Velo Cult - a vision of what cycling retail could be

[one60]

I had the opportunity to stop in the Velo Cult store in Portland this week.

The owner & all his employees relocated from San Diego to Portland this spring. Check out the shop blog to understand what a huge undertaking that was. (How many would sell off their coveted bike collection to fund a relocation?)

Beyond a great service area, lots of retail display space & a scattering of historic & noteworthy bikes on display (including a few Winter frames), there is a massive space for the cycling community to gather. There is a bandstand, a bar serving local beer & freshly brewed coffee and lots of tables. Downstairs has a theater & meeting area & another bar space. In addition, there is an amazing collection of mountain & road bikes on display.

In a city as bike crazy as PDX (there are 70 retail bike shops) there has never been a facility for clubs to hold meetings, for cycling nuts to gather before or after rides. And the value of such a venue never occurred to me til I spent a few hours there. It genius, I tell you! Incorporating the beer & coffee bar allows the owner to generate revenues not linked to purchasing bike parts or selling someone the latest bike. The free access to meeting space keeps a steady stream of like-minded folks moving through the building. It makes for a relaxed, convivial experience.

Having met some of the staff & the owner, there's something special about this shop & space. Its a great example of what an independent, small business can achieve. I hope they are around for a very long time. If you are in PDX, stop by & show them your support.

[fourflys]

I knew the guys when in San Diego... Sky (the owner) has/had one of the most amazing vintage Mtn Bike collections ever and has time as a ranked amateur road racer as well... Sky has partnered with Mark Nobillette to create his Velo Cult frames, just beautiful bikes...

Someone mentioned earlier in the other thread that there wasn't much to see at Velo Cult unless something was going on... I've visited the Portland shop when on my trip North and there is plenty there to see... I think it looks more sparse than most shops because of the space Sky has... besides the guys are always down for chatting about bikes or ???...

[one60]

granted the inventory at present is somewhat limited but I think that is a reflection of the store finding their stride in a new locale. Inventory requires a serious financial commitment. My take is the store is taking a thoughtful approach to developing its customer base rather than trying to compete head-to-head with established shops by offering the same or similar product lines.

[Ken Robb]

I am sorry that they left SD. Their interest/expertise in non-mainstream bikes was unique here.

I first met Sky when he opened a shop in La Jolla. His shop was not in a location with much pedestrian traffic and it was a bit hard to get to from most of SD County.

I thought his move to South Park put him much closer to a bigger population of potential customers and the shop looked great. Starting a business usually leads to a slow start while business builds up. Moving a business within the same region requires a re-start but one hopes not as slow as the initial start-up because with luck many of your customers follow you across town.

Moving to another state is usually almost like starting over. There's little doubt in my mind that presently there are more folks in Portland who share Sky's vision of cycling. That's the good news. OTOH I wonder how many similar shops exist in Portland. If you have double the potential customers but they can choose among 4 similar shops you have to get more than your normal share to succeed.

Making this shop a welcoming hang-out for the cycling community seems like it may be the needed ingredient for success. I hope so. A visit to Portland is on my bucket list. Let us hope that people who hang out there will be willing to pay him fair prices so he can succeed and keep hosting the cycling community. His prices in SD were reasonable.

[poet]

Mojo Bike Cafe in SF is similar too. Bike shop in the back, cafe and restaurant in the front with wine and beer. pretty perfect.

[67-59]

Mojo Bike Cafe in SF is similar too. Bike shop in the back, cafe and restaurant in the front with wine and beer. pretty perfect.

Same with Angry Catfish in Minneapolis. Not a full restaurant, but best coffee in the twin cities IMHO, plus bakery from The Baker's Wife (which has been voted best bakery in the twin cities several times), and local beers. In the back, a great bike shop that carries bikes like Moots, IndyFab and others, clothing from Rapha and Cafe du Cycliste, and has a great service department. My favorite place in Minneapolis to just hang out....

[fourflys]

Basically what Sky told me the difference between SD and Portland is in SD, he was the only shop for about 100 customers... Portland has more shops like his, but also a whole lot more customers to go around... People in SD seem to want carbon and tri bikes, not steel fixies or rando bikes...

Basically supply and demand... Just not enough demand in SD...

[Ken Robb]

Basically what Sky told me the difference between SD and Portland is in SD, he was the only shop for about 100 customers... Portland has more shops like his, but also a whole lot more customers to go around... People in SD seem to want carbon and tri bikes, not steel fixies or rando bikes...

Basically supply and demand... Just not enough demand in SD...

Yep--sometimes you can create a marketing program to create/increase demand but it takes time and money. If you jump on the coattails of what the big companies are producing it's probably an easier sale than convincing potential buyers your out-of-the -ordinary stuff is what they really want even though it's not what pros ride. For instance I think it would be easier to sell a custom carbon bike ("yes, the TREK Wonder Racer is a great bike but I can build you a custom carbon frame that is 100 grams lighter for $500 more") is easier to sell than "forget all that nonsense about 15 pound race bikes and buy my 23 pound steel bike with clearance for fat tires and braze-ons for racks and fenders".

I don't know that Sky or anyone else could successfully stimulate sufficient demand for his style of bikes where little to none now exists. Rivendell has been at it for a long time and it's still a tough market. Velo Orange is a more recent entrant in the practical bike market and I guess they are doing ok.

My limited observation of Sky's operation in SD was that he tried to cater to riders who were predisposed to like his stuff but there was not much effort to market all arounder bikes to the mass of riders who already owned "race" bikes. As fourflys stated,he found there weren't enough "true believers" to really support his shop. I don't know that he (or anyone) could/should have had the time and money to generate demand for Sky-Style bikes among new riders and racers in San Diego.

Every once in a while I turn up at a group ride on one of my Rivendells or even a bikefriday. There is usually a lot of interest in my bikes by the racer types(skeptical but interest) and I'll let them take a ride. Usually the reaction is "gee that's pretty comfortable and not as slow as I expected". I have no idea how many of those test rides would be needed to sell a bike.:)

[Louis]

Rivendell has been at it for a long time and it's still a tough market.

It's been quite a while since they stopped mailing the Reader, and I don't go the the Rivendell web site often, but if I remember properly at least every other Reader had something from Grant saying that they were on the brink of financial ruin. (or something like that) I don't know if he was exaggerating for effect, but it didn't sound like something they were doing to get rich.

[Ken Robb]

Grant did/does comment on the challenges of running a retail business. A visit to Riv H.Q. will prove that they run about as lean an operation as one can imagine: industrial space with no heat or A/C that I could see.

Probably the biggest on-going challenge is managing cash flow. I was taught long ago that "You can't sell from an empty cart" so you need inventory. Wholesale buying often requires a minimum purchase and/or prices get lower if you order larger quantities. You would like to offer widgets in all colors and sizes but you can only afford to stock one or two. How can you be sure you pick the ones that will sell? If you guess wrong and they don't move off the shelf you have no cash to buy other merchandise so maybe you have to blow them out at a loss.

Workman's Compensation and health insurance costs just went up again. If you raise prices to cover them how many of your customers will buy mail-order from overseas?

This barely scratches the surface of the many challenges a small business owner faces so when Grant shares some of them with us I don't think of it as whining. You can see his efforts at balancing inventory vs. cash flow by looking at his on-line special sale pages and occasional announcements of Sat. morning "garage sales" to convert slow-moving goods into cash to pay for fresh stuff he hopes will sell better.

At least twice in my life I considered owning a retail business but I was either too smart, too lazy or both. :)

[oldpotatoe]

Grant did/does comment on the challenges of running a retail business. A visit to Riv H.Q. will prove that they run about as lean an operation as one can imagine: industrial space with no heat or A/C that I could see.

Probably the biggest on-going challenge is managing cash flow. I was taught long ago that "You can't sell from an empty cart" so you need inventory. Wholesale buying often requires a minimum purchase and/or prices get lower if you order larger quantities. You would like to offer widgets in all colors and sizes but you can only afford to stock one or two. How can you be sure you pick the ones that will sell? If you guess wrong and they don't move off the shelf you have no cash to buy other merchandise so maybe you have to blow them out at a loss.

Workman's Compensation and health insurance costs just went up again. If you raise prices to cover them how many of your customers will buy mail-order from overseas?

This barely scratches the surface of the many challenges a small business owner faces so when Grant shares some of them with us I don't think of it as whining. You can see his efforts at balancing inventory vs. cash flow by looking at his on-line special sale pages and occasional announcements of Sat. morning "garage sales" to convert slow-moving goods into cash to pay for fresh stuff he hopes will sell better.

At least twice in my life I considered owning a retail business but I was either too smart, too lazy or both. :)

I had a really smart accountant tell me before I opened a retail store that the three most important things are

cash flow
cash flow
cash flow

followed by inventory control and personel management.

None are much fun.

Retail ownership of any kind is the best and worst job you can have.

[shovelhd]

Right on the money.

On the inventory front, you need to keep just enough of the standard stuff to keep your bread and butter revenue flowing, and you need to stay on top of it in order to reduce costs. You have to have just enough of the higher end stuff, if that's part of what the shop is all about, to keep the fat wallets coming in to poke around. It's a delicate balance, and when it swings the wrong way, it can ruin you.

[oldpotatoe]

Right on the money.

On the inventory front, you need to keep just enough of the standard stuff to keep your bread and butter revenue flowing, and you need to stay on top of it in order to reduce costs. You have to have just enough of the higher end stuff, if that's part of what the shop is all about, to keep the fat wallets coming in to poke around. It's a delicate balance, and when it swings the wrong way, it can ruin you.

Yep, it's a big game. Particularly with 6 other bike shops w/i 20 blocks and more than 15 in a small town.

Owners are 'betting' what they buy will sell-run out, lose a sale. Order too much, or order the wrong 'thing' and lose $. Not sell it or discount it at a loss.

[559Rando]

It's been quite a while since they stopped mailing the Reader, and I don't go the the Rivendell web site often, but if I remember properly at least every other Reader had something from Grant saying that they were on the brink of financial ruin. (or something like that) I don't know if he was exaggerating for effect, but it didn't sound like something they were doing to get rich.

Of course, Sky is not Grant, but I think he's another character in the biz and I for one would love Sky to publish a rag. He's an interesting guy, with a definite point of view.
Maybe I ought to buy his book.
I always wanted to get the Velo Cult wool jersey. I oughta call and order one. I don't see them on their site.
Daniel

[gomango]

Same with Angry Catfish in Minneapolis. Not a full restaurant, but best coffee in the twin cities IMHO, plus bakery from The Baker's Wife (which has been voted best bakery in the twin cities several times), and local beers. In the back, a great bike shop that carries bikes like Moots, IndyFab and others, clothing from Rapha and Cafe du Cycliste, and has a great service department. My favorite place in Minneapolis to just hang out....

+1

What a great shop.

A perfect money trap for my pay checks.

Excellent staff that truly know their stuff.

[svelocity]

Sky changed his shop a few times. It originally started as a fixed gear specific shop in La Jolla called VeloCulture. At the peak of the fixed gear movement, he moved his operation to a bigger space in South Park and changed the shop name to VeloCult. Presumably to create a bigger pie, he branched out to include geared commuter bikes in his shop. Many used frames hung on his shop walls for a customer looking for a steel commuter rig. I know he used to scour the interwebs and swap meets for cool older frames. He definitely knew his stuff when it came to frames and components. He would in turn build up those frames up with more modern components. Unfortunately, I don't think that was a great business model for him and at the end he was selling more completes from Surly, Linus, etc.

VeloCult was a great shop here in San Diego. Sky and his crew did a lot for the SD cycling community. I for one still use the San Diego Bike Commuter (http://www.sdbikecommuter.com/forums/index.php) forum which Sky was one of the founders. To further promote the cycling culture and integrate the local business community he created the SD Bike Commuter Discount program (http://sdbikecommuter.com/find_businesses/). These businesses give discounts to anyone who rides their bike.

Cycling infrastructure is relatively poor in San Diego and ultimately I think that's what prevented VeloCult (and other SD bike shops) successfully using the bike commuter shop model for long term growth.

VeloCult is missed here in San Diego. There's really no other shop that had that same sense of community. Other shops are focused on racing while Sky looked for the other 90% of riders. He doubled down when he moved his shop to Portland but from all the reports I hear it's doing very well and I for one am very happy for him and his crew. I look forward to visiting if I ever make it up north!