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From the Editor's Desk: Astronomy Biz Shakeout
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From the Editor's Desk: Astronomy Business Shakeout
From the Editor's Desk articles are the opinions and musings of Allister St. Claire. These articles do not represent facts nor are they objective in any way.
Whenever I've spoken with astronomy dealers and manufacturers over the past 8 years, they all lament the same issue - flat sales year in and year out. Astronomy is just one of those hobbies that's not growing with the increase in population. More to the point, if sales are not increasing as the population grows, then the ranks of the hobby population are slowly diminishing.
Blame it on increasing light pollution, decline in science and math aptitude in the U.S., or a younger generation that would rather be at the Mall. No matter what it is you feel the reason is, resellers are unable to grow their market share.
If I was a reseller and staring into the face of flattened sales, I would look instead to repeat customers. By whatever means possible I would educate and hammer home the point with my sales staff that the future of the company depends upon getting repeat business. Heck, I'd tack a large banner up in the sales room that read:
Repeat Customers are the Lifeblood of our Business
Now, given that the resellers are locked into low margins and are bound by minimum pricing contracts, how does a reseller grow its annual sales? Given the limited number of a shrinking pool of astronomers (spending their finite pool of money), stores should strive to obtain store loyalty and manufacturers should be looking for brand loyalty through the following:
Accept Trade-Ins on Eyepieces
Create a store policy that you will accept trade-ins on eyepieces purchased at your store. Require the eyepiece to have the original box and end caps and not have any marks on the optics. Accept it back at a percentage of the retail price as a trade-in on a higher priced item.
Eyepieces are the simplest of astronomy equipment to evaluate for condition. Take it out of the box, pop it into a spotting scope in the store and you're done. Selling “New to You” eyepieces attracts bargain hunters that shy away from the risks inherent at eBay by buying at a reputable dealer.
Accept Trade-Ins on Certain Telescopes
This one would require cutting an agreement with the manufacturer. For example, accept trade-ins on any Tele Vue refractor for up to 1 year after original purchase and you will be given a certain percentage off of a new price on a higher priced Tele Vue refractor. Work out an agreement with Tele Vue that they will pay you (the reseller) an extra percentage of that sale.
Let's face it - if you can get a customer to purchase a 2nd telescope from the same manufacturer, you now have a brand loyal customer. Such folks become the informal marketing department for any company lucky enough to snag them. It would be the height of silliness for a company to quibble over an extra 5% to the reseller for creating these legions of brand loyal customers.
Don't be Afraid of Creating House Brands
With global business and trade booming, the days of the optics importer/middle man are numbered. I've watched this happen in other hobbies. Here's how this has played out in other hobbies.
The importer simply places an order with a factory (typically in another country), imports the product and then distributes them down to established resellers. Initially, profit margins are high and the importer makes lots of dough. Along comes another importer who places an order with the factory, re-badges the product and is now competing with the first importer. At this point, foolish importers make the mistake of recouping lost profits by selling direct. This has them competing with their resellers.
The reseller becomes mad and (finally) places its own order with the factory.
For the customers, this works out great as the resellers can now sell the same product but at a lower price. The middle man/importer never added value to the product and was never really needed.
However, the middle man had the highest profit margins!
Now, astronomy resellers are very nice people and conservative to boot. They would look at the above as some sort of betrayal to their importers. They can't think this way any longer. Such global trends can not be wished away.
Get an Online Service Presence
If you haven't figured it out yet, the days of putting up a store web site and having customers flock to it have been long over. If you want to get traffic and customers to your business' web site, you need to offer a unique and free service. Astronomics did it with Cloudy Nights. Anacortes did it with Astromart. What is your business doing?
There is no lack of ideas. Cut a deal with one of the Astronomy computer star charting software companies to host an online version of their software for your customers. To insure the computer company still has customers buying their software, have the online version limited to mag 7 or something.
For an astronomy business to survive, it must provide a reason for the customer to return to its store – possibly price from clever purchasing or used equipment arrangements; or a unique online service that has convenient reviews and ordering features; or a purchasing service allowing trade-ins or other discounts. Find a way to keep the customers you have – statistics say the pool isn’t getting any larger.