I was asked a question back in May from one of my clients about whether their were any business cases of companies selling fitness equipment online.
This client sells fitness equipment in Calgary and surrounding area and wanted to expand their operations across Canada through online sales. He indicated to me that the purchase of large fitness equipment can be difficult for people living outside of major urban centres, because they do not have the selection, and even people living in urban centres without access to a truck find it difficult to purchase large fitness equipment.
My response was one of intrigue. Could fitness equipment be sold online? Would their be a market? As it turns out, the client is probably at least 2-years away from accomplishing this, however, it got me thinking about the viability.
One of my operations is an online shopping network targeted towards the US market. My two primary sources of revenue include Google Adsense as well as affiliate commissions. My primary affiliate manager is called Commission Junction. I decided to enrol in the affiliate program for a company called Smooth Fitness which sells gyms, elliptical trainers and treadmills.
The results surprised me. As of November 23, 2005:
Enrolled on August 10, 2005
Total visitors sent to program: 40
Total sales generated: 1
Gross sale amount: $1762.29CDN
My commission: $140.98CDN
My expectations about this type of affiliate program would have been 1 in 200 as a conversion rate or 0.05%. However, I am currently pulling 1 in 40 as a conversion rate or 2.5%. If you look at the above in terms of earnings, I earned $3.52 per visitor sent.
Here are the things I do not know about this visitor:
1) Do they live in an urban or rural area as my client indicated above?
2) Were they searching for a specific product that no local retailer carried?
3) If the product was available local, how did the price compare once you factored in shipping costs?
4) Was this a purchase of convenience, I buy online and wait for them to ship it?
5) What knowledge of this product did the consumer have before making the purchase?
If you would have told me at the beginning of August that I would have sold fitness equipment through an affiliate program with only 40 clicks, I think I would have been a little hesitate to be that optimistic. My scepticism would have resulted from the fact that large purchases, such as this, tend to benefit from the Internet at the research phase but not as much during the purchasing phase. I guess I will have a better idea after the next 40 clicks.
The next step for this client is more research, building the offline and online business processes, and implementing the plan for selling his products online.