Hello everyone, this is Julian and Cesc, and today we're having coffee at the Potter Club. Yeah, with a little bit of gossip. With a little, I like it, gossip time. We are All Things Padel. We're here, Pura Vida, enjoying this delicious macchiato, and he's having a café con leche. Yes. Yes. The way I like it. Well, let's talk a little bit about Padel. You know, I think I think this Padel is kind of crazy, right? The business, uh, what's going on investors.
Um, the Padel world, the Padel world in the USA. Yes. Yes. I mean, the growth has been like, it's crazy this last couple of years, right? Everybody wants to open up a club, right? Everybody comes down to Miami and comes to a club, gets addicted. And they're like, I want to open up a Padel club, right? How many times have we had calls about that? Right. Gasillion times.
I mean, where is the, you know, the industry it's estimating that by the end of 2025, This year, they're going to build over a thousand Padel clubs, and we got that, that data from, uh, from a very reputable source of, uh, Padel, different Padel, uh, companies, Padel manufacturer accords that those are the orders they have for this upcoming year. I mean, it's, it's just crazy what's happening with Padel.
And I mean, and what we tell them is, you know, investors want to see three basic things, a little bit more, but these are three basic things. One, of course, is location. Do you have a location? You know. Uh, demographics, right? Is it the right location? The other 1 is going to be some seed money, right? Some type of money. So they're vested into this project, you know, I think that's kind of a big deal. And the other 1 is going to be experience. Are you an operator? Do you have experience?
You know, in in a sports facility, not only you're talking about having the right coaches and programming. I mean, it's the whole structure. We see so many amateurs coming into this, this, this ecosystem of Padel that they don't know what they're doing. And, um, you know, we had a Padel smash. We're trying to guide them on and consult them the best possible way because we have experience. We have the business.
Accolades and the Padel experience that we want to guide him into, into, uh, into the right way. And, and, and the other, the other see that, that we, we, the other mistakes that we see huge, very, very important Padel brands coming into this market, which the American market is huge. Yeah. It's not because you're successful in Spain or a smaller country with your brand, you're going to be successful here.
You have to know the market and you have, and the American market is not the same thing as European market. They're very different. And the Spanish market is not the same thing as the Italian market, you have to know the market. And we see that left and right, we jump on calls and we said, Oh, gee, you know, these guys, they have no clue what they're getting into it.
And the thing is, we've been so involved in Padel for a little while now, and we kind of see the pitfalls and mistakes that people can make. So, you know, we're there to try to help them avoid those pitfalls and mistakes for sure. But you're right, we see a lot of companies, brands, investors. You know, they're trying to get into the American market because it's growing, it's growing. Um, but it's trying to avoid stern mistakes is what's key. And sometimes they're jumping in too quickly.
You know, putting together a great business plan on paper looks great. But, you know, in reality, sometimes it doesn't work out the way one thinks it does. You know, you come to Miami, you open up a club. Yeah, people are just going to fill it up, you know, especially in the right locations. Outside of Florida. It might be a little tough and look not only I mean What are you doing stealing my cookie what the heck man this guy is trying to You know, lose some weight.
And then it still, it's still in my, you wanna lose some weight? I was waiting for you to, that's why doing, I was waiting for you to finish my coffee to have that cookie. I'm doing a favor, my man. That's all. I'm sorry guys, but this is, uh, incredible. I mean, I gotta deal with this every single day, man. You know, it's like, I feel like I'm surrounded by hyenas, , trying to eat my, my food. But anyways, let's go back to the topic here. It's, uh, You snooze, you lose, my friend.
You snooze, you lose. Each community is different. Not only because your business is successful in Miami, it's going to be successful in, in, in Wisconsin, Minnesota, or the West Coast. You have to know the demographics. And you know, you have to know how to target those demographics the right way. You have to be the right team. It's budgeting for marketing.
Yeah. Um, you know, you, I mean, you're going to be, You know, what, uh, 16 to 24 months, you're hemorrhaging some money, you know, getting into the black. Uh, so you're gonna need a budget there for that, and you're gonna need a budget for marketing, you're gonna need to get into the community. I mean, really cement yourself in the community. Now, people talk about it all the time, what does it actually mean?
That means you gotta, you gotta, you gotta get these business owners, small business owners, corporate owners, get in there, get involved, talk to them, get them to come to, you know, to your club. You know, get the employees to come to the club, even for free. I mean, it doesn't really matter. You just need exposure to the sport and you have to do that all the time. I mean, this is what we focused on growth. Pornhub is the same, same model.
And I just don't think people maybe don't understand or they do understand it, but they're not executing it directly. You know what I'm saying? And we see, I call these the The Padel gold rush, but in reality it's not a gold Padel rush, it's more a Padel gold marathon. It's, it's a long way. You're not going to see your return on investments in a year or two years. You have to, it's a long term, this is a marathon. You have to hit the right marks for you to be successful.
And if you don't know You have to hire the right people and that's why we're trying to do our best for for our clients Are our viewers and listening and listeners to guide them the right way and what to do And if you're trying to bootstrap this you've got to create a budget for that, you know, 16 to 24 months Yeah, half if not, you'll be down the tubes in less than six months.
Yeah, you know, it's very if you're not incorporating that marketing budget And, you know, and the cost of, of hemorrhaging money every single month for that eight, 16 to 24 months, you're, you're going to be in trouble. Uh, you're going to have to compromise on your model. You're going to, you're, you're going to be looking for other investors. It's going to be a, a problem. You know, we've seen it, you know, a few times already. Um, a few times more than once, man. I mean, it's just crazy.
It is crazy. So let's talk more about the, the, the brands. I mean, right now. We see brands, uh, we see certain American brands, or at least, uh, American known brands. So let's talk about that, like the Wilsons, the Fitas, the Bevs, Babelot, the Head, right? And then you have other brands that are not so known, but really largely known in the, in the Padel community in Europe. In European market, yeah. Like the Padelnox, Sukes, things like that.
They're also wanting to get into this industry, not only with rackets, with pickle, with other racket sports, and also with courts. Um, so they're trying to get, cement themselves in the American market because they've seen it in Europe and they've been successful there. And now they're trying to apply the same thing here in the U. S. And it may not be the same. Their model there and what worked there may not be the same here. Because again, this is the U. S. It's a little bit different.
And so, I think they're starting to realize that a little bit. And a pivot and a change is what was needed. To be successful in cementing their brand here in the U. S. A. And working with the right with the right people. I think that's kind of not jumping into into a marriage so quickly without vetting the personnel, you know, understand, doing the diligence and understanding what their vision is, what the person's vision is and and who they're reaching.
Yeah, and I think that's kind of what's going on right now. What we kind of see. Yeah. And I tell you, uh. And the big difference between the Wilsons, the Heads, and the Babelats, they've been in the American market for over 40, 50 years. They already made all the mistakes necessary for them to succeed. They're huge brands. I mean, it's Wilsons, the Heads, the Babelats.
I mean, they have headquarters, they have, you know, over a couple of hundred people working on each, on, on departments, on different departments, they have distribution centers all over the country. I mean, it's, it's, they're so massive and they know how the market works because they've been doing it for 10 years, for forever. So, so the key here for, for you as a brand to come over. Can I have some more cookies? He's only more cookies. Can you see this guy? This guy ate my cookies.
Oh my God. Can you bring me another cookie, please? Please. Sorry about that. You know, it's, it's, yeah. I feel bad I took his cookies. I have to ask for another one. Alright. He's crying so much about it. So, going back to what you guys, what I was saying is that, uh, you as a successful brand in a different continent or a different country, you have to know exactly what are the benchmarks that you need to do. Distribution is crucial. Having the right marketing.
Um, you have to have sales people by region, you know, you mean someone in the West Coast, someone in the East Coast. The East Coast is huge, Northeast, Southeast, um, the middle of the country. I mean, this country is huge. You can't have one, you cannot have just one sales rep for the entire country. It's literally impossible. I mean, the, the, the, the, the country is too big. So you have to distribute that. And for that, you need to have a budget without the budget.
Your growth is going to be so much slower and you need to find e commerce partners, which they're going to help you distribute through the e commerce, uh, uh, ecosystem much faster that they're already established here in the United States because it's, this is a cutthroat market. Uh, and, and when you're dealing with these big Wilson's, I mean, their budgets are huge compared to the European brands that are trying to get into these markets. Yeah, yeah. But I, I think they're.
They're slowly getting into the market. They're not rushing into it. I think they're assessing every year the market and increasing their marketing and what they're doing. So they're kind of like, they have that experience. They have those deep pockets for that. Yeah, I mean some of these other smaller companies are maybe pretty big and thank you very much. Here we have the famous cookies. This is it. See, he doesn't know how to eat this. First of all, you dip it on the coffee. You buy the top.
It looks like you're doing that too. You know, how do you do that, man? I don't know, man. I don't know about that, Julian. And the way you drink the coffee is with a little pinky. That's the wrong type of, uh, uh, you know, podcast. Mmm. When you mix the bitterness of the coffee with the cookie, the sweetness of the cookie. Delightful delicious. But anyways, yeah, so I think, I think the bigger companies are kind of doing right.
They're assessing each year seeing, you know, how the year went, you know, the growth and how much more money they're going to be marketing into the Padel. I think they're doing the things the right way, but let's talk about distributors and what, what their jobs are responsibilities and does it work?
You know, um, the way they, their model and you see distributors jumping all over the place, you know, this month, it's this guy, a distributor for this brand, six months from now, it's another distributor, why it doesn't work and why are people jumping around, things like that. Well, I mean, the distributor is very simple. The European brand is going to ask you for, um, uh, a fixed amount of purchases from the brand on a monthly basis. You need to have a warehouse, definitely.
You have to have a distribution center. So somebody has to be there 24 seven, especially if you have an e commerce to be shipping out orders to the clubs, to the, to the pros, to the e commerce, logistics, logistics, you need to have the logistics. Uh, you can, uh, have a, uh, another company to do those, but it's going to cost you money. So. Bottom line, it's, it's what are your margins?
It's crucial for you to know all those details before you jump into representing a brand and buying a couple of hundred thousand dollars worth of inventory. And then what do you do? And then, you know, the brand may not have a budget to market to help you push that, you know, those rackets. Yeah. And sometimes, you know, as a distributor, you're not creating any value. You're just a distributor making money at that time, right?
So a lot of times you see them jumping on to different, different places because of that. There's no like footing or there's no building of anything, you know, unfortunately. And not only that, I mean, you have to really be careful with the brands, um, just to name some. Every, every, some, each brand is different, but every four to six months, uh, or every year, they come out with a new model. So let's say you purchase the Tapia racket from Knox, uh, from last 2024.
Now you're, you know, you purchased a couple of hundred rackets, you saw 100. Now you're stuck with 100 old models from, from last year. So what do you do? I mean, you're committed by thousands and thousands of rackets. So you have to pretty much sell it at a cost or, or literally give it away. So you can start selling the 2025 model. So you have to be very careful with that. And the brand has to. Uh, let you know, so you know how much rotating equipment that you need to have.
And it works the opposite way. Yeah. Like, we do a review on a racket that we really love, and boom, it's out of stock. Yeah. And that distributor didn't know it was going to be out of stock, and they're losing money because people want it, you know? So it is not an easy, it's not an easy gig, I would say, you know, there's not a lot of Well, let's talk about what happened with, with, with Knox, the, uh, Ausberger saga. Yeah. Another one.
I mean, you know, leave an Ausberger, you know, there, there were Knox players for, for quite a long time. They have a contract still for another couple of years. Yeah. They had a contract and then suddenly they switched to suits. Let's say you purchased the Ausberger rocket, which. It's spectacular racket. The racket was about to come out. The racket was about to come out, you know, and the next racket, they did R and D specific rackets for them. It was about to come out the following month.
And we were like, Hey, let's put in these orders for these. And boom. So all those rackets, what do you do with those rackets? You have an inventory, right? You have to give it away or put us a demo rackets in a cloud. So it's, and then we're also talking about. You know, defects, right? When you make a racket, let's say for 100 rackets, you may get anywhere from 10 to 25 percent defects that, you know, you can't use, which is a waste.
Uh, something you can do as testers or what have you, but some of those leak through. And then you have to deal with rackets that are defective, cracked, you know, cracked somewhere. I mean, and then You return policy. Let's say I'm playing with your racket and it breaks. So are you going to take it back as a distributor or not? Uh, the e commerce store needs to have a return policy. What, what, what can you do? You can do because now you ended up if it becomes defective, like you said.
It's happened to me. It happens. It can, a batch comes defective. And now you're responsible 100 percent and then you have to deal and your e commerce store, you know, their customer doesn't want to hear that. Hey, you have to get permission from the district. They don't want to hear that. Yeah. They just give me a note. Yeah. And you know, you want to have some good reviews. So, you know, you risk taking the loss there.
Yeah. So, and that's just rackets, you know, and now, now you have, you know, courts. I mean, things are starting to more companies starting to make the courts. You know, um, where they're coming from the logistics on that, uh, how to hold them, where are you going to hold them? You need any space for them, you know, uh, broken things when they come in. Oh man.
It's just what it happened to your club, I mean, you received the cord with four broken glasses, four broken glasses, where in the world in Connecticut, you get four Padel, you know, panels. I mean, so fortunately, fortunately we weren't. We weren't in a rush. We weren't like, okay, we're going to put it up and we're opening. So, fortunately, we're in that situation. But a lot of clubs are. A lot of clubs are like, they need to get going because they're paying rent.
Yeah. Fortunately, I own the building, so it wasn't that big of a deal. But for somebody to wait a month or, you know, a month and a half for a glass, that's, that's killer. And glass breaks like that, you know. I mean, it's heavy. Just to give you a rough number. because I deal with that every day.
It's, uh, uh, uh, uh, each outdoor court gives you an estimate of 20, 000, you know, of, of rentals a month, give and take here in Miami for each day, your clothes, because your glass is broken, you're losing money and you could be losing thousands of dollars just because so, so this is a good, good thing you're saying, because anybody who gets courts, they should buy one or two Glasses, extra and just keep them in the back because it's, it's going to happen.
But, but let me tell you one, another mistake, glass breaks, where in this world you get an installation or install is a guy who can install these glasses. They're not easy. They are extremely heavy and you need at least four people, five. I can do it. I've done it. I put it, I put it, no, five people. You need five people. Yeah, watch my video on putting up a court. I mean, it's uh, it's not that difficult But you have to know you have to know yeah, there's a lot of tricks.
I mean that video should help you out Um, but handling the glass is something it's nerve wracking. Yes. They weigh almost 400 pounds. Yeah And, you know, you drop it. That's it. You're not going to get one for a couple months. So, you know, it's, it's really, uh, important handling like that. But most, most people are going to have, uh, professionals come and install it, you know. But it's not something that you can't do.
I mean, if you got one core going and you're in your home or one core just, it's something you, you can handle. But you, again, you're going to need five people. Uh, to handle that, that, that class and you're going to need like two or three people just to do the rest, you know? Yeah. And look guys, we, you know, we're going to start doing these more, uh, these episodes of, uh, coffee and chill on the Padel club.
Uh, and we're going to just talk about, uh, I hope this, this was helpful to you guys and, uh, we're here to help. Uh, we know the market, we have, we have the, you know, the business part, we have the Padel part, reach out, reach out to us, reach out to us, reach out to our helper, and we'll, we'll, we'll help you, you know, guide you the best we can into this beautiful Padel journey, and remember, Padel is beautiful at Padel Smash.