer’s quotation for dumbbells soared during the influenza pandemic, and formulated strategies on whether the reopening of the gym would drive down the price.
Dumbbells have become a necessity for fitness.
Because in most cases, our way of working still does not return to “normal”. Even in places where the gym is open, some people may not be willing to work with others during the influenza pandemic.
Retailers delay selling weight at a fair price, but using dumbbells allows you to exercise immediately, and you risk being hosed down. Doyle summed up the price dilemma: “how much is my time worth? How much is it worth to get what I want without waiting for two months?”
The answer seems to be a price increase of up to 600%
How do unwitting customers push up the price of sports equipment
For 42 years, American barbell has been the behind the scenes player and commercial manufacturer of American barbell. It provides everyone with services from orange theory to planetary health, but when the pandemic struck, most of its business – $28.5 million out of $30 million in 2019 – closed overnight.
As patty of the American barbell team said, it was a crisis – it lasted about a week.
When the CEO was planning his next move, one of his partners came to him. “He said, ‘we have $4 million in online orders,'” Patty told me. “In 2019, we (online) invested a total of about $1 million to $1.5 million. Now we have $4 million at once.”
In previous times, gyms such as gold’s, equinox or planet fitness customized sports equipment and weight for customers. According to Patty, these customers are now ready to spend money and don’t know what to buy. Therefore, resellers and new retailers hope to profit from the surge in demand, but can sell or resell inferior products at astronomical prices.
Take the hexagonal dumbbell as an example.
Patty explained: “Hex Dumbbell is very, very popular in the domestic market. They always exist.”. “But you know, you can buy a recycled rubber like an old car tire. It will make the room stink and disgusting. That’s most of the things people sell.” (rubber and polyurethane coated dumbbells are popular because they can protect surfaces such as equipment and floors.)
Patty knows very well that his products are not cheap – he says they mean high-quality, top-notch strength training products. His rubber hexagonal bell retails at a high price ($1.75 to $2.25 per pound), but he thinks you’re paying for high-quality natural odorless rubber that won’t cause vomiting.
The reason for this idea is that if you have paid a premium higher than the market price for a product, you’d better choose a premium product. In addition, Patty said that the influx of new and resale products could lead to serious safety problems, such as equipment damage or catastrophic events, such as the fracture of the Olympic barbell bar.
Patty told me, “we realize that children, the public need a little education, because it’s a great harm for us to watch these people make a lot of money.”. “They don’t deserve it. They don’t pay any fees. You know, they’re just taking advantage of unwitting customers. For me, it’s very personal.”
Home fitness expert Doyle agrees with Patty about education. He said he was in a favorable position because he had been building and studying his family gym and guiding college athletes for many years. He knows what to look for and what price to look for.
“Without market knowledge, it’s like throwing darts with your eyes closed and trying to find the right price,” Doyle said.
Patty said he doesn’t think the market will return to the gym soon or on the scale of the past, at least not until the vaccine is invented. He doesn’t blame people for not wanting to exercise with others in a narrow space. Nor does he blame consumers for wanting to take these exercises home – he just wants them to receive more education.
“Don’t be afraid to ask the seller a lot of questions,” Patty told me. “If you buy something very inferior and you pay the price of Ferrari, that’s a problem.”
How should suppliers transform their business model?
As you can see, the prices of sporting goods in the world are very chaotic. Many people are paying high prices to buy many products from one company. How can we break this dilemma and realize the so-called value return? In fact, there are several important requirements and conditions.
- First of all, if you are a wholesaler, because if you are a household buyer, it is difficult to avoid the premium of purchased products in the current era of inflation. If you are a private buyer, you should polish your eyes to delete the businesses you want to buy, and make sure they have false publicity and exaggerate the value of products.
- If you own your own brand and have a certain sales scale and channels, you can make many adjustments at the source of purchased goods, so as to achieve the return of product value..
A: Make sure you buy from the manufacturer, not the middleman.
Because the more middlemen, the higher the production cost you purchase. De middlemen is the most important thing you have to do. Generally, middlemen do not have physical products, but only act as resellers. If you have been in this industry for a long time, you can easily distinguish whether their understanding of products is defective. Of course, you can put forward customization requirements, Most middlemen can’t make customized production!
B: Place an order in advance to prepare for future sales
Placing orders and preparing goods in advance is a very important thing, because the recent international shipping congestion is unprecedented. Now alone, it is estimated that there are more than 40 cargo ships lining up on the coast of Los Angeles. Before the epidemic, it was estimated that it would only take about 24 days to ship to the United States, but how long does it take now? At least 60 days!!
Moreover, the price of raw materials has been changing all the time. Due to global inflation, the price of raw materials will only rise all the time, which leads to the uncertainty of production cost. Therefore, I suggest that if the inventory is insufficient, place an order for production as soon as possible, otherwise the purchase cost will rise all the time!
C: Anticipate your sales and purchase appropriately
When it comes to purchasing in advance, I don’t mean to ask you to purchase a lot of products, which is different from our cost saving purpose, because the storage cost in developed countries is very high. If you purchase a lot of products at once, it will cause high storage cost. Of course, unless you have your own large warehouse, you don’t have to worry about this problem. If not, It’s best to purchase, which can support your inventory for three months, and purchase four times a year. If you purchase, the types must be complete, otherwise repeated purchase will also increase a lot of unnecessary expenses.
D: Select national factories with strong productivity and low production cost for procurement
You can think about it, if you buy a batch of dumbbells in the United States or in China? I think the answer is obvious.
Let me ask you another question. If you buy a batch of dumbbells in Vietnam, is the quality good or in China? China, of course!
China is now a “world factory”, and productivity is absolutely fine. Now COVID-19 controls it very well in China, and it does not affect production progress at all. Moreover, China’s raw materials are one of the lowest in the world, which is very conducive to the procurement of the batch merchants.
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