Quite a Dilemma

Over the years our game has changed. A lot! At the very beginning we played on large fields and shot paintballs that were very costly. We could count on our fingers and toes the number of balls we shot during a multi-hour session. Over the years, as the number of players increased and paintballs were produced and sold in higher volumes, the price of paintballs dropped and we could all afford to buy and shoot a little more.

At the same time technology was advancing and our markers went from shooting very slowly to considerably faster. The number of players was still increasing as well. This allowed paintball producers to increase production and saw many new paintball manufacturers enter this relatively new and continually growing market. Each of these manufacturers thought they could cash in on this growing market. The push was for players to come out of the bush where they had been shooting far fewer paintballs, onto speedball fields, using high tech equipment, and shooting huge volumes of paintballs.

The industry was promoting the opening of fields to further fuel this rapid growth. Field starter kits were advertised in every magazine. The talk was that if you opened a field, the money was in selling paintballs. Fieldowners were encouraged to build smaller fields with shorter game times to promote players to shoot higher volumes of paintballs. It worked. More and more fields, many in areas that had not had fields available before meant more and more new players, all being encouraged to shoot high volumes of paintballs.

Since there was a higher chance of success on the field shooting more paintballs, players hungered for even faster technology. We were the fastest growing extreme sport in North America; new fields and new players everywhere. High volume paintball usage by all these players meant that manufacturers could develop technology and use economies of scale to their advantage and produce paintballs for less and less. Coupled with a high degree of new competitors entering the market, paintballs got very cheap at the wholesale level.

The promotion for players to open new fields had worked very well. There were fields everywhere, many often catering to the same market. This meant competition among fieldowners. Like any other business, competitors all want a bigger share of the market. How do you attract a bigger share of paintball players? Like almost everything else in the world, you lower prices. Sell paintballs cheaper than the other guys and you will attract more customers. As a fieldowner you weren’t really going to make a lot less money as paintball players all want to shoot more paintballs, especially if it gives you an advantage when playing. So fieldowners would undercut the field across town by selling paintballs cheaper, but would make up for it by selling more paintballs.

This was the trend from very close to the start of our industry and for the most part is still the trend today. There are some isolated pockets in North America that didn’t go this route, but for the most part, that is the way it has played out. And that is where we are today. Where the first paintball players could count the paintballs they used in a day’s session on their fingers and toes, today’s average player needs the fingers and toes of 100 friends to count the paintballs he uses in a day’s session.

As one could imagine, there is little resemblance to the original game. The original game was fun for most who tried to play it. Hence, why it started to grow at such a tremendous rate. It was still fun for most who tried it when players started shooting a few more paintballs. Sure, a higher percentage of those who tried probably didn’t come back for a second outing, but overall, the vast majority had fun and came back. As the number of paintballs shot kept increasing, a higher and higher percentage of first time players didn’t come back a second time. The industry started to see a slow down in the growth rate of our sport.

The push had been on for many years to promote speedball. It was thought that speedball was the future of the game after all. Small fields, lots of paintballs shot in a short time and with increasing popularity, the sport was bound to make it on to TV and become an even bigger hit. But the high volumes of paintball being shot on a speedball field, was keeping many players off the speedball fields. It was time to do some back peddling. Maybe speedball wasn’t all that we hoped it would be. A few entrepreneurs saw an emerging market within the industry. Over the years, even though speedball was getting most of the attention of the promoters and media, there had always been more players in the woods than on the speedball fields. Here was a great opportunity to give these players in the woods some of the technology developed for speedball fields that would get these players shooting more paintballs. Since the majority of players obviously prefer to play in the woods instead of on speedball fields, the industry shifted their thinking and started concentrating on these players. Equipment was produced that looked more at home in the woods, but capable of the same high rates of fire as its speedball counterpart.

All was good again for a while. Manufacturers had tapped into this market they had practically ignored for many years and had turned them into high volume shooters. Paintball manufacturers were selling massive amounts of paintballs again. For a while.

But sometimes history does repeat itself. Just as many players had chosen not to take part in speedball, because the high paintball usage was just too extreme for their taste, now people were choosing not to take part in the woods as well. New players that had traditionally started playing paintball in the woods where the game was much more mellow, came once, didn’t like the experience, and didn’t come back.

Eventually, as the game started reaching extreme volumes of paintballs, the percentage that actually had enough fun and decided to come back a second time was not enough to replace the players that typically leave a sport due to natural attrition. The extreme sport that had the fastest growth rate in North America, started to decline.

This created quite a dilemma for the industry. We have competing paintball manufacturers able to churn out paintballs at an incredible rate, paintballs that are selling for very little cost. We also have a continuously dwindling number of players, further decreasing the demand for these paintballs. We have fieldowners that are losing the numbers of customers they used to have, all competing for a bigger share of the pie that’s left. Paintball prices are brought down to the lowest possible prices in hopes of attracting new players. Competing paintball manufacturers are doing the same, supplying these fields with paintballs for very little. Fieldowners are passing these savings on to their customers in hopes of attracting new customers. All this is great for the players still playing the game. Never before have they been able to buy so many paintballs for so little money. Players can shoot volumes of paintballs never before seen. And more and more new players aren’t coming back a second time. Quite a dilemma.

What created the situation? Good old capitalism. Free enterprise. It’s what our society in North America is built on. Give the consumer what he wants for less money and you will sell higher volumes. It works well with almost everything. In paintball however, there seems to be a little flaw. Quite a dilemma.

Prelude to the Economics of a Recreational Paintbal Facility

You wil find below a 3 part article I've put together with the intended purpose of providing current fieldowners or future fieldowners with ideas on how to price their products and service offered at a recreational paintball facility. Please keep in mind that the opinions provided are just that, opinions. In no way should the information in the article be considered a foolproof way of operating a paintball field.

Also, keep in mind that this is for a recreational paintball facility only. This is not for tournament type (speedball) facilities or for a combination recreatioanl and tournament facility where the owner chooses to run them as basically one business with pricing structures virtually the same for both components. Every business is different and every paintball field is different. Every business person must be comfortable with the decisions they make when running their business and risking their resources.

I only provide this information because it has worked for us and I would like to see our industry become a little more stable. Growth rates have shrunk in the industry overall in the last few years and this is a trend I would like to see reversed.

Happy reading. Please make sure you read the article in the order it was written in, or it isn't going to make any sense (there are 3 parts in total).

Part 3, Economics of a Recreational Paintball Facility

Prices and Satisfied Customers

This is a multi part article. If you have not read "Parts 1 & 2, Economics of a Recreational Paintball Field", you should stop reading now and read those first (You will find these below). Otherwise, this will most likely not make much sense to you.

Alright then. If you are still reading, then you either see some logic in my writings, or your just sticking around rubbernecking to witness a train wreck. Either way, welcome back.

In the previous two parts of this article we determined that recreational paintball fields' customers are more concerned about the cost of anticipated fun, rather than the prices of the necessary individual components provided by a field to play paintball. We also determined that customers tend to spend roughly the same dollar amount to achieve the goal of having fun. Lastly, we determined that the only real variable fieldowners have when providing the needed components to their customers, is the amount of paintballs they will supply those customers. I told you that from my experience as a fieldowner 500 to 700 paintballs per customer for a day of paintball seemed to be about right for the majority of recreational paintball players (if you are wondering how I arrived at those numbers and haven't read parts 1 & 2, do so now!).

OK, so how do fieldowners achieve this? Well, they could make up a package which would include field fees, rentals (if needed), enough propellant, and somewhere between 500 and 700 paintballs (let's say 600, cause it's right in the middle). So all your customers will get everything they need and 600 paintballs for the dollar amount you determined was the average your customers tend to spend in your area for a day of anticipated fun at recreational paintball fields.

OK, that was simple enough, except for a few problems. What if some of your customers shoot their 600 paintballs off faster than their friends? Should they sit around and watch their friends continue having fun? What if some of your customers come later or have to leave earlier? Maybe they won't need 600 paintballs. If they are playing at the same average pace as everyone else, they'll feel they got ripped off having to buy the package with 600 paintballs when they could have made do with less paintballs. They will feel like they should have had the option to pay less for less paintballs. Will your customers feel you are "forcing" them to play exactly the way you want them to? Most people enjoy their "free will" and don't like being told exactly how to live their lives.

These are some of the reasons I don't think the idea of making a "package" up with the exact number of paintballs you would like your customers to use. I definitely like to "guide" my customers to the number of paintballs I would like them to shoot, but I don't want them to feel I'm forcing that amount down their throats.

So how do we do this? Well, it's really quite elementary, my dear Watson. We know what we want to provide our customers (everything they need plus approximately 600 paintballs) and we know how much our customers want to spend for their day of paintball fun. Now all we need to do, is price our individual items accordingly (you can still do it as a package, but I'll get to that in a bit). Earlier I said in our area, that amount is approximately $60 (the $60 is actually an average for gear owners and non-gear owners). We've priced our separate components such that $60 will pay for everything they need to play paintball for the day, including 600 paintballs. This way, the customers spend what they have allotted for their day of anticipated fun at our paintball field and we provide them with the amount of paintballs we feel achieves the the objective of the majority of your customers having a lot of fun. But with our pricing structure, we give our customers options, so they don't feel we are forcing them to buy a certain amount And in all honesty, the amount of paintballs shot (and the amount spent) varies from person to person. But pricing everything individually and letting customers purchase paintballs in the amounts they want to buy, let's them feel like they are in control.

If a player wants to play a shorter time period, they can buy less paintballs. If a player runs out a little earlier than his buddies, he can buy a few more paintballs. We also give small price breaks. This way our customers feel they are getting a better deal if they buy larger amounts of paintballs and share them between themselves. And yes, these price breaks will mean that some players will have a few more paintballs if they spend the "average" that most players spend.

So that's the general concept of a pricing structure at a recreational paintbal facility, but there is still one more very important thing to discuss. Actually this is the most important part. This part will, in my opinion, separate the optimally successful fields from the less than optimally successful fields (and possible failures). It has to do with how you price the various components, specifically the paintballs. We know that the "average player" tends to spend and "average amount" for a day of fun at a paintball field. We've determined that we need to price our products, such that the average player will purchase these components and end up with approximately 600 paintballs.

So using the $60 average for our area, theoretically we could charge $35 for field fees, $10 for rentals, and $12/bag of 500. That would be close to $60 and would be close to the amount of paintball we said would be optimum. We could offer bags of 100 for $3, so people could get the extra 100 to achieve 600 for $60. As you can see, you could play around with these prices many different ways and still end up with everything your customer need including 600 paintballs for $60.

But there are some fundamental problems with our example. First, $35 for field fees is going to seem high for your potential customers. They are going to look at that and say, "that's $45 and I haven't even bought any paintballs yet". That's a problem and that might scare away a lot of people before they even give your field a try. Second, at $12/500 (and probably $45/case of 2,000, paintballs are real cheap. So when your customer is having fun shooting a lot of paintballs, he's going to think to himself, "hey, I only do this once in a blue moon, another $12 isn't going to break me. I think I'll get another 500 paintballs and really go nuts." Short sighted fieldowners would think, "Hey, that's great! My customer just went from spending the average $60, to spending $72." But fieldowners that are trying to achieve an atmosphere that the majority of players are going to enjoy, will realize that they are actually hurting the long term success of their business by pricing paintballs so cheap that it is relatively easy to purchase another bag of 500 or two.

Therefore, a more successful pricing strategy will have the field fees and rental rates "reasonable" and will price paintballs at a level that purchasing many more than the amount the fieldowner determines to be the optimal amount, become prohibitive. I suggest having paintballspaintballs available in bags of 100 as well (for a slightly premium price) so players can buy another 100 or 200 towards the end of the day if they want to. A bag of 500 should be priced such that two or three players will feel they want to "share" that extra bag towards the end of the day, rather than so cheap that a single player won't think too much about purchasing another 500 paintballs for the last hour or two of play.

I won't go into specific dollar amounts that you should price you paintballs at. Knowing what you've learned from reading this article (if anything of value) you can come up with your own formula. You can see what our pricing structure looks like by checking out our website, ( www.tntpaintball.com ) but keep in mind that this is based on what the average player tends top spend on a day of fun at a recreational paintball field in our area. Your area's demographics may be different and prices may need to be adjusted accordingly.

I just want to backtrack momentarily and talk about "packages" (cause I promised I would). I don't have a problem with offering packages. When we first opened our field, years ago, we offered three separate packages. Each included field fees, rentals, all day CO2 or air, lunch (yes we provide lunch for everyone), and varying amounts of paintballs. Small price breaks for the larger packages were offered. We also sold paintballs separate at the same prices we sill sell at today. This worked OK, except for the fact that it was a little too complicated for our first time players (which we have many of). Our customers spent too much time scratching their heads and asking us for advice on which package would be right for them. It was annoying for us and confusing for our customers. It didn't take us too long to abandon the idea and offered only one package with 100 paintballs and everything else needed. This made it simpler for our customers and ourselves. I think a year later we took the 100 paintballs out of the package altogether and lowered the package price accordingly (actually we slipped a slight price increase in, but no one seemed to notice). We found we were bagging too many bags of 100's, which is time consuming.

Today, we have two packages. We have a rental package which includes everything needed except paintballs and a gear owner package which is exactly the same except there are no rentals included. All paintballs are sold separately, but priced such that in the end, our average customer is spending $60 and is shooting approximately 600 paintball per day.

Thanks for reading. If you are a paintball player who has wandered in here and wants to inform me that I'm nuts, try to do it gently and remember that I've probably heard it all before. If you are a fieldowner or a potential fieldowner, hopefully I've given you some food for thought. Hopefully you'll have a better understanding of why our pricing structure works for us and why our customers are leaving happy and coming back with their friends, unlike what is currently happening where playing paintball is "cheaper" because paintballs are being sold for very little markup.

Part 2, Economics of a Recreational Paintball Facility

Choices, Choices, Choices

This is a multi-part article. To get the full story, you should read "Part 1, Economics of a recreational Paintball Facility" first before continuing on here.

So in Part 1, we determined that the Demand curve for you recreational paintball field was really based on the desire to have fun (Demand curve for anticipated fun) rather than separate Demand curves for all of the products and services necessary to run a recreational paintball facility.

From that we can conclude that, if all other things are equal, the facility where consumers anticipate they will have more fun, will be the facility they will choose to go to. "If all other things are equal" is an important part of that statement. That means cost as well. So if the cost of various facilities is the same, the one that the majority of consumers anticipate they will have the most fun, will be the facility where the majority will choose to go.

But rarely are there two facilities that have the same prices. So although that statement may be true, it is only a theoretical statement and has little bearing in the real world. Right? Well, yes, sort of. This is where most field owners tend to get confused. We have to stop thinking of "prices" of individual items and need to start thinking in terms of the "cost of fun".

Those that already operate a paintball field know that on any day that their field is open for business, the average amount their customers spend tends to be relatively stable. That average will vary from field to field, mostly dependant on the demographics of the people in the area. For instance, in our area, the average spent is right around $60 for a full day of paintball. We can play with our "prices" of individual componants such as field fees, rentals, or cost of paintballs, but the average amount spent by our customers tends not to change a great deal (slight fluctuations from day to day are normal). That means if we charge more for one componant, our customers will spend less on another componant (assuming we don't have all our componants lumped together in a "package"). For instance, if we raised our field fees by $5 and kept everything else the same, our customers would probably spend approximately $5 less on paintballs (buy less paintballs).

Now we have to be a little careful here, because as we determined earlier, consumers are coming to your facility to have fun. Part of the fun at a paintball field is obviously to shoot paintballs. If we play with the prices too much and charge too much for everything but the paintballs, leaving too little money left to purchase enough paintballs, then your customers aren't going to have the fun they anticipated they would have and not come back. Either that, or they will have to spend more than what they would normally allot for that fun, which would be another reason to consider not coming back. Therefore a paintball field's pricing structure has to be such that customers can get all the elements needed to play paintball, including a sufficient amount of paintballs. One relatively easy way to do this is for a field to put together a "package" that will include everything needed and price it at the amount the field has established that their average customer will pay for a day at their field. I'm not saying that is necessarily the best way to do this, but it is one way to do it.

So let's summarize for a moment. We've determined that a recreational paintball facility's customers are really buying anticipated fun, rather than the individual components a field usually provides. We've also determined that the average customer spends a certain "average" amount for that fun they are hoping to have.

So we have to ask ourselves, what is the variable in this equation? Well from a customers' viewpoint, the variable will be the amount of fun they will have. From a fieldowner's viewpoint, the variable would be the amount of paintballs and propellant you are willing to supply for the "average amount" your customers are willing to spend for their day of fun. OK, so let's chew on that a bit. Our consumer has come to have fun and it would make sense that the more fun they have, the happier they will be and therefore will return more often and will be singing a field's praises, which is obviously a good thing from the fieldowner's perspective. To create this fun, a fieldowner needs to supply his customers with everything they need to have that fun, including a certain amount of paintballs for an "average" cost. So how many paintballs? That's really the only variable for the paintball field owner's perspective (well, propellant as well, but they really go hand in hand). How many paintballs is the right amount of paintballs for the average player at the field? The fieldowner wants to make sure the amount of paintballs will be the appropriate amount for the average player at the facility to have the highest amount of fun.

You may have noticed that I have used the word "average" quite a bit thus far. I have done this on purpose, because if you remember, we said fun was a subjective thing. What one person considers fun may not be fun at all for another person. We've determined that the variable for fieldowners is the amount of paintballs provided to their customers. That amount is going to determine the amount of "fun" their customers will have. So more paintballs, means more fun, correct? If a recreational fieldowner supplies 2,000 paintballs to each of their customers rather than 500 paintballs, their average customers will have more fun, right? Wrong! Some of that field's customers will have more fun, but not necessarily the "average" customer. Remember, as a fieldowner, you need to make sure the majority of your customers are having as much fun as they possibly can. That's your recipe for optimum success. Making a few of your customers happy but the majority less than happy is a recipe for less than optimum success.

So more paintballs doesn't necessarily mean more fun. Why not? If I go to a fair, won't I have more fun if I can go on more rides for the same amount of money? Sure I would (unless I go on so many that I might feel ill). Why would that not be the same for the amount of paintballs purchased at a paintball field? To answer that, we have to think about what our "average" players wants out of a day of paintball to achieve their anticipated level of fun. Recreational paintball fieldowners that can figure this out, are well on their way to success.

It's not an easy question to answer though. Recreational paintball players want lots of different things, depending on their experience level. Players playing for the first time or who play very rarely are going to be looking for something different than those that play more often. I still remember my first outings years ago and the fun I had crawling on my belly through the undergrowth of the forest for what seemed like an eternity trying to sneak up on players to surprise them by popping out when they weren't expecting it. I remember being real still behind a bunker while several of the opposition thought they were sneaking up on our fort, only to blast them all when I thought they were close enough for me to get most of them. I remember taking the high ground, lying in the brush, sniping the opposition in the valley (yes, I said sniping). These are all great memories. I also remember talking about these events and many others for a long time afterwards, reliving them over and over again whenever I shared them with friends. Today when I play, I still enjoy surprising the opponent, but I also now enjoy a head to head shootout with a fellow player of equal or better skill. I don't mind a firefight with a fair amount of paintballs involved, although I still prefer a more leisurely pace, with less paintballs in the air.

What I didn't enjoy when I first started playing, was playing in an atmosphere where there were so many paintballs hitting and buzzing past the bunker I was behind that I felt I couldn't move or even stick my head out. I didn't enjoy playing against the local "pro" with his semi-auto Autococker who seemed to have no problems taking most of us out, and not just with a single hit. There were almost always several hits on me, rather than just one. I didn't enjoy the animosity felt for the local "pros" and how the whole mood changed when they played with us and seemed to shoot endless streams of paintballs. And I wasn't the only one that felt that way. There was always lots of talk after the games. There was talk of the good time, but there was also talk of the things we didn't like. Some guys that came to play at our organized outings never came back a second time.

So back to the question. How many paintballs do we give our customers for their allotted budget for their day of paintball? If we give them too few (let's think ridiculously low now and say 100 paintballs for the day), chances are they are not going to have very much fun. If all they think about every time they pull the trigger is "how am I ever going to make it through the day with only 100 paintballs? How am I going to be able to protect myself when I'm surrounded by two players from the other team?" This is just going to cause stress. Stress isn't fun, and we want our customers to have fun.

Well what if we give them 2,000 paintballs? As a player now I won't face the stress of conserving every paintball and will more than likely have enough to get through several fairly heavy firefights, with paintballs to spare. I will really be able to lay down the paint, keep the opponent’s heads down and make big moves on them. When I see an opponent in the open, I won't have to worry and shoot just two or three balls in their direction, I can shoot 10 or 15 (or more) balls and really make sure I get them. But wait! If I can do all that, won't that mean everyone else will be able to do all that as well? Won't I be the one behind the bunker, unable to peak my head out? Won't I be the player that might be caught in the open and have 10 or 15 (or more) balls come at me in a very short period, probably hitting me several times? Yes, of course. It's a two way street. Along with all that comes the total change in atmosphere at the field. The mood or tone changes. With each player shooting that many paintballs we start to see many more confrontations, mostly between players thinking they were overshot and offenders who feel they weren't guilty.

Ok, I'm going to cut to the chase here (finally!). The only real variable for fieldowners is the amount of paintballs to provide for their customers for their allotted budget. 100 are too few, and 2,000 are too many. So the amount lays somewhere in between for the majority of recreational paintball players to have the most amount of fun. What's the number? I don't know. But from experience running a successful recreational paintball facility, I can tell you it is somewhere between 500 and 700 paintballs per player if you have a mixed bag of players. This is an opinion. It's my opinion. But I can tell you from experience, that this is a range that will work for the majority of recreational paintball players to have fun. And if your customers are having fun, they will come back, probably with friends.

Check back soon for "Economics of a Recreational Paintball Facility, Part 3" to find out how you can achieve your success without making your customer feel they have been hobbled.

Part 1, Economics of a Recreational Paintball Facility

The study of Supply and Demand for a Recreational Paintball Facility

This exercise is going to be exclusive for recreational paintball fields and will include the standard elements found at a paintball field facility. This will include; fields to play on; a area for staff and customers to rest at, safely situated away from the playing fields; staff to operate the facility. By my definition, a recreational paintball field one that customers come to play for recreation (leisure). A non-recreational paintball field is where customers come to play competitively. For the most part, those that go specifically to a non-recreational paintball facility are players playing regularly and competitively. Although there are also players who play regularly at recreational paintball fields, most of those do not play at a recreational facility with the objective to win at all cost (seriously competitive).

The general concept of Supply and Demand is relatively easy to understand, even for those with no formal education in economics. This is good, because other than one single class on microeconomics, I know very little about economics. Simply put, as the price of a commodity increases or decreases, the demand for the commodity reacts inversely. That means if the price of a commodity increases, the demand (the amount willing to be purchased) will go down. And alternately, if the price of a commodity decreases, the demand for the commodity will increase.

We are going to examine those rules as they apply to a recreational paintball field. First we need to determine what a paintball field supplies. Here is a partial list of main products and services most paintball fields supply.

1. Facility
2. Rental equipment
3. Propellant (HPAir/CO2)
4. Paintballs

Let’s examine each of these a little before we go on.

1. Facility

The Demand curve for paintball facilities reacts like most other standard demand curves. At any given price, there will be certain amount of people willing to pay that price to visit that facility. Lowering the price will increase the number of people willing to pay the lower price and raising the price will decrease the number of people willing to pay the higher price.

Supplying a better facility will create reactions much like most other products or services. If you increase the quality of the facility, then you have created a new Supply curve and with that a new Demand curve. Basically, as we all know, if you increase the quality and keep the price constant, there will be more people willing to pay that price. Decrease the quality and keep the same price, and less people will be willing to pay the price.

2. Rental Equipment

This will include the usual marker and mask and may also include clothing.

Most rental equipment is fairly standard and most people renting gear know very little about the quality of the gear. Overall, equipment rental will have the same Demand curve reactions from customers as indicated in the Facilities section (above).

In general, a change in quality of rental equipment will have less affect than a change in quality of your facilities. If you however keep you equipment in overall good condition, mechanically and visually, you will make a better impression on your customers and they will not mind spending slightly more than a comparable facility with equipment in a condition that is not as good. An upgrade in rental equipment can create a significant shift in the Supply curve and can create a situation where customers are willing to pay a higher price for the upgraded equipment, be it a higher technology marker or a mask guaranteed not to fog up.

3. Propellant (HPAir/CO2)

This is the propellant needed to propel (shoot) paintballs from the marker towards a target. At one point in the industry’s history this was all CO2. Now HPA (High Pressure Air) is another option and many new markers need HPA to operate. Both do basically the same thing, giving the marker the energy needed to propel a paintball.

Although some fields charge for propellants, many include the cost of propellant as part of the payment to use the facility. Propellant is a necessary product to shoot paintballs. Players can’t shoot paintballs without it and fields won’t have many players if they do not have propellant available.

The demand for propellant is directly related to the number of paintballs sold; as the paintballs being shot, need propellant to shoot them. Other than the varying design and efficiency of markers, the propellant needed per paintball stays fairly constant. The first paintball a customer shoots will need the same amount of propellant as the 500^th paintball shot.

Whether a field owner wants to charge separately for propellant or build the price of propellant into the price of paintballs really doesn’t make any difference. In the end, the customer is going to be paying for the propellant.

There is no significant difference in quality of propellant. One could argue that providing a higher pressure HPA could be considered a step up in quality, but since paintball markers shoot at a much lower pressure than virtually all HPA tanks can hold, really the higher pressure is just a change in amount of propellant being provided per fill. There is a convenience factor that does come into play, as players able to get a higher pressure fill will not need to fill as often. If your field offers higher pressure fills than your competitors, then it could be considered an increase in quality and could therefore demand a higher price. This is not really an increase in the quality of propellant though, but rather an increase in level of service at the facility as it makes it more convenient for customers.

4. Paintballs

These are of course round gelatin capsules filled with a colored liquid somewhat thicker than water used to mark another player, indicating that he/she has been hit. In recent years, reusable balls of similar size and weight have been introduced and used at some facilities to ease the clean-up problem. These reusable balls have no liquid in them and other than needing some external cleaning can be used over and over again. Their use is mainly limited to indoor facilities where they can be relatively easily gathered for reuse. At this point, their use is much less popular than the traditional liquid filed paintballs. For this exercise, we will concentrate on traditional gelatin capsules filled with thick liquid.

The Demand Curve for paintballs is very standard. At any particular price point, there will be a certain demand. Raise the price; demand will go down and people will buy fewer paintballs. Lower the price; demand will go up and people will buy more paintballs.

So what’s the big deal?

So far we haven’t discussed anything that anyone with a little bit of common sense didn’t already know. So why are we discussing this at all? Well, we wouldn’t need to discuss this any further if the four products and services were the only thing a recreational paintball field supplied and they truly all had their own individual Supply and Demand curves. The interesting thing is when you lump it all together and then try to figure out the Demand Curve for the whole package. You see, when consumers go to play paintball and are deciding which facility to go to, they are taking all the products and services into consideration. For example, if they are renting, they are not going to go to Field “A” because the rental gear is $5 less than at Field “B”, if the cost to play is $15 more at Field “A” than Field ”B”. They are going to go to Field “B” because the total cost is less, assuming all other decision making criteria are equal. This is why most fields sell “packages”. These packages will usually include field fees (the cost to play at the facility), propellant (CO2 and/or air), and may include a certain amount of paintballs (with more available to be purchased as needed). Most fields will have at least two packages, one for those needing rental equipment and one for those that have their own equipment.

So if consumers are looking at the “package” a recreational paintball field is offering why did we bother to look at the Supply and Demand curves of each individual product and service? Mostly, I just wanted to make sure that everyone understands that the package is made up of components, each with it’s own theoretical Supply and Demand curve. When lumped together, they create a new Supply and Demand curve for the “package”, but each component still influences the package. Also, there is one and possibly two products that may or may not be in the package, but even if they are, there is still the option for the consumer to purchase more of those products. Those of course are paintballs and possibly propellant.

OK. So let’s look at the decision facing your potential customer. This is the person out there who has somehow been stimulated to consider playing paintball in the not too distant future. What is going through their minds?

The cost of their upcoming endeavor is definitely going to be on their minds. Why play paintball at all? There are at least a hundred other things our consumer could spend their money on. Therefore the price the consumer is willing to play paintball must be competitively priced with many other activities. But each activity is not the same. Of the hundreds of activities a consumer can choose from, most are completely different from paintball and from each other. So why need to consider these other activities at all. Each would have a totally different Supply and Demand curve, would they not? The short answer is yes.

But it really gets a little more complicated. We do know that other activities are in the mind of our potential customers. Why? Because consumers are really deciding where to spend their entertainment dollars. Consumers are looking to have fun. So when a consumer is making a decision on where to spend their money in order to experience fun, the amount of fun they are going to have plays a big roll in the Supply and Demand of those activities.

Fun is a subjective thing. The criteria people have to decide what is fun varies greatly from one person to another. There are people who consider going for a walk in the park a fun activity. At the other end of the spectrum, you will have people who feel it necessary to literally risk their well being in order to feel stimulated. These people will participate in activities such as extreme skiing on the slopes of uncharted mountains or intense rock climbing. Then there is everyone else in between. For those that haven’t figured it out, paintball is somewhere in between.

Alright, so let’s get back into the minds of our consumers. We’ll assume at this point that our consumers have decided they have chosen paintball from the multitude of activities they could choose from. Now they need to decide at which facility they want to spend their entertainment dollar. In the minds of our consumers is still the objective to have fun. They need all the four products (if they own their own equipment they only need three) we discussed individually earlier to participate, but in reality, they are making a decision of where to go, based on the entertainment value. They are going to choose the facility that will provide them the most fun for the amount of money they are willing to spend on their paintball outing.

You might want to go back and reread the last paragraph again. As a recreational paintball field owner (or potential owner), this is the most important concept to understand. Each and every one of your customers is coming to your facility to have as much fun as they possibly can, and they are willing to pay you for that fun. How much they will pay you will depend upon how much fun they anticipate they will have. The level of anticipated fun they will have will be easier for repeat customers to estimate, but even brand new customers will hopefully have an idea of the fun they might experience, either from former customers or from advertising you have provided to give them an idea. The level of fun will also determine where the Demand curve for your facility (or paintball package) will be. A facility with a higher level of anticipated fun will have a Demand curve higher than a facility with a lower level of anticipated fun.

Check back soon for "Economics of a Recreational Paintball Facility, Part 2"