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Building His Fitness and His Online Sales Success
Art Carey | The Philadelphia Inquirer
On a recent Sunday, Billy Olson decided to do something new. Though he’d lived in the area before, he had never visited Valley Forge National Historical Park. So for two hours, Olson took a hike.
The rolling hills and open meadows were soothing, and as he recalled the difficulties faced by the Continental Army, he felt encouraged about his own challenges.
In Olson’s words: “It was a real kick in the [butt].”
Trying something new is a tenet of Olson’s philosophy of fitness — and business success.
Olson is president and CEO of Smooth Fitness, an Internet company based in King of Prussia that sells its own line of treadmills, elliptical trainers, and recumbent exercise bikes.
Its 2008 sales were about $30 million, Olson says, down about 5 percent from the previous year, largely because of the diving economy.
Because it has no retail stores, Smooth Fitness can sell commercial-quality home fitness equipment for 25 percent to 30 percent less than such larger competitors as Precor, Cybex, and LifeFitness.
That Olson practices what he preaches is evident in his physique. At 51, he has a body that men in their 20s would envy. The former Conestoga High tight end and Temple University linebacker is 6-foot-1, 190 pounds, with broad shoulders and narrow waist.
Of exercise, he says, “It’s transformative, like taking Ritalin and Prozac. It gives you more focus and acuity and keeps your spirits up.”
The mental benefits of exercise show in his demeanor. He is energetic, cheerful, positive, optimistic. He is also a curious and attentive listener.
He has held marketing and executive posts at Guinness Brewing, Dunlop Sports, Coca-Cola, and Procter & Gamble.
Olson was brought aboard Smooth Fitness in July 2008 to help right the company. It was launched in 1984 and, in 1996, became the first fitness retailer to sell online. The father-son business was acquired in 2006 by two venture-capital firms, Spring Capital Partners and New Spring Capital, and several private investors, including local entrepreneur and fitness enthusiast Pat Croce, and Brian Tierney, publisher of The Inquirer, Daily News, and Philly.com.
The company has 45 employees, most of whom work in the area, and distribution centers in King of Prussia, Indianapolis, and Las Vegas. The equipment it sells, ranging in price from $1,000 to $3,000, is manufactured according to Smooth Fitness designs and specifications in China and Taiwan.
For Smooth Fitness, the last year has been tough. Around the holidays, the company nearly perished. The business survived by restructuring debt and husbanding cash carefully, Olson says.
Home fitness equipment is a $3.5 billion industry that lately has been contracting. For the first six months of 2009, sales at Smooth Fitness did drop 5 percent. But its competitors saw much larger drops — Cybex, 22 percent; Precor, 24 percent; LifeFitness, 27 percent; Nautilus, 41 percent, according to financial statements compiled by Olson.
“There are too many fitness-equipment manufacturers, and the market is oversupplied,” says Jon Stevenson, an industry observer and the chief executive officer of Treadmill Doctor, a Memphis, Tenn., fitness-equipment services company that reviews products.
“Smooth Fitness embraced the Internet early, not as a gimmick, but as a channel for building business, and they’ve become highly competent at marketing on the Web.”
One of Olson’s top goals is to enhance the Smooth Fitness Web site so that it offers “a virtual-shopping experience,” enabling prospective purchasers, through interactive features, to become almost as familiar with an exercise device as if they were trying it out in a store.
Nationally, treadmills and elliptical machines account for about half of home-fitness-equipment sales. Treadmill sales are flat and declining, but sales of elliptical trainers are growing fast, as aging baby boomers seek low-impact ways to move their increasingly arthritic bodies.
At Smooth Fitness, treadmills and elliptical trainers account for 90 percent of sales, and the pressure is always on to innovate and improve.
Olson believes Smooth Fitness has succeeded in a substantive way with the design of one of its elliptical trainers. On these models, the pedals move more horizontally, lengthening the stride and keeping the toes in front of the knee. This reduces shear forces across the knee and stress on the shins, Olson says.
“Smooth makes a highly competent machine, as good a quality as you can find in the industry,” says Stevenson. “The question is, can they continue to do so in the future?”
Smooth Fitness expects to sell 15,000 to 16,000 pieces of equipment this year and to tally sales in excess of $30 million, Olson says.
In the meantime, he is a man fully engaged. Two knee replacements have not diminished his ardor for exercise. He swims, spins, and twice weekly, trains with Pat Croce, doing core exercises and lifting weights. He also practices yoga.
“I love fitness,” Olson says, “and I love the game of business.”
To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer.
Copyright © 2009, The Philadelphia Inquirer
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