by Matt Weik
In this article, you are going to see me play on both sides of the fence. Why? Because I see pros and cons with both when it comes to supplement brands putting their products in Dick’s Sporting Goods. I’m actually shocked that it took as long as it did for it to happen, but seeing supplements in your local Dick’s Sporting Goods is our new reality whether we like it or not.
Take the knife out of my back
Every mom and pop supplement retailer out there has got to be asking themselves what else the industry can do to eliminate them like the dinosaurs. The people who helped shape the industry into what it is today are being exterminated. When you look back 20+ years ago, who was selling supplements? The mom and pop corner store brick and mortar retailers. That’s who. Sales were not done online. You weren’t buying supplements from Amazon or the many other online retailers today who are crushing brick and mortar business.
The mom and pop stores have stuck behind and been loyal to supplement brands for as long as their existence. However, the same cannot be said about the relationship the brands have with the retailers. Today, everything revolves around sales and overall volume. If a wholesaler can push volume on a product, guess what? They are going to get a deep discount to move a ton of product. Meanwhile, the pricing for the mom and pop locations remains the same.
I can literally walk out of a supplement retailer in my hometown, drive two minutes to a local grocery store (or even Wal-Mart) and purchase many of the same products for less. And I’m not talking a few pennies here and there, I’m talking about saving DOLLARS in comparison.
With that being said, can you blame the consumer for going to those locations to save money? Not only are they going to save money, but they are already shopping at many of those mass market types of locations so it only makes sense to purchase what you need there rather than making a special trip to your local supplement shop and buying from them. Or, skipping the drive altogether and simply placing your order online for the supplements you need and have them delivered to your doorstep.
We see mom and pop retailers in our industry closing up every day. They simply can’t compete with e-commerce and mass market/wholesalers. Consumer behavior is changing and unfortunately not in favor of the little guys. So, putting supplements in Dick’s Sporting Goods is further hurting the smaller retailers who had the supplement brands’ back since the start but is not getting any love in return.
Size matters when it comes to Dick’s
Ok, if you didn’t chuckle at that subheading you’re clearly not as immature as I am. But in all honesty, size matters (that’s what she said). Alright, I’m done with the jokes.
Dick’s Sporting Goods is a HUGE retailer in the sporting goods space. They sell everything from fitness equipment, to golf clubs, to athletic apparel, to inflatable rafts, and pretty much anything and everything in between. If it deals with sports or the outdoors, there’s a very high probability you will find it at Dick’s Sporting Goods. So, it only makes sense that supplement companies are taking over some shelf space in their locations across the US.
When it comes to pricing, sorry mom and pops, Dick’s Sporting Goods is priced better. It’s buying power, my friends. It’s hard to compete. It’s the same reason you see a protein bar being sold at Wal-Mart for $1 and when you walk into your local supplement shop, you’d be paying $3 or more. Heck, most mass market locations are basically selling supplements at the cost mom and pop locations are paying just to bring it into their stores. There’s no way they can compete with bigger retailers. If they wanted to compete, they’d literally need to sell products at their cost or make margins that are so small it’s impossible for them to survive in the long-term without going out of business.
But just like in the case of Wal-Mart mentioned above, people are already shopping at Dick’s Sporting Goods for clothing and sporting goods products so, again, it only makes sense for them to want to bring in supplements as well to create that one-stop-shop customer experience. Why would they want you driving down the street to get your protein powder and protein bars if they know you’re already coming in for your running shoes, workout equipment, and apparel? They don’t. Therefore, it’s hard for me to sit here and blame them for strategically making a move that can benefit their company.
What’s the right answer?
I played both sides of the fence above. Which one is right? Honestly, they both are. I feel bad for stores who supported supplement brands – especially when they first launched and these stores gave them the opportunity to get their product out in front of the consumers and gain trial. And now, all of that is disappearing as brands are opening up doors in places that can sell in volume and help move the needle when it comes to increasing the brand’s total revenue.
Sure, brands are mildly shrinking their margins to play with the big boys in the market, but at the end of the day, they make it up in gained sales versus the smaller sales coming from mom and pops where brands would be getting higher margins. For the brands, it only makes sense to go in Dick’s Sporting Goods. As a business owner, I’d have to agree with their move. Am I saying it’s right? Not really as I’m not a fan of crushing the little guy who always stood behind various brands and is now getting squeezed out and forgotten about.
What are your thoughts? Do you think it was a good move putting supplements into Dick’s Sporting Goods locations or do you think brands should have supported their smaller brick and mortar businesses? Let us know what you think in the comments.