Communication is key to success, especially during times of uncertainty. When we first started to feel the real strain of supply chain and logistics in late summer 2020 – we never could have imagined that we would still be experiencing the ripple effects almost 2 years later.
As fitness facilities of all sizes begin to restore clubs, staffing, and programs to full operations, we are all hopeful that equipment updates, renovations, even grand openings that were put on hold will be green-lighted again in the coming months. In support, we want to give you an update on where the fitness equipment industry stands as we enter 2022.
Here’s what you need to know to activate or re-activate a facility project with the highest rate of success this year.
1. Adjust the budget for cost increases.
We have all felt the sting of post-pandemic inflation in nearly every area of our lives – and ordering fitness equipment is no different. Typically, we recommend assigning 8-10% of the equipment budget to shipping costs.
However, for 2022 projects, we suggest doubling your estimated shipping costs to 15-20% of the overall equipment budget. Also, be on the lookout for surcharges. The price of shipping a container of goods overseas has skyrocketed nearly 300% from $5-8,000 to $25-30,000. Many companies have had to implement surcharges to offset the massive increase in shipping and supply chain logistics. Surcharges may range from 5-12% of the cost of the product – with some as high as 20-30%.
The good news is that a surcharge is a temporary solution to state of the world – while a blanketed price increase is often permanent. Surcharges are not meant to add to the supplier’s bottom line, but an unfortunate response to the cost of doing any kind of business right now.
While we can’t be sure at this point if high shipping costs are here to stay, we can be sure that the combination of shipping and surcharges in 2022 can send your project into the red if you don’t make those adjustments ASAP.
2. Increase the project timeline.
Shipping lead times and product availability are no longer the only variables that could affect your project deadline. What started as a ‘labor shortage’ in the Fall of 2021 has now reached a level that has been given a nickname for the history books. “The Great Resignation” has extended past the restaurants and service industry to impact several others including construction and trade labor.
If you rely on day laborers or an outsourced contractor for construction, equipment maintenance or installation – be prepared to schedule those jobs with more advance notice. This will not only get your project on their schedule, but it will also alert the company to the demand and provide time to hire additional staff if needed.
3. Order ALL equipment at the same time – EARLY.
The reason for this is two-fold. First, it helps guarantee that you get all the equipment you want in the right weights and quantities. By placing an accessories order early and providing the supplier a future delivery date – your equipment can be held in reserve for complete and on-time delivery.
Fitness accessories such as resistance bands, kettlebells, mats, medicine balls and the racks to store them on are often the last pieces to be ordered. Previously, ordering fitness accessories and getting delivery the same week wasn’t a problem. However, at this point we recommend placing your fitness accessories order at the same time you order larger cardio and strength pieces.
Secondly, as more gyms and studios start to return to full scale operations and working capital starts to increase – the demand for these items will go up in the commercial fitness space. In fact, 4 major health club and studio chains are all showing growth in revenue and in physical locations planned for 2022 – including F45, Xponential Studios, LifeTime Fitness, and Crunch Fitness.
4. Be prepared for a limited selection.
You may have noticed that some of your favorite food or other consumables are still hard to find. The overall streamlining of product lines is another effect of the pandemic’s supply chain reaction. In an attempt to speed up production time, companies that made a several varieties of a single product have cut back to producing the most popular one or two versions.
During the manufacturing process, the assembly line must pause production to physically switch out product materials, rubber molds, paint colors, packaging, etc. If the demand isn’t high enough for an item, it has likely been temporarily or permanently discontinued.
How does this affect an upcoming project for a fitness space? Be prepared to go back to basics. Some of the specialized equipment or training accessories you ordered in the past, may no longer be available. Check with your suppliers to make sure the products you have come to expect are still active.
