Bike Shop Economics

[H1449-6]

Another thread re: a bike store in SF potentially on the market leads to this question:

What are the economics of a medium-sized, well-run bike shop? Interested in things like

- inventory cost and annual turnover
- gross and net margins
- typical merchandising terms (manufacturer financing for inventory)
- revenue breakout by hardgoods/softgoods/service

Etc.

I have no retail management background. Point is that I may be misusing terms above. I was a salesman in a bike shop about 10-12 years ago.

I do have a frame of reference based on that experience but that was a tiny shop with three employees and a limited inventory so probably not the best example from which to reach general conclusions.

Any comments or pointers to references appreciated.

[ols]

You have to buy the report from the Nat'l Bicycle Dealers Association, but it should give you the kind of info you outlined:

http://nbda.com/page.cfm?PageID=40

They also have a link called "want to start a bike shop?"
http://nbda.com/page.cfm?PageID=70

[grosmerou]

I think it is just like any other business : customers frist, good job, some accounting rules and a good balance sheet, the last are usually comming by themselves as you do well.
I run a construction company and before I never been in building i was doing oil drilling. but down the road any business is hte same. customer customer, quality, delay, price (pay for what you get)

[H1449-6]

You have to buy the report from the Nat'l Bicycle Dealers Association, but it should give you the kind of info you outlined:

http://nbda.com/page.cfm?PageID=40

They also have a link called "want to start a bike shop?"
http://nbda.com/page.cfm?PageID=70


Perfect.

Thank you.

[trymorecowbell]

ain't gunna get rich in the bike biz - especially retail
avg bike shop nets about $35K per year or just enough to pay yourself an ok salary. of course some are lower, some higher. plus most folks in the bike biz end up spending more time with the biz than on the bike.

[H1449-6]

ain't gunna get rich in the bike biz - especially retail
avg bike shop nets about $35K per year or just enough to pay yourself an ok salary.

$35K a year is not a living wage in some parts of the country.

[xlbs]

20 years on and off in the Bicycle retail business in Canada. It's not the same here, with a shorter riding season and other constraints imposed by geography and population. However, here are some probing questions you should ask yourself if you're truly considering buying a store:

Are you happy spending lots of time doing administrative tasks versus spending floor time with customers?

Are you happy foregoing rides when the desk calls you?

Are you willing to give up most of your weekends?

Do you enjoy structured routines and scheduled living, to the tune of 6+ days per week?

Do your personal interests run across a wide spectrum, or do you like a narrow band of activities? (If you like lots of things, do you want to limit your life to a smallish square footage for many years?!)

Are you okay with never-ending training? (turnover is normal and common in the average lbs.)

Do you have a lot of cash set aside to bolster your living if times get tough?

Are you prepared for the potential liabilities if something goes wrong?

Is riding really a big part of your life, or are you more interested in the mechanics of the bicycles themselves?

Are you prepared to watch others spending more time enjoying the sport that you love, while you work to get paid to enable them to ride even more?!

Running a bicycle store, as per the article above, takes lots of determination, and a lot more sacrifice than many folks realize. I loved my years, but am truly happy not to be living under the self-imposed pressures and constraints of running my own retail business.

pm me if you wish to chat more...