How this business owner created a grassroots sports retailer after being “ripped off” on 60% margins
Friday, February 22, 2019/
Whether it’s tossing around the Sherrin, letting loose a couple of Shane Warne-spinners, or popping off a centre pass to wing defence, us Australians love our sport.
But our diverse love for sport in all its forms does not translate to a diverse selection of sports retailers, as for a long while, Super Retail Group-owned stores Rebel Sport and Amart Sports (now both merged into Rebel) comfortably dominated the Australian market.
It’s only in the last 18 months real competitors have landed locally, with players such as JD Sports and Decathlon starting to make their mark, providing Australians with more options when it comes to apparel and equipment.
But while these big players are great for general competition, the smaller end of the market is increasingly finding itself without a home.
Ahmad Elhawli was one such smaller player four years ago, running a small retail business selling sporting equipment in the boxing space. Having experience as a digital marketing consultant, he managed to grow the business at a decent clip, before looking at bigger players to help him scale.
“We were expanding through Australia via a pretty traditional model of growth, finding small distributors, but I decided if I really wanted to build a presence I’d need to approach Rebel and Amart,” he told SmartCompany.
After approaching Amart, who told Elhawli they loved his products, the business owner was told he’d have to secure the sporting giant a 60% margin on his products, which made the founder double-take.
“I told them that it couldn’t be done, so they came back to us with an offer of 40% margin, and every month we’d have to pay them marketing fees,” he said.
“We also had to purchase data interchange technology and secure a certain amount of space in their warehouse. It was going to be a full-blown operation that would have cost us thousands of dollars.”
“And we wouldn’t have made a cent.”
Elhawli could quickly see the problem, realising he was likely far from the first sporting SME to run into these issues. So a few years later, he launched Sportsfinda in an attempt to give small players a fighting chance.
Sportsfinda is an online marketplace that allows small businesses in the sports and health space to sell directly to consumers through virtual shopfronts they set up themselves. Elhawli launched the platform officially at the start of 2018, though he started work on the idea a few years before that.
Currently, Sportsfinda has about 40 vendors on board, selling everything from organic protein to boxing shoes and stainless steel drink bottles. The founder says while the business isn’t pulling in any wild revenue numbers, it’s growing at a steady rate, and providing small businesses with an alternative when it comes to selling sporting goods in Australia.
“We provide businesses with a platform to go from no online presence to a full online store. No one else in Australia does that,” he says.
“We know there are around 6,000 SMEs in this niche, so we have a solid opportunity.”
Sportsfinda is keen to stay in that niche too, with Elhawli clear on the platform not being a competitor to bigger sports retail businesses, but rather, more of a “grassroots” approach.
Working with small businesses is something Elhawli enjoys and says he feels like he’s helping businesses in the way he would have liked to have been helped when he first started out.
Simultaneously, he notes it can be tough work, especially with completely new brands and working out how to convince customers they should buy from them. However, in the end, he says it’s about giving hope.
“We want to give hope to those who thought they could never get into it, the ones who want to learn but don’t know how to go about it. We also want to stop them getting ripped off by retailers,” he says.
“The goal is to reach 1,000 businesses on the platform and get over 100,000 visitors a month. We’ve changed the small business sports marketplace, and we know we can keep doing it right if we all come together.”
“The stars don’t usually align, but when they do it really can be something.”
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