Adidas brand is very popular in our country. The brand has become a cult since the Soviet period, but now it is no less in demand. You can find many shops with sporting goods of this company, moreover, there are goods for a different wallet. There is an Adidas franchise, thanks to which you can open a profitable business. Details about this are presented in the article.
Brand history
The company was opened in 1920 by the Dassler brothers - Rudolph and Arthur. At that time, the brand was called Dassler. Slippers and professional sports shoes were on sale. Later began to produce sneakers with spikes. They began to be called "boots" and were in demand among football players.
In 1948 there was a division of the business. So there were 2 competitors - Adidas and Puma. Over a long history, there have been many financial crises. It first happened after the war. Only in the 1950s did Adidas take a leading position in the market. It turned out thanks to the implementation of football boots.
About company
A small orthopedic shoe company has gradually grown. Nowadays, in all corners of the earth there is a developed network of stores of this trademark. Adidas has many subsidiary brands. These are Salomon - a manufacturer of goods for tourism, Reebok - sportswear and shoes, CCM - hockey products, Mavic - a rim for bicycles.
The size of sales becomes more than 1 billion dollars. Now in Russia there are over 800 trading establishments selling goods of this brand. The Adidas franchise is in demand, most of the points work on it. This is a profitable investment for those who want to open a business. But it will take investment and a desire to make money.
pros
The benefits of the Adidas franchise are as follows:
- Work with a popular brand.
- Thanks to proven work schemes, costs are minimized and the risk of bankruptcy is reduced.
- Getting support from the franchisor regarding equipment selection, assortment creation and marketing nuances.
- Training.
- Assistance in registration of trade establishments according to the corporate identity of the company.
Thanks to these advantages, many people choose the Adidas franchise for starting a business. Many shops operate in it in our country. Thanks to comprehensive assistance to a novice businessman, it will be easier to understand the field of trade.
Minuses
The disadvantages of the Adidas franchise store include:
- High cost.
- Long payback period - from about 1 year.
- Strict requirements for doing business, large deductions to the franchisor.
- Dependence on patency.
- Self-optimization of costs.
- Dependence on customer income.
- Strict selection, high requirements.
The Adidas franchise will not be so profitable for a small town. For the development of business requires a large cross people. And in large cities, this type of trade will be quite profitable.
Conditions
Even with a margin of at least 100% of the purchase, 1/3 of the part is transferred to the franchisor. This type of work will be beneficial if the following conditions for the Adidas franchise are met:
- Goods are purchased for their money, not for credit.
- Turnover will be at the highest level.
- The premises are owned or rented for a low fee.
- Trading is carried out independently.
If the turnover is low, there are a lot of employees and high rents, then these expenses will occupy more than half of the revenue. With this progress, bankruptcy awaits. To conduct this business, a careful calculation of income and expenses is required.Only then will the business develop successfully.
Price
Profitable business cannot be cheap. What is the cost of the Adidas franchise? A lump-sum payment is required to start. Its amount is not regulated, it depends on several factors, including the region, location of the premises. The minimum amount is 20 thousand euros, that is, almost a million rubles.
Expenses include royalties (monthly deductions) in the amount of 7% of the turnover. You also need to pay an advertising and marketing fee of 1.5-2%. The cost of the Adidas franchise is high, deductions equal to 9%, make them from profit, not from turnover. Although at first glance this may seem small, it is actually an important indicator. For example, the margin on the purchase value of products is 100%. Then every month the franchisee deducts a third of the mark-up to the franchisor, but with the condition that
- The franchisee is considered the owner of the premises.
- The turnover is high.
- Business is done on its own.
- Goods are purchased on their own, and not on borrowed money.
The Adidas franchise is above the average market price. For example, to acquire the Provocation business, you will need 300 thousand rubles for investments and 100 for a down payment, and other conditions are simpler. There are many factors to consider when choosing a franchise.
Other expenses
When doing business with the Adidas store, there will be the following expenses:
- taxes
- rent;
- equipment for trade;
- salary and employee training;
- purchase of goods.
It is important to consider all additional expenses. Typically, the payback period is long, which is associated with costs. His franchisor must calculate individually for each franchisee. For some, it can be a year, for others much longer, which depends on many factors.
Adidas Kids
The company is developing various areas of work, including the Adidas Kids brand. These stores sell sporting goods for children. There may be clothes, inventory, shoes.
But you won’t be able to buy a separate franchise; it comes with sports products for adults. The conditions and requirements for cooperation are the same.
Products
Adidas stores sell clothes, training shoes, sports equipment, equipment for professionals and amateurs, and children's goods. Moreover, the products are presented in different price categories. You can choose casual clothes, as well as products from collections created by popular people. Adidas is considered the title sponsor of sports teams and competitions, so the stores will find the official form and equipment with logos.
Possible problems
Even if there is enough money to buy a franchise, you should not immediately purchase it. In addition to the cost of buying permission to sell the goods on behalf of the brand, you need a room. It can be purchased or rented, and it should be in a prestigious area.
Brand control compliance with the interior, so to meet all the parameters you need to spend money. We also need funds to buy goods and equipment.
Even if you acquire the franchise of a famous brand, it is not yet known whether the business will be profitable. Prices of goods in such stores are high, designed for consumers with high incomes. In big cities, people get expensive, branded things - this must be taken into account when choosing a place of trade. It is unlikely that the products will be in demand in a small city.
"Adidas" produces high-quality sportswear, accessories, shoes. You can start a business under the brand with the necessary amount of money and the desire to earn. It will be possible to make it successful if the property has a premises or a lease with a small fee, as well as a high margin, the purchase of products with personal funds, and a small number of employees. Thanks to this, it will be possible to reduce costs, and subject to large company contributions, this will positively affect the business.
Thus, the Adidas franchise is considered a profitable investment if all the details of the business are carefully thought out.In this matter, it is important to calculate everything correctly. Only then will a sporting goods store be in demand among buyers.