Ball Control

Dealers are trying to decide whether to drive the lane or pull up for the jumper

No one has been hit harder by the economy than
the people of Michigan. Statistics from the U.S. Bureau of Labor put the state’s unemployment rate at just shy of 15 percent. It is expected to surpass that in 2011. Nearly half of college graduates leave the state for greener pastures. By 2012, Michigan will likely face a $1.2 billion budget deficit.

None of this is good news for Mike Stewart, division manager for Johnny Mac‘s in Lansing, MI, who needs a strong hoops business to supplement the big three of football, baseball and softball in his team business. His business is one of eight Johnny Macs locations, which cover Missouri, Illinois and Michigan and more than 90 percent of Stewart’s sales are generated through team and school customers and they drive his basketball biz.

“The high school business is our largest in basketball,” says Stewart. “We also do a fair amount of youth league and AAU.”

With the state’s budget problems, Stewart knows that his team basketball business faces serious challenges. “We’re hoping to do as well as last year,” he says. “The numbers we’ve quoted so far in 2010 are a little better, so that’s a good sign.”

But a potential pitfall looms. Michigan is a pay-to-play state, and those fees will likely increase statewide. “East Lansing High School got a mid-year budget cut,” says Stewart. “Their pay-to-play was raised from $150 per kid to $400.”

Olivier Pelletier, owner of H&L Team Sports in Lancaster, PA, feels Stewart’s pain. Basketball is his top revenue generator, but 2009 was a tough year. The business was down by 12 percent. Pelletier isn’t all that optimistic about 2010.
“The team business had been recession-proof until now,” he says. “We’ve seen booster club money and non-district money tighten. The biggest impact is school budgets being cut.”

On the manufacturer side, the outlook is somewhat rosier. Many equipment vendors – Gared, Jaypro, Porter, Spalding, SSG and TSI, among them – all report increased sales from 2008 to 2009. But they are well aware of the problems that team dealers are trying to work through.

“In 2009, the hardgood basketball business was fairly strong,” says Laura St. George, VP-sales for equipment supplier Gared. “However we did not see a large increase in movement of any particular SKUs. In past years, we have always had a few key new products really take off and sell extremely well. In 2009, customers seemed more comfortable purchasing ‘bread and butter’ and low-risk products, such as glass backboards and breakaway rims.”

According to Dan Morgan, VP-sales for Porter, equipment is a good, steady business for team dealers no matter what the state of the economy is. “That segment of the market has held steady and actually increased slightly in 2009,” he says. “I believe this is due to facilities maintaining and replacing equipment components rather than doing renovations or building new gyms. Since team dealers service the aftermarket rather than the new construction contractors, the number of new gyms being built has diminished while purchasing of replacement equipment has increased.”

For dealers like Stewart and Pelletier, however, uniforms drive the team business. “The introduction of moisture management has been the biggest thing,” says Pelletier. “Now all manufacturers include new fabrications. It makes a big difference in what people want to purchase.”

Ask Pelletier about basketball equipment, by contrast, and he won’t go into nearly the same detail. He’s not alone among team dealers. For many, equipment ranging from goals to rims is an afterthought. Jane Rathburn, catalog merchandiser for Jaypro, understands why.

“The economy will have an impact on higher ticket purchases, but school teams and youth leagues still need uniforms,” she says. “In this environment, there will be more price comparisons and delays of major purchases.”

Stewart and Pelletier both feel that shifting their focus from uniforms could possibly hurt their business. At the same, they have had to adjust to a rapidly changing marketplace.

“It used to be that 75 percent of uniforms at the high school level was custom,” says Stewart. “Now it’s like a 50-50 split between custom and stock. Price points are being driven down, which is tied into the economy, especially in Michigan. There has been a shift from the $150 custom uniform to the $99 stock uniform. Our typical orders have been cut by more than 50 percent.”

Pelletier has experienced similar conditions. But he does feel there’s a silver lining. “Manufacturers have become more price competitive,” he says. “That really helps me out.

For example, Speedline now offers less expensive promo uniforms that fit into cut budgets.”
Moderately priced uniforms, adds Pelletier, cater to his customers’ desire to find value. “They want quality at a good price,” he says. “Some schools have increased their uniforms cycles to four, five or even six years. I end up steering them away from stock and try to make them understand the benefits of custom uniforms. For example, fill-ins become much easier.”

Stewart has also had to adjust to changing buying habits. “Booster clubs are doing more and more of the purchasing,” he says. “We used to write orders for custom uniforms in April, May and June. But schools don‘t know what their budgets are, so much more business is done in September and October. That means shorter lead times for us and more stock orders from our customers.”

Given this new dynamic in uniforms, many manufacturers argue that now is the perfect time for team dealers to branch out into new segments. “Backboards fit into the picture very well for team dealers,” says Morgan. “They occasionally break, and frequently coaches want to replace fiberglass, metal or wood boards with glass.”

A.J. Varin, sales manager for SSG, agrees. “Backboards are a very nice piece of business for the dealers who know the right places to look, such as city parks and even elementary schools,” he says. “These customers can look at replacement steel backboards to complete gooseneck systems.”

According to Chris Bawcum, VP-sales/distribution for TSI, there are many misconceptions when it comes to basketball equipment. “Dealers always worry about the direct marketers/catalogs and think they cannot be competitive,” he says. “We have worked with hundreds of dealers to help them stay competitive against the direct sellers.”

Another misconception is that backboards and goals are difficult to sell. “That is usually a result of not knowing what questions to ask to clearly define what size and model the customer needs,” says Morgan. “Prices for equipment are typically much higher than the other products they are selling and, while there are fewer transactions, the size of the equipment sale can be very meaningful. In today’s market where budgets are tight, earning profitable incremental sales seems like an opportunity no one should pass up.”

A lack of product knowledge can also derail dealers, says St. George. “Many team dealers believe that they must take inventory of this sometimes bulky product,” she observes. “By understanding universal hole patterns, for example, team dealers will almost always be able to find a solution for their customer and provide them with the best equipment for their facility.”

According to Tadd Reilly, national sales manager for Spalding, making an equipment sale is as easy as bringing a ladder to a sales call. “You need to inspect the quality of a goal,” he says. “Look at the physical properties. Is paint chipping? Is padding attached appropriately? How is the goal suspended? The answers to these questions can lead to the opportunity for new sales.”

It doesn’t end there. “Even if a customer can’t afford a purchase, talking to them about maintenance is important,” adds Reilly, “It can save them dollars in the short term.”

Rathburn believes another good selling point for backboards and goals is safety. “Large purchasing decisions may be delayed, but safety can never be compromised,” she says. “It is important to point out safety issues to customers that may not be aware of the implications of putting off a replacement or purchase. Taking pictures and utilizing the expertise of the manufacturer can go a long way.”

For team dealers who ignore basketball equipment, St. George encourages them to ask critical questions. “Evaluate why you aren’t selling this product,” she says. “Is it because of lack of product training? Not wanting to take inventory?

Or maybe not having an installation crew?”

Answering these types of questions, adds Bawcum, can turn around a team business. “Backboards can be very profitable for dealers,” he says. “This is just another door that can be opened with your customer that would consider you the go-to dealer in town.”

Pelletier acknowledges that equipment can become a profit center, but devoting the proper effort to it isn’t easy. “Time is my biggest challenge,” he says. “We have to find ways to reach out to new customers. We’ve been successful with a referral program and email blasts. But we spend even more time on existing customers. We can’t afford to alienate them. Basketball has definitely become a year-round sport.”

Stewart feels the same way. “The business has become more stressful,” he says. “Basketball is a high-profile sport. We have to be diligent. Service is the key.”

Manufacturers would encourage every team dealer to make equipment part of that service equation.
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Chairmen of the Board
Setting the record straight on backboards and goals

Contrary to what some may believe, backboards are
not particularly complicated items to learn, install or sell. Here’s a quick primer.

GOAL TYPES
1. Fixed goals: These are basic rims that do not flex/breakaway and are generally the least expensive type goal.
2. Flex goals: These goals have springs and allow the rim to flex down when players hang on the rim, when the player releases the rim springs back to it's original position. Flex goals should not be confused with Breakaway goals.
3. Breakaway goals: The manufacturer’s information is the key here. Breakaway goals are built just like Flex goals with one added feature inside that prevents the rim from flexing until a predetermined amount of pressure is applied to the rim. These goals are designed for game use to prevent the rim from flexing under normal game activities such as a ball hitting the rim during a jump shot. The Breakaway goal should only flex when a player hangs on the goal.

MOUNTING PATTERNS
Most backboards have four attachment points used to bolt the goal in place. The spacing of these holes vertically and horizontally is known as the Mounting Pattern for the goal. Though there have been numerous mounting patterns that have come and gone over the last 50 years, knowing the two most important will satisfy 99 percent of today's requirements. Most backboards today will require a goal that is designed to fit a 5 X 4-inch or a 5 X 5-inch mounting pattern. Keep in mind the hole spacing is measured from center of hole to center of hole. Most fixed, flex and breakaway goals are designed to accommodate either mounting pattern but double check your manufacturers info to eliminate the risk of incompatibility.

NETS
Keep a good quality Anti-Whip net on hand for replacement on game goals. Anti-Whip nets generally have a tight weave at the top creating a stiff loop where the net attaches to the goal. This prevents the net from "whipping" over the top of the goal after a swish shot. Less expensive standard nets are acceptable for outdoor use but stay away from nets that are made too thin.

INSTALLATION
Dealers rarely have to get involved with installation. “Many times at the city level, they will send their crew out to do easy replacements and then at the elementary level they will just use their maintenance people,” says SSG’s A.J. Varin.
Even so, says Jane Rathburn of Jaypro, installation can be a great opportunity for dealers. “Many customers know they want to improve their equipment, but often don’t know what the options are,” she says. “Retaining a qualified installer is a good way to increase this type of business by offering an installed price and ensuring the customer not only gets the proper equipment, but also gets it installed safely. It is a good way to increase their value to the customer and increase the total dollar sales per sale/customer.”

PRICE
Backboards and goals can be high-ticket items, but that doesn’t mean they won’t sell. “Prices for this type of equipment are typically much higher than the other products team dealers are selling,” says Dan Morgan, of Porter. “While there are fewer transactions, the size of the equipment sale can be very meaningful. In today’s market, where budgets are tight, earning profitable incremental sales seems like an opportunity no one should pass up.”
Meanwhile, Gared’s Kara Hatcher feels that tough economic conditions may be a blessing in disguise. “Backboards are typically an easy sale for team dealers because they aren’t required to stock the product and they won’t be charged to drop-ship,” she says. “That eliminates the need to take inventory of the product. Budget constraints have also led to more purchases of after-market products for renovations of gyms, playgrounds, etc, rather than building brand new facilities.”

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It’s a Hardgoods Life
A look at some new products from leading backboard and systems suppliers

Gared: “We are particularly excited about our Endurance Playground Basketball Systems, which are the strongest outdoor basketball systems on the market today,” says Kara Hatcher. “These systems are available with a wide variety of backboards, including our new virtually unbreakable Polycarbonate Backboard. We have also greatly expanded our portable basketball line with such products as our Quick Connect Backboard Replacement System and our new Gared Pro S Spring-Loaded Portable System.”

Jaypro: “We recently introduced a high-performance line of basketball rims,” says Jane Rathburn. “The Collegiate Revolution and Shot rims are NCAA, NFHS and FIBA compliant. They can adjust from 140 lbs to 250 pounds even after 50,000 revolutions while still maintaining all of their rebound features. These rims come with a seven-year limited warranty. We also recently introduced our Elite portable basketball systems. The Jaypro Elite 5400 model is the perfect option for smaller programs that want the professional look.”

Porter: “The most exciting new product is our new Powr-Touch LCD control module,” says Dan Morgan. “Since Porter offers to refer dealers to qualified installation companies, this is an item the team dealer can consider selling in existing gyms as an upgrade.”

Spalding: “We’ve introduced the NBA 180 Goal,” says Tadd Reilly. “The rim breaks away from the front and the baseline, and the system includes our positive lock technology, which allows the rim to return to its natural position. Players really like it, especially at the high school level.”

TSI: “We are generally seen as a baseball equipment manufacturer, but many dealers did not know that we are making great strides in producing a very competitive basketball equipment program,” says Chris Bawcum. “We will be coming out with some very nice goals (photo above) this fall along with our already established line of ball carts and existing goals.”

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