NEWS SPECIAL
ENTRY LEVEL NOT HOLDING WATER
A
fter a year that can only be described as a rollercoaster ride, what can we expect from 2021, writes Rob
Carlin, managing director of Superior Wellness. 2020 has seen a huge increase in
new start-ups and also established companies, moving into the hot tub market, typically in the entry range of products which are sold online. These companies have specialised in the £3k-£3.5k price point, which I dare say, have done outstandingly well to sell in impressive volumes. However, some of these companies may find themselves in hot water over the coming months, especially if they have already secured sales that they must now ship and fulfil.
I believe we look to mourn the loss of
the competitive price points between £3k and £3.5k for online retailers.
INCREASED COSTS
Shipping costs from China to the UK have seen catastrophic increases over the last few months, with average shipping prices increasing from $1000-2000 US to approximately $2500 over a period of 12 months. Forecasts of shipping costs are set to be between $8000-10,000 US for containers between December 2020 and February 2021. With a container holding an average
of 12 hot tubs, these forecasted prices leave hot tub importers with a potential increase of $650US per hot tub in shipping costs.
With a 400% increase in hot tub
sales in 2020, the rise of manufacturing costs was inevitable and unavoidable. Many hot tub factories worldwide have already sent price increases to their customers. A lack of raw materials for the
components: jets, panels, topsides, packs, pumps etc has resulted in the supply not being able to match the demand. The raw material costs have increased across the industry, leaving manufacturers no choice but
DUE TO INCREASED OVERHEADS, retailers need to rethink their pricing structures. Pic. Library
“WITH A 400% INCREASE IN HOT TUB SALES IN 2020,THE RISE OF MANUFACTURING COSTS WAS INEVITABLE AND UNAVOIDABLE. ”
- Rob Carlin, Superior Wellness
to implement price increases down the supply chain. Increases for raw materials are set to add an extra $150- 200US on the cost of every hot tub.
ON-LINE MARKET
An online retailer selling stock for £3k-£3.5k before it is shipped, will rely on advance orders. Following shipping the containers from China, they will then find their profit margins drastically diminish. For hot tub retailers, these increases of approximately $800 per hot tub
6
WINTER 2021
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