Sporting Goods Store Business Overview

A sporting goods store sells athletic equipment, apparel, footwear, and related accessories to consumers. Sporting goods stores serve a broad base of customers, from professional athletes to fitness enthusiasts and outdoor adventurers. As such, the target market for sporting goods stores is vast and diverse.

Stores range from small specialty shops to large format superstores like Dick’s Sporting Goods and Academy Sports + Outdoors. Independent stores make up the majority, along with regional and national chains. Competition is high, both from other dedicated sporting goods retailers as well as big box discount stores and online sellers.

Related: Checklist To Start A Business

How Do Sporting Goods Stores Make Money?

Sporting goods stores make money by selling equipment, apparel, and accessories for sports and outdoor activities. There are a number of revenue streams available to this type of business, including:

• Equipment Sales: The largest source of revenue comes from selling sporting equipment like baseball bats, tennis rackets, and exercise machines.
• Athletic Apparel: Selling workout clothes, jerseys, and sports-specific clothing for activities ranging from baseball to yoga
• Athletic Footwear: Offering specialized shoes for different sports and activities, including running shoes, cleats, and training footwear
• Hunting and Firearms: Providing firearms, ammunition, and hunting accessories to licensed buyers
• Fitness Equipment: Selling home gym equipment, weights, yoga mats, and other exercise-related products
• Team Sports: Supplying equipment and uniforms to local sports teams, schools, and recreational leagues
• Seasonal Items: Rotating inventory to match sporting seasons, from summer camping gear to winter skiing equipment

Industry Statistics

The sporting goods industry sells athletic equipment, apparel, and accessories through retail locations. The industry operates under NAICS code 451110 – Sporting Goods Stores.

Here are some highlights of the sporting goods retail industry:

Sporting Goods Store Industry Size & Growth: The sporting goods store industry generated $115.8 billion in revenue last year. The industry has grown at an average rate of 6.9% annually over the past five years. Growth is expected to continue as more people participate in sports and fitness activities. The industry benefits from rising health consciousness and increasing participation in outdoor activities. (IBISWorld)

Number of Sporting Goods Stores: 90,504 sporting goods stores operate nationwide. The industry includes both large chains and independent retailers. Dick’s Sporting Goods holds the largest market share, followed by BPS Direct LLC and Academy Sports & Outdoors. These three companies combined account for a substantial portion of industry revenue through their extensive retail networks. (IBISWorld)

Sporting Goods Store Profit Margin: Sporting goods retailers typically achieve profit margins between 3.9% and 8.8%. The variation in margins depends on factors such as store size, product mix, and operational efficiency.

Costs To Start a Sporting Goods Store

Starting a sporting goods store ranges from $50,000 to $500,000, depending on the size of the store and initial inventory selection.

Here are some of the main costs to consider when starting this type of business:

Initial Inventory: The largest expense when opening a sporting goods store is stocking the shelves. For a new store, inventory costs range from $30,000 to $300,000. This includes a mix of equipment, apparel, footwear, and accessories across various sports categories.

Location: A retail space for a sporting goods store often requires first and last month’s rent plus a security deposit. Adding basic renovations and display fixtures, the initial location costs could range from $15,000 to $100,000.

Store Fixtures and Equipment: Display cases, shelving units, clothing racks, and point-of-sale systems are needed to operate the store. These items collectively cost between $10,000 and $75,000.

Insurance and Licenses: Business insurance and necessary permits, including special licensing if selling firearms, can cost between $2,000 and $10,000 for the first year of coverage.

These estimates represent general ranges, and actual costs will vary based on location, store size, and product selection.