How to Start a Hydroponics Store

Part 1 - How to start a Hydroponics Store business - Background

Growing plants hydroponically eliminates the need for soil, so it can be done anywhere. Many gardeners are getting into this form of gardening to grow plants they otherwise wouldn’t be able to. In order to grow plants hydroponically, gardeners need specialized equipment and supplies. Hydroponics stores sell the specialized equipment and supplies that hydroponic gardeners need.

According to IBISWorld, the hydroponics growing equipment stores industry has an annual revenue of $654 million and has been growing hat a rate of over 8 percent. There aren’t any companies with a dominant market share, leaving plenty of opportunities for new businesses.

Our guide is in 3 parts:

• Part 1 - How to start a Hydroponics Store business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a hydroponics store?

The startup expenses for a hydroponics store business are sizable. Business owners must pay for:

• Storefront: Leasing costs will likely total several thousand dollars per month.

• POS system: This cost can be as low as a per-swipe fee with a mobile phone card reader, to thousands of dollars for a more traditional system. You may be able to finance these costs monthly.

• Inventory: This will likely be one of your biggest costs. You will need to stock your store with enough equipment for customers to start their hydroponic gardens. You may be able to offset these costs by ordering your items via drop-shipping. This way, you only pay for what you need as you need it.

• Store sign: These costs are highly variable.

Inventory costs alone can be significant, for businesses need a variety of complex equipment to sell. Customers may be looking for grow tunnels, greenhouses, climate control systems and irrigation equipment.

Those who open an independent store might be able to reduce their capital requirements slightly, but all of the initial expenses still aren’t cheap.

What are the ongoing expenses for a hydroponics store?

A hydroponics store business’ ongoing expenses are sizable but manageable. Rent is one of the main costs, but this can be kept low by choosing an inexpensive location. Most gardeners who need hydroponics equipment are willing to drive to a specialty store, so it’s possible to choose a location that’s in a lower-rent district. Other ongoing costs include utilities, purchasing additional inventory, insurance and employees’ salaries.

Who is the target market?

A hydroponics store business’ ideal customers are avid gardeners who want to grow plants indoors and without soil. Passionate gardeners will likely want to grow many plants and, therefore, need lots of equipment and supplies.

How does a hydroponics store make money?

A hydroponics store business makes money by selling hydroponics equipment, supplies, and nutrients. Equipment sales can be for large sums, while supplies and nutrients can provide recurring sales.

How much can you charge customers?

The cost of hydroponics equipment and supplies varies a lot. A bottle of nutrients might sell for just a couple dollars, while a complete advanced climate control system might be over $1,000. Instructables reports that a basic multi-plant kit might cost $185, while a single pot may sell for $50.

How much profit can a hydroponics store make?

A hydroponics store business can bring in six- and seven-figure sums annually. For example Seattle Hydro Spot was bringing in about $1 million annually before it was purchased by a competitor.

Because the ongoing expenses of a store are significant, profits can be much lower than revenue. A business owner who is able to run an efficient operation will still be able to realize solid returns on their investment, though.

How can you make your business more profitable?

A hydroponics store business can increase its revenue by manufacturing and branding its own equipment. This requires in-depth knowledge about hydroponics, but business owners who have this knowledge will be able to reduce their cost of goods — and, thus, increase their profits.

Day-to-Day and Growth

What happens during a typical day at a hydroponics store?

Running a hydroponics store business mainly involves helping customers, selling equipment and supplies, and reordering inventory as necessary. In between customers, business owners or staff spend time straightening inventory, restocking items, cleaning, and tending to any plants a store has growing.

What are some skills and experiences that will help you build a successful hydroponics store?

In order to successfully sell hydroponics equipment and supplies, it’s necessary to know how to use them. Gaebler notes that most business owners grow into owning a hydroponics store, starting to grow plants hydroponically as a part-time hobby first.

Business owners who want don’t have experience with hydroponics can take courses on the subject. The Institute of Culinary Education, The University of Arizona and other schools offer courses and workshops on various aspects of hydroponics. Alternatively, ACS Distance Education has an online Certificate in Hydroponics.

In addition to taking courses, it’s also wise to have a couple books on hand as references. Hydroponics: The Complete Guide to Hydroponics for Beginners and Hydroponics: Gardening at Home Without a Garden are just two of many titles that cover topics in hydroponics.

What is the growth potential for a hydroponics store?

A hydroponics store business may be a small, local store, or it can have several locations throughout a region. The Grow Show in Ann Arbor, Michigan and Grass Valley HydroGarden in Grass Valley, California are a couple of examples of local hydroponics stores. GreenCoast Hydroponics has several locations on the West Coast.

What are some insider tips for jump starting a hydroponics store?

A new hydroponics store business may not have everything that customers want in stock. Offering to place special orders at no additional cost — or even at a discount — could help prevent customers from going to other stores. Even if little profit is made on a special order, developing a reputation as a business that will place such orders will keep customers returning for specialized service. These customers will likely also purchase other supplies and nutrients that are in stock — ones that do provide a profit.

How and when to build a team

Most hydroponics stores start out with a small staff, sometimes just the business owner. Hiring at least one or two people as early as possible, though, is important for a business’ sustained growth. Without a staff of at least a couple people, business owners can’t take a day off for vacation or illness. They also aren’t able to spend as much time sharing their knowledge through workshops or classes.

Part 2 - Is a Hydroponics Store business the right fit for you?

Part 3 - Action plan to launch your Hydroponics Store business in 90 days