How to start up a sports shop – small business guide

When it comes to shopping for sports gear, there are few places better than the UK. The country is home to some of the world’s biggest sporting brands, and its stores offer a wide variety of equipment and apparel for every type of sport.

Whether you’re looking for football boots or tennis racquets, you’re sure to find what you’re looking for in the UK.

And with so many options to choose from, you’re sure to get the best possible deal on your purchase. So if you’re in the market for sports gear, be sure to check out the UK’s top sports shops. You won’t be disappointed.

The sporting section of the retail sector is highly competitive in the UK. While you are unlikely to be able to compete with the ‘big boys’ of the sporting goods world right away, starting up your own small business venture could prove to be profitable.

This article should guide you through everything you need to do when attempting to establish your new company from the ground up.

How to open a sports shop in the UK

Opening a sports shop in the UK presents an exciting opportunity to tap into a nation passionate about sports and fitness. With a rich sporting culture and a strong demand for sports equipment, apparel, and accessories, the UK market provides a fertile ground for entrepreneurs in this industry. A well-located sports shop can attract a diverse customer base, ranging from professional athletes to fitness enthusiasts and recreational players.

Understanding the latest trends and stocking a wide range of high-quality products from renowned brands can help capture the attention of customers seeking top-notch sporting goods. Additionally, establishing relationships with local sports clubs, schools, and community organizations can foster partnerships and generate a loyal customer base.

Adhering to consumer protection laws, providing excellent customer service, and staying up-to-date with industry developments are essential for long-term success in the UK sports retail sector.

By offering a comprehensive selection of sports merchandise and catering to the needs of diverse sporting interests, opening a sports shop in the UK can be a rewarding venture for entrepreneurs passionate about the world of sports.

Here is the step-by-step guide to starting a sports shop business:

Estimating demand

If you don’t anticipate that your sports shop will be mainly online or by mail order, you will need to determine whether there will be enough local demand. There has been a decline in the number of independent sports shops over the years, indicating that the sector is extremely competitive.

If you’re planning to run a ‘pure’ sports shop and sell only clothing and equipment designed to be used when participating in a particular sport, local participation levels and when the season starts will directly affect the demand for the products you sell. Statistical estimates of how many people participate in different sports locally and nationally are included in Sport England’s Active People Survey, which is conducted every year.

Sport England’s website provides access to the survey results. Similar resources are also published by Sport Wales, Sport Scotland, and Sport Northern Ireland.

You may sell sports leisurewear as well as clothing designed to be worn during sports. Then, be aware that people tend to trade down to cheaper items when the economy is difficult, even if demand for fashion clothing remains constant.

The Sport England report ‘The economic value of sport in England’ gives estimates of the amount spent on sports equipment, sport-specific and sports leisurewear. This is also available on the Sport England website.

Your competitors

When you’ve estimated local demand, it’s important to see how well existing businesses meet it. A large number of businesses serve the sports retailing market, including:

• Sports Direct and JD Sports are two of the largest High Street chains. Sports leisurewear is the main focus, while equipment is commonly sold in a minority of outlets
• There are two chains of outdoor stores, Decathlon and Go Outdoors. Decathlon caters to over 70 different sports, while both specialise in equipment sales
• Chains that specialise in a particular sport, such as Up and Running
• Alternatively, independent specialists may cater to a broad range of sports – maybe ten major sports combined with a few others – but may specialise in one sport or cater for a wide range of sports.

In addition, you should be aware of how strong your online competition will be, since online retailing is now an important feature of sports retailing – both for equipment sales and for clothing sales. It is common for online retailers such as Gymshark to offer a wide range of well-regarded products at very competitive prices in many areas of pure sports retailing.

Shop location

The type of goods that you intend to stock may have a great impact on the location of your shop. The shop you intend to open will not depend too much on passers-by and will instead have a large proportion of customers that are prepared to make pre-planned purchases.

If you plan to become a specialist retailer, focusing on a niche market, it might be a good idea to open it away from the city centre. In order to get enough business, you may need to take premises close to the main shopping areas if you plan to stock a lot of sports leisurewear.

It is also wise to check the crime rates in your area – you won’t want to be faced with excessive shoplifting, theft, and break-ins.

Why will customers choose your shop

Your shop needs to attract enough customers to outweigh any existing outlets. See what the competition has to offer:

• What products they offer
• Services offered by the company
• How much they charge
• What their opening hours are
• The type of customer they are attracting
• If the premises and fittings are modern and stylish
• Their staff’s knowledge and helpfulness

There may be a gap in the market that you can exploit based on your research. You might be able to offer customers specialist advice and services because you are an ex-professional athlete.

Rules and regulations when running a sports shop business

There are not many legal matters that cover retailing with the majority of stock not covered by any specific pieces of legislation. However, it is crucial that you adhere by these simple rules. If you plan on stocking bicycles this is an exception and comes under the Pedal Cycle Safety Regulations 1984 which sets out safety standards for new bicycles sold in the UK.

If you on retaining customers’ details on the premises you will have to register with the Data Protection Commissioner, while you must also comply with health and safety regulations. If you have more than five staff, for example, you will have to prepare a written health and safety policy statement. Contact your local environmental health department for more advice.

Finally, if you have staff, you will be obliged to comply with employment legislation including the minimum wage act, working time regulations and the employment rights act.

Checking out future developments

Your proposed area must not be slated for the opening of a sports chain outlet or for the construction of new roads that will bypass your shop. Watch out for any parking restrictions proposed in the area.

Find out what people want

Sports goods retailers face tough competition from national chains and online retailers, making it difficult for small, independent shops to stay afloat. It is therefore crucial to ensure that the goods you stock will have a market. If you want to know what people in your local area think, you might want to consider conducting a survey:

• What products they would like you to stock
• The company’s willingness to provide services such as equipment repair or hire
• If you offered other services, such as purchasing tickets for sporting events, would there be a demand
• What do they dislike about the existing sports shops in your area, if anything

Quality standards

It is important for your business to meet the high standards set by large retail chains:

• Is clean, tidy, and professionally designed
• Contains the goods that your target customers demand
• The company’s employees are knowledgeable and smart
• Provides high-quality customer service

Advertising your shop

You must make sure that your potential customers are aware of you and what you offer, regardless of what goods or services you decide to sell.

You shouldn’t ignore the potential of your window display – a bright, regularly changed display of the latest equipment, clothing, and footwear will help you to attract customers.

A shop window can also be used to advertise special offers and promotions, or to highlight new products or services.

Advertising in the local press may be a good option for your business, but you should monitor the results to make sure you are getting the best value. It may also be a good idea to sponsor local sportspeople or sporting events.

Your business could be highlighted in a leaflet that is distributed to local residents and workplaces. Promote events and promotions through social media like Facebook and Twitter.

Websites are a great way to let customers know where you are, what you sell, and what hours you are open. Your website may be designed to be able to sell online since e-commerce is already a major feature of sports retailing. You can sell online through third parties like eBay or Amazon for a cheaper alternative if you just want to dip your toe in the water.

Selling on eBay and Amazon

Selling online can help you reach new customers and boost your sales. The cost of setting up your own ecommerce website may not be covered by the sales you will make online at first.

If you prefer, you can try selling online through eBay or Amazon without having to invest a lot of money. Even if you have your own online shop, you may decide to continue selling on eBay and Amazon.

Getting started

Buying items for yourself and selling items that you no longer need might already be part of your eBay account. If you trade on eBay as a business, however, you’re legally required to mention that you’re a business seller in your listings. To do this, you will either have to register a new business account or upgrade your personal account. To find out if you need to register as a business seller, check out the eBay Seller Centre’s definition of ‘trading’.

You can register as a business seller on Amazon using an existing account or by creating a new one.

You will need to notify HM Revenue & Customs (HMRC) that you are trading on eBay or Amazon if you are not already running a business. Gov.uk offers guidance on what counts as self-employment and what counts as trading. In addition, it explains how you must maintain your tax records and keep track of your expenses.

Decide whether to have your own virtual ‘shop’

It will be easier for customers to find your products when you have your own virtual storefront.

eBay Shops are available when you register to sell on eBay. By using existing templates or customising them, you can create your own shop. Consider waiting until your monthly sales reach a certain level before upgrading to eBay Shop – you don’t have to choose it right away.

Regardless of the package you choose, Amazon will automatically create your own storefront. In terms of customization, you can add your name, logo, and some business information, but you won’t be able to change too much.

How much does selling on Amazon and eBay cost?

Make sure you know how much fees you’ll have to pay before you start selling on Amazon and eBay. Your total fees can be quite substantial, depending on what you sell and how you sell it. Some of the fees you pay will be tied to how many items you sell each month, but others may be fixed costs that you incur regardless of whether you sell anything.

Unless you’re only selling a small number of items each month, it’s usually more cost-effective to choose a subscription-based package with eBay or Amazon.

You can compare the fees for different selling methods on eBay’s website using a fee illustrator tool and a fee calculator, so you’ll know what you’re likely to pay per item.

In addition to pricing examples for subscriptions and non-subscriptions, the Amazon website offers detailed fee guidance.

Managing your listings

When selling a large quantity of items, uploading your inventory to eBay or Amazon and managing your listings can be a time-consuming process.

There are free and paid listing tools available on eBay and Amazon.

Promoting your items

As there are so many items for sale on eBay and Amazon at any given time, it’s essential to make sure that you stand out from the crowd.

In your listings, make sure that your descriptions are accurate and spell-checked, and that your photos accurately depict the items you are selling.

Make use of eBay and Amazon’s marketing tools such as search engine optimisation, cross-promotions, and paid ads if you want to take it a step further.

Your reputation

Your online reputation is extremely important as an eBay or Amazon seller. Based on actual customer feedback, all sellers have a feedback score, which is the main measure of trustworthiness and reliability for future buyers.

Your goal is to maintain a high rating by offering excellent customer service, fast delivery, and reasonable prices. You should always respond to customer queries promptly, handle returns efficiently, and keep an eye on your stock levels to avoid showing sold items as in stock.

It can take time to pack and send orders out, but it’s important to stay on top of the task to ensure the right items are delivered in good time to the right people. You can easily arrange and track shipments with many parcel delivery services that integrate with your eBay or Amazon account.

It might be worth your while to consider Amazon’s Fulfilment by Amazon service, where they pick, pack, ship, and provide customer service for your products. You can submit your inventory to Amazon, and they will handle all of the picking, packing, shipping, and handling for you.

More information

There is a lot of useful information on Amazon and eBay websites to help you get started as a business seller and expand your business. A lively seller community forum is also available on both, where experienced sellers are often happy to answer questions.

Your market

Sports goods shops have a variety of typical customers that differ based on their type. The mid- and late 2010s saw a very strong trend for buying sporting clothes as leisure wear, known as ‘athleisure’ wear, whether the person is a competitive sportsman, an amateur, a recreational sportsman, a complete beginner, a gift for someone else, or someone searching for sports fashion items. Local sports clubs and schools may also be your wholesale and trade customers.

Some types of customers may be eligible for discounts, such as university students. In addition to raising your shop’s profile, this could encourage customer loyalty and increase sales. Sports club members might also be eligible for discounts.

Decide what to sell

What kind of shop you plan to operate will determine what products you sell. In a specialist shop, everything needed by participants in one or two sports can be found. You may also decide to stock sports fashion clothing and footwear if you intend to open a more general sports shop.

Fairtrade sports balls and clothing might be of interest to you. It will also depend on how big your premises are and what you will stock. The size of your premises may make it impossible to stock a large range of golf equipment, for instance, as this would make the shop too crowded.

Providing an efficient ordering system for larger items – such as home gym equipment – might be a good idea if your shop is small. Having fewer stocks would also help your cash flow, since you would not have to hold a lot of stock. Customers may choose to go elsewhere – or order online – rather than wait for delivery if you don’t have something in stock. If you order this way, you could also lose out on good payment terms and discounts from suppliers.

Price your products

It is very important to get the price right. Your operating costs, including your own drawings, should be covered by the difference between the cost price and the selling price of your product ranges. Sporting goods are highly competitive, especially if you offer general sports clothing and footwear, so you’ll likely have to match the prices of your immediate competitors. Depending on your niche market, you might find prices to be less sensitive if no one else caters to it.

Retail prices (RRPs) are sometimes recommended by suppliers. It is up to you whether you follow these closely, if you use them as a guideline, or if you ignore them altogether. It is up to the retailer to determine pricing from other suppliers.

When setting your prices, keep the following points in mind:

• How much do your competitors charge for similar items?
• Are you trying to win business away from your competitors by offering attractive prices?
• Is it really necessary to discount? You may intend to sell high-end items for which people expect to pay a lot. You may be aiming to justify higher prices with an excellent level of service
• Will you use ‘key price points’

Special offers and discounts

Throughout the year, you may want to consider running special offers. Your door may be filled with more customers through these special offers, and they may spend more than just on the advertised items. However, it’s important to keep track of your sales during these periods to make sure you’re getting more custom rather than just giving away cheaper products to your regular customers.

It can also be a good idea to offer discounts on selected lines in order to shift old stock. Both the clothing and equipment sides of the sports goods retailing industry are vulnerable to fashion changes. You can keep your stock current by offering generous discounts on previous year’s stock, so that you don’t have too much money invested in items that people won’t buy.

Staff, family, and friends are often given discounts at many shops. Make sure any special offers you make are working for you by keeping an eye on them. Promotions like these might increase your sales, but they will also reduce your profits. Don’t allow your staff to offer friends and relatives unauthorised discounts by informing them of what discounts are available.

Seasonality

The sales of your business may differ at different times of the year, such as January and February may be slow, while holiday seasons, such as spring and summer, are typically busy. Parents make sure their children have everything they need before school starts in September, so many sports stores report an increase in demand during August. During these periods, you will need to buy a greater amount of stock, which should be accounted for in your cash flow estimates.

Seasonal variations may also affect equipment hire – for example, bicycles, windsurfers, and surfboards will be in greater demand during the summer months.

It can also affect sales levels and stock levels throughout the year due to different sporting seasons. Use the information below to adjust your cash flow projections if you believe this may be the case with your shop.

Equipment hire services

A sports equipment hire business might be in demand in your area based on your market research.

It is vital that you make sure the items you intend to hire out are safe to use. Protect them from loss, damage, and theft by insuring them.

Availability of local facilities determines the demand for hire equipment. Moreover, it will depend on whether participants own their own equipment, as well as the level of local competition in the hire market.

The longer the hire period, the better value the customer receives for their money. An hourly surfboard hire rate might be £5.00, or a full day rate might be £20.00 (figures used for illustration only). Consider your pricing policy carefully if you plan to offer an equipment rental service to ensure that your charges are all reasonable and that one set of charges does not detract from another.

It is likely that equipment will need frequent repairs since customers do not treat hire equipment very well. A specialist will need to perform the repairs if you lack the expertise to do them yourself.

Buy an existing business

Instead of starting from scratch, you might decide to purchase an existing sports shop.

When negotiating with a seller, make sure you negotiate a fair price for any business that you are interested in. Identify the reasons the business is being sold – for example, is the owner planning to retire or is there another personal reason?

In your market research, you will be able to determine whether the owner is selling because he or she is unable to generate enough income from the business. The fact that a business is failing may not necessarily deter you – many businesspeople are confident that they can turn it around. Establishing the current position is important so that you don’t pay too much for the business.

Conclusion

Starting a sports shop can be a rewarding and challenging endeavor for an entrepreneur with a passion for sports and a desire to serve the needs of athletes and fitness enthusiasts. To get started, you’ll need to conduct market research, create a business plan, secure financing, and find a suitable location. You’ll also need to carefully choose and purchase inventory, including sports equipment, apparel, and accessories, to meet the needs of your target customer base. Additionally, you’ll need to develop a marketing strategy to promote your shop and attract customers.

Once you’ve established your shop, you’ll need to focus on customer service, inventory management, and financial control to ensure your shop’s success. While it takes time, effort, and dedication to open and run a successful sports shop, the reward of serving your community and helping people achieve their fitness goals can be incredibly fulfilling.