Help me start a bike shop......

[pdxmech13]

I am really thinking of starting a small 2 owner boutique store. I have been in this business long enough that I absolutly have no intentions of being rich, just working for myself. Since I hold the majority of the peoples opinions here in high regards ( tell me about it :D ) I would like to hear what things YOU would want. Things that businesses are doing well and doing terrible.

FYI I would like to carry one custom bike builder ( I could only dream of serotta :banana: ) and some other small builders. The idea would be not to have more than a six prebuilt bikes and another half dozen frames for customer's dream builds. Only repairs on store bought bikes and the local friend. This will be somewhere that you would want to just stop buy and say high because your in the neighborhood.

Any way, thanks in advance and I look forward to what ideas ya'll have.

[shinomaster]

Have cute stuff that people need or want to buy, like Castelli wool socks. I never thought Molly's Veloshop would survive when I first went in there, but it seems to be doing well, catering to messangers and racer friends.

[csm]

free coffee.

[eddief]

it's one thing never to be rich and completely another to starve while working 60 hours a week. I believe unless you are ready to attack it (in a nice way of course) you'll eat it. Margins are sucky, the internet is not your friend, competition is stiff, you can give away the store thinking you will have the time to kibbitz with the neighborhood.

But...with a well thought out business plan and a good mission you could make it work.

I have recently been researching latex foam mattresses locally and on the net. So much hype and double talk. Seems like an opportunity to compete with the truth. Think I'd rather sell mattresses than bikes these days.

[pdxmech13]

I won't say where I'm planning this but poopoo on portland. I wouldn't start a shop there if you gave me a million bucks too through away.

[shinomaster]

I won't say where I'm planning this but F**K portland. I wouldn't start a shop there if you gave me a million bucks too through away.

Wow buddy? It must be happy hour...and oh yes it is! I thought this was a great cycling town..?

[Smiley]

I always thought a coffee shop within a bike store would be intriguing , ride starts and finishes would be good. All you need from my past rep days is maybe a low end line , a mid price point line and a high end line. I'd stay away from the BIG boys that will force you to buy on finance like TREK.

[pdxmech13]

Cool............this town needs another bike peddler like it needs more vegans or punks

[atmo]

Cool............this town needs another bike peddler like it needs more vegans or punks

"This will be somewhere that you would
want to just stop buy and say high..."


how's the meth scene in portland atmo?

[pdxmech13]

oh it's still on a all time high

[adavis]

It sounds like you are describing Vecchio's in Boulder

http://www.vecchios.com/

[Kevan]

but the community where you set up shop should be. As long as it has a robust or growing cycling lifestyle too.

I like the minimalist cycle shop, but I think there has to be a calculated decision as to the extent you’re willing to go, peddling less. Meaning, if you’re truly going to cater only to die-hard cyclists, then maybe all you sell are the bikes they demand and the accessories the buyer and you select during the fitting and building process. Very little else is hanging from the rafters, hanging on racks, or kept in display cases. The business is focused on a customer and on a bicycle being built for him.

Do you carry wardrobe? Pearl Izumi or Ralpha? Your customers might want or wish you had carried the typical stuff they commonly see in other shops. Are you okay with the idea that your best customer Bob who bought 3 bikes from you is now visiting Acme Cycle, across town, buying his Powerbars, some eyewear and, oh, that sweet wheelset on sale?

I can see a “bikebuilder” operating with a space similar to what you might see from a guitar or watchmaker, but they aren’t shops to the extent most Joe-blow customers are willing to accept. I think these type of artisans do better in or near big cities, where discerning customers know what they’re getting themselves into and know where to find it.

That said, I wish the local shops here had a safe place to hold my bike while I stepped inside to buy a coffee, flap some lip, and maybe check out the newest latest and greatest, but then maybe a shop owner doesn’t want a bunch a guys hanging around distracting his help, either.

Good luck with it.

[SoCalSteve]

I am really thinking of starting a small 2 owner boutique store. I have been in this business long enough that I absolutly have no intentions of being rich, just working for myself. Since I hold the majority of the peoples opinions here in high regards ( tell me about it :D ) I would like to hear what things YOU would want. Things that businesses are doing well and doing terrible.

FYI I would like to carry one custom bike builder ( I could only dream of serotta :banana: ) and some other small builders. The idea would be not to have more than a six prebuilt bikes and another half dozen frames for customer's dream builds. Only repairs on store bought bikes and the local friend. This will be somewhere that you would want to just stop buy and say high because your in the neighborhood.

Any way, thanks in advance and I look forward to what ideas ya'll have.

I think its a great idea and I wish you much success...

If you want my opinion (I'm gonna give to you either way) a repair shop that CARES about fixing peoples bikes will bring you much business. I have found that I stay away from bike stores now because of all the horror stories I have seen by uncaring, sloppy bike store wrenches.

I was a Team in Training cycle coach for a few years and inevitably, I'd be fixing the participants bikes after they came back from being serviced, repaired or having stuff "done" to their bikes. I cannot tell you how many stupid things or just forgetful things bike mechanics can and will do.

Fix every bike that comes in your shop. Whether it be a Townie or a Serotta Ottrott. Do as good a job on the 25 year old rusted out Schwinn as you do on the high $$$ bling bikes and you will have a loyal customer base that will keep coming back, year after year.

Again, good luck!

Steve

[Louis]

Some advice from someone who knows nothing about bike shops:

Try to keep your fixed costs (e.g. rent) as low as possible, but still have a good location. (I know, not easy to do.)

My LBS had the A1 primo location in a fairly high-zoot strip mall and I'm guessing that the rent is just eating them alive. I have no idea how they can make it.

Louis

[Steve Hampsten]

Steve is right - focus on repairs.

My advice is to lose the partner unless you trust him more than your wife. Splitting up with a business partner is worse than a D.I.V.O.R.C.E., according to my smart friends.

Vecchio's in Boulder is one example - with two partners - that seems to work. Il Vecchio in Seattle is a good example of a strong one-man show, imhco.

[chuckred]

Fix every bike that comes in your shop.
Steve

You mentioned having the kind of shop that people would want to stop in to say "Hi" and also that you'd only fix bikes that were store bought. I don't think you can have it both ways.

I'm more likely to stop in a shop to get something fixed first. Then I start the weekly visits to pick up some little thing. Then a more major repair. If I like the way I'm treated with minor repairs and develop trust, I'm spending money almost every week during the riding season... And, at some point, I may decide to drop some serious $s on a boutique bike. But, I'd not be likely to buy the boutique bike first unless I had already developed rapport with the shop...

I liked Cycles Bykyle when I lived in the Phillie area - I got great service on my old bike, when I was ready to get a new one, they treated me great even though I wasn't buying top of the line (actually, was closer to bottom of line for what they sold)- and everytime I came in for service, they treated me like a loyal customer. But, I never would have gone back if they had turned me away first because I didn't have a "store bought bike".

[stackie]

There is a shop in San Diego called Rose Canyon cycles. Not in the yellow pages. You find it because someone takes you there. He will work on your bike if it merits his standards and he will charge you. I had him do insurance work for my Serotta when I was hit by a car. He was instrumental in getting every little scratched bit on my bike replaced. Took frame to Joe Starck for alignment check. Got JB estimate for repaint. Cost almost as much as a new bike, but I pocketed the paint money. He told me that if someone wanders in with a Huffy, he refuses to work on it. If someone comes in and wants a bike for $1000, he recommends another shop. He sold Pinarello, Moots, and DeRosa, I believe.

The short of it is that he was able to provide primo service and charge for it. He refused to waste time on things that did not reimburse well. Seemed to be making a go of it. But, then again, San Diego has enough high end cyclists to support such a shop.

Sure, give free coffee to the people who can find you. Just don't make yourself to easy to find.

BTW, Smiley, we have the same dream. Perhaps, half price coffees for those coming for Saturday am ride. Free for those who return after ride!

Good luck, PDX

Jon

[saab2000]

I love bike shops. I have worked in them several times and consider that to be my first passion. Since I was a kid I have had a need to go into every new bike shop I drive or ride past.

But I am also not blind. Most of the owners of the bike shops are unable to ride that much. It is extremely hard work and the repairs can really pile up starting in about March. And you have to do the repairs because that is where the money is.

Depending on where you are, having a 'boutique' shop as you describe might or might not be possible. I know that in the Twin Cities, which is a pretty large and reasonably affluent area, there are only two really high-end shops which stock the kinds of brands people here talk about and they don't screw around with much cheap stuff.

The only way I will have a bike shop is if I know that I can afford to not make money with it. It would be a side job for me or I would have to become independently wealthy.

Don't want to sound sour, but it could be tough going, especially as someone pointed out that the internet is not the friend of the small retailer.

[Lifelover]

I don't know much but it seems to me that getting into high end road bikes now is very similar to getting into real estate right now. The market trends are going in the wrong direction.

It could still be done but not very easily.

Good Luck and we will miss you here.

[stevep]

its all math.
the numbers have to be positive.
these days rent in many areas is a significant problem for many bike retailers. insurance also is a tremendous drag on your end dollars.
your first $80,000 in sales will go directly to these 2 items...not a cent to your pocket.
can it be done? yes.
will you make it happen? odds are against it.
it is a great and engaging sport. it is a time consuming and life consuming business... as are many small sole prop type businesses.
i'm in the camp that you should think long and hard about it before you lose a small pile of money and a lot of irreplaceable time on the venture.
pm me if you want. i have the stories of 2 friends who ventured into this.
both same. 2 yrs and out...
end analysis. no money in it.
i dont mean no get rich money...i mean no pay the bills money.
dont want to sink the ship. but honesty is the best policy atmo.

[Paul Levine]

There are a few cycling business models similar to what you describe that are very successful. They all have a common thread running through them. You can pm me and I can set you off in the right direction to start your research.

Paul Levine

[Too Tall]

Create bicycling culture and repairs. The shops I've seen prevail are good with that.

Coffee is a good thing esp. when it is the "object" for apre's the Sunday shop ride. Locate someplace where that can happen. I know three shops who's biz gets a serious amt. of their customers via the sunday ride delio.

[sspielman]

I think that it is a great idea....it is the type of business that I would like to patronize....HOWEVER, I see a couple more pitfalls...One, is that for your business to work, you will have to take away ALOT of high-end business from other shops in the area. The problem is that alot of shops know these customers well and are willing to sell the most expensive equipment at ver low margins or at cost....That is pretty tough to compete with..Another pitfall is selection. You would have to be VERY flexible. The customers to whom you will cater are knowledgeable and demanding. When I decide that I want a certain brand and model of bike, my decision has been made. If I want a DeRosa King, I don't need the boutique shop to tell me that I really need a Seven Elium...So, I will walk to where I can get what I want. The bike business is full of operations that go to staggering lengths to get in the way of the process of selling the customer what he wants....

[R2D2]

I too think the key is to have master mechanics.
Fix the machine, allignment, bearings, fit ..........
It is a lost art today. Anyone can adjust a derailluer.

[Ozz]

.... Il Vecchio in Seattle is a good example of a strong one-man show, imhco.
I was thinking the same thing....he also serves coffee.

[DfCas]

If you limit service to what you've sold,and you have not sold anything,you are starting waaay below zero,and adding years to the time when you are profitable.

I would start with service first and work on any decent or better bike-say anything that bike shops sell.

Taking these bikes for service will give a much greater customer base much sooner,and this may help lead to sales of your own.

After you have a better customer base,you can be more selective about what you accept for service,or maybe even service only what you sell.

I would also consider timing the opening for either the March-April rush,or when the local phone directory is published.Lead times are pretty long for directory advertising,but I find it to be the most effective way to reach people-Its cheap and works 24 hours per day.

My primary service business is not bicycle,but a lot of the problems transfer.

dan

[xlbs]

1) You really need a good chunk of cash behind you to start. My nine years of store ownership were all difficult because I started with too little cash. Relying on sales only to keep the doors open for the first couple of years is a serious mistake.

2) As mentioned, be prepared to reduce your riding time a lot.

3) If you can do it, keep it small but focus on margin. If you aren't making money on most of what you do, you simply won't make it. Loss-leaders are great if they generate sales, but all too often for the small lbs. they end up being give-aways that generate no ancillary business.

4) Work really hard on the numbers you'll need to survive, then those that you'll need to do okay, and then those that will make your life much better. Figure out a way to get to okay, and you can probably do it. If you build a business plan on survival only, you won't make it.

5) If anything can go wrong it will! Have contingency plans for every aspect of your business from suppliers to marketing (yes, you need to market yourself) to disability protection.

6) Have fun.

[gt6267a]

TT’s point rings true with me. Maybe take it a step further. Make the shop the center of cycling. One question that seems important to answer, is the shop you have in mind about cycling as an activity or a culture?

Thinking about this website, there are tons of off topic posts. Even though they initially came here for cycling, people come here to talk about what is on their minds with the friends they made here … colds, watches, binoculars, gaming systems … it has gotten to the point where people post about missing Archibald for the love of g-d!

I think this is all positive. Why not bring this type of cultural thinking closer to home? As others have pointed out, have coffee and some couches to sit and chat. Not certain you want to take it as far as splitting the retail space with a coffee shop w/ pastries, pies, and wifi, but, I like that idea.

Getting back to TT’s idea, rides and lectures. Have lots of rides running out of the shop. Have people come to talk about cycling that serious enthusiasts or racers might want to see. Off the top of my head, the types of people that come to mind are ex-pros, coaches, nutritionists, and industry glitterati.

Now, let me caveat what I write here, I am not in the bicycling industry nor do I plan on getting into it. What I write here are my thoughts about what might bring me into a cycling shop.

[Tom]

Steve is right - focus on repairs.

My advice is to lose the partner unless you trust him more than your wife. Splitting up with a business partner is worse than a D.I.V.O.R.C.E., according to my smart friends.

.


Yes... repairs keep me going back to Blue Sky. The day I think I can do it better, I do it myself. If they lose their good people, I buy tools on the 'net and a repair manual.

The partner thing... I stayed at a little place in the Bahamas and the owner was there and I was talking to him and he said he became much more hands on after Hurricane Andrew came through and he found out his partner hadn't been paying the insurance company like he said he had been. I asked if his partner was still involved... he said yes, he is, but not as much. All he's doing is holding down the diving buoy, he said.

[fierte_poser]

http://www.road34.com/

Not what I'd recommend, but an example of a joint bike shop/bar.

[Louis]

He told me that if someone wanders in with a Huffy, he refuses to work on it. If someone comes in and wants a bike for $1000, he recommends another shop.

Seems a tad too snooty for me and not the type of place that is going to have the vibe where people will want to hang out.

[OldDog]

In the area you are thinking can you afford the down payment to purchase your own building, preferably with additional space to rent as apartments or other retail/offices to help cover some overhead? Could you live in one of these apartments? If the shop failed you could come out with an investment property.

As others have mentioned, overhead can eat you alive and can spin out of control without keeping a very short leash on your expenses. Can you trust your partner to exercise the needed control?

[Dave]

Unless you're independently wealthy and want to do this to have fun, but lose money, I'd rethink your business plan.

Stocking a few high bikes will result in your having perhaps one, two or none of the right size for some customers. The ones that do fit will be the wrong color or not equipped like the customer wants.

I tend to think that a lot of high end buyers have enough knowledge not to need shop support. That's my case. I've been building up all my own bikes since 1995 and buy everything mail order. Even back when I bought prebuilt bikes, I never returned for service.

[rpm]

I think to succeed with a boutique shop you need to find a market niche and/or a need that's not being fulfilled in your area. For example, in the Twin Cities area, Hiawatha Cyclery has now made it into its second year as a one and now two-person shop by serving the Rivendell-Berthoud-Honjo-Nitto-650b niche that nobody else was serving. I was just in there yesterday ordering 650b wheels and challenging the guys to see if they can fit hammered Honjo's to my latest conversion project. They seem to be doing OK and having fun.

Another niche that in my opinion is a "killer app" is repairs while you wait. The other shop that gets my business will do this except when they're really busy, and it's a definite draw. That would be a natural fit with your coffee shop idea. Sit and sip while your bike gets fixed.

[Erik.Lazdins]

Location is important but I believe it comes down to people being your strength.

Ultimately you need to add value to every person that comes into the shop. They will be drawn to you and will want to buy from you.

I've seen small shops in other industries work and others that haven't. The common element in the shops that make it is that the owner is passionate and charismatic enough to make every person at ease and interested in what happens there. They leave not having bought anything but want your thoughts on their plans as they relate to biking.

Case in point, a guy I've know for many years can tell a customer that they broke the car seat because they are too fat - The customer loves it, I'm laughing because I see this exchange. The guy with the shop also does top notch work and has a line at his door. He has help, but he engages with every customer. Its him that they want to see.

Me, If I said that - they guy would have clocked me!

[pdxmech13]

When Service is being talked about I am assuming it is in regards to repairs. I really don't know how I feel about having a full stocked department. Just to put this out there I am a master mechanic and have run a very large service department for some 3 years now in a top 100 dealer in the country. I know what it takes and I was hoping to get away from that and enjoy selling the experience of creating/owning that new bike, not the bad guy who wants to sell parts and stuff that surely isn't needed. As for image I love bikes and what not but I am most passionate about cycling and its racing culture. I donate tons of time to charity events and helping the community already but its not what really drives me.

[Louis]

Setting the Table (http://www.amazon.com/Setting-Table-Transforming-Hospitality-Business/dp/0060742755/sr=1-1/qid=1168015969/ref=pd_bbs_sr_1/104-6690123-2047958?ie=UTF8&s=books)

A book on hospitality as a business model. This might provide some useful insights.

[djg]

One advantage to the boutique model is that start-up costs may be vastly lower than for larger-scale ventures. In fact, if you don't need a large and highly visible store front on a main street, because your main business doesn't come from folks just walking or driving by and noticing that you have a store in the neighborhood, even relatively expensive markets may have suitable space at non-scary rents.

A disadvantage of course is that you are selling goods and services that most of the market doesn't want, so things like small niches of geographic advantage (e.g., this Neighborhood doesn't have an LBS, even if the area has plenty) may not do you much good.

The trick, of course, is establishing a flow of business. Good accessible service seems to be a reasonable income stream. For sales, I reckon that the high-end market is tough in most places. As others have mentioned, experienced riders and racers who are laying out their own cash may have very specific preferences as to what they want, and being positioned to satisfy them all is not really possible. Also mentioned is that riders may well have ongoing relationships with shops, often reinforced by club or team membership (and sponsorship). Some areas may have more wiggle room than others in this regard. Finally -- and this area may not be representative -- experienced riders who have the scratch to buy their own high-end race bikes and kit may be very likely to have moved past the stage of life--collegiate, or a few years out--time to hang in the bike shop kind of thing. I hung out a bit once upon a time, but I hardly do it at all any more. Part of this has to do with the fact that the small local shops I knew around here have, with one exception, gone the mini-chain route, so the familiar has been distributed (and the one exception has lost its familiar folks too, but that's neither here nor there). But a lot of it is time--I don't ride nearly as much as I like; and I don't see my pals nearly as much as I like; so an afternoon spent shooting the stuff at an LBS is (a) hard to arrange and (b) way down my list of priorities.

If there's room in your area for a new club/team this might give you quite a bit of leverage. One club I know has a Friday morning ride (early) that folks can do before work. They begin, and conclude, at a local coffee shop that is one of their co-sponsors. Some folks always hang out a bit afterwards for coffee, etc., and if that sort of thing could be tied to a bike shop, it might be a sort of anchor for a business (although I think you'd need more than that). I dunno about free coffee, unless it's fixed quantities tied to certain events--I mean, it could add up, and it's not as if you'll make tons of money off of folks who hang out for a couple of hours versus folks who hang out for 15 mintues.

[SoCalSteve]

In Los Angeles, a very popular ride is one that starts in Santa Monica and ends up in Malibu at a Starbucks. Some riders continue on, some turn around at Starbucks. Most use the "facilities" at Starbucks and do not purchase anything....I imagine this pisses Starbucks off.

Anyway, my idea is to open a bike store/juicebar/coffee shop/place to use the facilities near the Starbuckss. You would have a built in clientele and could also offer "roadside" assistance in the general area...You could offer quick repairs and have items that people need on a ride quickly like tubes, gels, bars, heavier gloves, etc....

I know this business model would work, save 2 things...

1.) It is a weekend thing. Very few people ride this during the week as the turnaround is pretty remote for general traffic.

2.) Its Malibu and I am sure the rents are astronomical.

But, take from this a couple ideas...One, have a bike store near a coffee house that bikers congregate to on a regular basis and two, find a location that is along a route that bikers regularly ride.

Just some idea's (not sure if they are good ones),

Steve

[Too Tall]

PDX - no no, not a full service dept. as in stocking everything...rather doing repairs no hurry and done right basis. QBP orders are delivered twice a week non? Special orders just have to wait.

[pdxmech13]

that was my impression. the average good road bike needs chain,cables, tires and tape once a year. esssy peessy as one mite say. I have a nice little distributor out of pdx that could get things to me for special orders sake.

[Louis]

I think you have to ask yourself what you can do better than others in the business. None of these ideas (mine included) are anything other folks haven't thought of or can't duplicate. What do you bring to the game that will make you better than the other guys at the table? I would think that that is what will allow you to win where others have not.

[Frank]

Questions to consider before buying or starting a bicycle store

http://nbda.com/page.cfm?PageID=65

[nm87710]

Teammate and a buddy started started something similar to your idea 6mo ago. http://www.trinitybicycles.com/index.php

Their key to success - KEEP OVERHEAD LOW. They pay like $200(incl util)to rent a 25 x 75 light industrial/warehouse space just off a main road. They are a niche destination business - not traditional retail and don't need to pay retail rents. They both worked in a shop previously and customers followed them over. Specialize in custom wheels, Rivendell, Kogswell, commuter, grand touring segment, etc. Hell, they'll even track down stuff for customers on ebay. Oh yea, stopping in for a free cold one and grilled brats after the Saturday ride or Sunday Bike Polo game is way cool too.

The crux of their retail model: Nailing their nitch(ignored by traditional bike retailers), keeping overhead low and operating with a positive cash flow model.

From a former retailer that's just my 2 pesos...good luck!

p.s. nix the partner idea...no good can come of it - only trouble

[atmo]

I have a nice little distributor out of pdx that could get things to me for special orders sake.


now you're cookin' with gas -
screw the coffee bar.
get the sake atmo.

[sspielman]

now you're cookin' with gas -
screw the coffee bar.
get the sake atmo.


...sounds like it is just about happy hour in Connecticut.......

[atmo]

...sounds like it is just about happy hour in Connecticut.......
what has two thumbs and agrees with you atmo?

[atmo]

what has two thumbs and agrees with you atmo?
uh too late -
this guy:

[manet]

what has two thumbs and agrees with you atmo?

catherine keener as a proctologist

[sspielman]

catherine keener as a proctologist

Wow...Manet is jumping on all of the wisecracking threads like a hobo on a bologna sandwich

[vaxn8r]

I think you have to ask yourself what you can do better than others in the business. None of these ideas (mine included) are anything other folks haven't thought of or can't duplicate. What do you bring to the game that will make you better than the other guys at the table? I would think that that is what will allow you to win where others have not.
What can he do better? TLC. Most cyclists I know are either too busy training and racing or too busy with working and training and racing to spend time on a forum like this or to do their own wrenching. But we do want someone we trust to do it right without scratching the top tube in the process.

Race bikes like we ride need regular maintenance. If I knew I could drop off my bike and pick it up a day or two later or even have it delivered...that could work. Especially because most of us are finnicky about who works on our bikes. Consider a bike maintenance program like (we should do) for our health. Charge by the visit or by the bike/year.

Don't stock anything but tires, chains, cables, tape etc. Everything else you can get in two days anyway.

Work out of a warehouse or your garage. Think cheap!

I still think you could do this and be a Serotta dealer if you wanted to add that part.

Or you could go the full meal deal. Carry bikes, stock equipment, have pastries and coffee (not for free) and a couch or two. Seems like most shops have several hundred thousand dollars in inventories. Are you willing to do that?

[fstrthnu]

After reading all the reply's, I think vaxn8r is on the right trail taking into consideration what stevep and other experienced business operators have said. Hampsten started it by stating the money is in the repairs. The internet will crush all high-end specializing retail in the future. Though you don't want to do repairs any more... it's what you are good at. You have this "niche" already.

I don't think operating a normal bike shop or even high end retail location is where the future is unless you have had a location for many years and have a strong client base.

The way of the future by way of "retail" location is specializing in repairs.

Could you not somehow set up a business plan focusing on tuning and maintaining all the local racer's bikes? Set up some sort of pickup, delivery and fast turnover time? Your inventory may only need to consist of repair items and you could easily keep the overhead low by operating out of a warehouse location or even your garage if it suffices the workload.

I would buy your product. You come to my home when I have finished training. You take my bike back to your shop, tune it. Deliver it to my doorstep later that evening or by the next moring in time for the travel to my next race and offer all this at a reasonable price. I would spend my $ on your product (service) and I think many others would too.

Those are my random thoughts on all this.

Justin

[Hysbrian]

In response to the above, this was written by Jeremy Powers;
"Thanks a bunch to Joe Mai from Joes Bike Garage Every weekend, I would bring my beat cross’ bikes from the weekend battle and Joe fixed em’, no questions asked, I just dropped them off on Monday and by Tuesday, done. It’s nice to have someone as talented as Joe working on my bikes, so if your ever in western Massachusetts and need something, look Joe up, you won’t be disappointed!"

http://www.joesbikegarage.com/

I think that this would be a viable business platform but like anything else you have to find what the clients are in your area and cater to them. Think about the shops and boulder, and the riders in boulder...the type of shops in portland and the types of riders in portland...

I have a friend who just closed a shop similar to the one that you are talking about. Except he did it so that he could race full time.

[pdxmech13]

Just so I'm clear, Serotta would be the MARQUE custom choice . It is a builder I trust and a company I value deeply. I'm really interested in all this talk of servicing bikes. The way it is being described is as if it is the life blood of a store.

Many thanks to those you have contributed

Oh and great to hear from fstrthnu !!!!!!!!!!!! :beer:

[chrisroph]

After reading all the reply's, I think vaxn8r is on the right trail taking into consideration what stevep and other experienced business operators have said. Hampsten started it by stating the money is in the repairs. The internet will crush all high-end specializing retail in the future. Though you don't want to do repairs any more... it's what you are good at. You have this "niche" already.

I don't think operating a normal bike shop or even high end retail location is where the future is unless you have had a location for many years and have a strong client base.

The way of the future by way of "retail" location is specializing in repairs.

Could you not somehow set up a business plan focusing on tuning and maintaining all the local racer's bikes? Set up some sort of pickup, delivery and fast turnover time? Your inventory may only need to consist of repair items and you could easily keep the overhead low by operating out of a warehouse location or even your garage if it suffices the workload.

I would buy your product. You come to my home when I have finished training. You take my bike back to your shop, tune it. Deliver it to my doorstep later that evening or by the next moring in time for the travel to my next race and offer all this at a reasonable price. I would spend my $ on your product (service) and I think many others would too.

Those are my random thoughts on all this.

Justin

Vancouverdave already provides a service like this in the portland area. He worked for years at the BG. Low overhead is a real key to all successful businesses. I went to a breakfast this am with the ceo's of alaska, nw, and horizon air and they were talking about overhead control.

[saab2000]

Vancouverdave already provides a service like this in the portland area. He worked for years at the BG. Low overhead is a real key to all successful businesses. I went to a breakfast this am with the ceo's of alaska, nw, and horizon air and they were talking about overhead control.

When they talked about overhead control in the airline business did they mention the 8-figure bonuses that are now being awarded to some airline execs while employee salaries are being slashed?

Sorry for throwing that out. Just a sore point with me.

I think that thinking outside the box is important here and there have been good ideas.

Glad to hear from Fstrthnu as well!!! Stick around!

[obtuse]

fstrthnu is wrong. the niche is not service unless you want to pay $65 an hour to make $50 an hour.
unless you can provide value no one will buy anything from you. people want to see, touch and feel and so far only brendan and the folks at competitive cyclist have figured out how to achieve that on-line. service/repair is a waste of time at worst and something akin to a ceiling at best.....a brick and mortar bike shop needs to have a decent service department in the same way it needs to have a decent roof. it makes it possible to do what brings in the real money; selling bikes. most shops have horrible customer service; everything you can do to over deliver in every aspect will add to your bottom line; but don't think for a minute that fixing bikes is going to be a money maker...this isn't a car dealership. the money is in moving bicycles, parts and accessories and you need to be smarter, more experienced, more honest, and harder working than everyone else around you. then your shop will work and you'll be able to break even and pay yourself a liveable wage.

internet retailing is not a threat to brick and mortar bike shops who know their shi'ite. its free advertising.

obtuse




obtuse

[Louis]

OK, that settles it. My suggestion is that you learn to play blackjack really well then go to your nearest casino. I think the odds are probably better there. Plus, you probably won't have to work as hard and will have more time to ride.

Hit me.

[swoop]

i'm late to the thread.

what i am about to say is true and from an actual study:

they took a bunch of kids that loved to read. they randomly split the group into two and paid half the kids for every book they read and didn't pay the other kids.


the kids that were paid read less books and reported that they enjoyed reading less than the kids that were not compensated. they read more and reported enjoying readingmore when they were not paid.

if you love the challenges of creating a small business in a tough industry.. and want to try and develop new models of doing stuff.. having a bikeshop might be fun. but if you love biking... making a living in the industry...
will make you into a little kid that used to like to read.

atmo.

[shinomaster]

Not that this is a great example but here goes...
I worked for my two friends Husam and Rustem when they first opened up ATA Bicycles in Boston in a tiny cramped space with no storage or anything in, oh about...1995? They printed up lots of flyers and offered $25 tune-ups to every kid at Harvard who had a bike to tape the flyer to. Being the nearest shop to Harvard they got lots of walk in customers from new students. We did countless half assed tune-ups and sold a fair amount of tires and replacement parts. They had to lock bikes up in the parking lot they worked on in the back with a big long chain.
They got one bike line to start, KHS and sold older close out mountain bikes to college kids for $499 or less, and sold parts and random stuff, like bar tape and bells.
It helped the Husam had an MBA, and knew a heck of a lot about bikes, as did Rustem. Those guys were magical mechanics.
Eventually they grew their business and expanded, twice. The owners parted ways with one staying at ATA, and the other moving to Arlington to start Quad Cycles with his share of the business. Sadly, these childhood friends are friends no longer...
These guys might not have the best shops in Boston (even though ATA won best of Boston several times) but they have in a way, lived the American dream of turning nothing into a sucessful business..

[dave thompson]

<snip>...........
but if you love biking... making a living in the industry...
will make you into a little kid that used to like to read.

atmo.
True this. I used to love airplanes, everything about them. Got my pilots license, commercial multi-engine, owned a couple of planes and decided to get into the aircraft sales biz........ I hate airplanes.

[swoop]

True this. I used to love airplanes, everything about them. Got my pilots license, commercial multi-engine, owned a couple of planes and decided to get into the aircraft sales biz........ I hate airplanes.


this is why i pimp but don't take a cut. stevep... come here. slap. get back to work, ho.

[chrisroph]

When they talked about overhead control in the airline business did they mention the 8-figure bonuses that are now being awarded to some airline execs while employee salaries are being slashed?

Sorry for throwing that out. Just a sore point with me.



Jim:

No surprise there was no mention of their bonuses. But they were wearing very expensive suits and shoes.

[rwsaunders]

There are a dozen or so shops in our town that have been around for years. It seems that they stay alive buy selling family priced bikes and repairs. That would seem to be a tough way to make a living, with Wal-Mart and ****'s Sporting Goods being your competition.

There are 3-4 shops shops that cater to the more avid cyclists. They seem to have a loyal following by offering move-up and custom fitted bikes, with a better selection of hard to find parts and gear.

Maybe look at finding a shop that's looking to take on a partner with an option to purchase?

[WickedWheels]

First words of advice:

DON'T DO IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! DON'T, DON'T, DON'T, DONT'!!!!!!!!!!!!!!

Second, if you are going to do it anyway:

- Dump the partner. It's hard enough to make a living in this business without having to split the profits.
- Location, location, location
- Become active--REALLY ACTIVE--in the local bike culture (assuming that you have a good personality). If you are an angry person then you're doomed to fail anyway. Learn to kiss *** and learn to love dealing with people that you hate dealing with.
- Buy an established existing business if you can. That dad that buys his kid a bike at your shop because his dad bought him one there is worth more than you would think. All these guys that buy bikes once every 5-10 years are worth more than you'd think.
- Be careful what you listen to on this board, as well as any other. Other than the guys in the business, a lot of people here talk about what they'd like to see, but not necessarily what they'd like to pay for. I don't think that too many people on this board pay full retail for anything, and those are not customers you want. How many of these guys would want to pay $130 for a King headset with no discount (because it's a super-low-margin item) and then pay $30-$40 to have it installed?!
- If you have a job where you're making a decent living in this business, with a 401k, medical, vacation, etc. then learn to appreciate it. You're probably doing better than you would be with your own shop.

Final words of advice:

If you have to stay in the business, find work outside of retail.

[soulspinner]

catherine keener as a proctologist

Thumbs up LOL :D

[saab2000]

Jim:

No surprise there was no mention of their bonuses. But they were wearing very expensive suits and shoes.

Did you actually meet Steenland? Not a lot of warm fuzzies regarding him in the industry.

[rodcad]

I would say you will need to repair ALL bikes, not just the ones you sell. Unless of course you're wealthy and just doing this for fun. Check out this new shop in Denver... http://unobicyclestudio.com/

Finding a bike shop/mechanic that cares? I have yet to find one here in Colorado. Vechhio's? Well, I had good luck with them until my last build, a NOS Merckx Corsa Extra. Peter graciously kept some good sized chunks of paint out of my formerly perfect frame. I know **** happens but this bummed me out big time. I would be willing to more than the going rates to a mechanic who cares. One who will build and return my new frame in perfect condition.

Any of you know a mechanic in Colorado who CARES?

[stevep]

this is why i pimp but don't take a cut. stevep... come here. slap. get back to work, ho.

swoop, you're pissing and moaning on the forum.
"ouch, my fingers are tired from typing, i need to slow down..."
thurlow rogers is out training.
slap, slap, slap.
oooowwwwwccccchhhhhh.

[1centaur]

Other than charging $30-$40 to install a headset, I think everything wickedwheels wrote was 100% right on (man)!

[pdxmech13]

me too

[SoCalSteve]

I would say you will need to repair ALL bikes, not just the ones you sell. Unless of course you're wealthy and just doing this for fun. Check out this new shop in Denver... http://unobicyclestudio.com/

Finding a bike shop/mechanic that cares? I have yet to find one here in Colorado. Vechhio's? Well, I had good luck with them until my last build, a NOS Merckx Corsa Extra. Peter graciously kept some good sized chunks of paint out of my formerly perfect frame. I know **** happens but this bummed me out big time. I would be willing to more than the going rates to a mechanic who cares. One who will build and return my new frame in perfect condition.

Any of you know a mechanic in Colorado who CARES?

Have yet to find one in Los Angeles....That's why I started doing my own wrenching. If something goes wong, I have no one to blame but myself.

And, if something goes wrong on the road, I am able to fix it.

Steve

[pdxmech13]

I don't really need to be told of what a high risk this can be. I have been doing this industry for 15 years. It's not the longest but its enuff to get a guys feet damp. Please let me know what you like about your current fav shop

Thanks again.

[swoop]

to be honest with you.. what i like is that i get things at wholesale or significantly discounted from them because they know i'll look out for them. i like that i care about the guys that work there as friends and that i would do anything for them.

they know that i'm out there representing them and trying to earn the discount they give me. i try to help them sell or reinforce the customers they have.

[manet]

... obtoose maketh several good points.


i don't want to go a shop to look through catalogues.
if you desire manets business you have to have
product on the floor to touch, perhaps try, and of course spy.
and in stevep + swoops case _ sniff and lick.

[Grant McLean]

i don't want to go a shop to look through catalogues.
if you desire manets business you have to have
product on the floor to touch, perhaps try, and of course spy.
and in stevep + swoops case _ sniff and lick.

+1
Ya, isn't that why al gore invented the internet, for bike porn?

Actually having all the new cool stuff, and the old kewl stuff
in stock is paramount. It's tough to sell what you don't have.

g

[Louis]

Stuff that I like: Guys (and gals) who are experts and also decent people; easy to talk to, with no attitude.

I use bike shops for stuff that I can't do. Things like evaluating my fit or buying a new custom frame. I do 99% of my wrenching myself so only rarely do I use them for that. I can buy parts on the web cheaper than I can get them at the LBS, so I don't spend a lot of money for stuff there. Maybe $50 per year max. I don't mooch off them by going in to ask technical questions then leaving - I use the forum for that!

[1centaur]

... obtoose maketh several good points.

Actually, I think obtuse's points are very revealing of a dichotomy that may be at the heart of the business decision here: what would attract most people to ANY new bike store is service and atmosphere, but what really makes the money is bikes. The ATA story told that well - service got the business going but it grew by becoming a high end bike store. Negotiating the transition has to be tricky given that most high end bikes have good distribution in areas where there's the money to buy. Obtuse's point of reference is a place that thrives at knowing stuff, getting stuff, and understanding the minutia that high end buyers are thinking about, and it has the market power to put a lot of temptation on the floor. It's great at satisfying the desires of people with the checkbook to get what they want now and value that more highly than a maximum discount. He was right to cite Competitive Cyclist, as that is their business model as well. However, as we know, there are plenty (the majority) of buyers who view Brendan's shop as unCompetitive Cyclist.

So, I think the starting gig is based on service, atmosphere, tubes, bar tape, and a welcoming attitude to everyone who comes in the door, and when that doesn't make a lot of money, the question is whether one moves up to something else, making risky inventory and distribution agreements along the way.

If the question is why do I favor one LBS over another, the answers are service (he's a great wrench), attitude (he's nice and easy going), and location. I've bought a couple of bikes from him (because he carries those brands), several from obtuse's reference point (because they carry those brands), and a few from other places (based on price, location, or straight from the maker). I have never bought a bike because I saw it somewhere in person and was inspired to reach for my credit card. I do give my LBS a chance to price match most of my smaller purchases because he asked me to and I like and respect him and want him to do well. On the items the Net's way cheaper for I use the Net. My LBS guy is well known nationally, sponsors a club, has a web business in a cycling niche, sponsors a team, is located centrally and without a ton of serious competition in a riding hotbed, fixes children's bikes as readily as pro's bikes, owns some of another store and probably does not make a ton of money. It's a tough business - there may be 100 shops in the US supported by the kinds of buyers that make obtuse's point of view valid. Most of them have staffs that could use some attitude and sales training (I'm guessing), so there's potential to crack their ranks. Getting that chance is a whole nother thing.

[Lifelover]

Please let me know what you like about your current fav shop

Thanks again.

I like that they always have free coffee, they lead a ride everyday, on Saturdays they have free bagels and they have couches for me to sit on. But what I like best is that they don't seem to mind that I ( many other riders) take advantage of all this even though I spend less than $200/yr in there! Of the $100 or so that is on product I get a 15% discount since I'm in the local cycling club.

Performance online offers none of the fringe benefits but I order around $700.00 of stuff from them every year.

I understand you point about not needing to hear how tough of a business it is but I think my point is that you are asking the wrong question.

What I like about my LBS has little to do with what will get me to spend money there.

[bcm119]

To answer PDX's question, here are things that I would like to see at my local shop...keep in mind these aren't business tips, I don't know the first thing about starting a business.

-stock parts! At least a full set of parts from each major gruppo...I don't know why most shops seem to fail on this front.

-stock clothes that actually fit skinny bike racers, not clothes made for the mid life crisis crowd. Don't even bother with pearl izumi!

-do not carry clothes from "primal wear"

-stock more than one brand of booties

-fill up the space most shops use for three dozen Trek hybrids with useful things.

-have a bike rack for customers who ride their bikes to your shop, and put it somewhere the bikes won't be stolen from.

-don't have a hard slippery floor that you can't walk on in Look pedals

-Stock wheel parts and actually build wheels, and do a good job...

-if you have coffee, serve good coffee.

-don't hang up a bunch of big cushy saddles on the wall...I don't want to see 'em

-Don't assume every customer knows nothing about bikes...just assume they do and if they don't they'll ask

-when a customer asks for a part, don't ask them what they're trying to do, just give them the part

-Don't build up your showroom bikes with goofy stem angles and bars that look like a 747 at liftoff

-stock more than one brand of racing tire

-don't close at 5pm, thats when most people get off work/ride

-offer to install fender flaps when someone buys fenders

-have the repair shop be out in the open instead of in a back room

-don't name drop, be condescending, boast about who you've met, hint at how fast you were back in the day, or tell long stories with no point except to illustrate how much you know about bike stuff

-take a customers day/night phone numbers, and call before doing anything to their bike not discussed at dropoff

-carry high end bikes, and budget/value brands like Soma, Gunnar, Surley, etc. Skip the ubiquitous brands.

If you take all my advice you'd be out of business in a week...but hey, you asked! I wish you lots of success.

[vaxn8r]

...Performance online offers none of the fringe benefits but I order around $700.00 of stuff from them every year...

See I don't get that. Why would anyone drop any money at Performance? Nobody at this forum claims to shop at Walmart either but I fail to see any difference between the two.

Buying with price as a sole criteria is short sighted at best. In the long run everyone who loves the sport will suffer.

This isn't just meant be a dig at Lifelover. We ride bikes worth $$$$ but can't afford to support our local cycling communities?

[fstrthnu]

fstrthnu is wrong. the niche is not service unless you want to pay $65 an hour to make $50 an hour.
unless you can provide value no one will buy anything from you. people want to see, touch and feel and so far only brendan and the folks at competitive cyclist have figured out how to achieve that on-line. service/repair is a waste of time at worst and something akin to a ceiling at best.....a brick and mortar bike shop needs to have a decent service department in the same way it needs to have a decent roof. it makes it possible to do what brings in the real money; selling bikes. most shops have horrible customer service; everything you can do to over deliver in every aspect will add to your bottom line; but don't think for a minute that fixing bikes is going to be a money maker...this isn't a car dealership. the money is in moving bicycles, parts and accessories and you need to be smarter, more experienced, more honest, and harder working than everyone else around you. then your shop will work and you'll be able to break even and pay yourself a liveable wage.

internet retailing is not a threat to brick and mortar bike shops who know their shi'ite. its free advertising.

obtuse




obtuse

FREE advertising? Where can I get some of that cuz it sure would be better than paying like all the other e-retailer's?

Now... Obtuse. I agree with you on all of the rest. I know that is the way as I witnessed and learned from it first hand.

But...

from what I understand pdx want a differnent kind of shop than the one you are referencing in your post... much smaller. Labor could be a huge contribution to sales in the small shop he is describing to pursue.

imho
Justin

P.S. pdx... get some really nice glass display cases from IKEA and don't clutter your counter with Powerbar boxes... total turnoff.

[SoCalSteve]

See I don't get that. Why would anyone drop any money at Performance? Nobody at this forum claims to shop at Walmart either but I fail to see any difference between the two.

Buying with price as a sole criteria is short sighted at best. In the long run everyone who loves the sport will suffer.

This isn't just meant be a dig at Lifelover. We ride bikes worth $$$$ but can't afford to support our local cycling communities?

Ok, first question: How will everyone who loves the sport suffer if we buy bike parts (that retail bike stores never seem to have in stock and when they do, they charge big $$$ for) from Performance (or any other outlet on the Internet) ?

And, please define local cycling community? In Los Angeles, there is pretty much one independent chain and thats about it. Why would I want to support them when they offer NO customer service on both the sales and service level? (and charge full retail on top of it)

[fstrthnu]

And get a flatscreen TV. Show bike race vids all day and the Tour when it is happening

Justin

[pdxmech13]

Big Screen
Now where talking baby

[Lifelover]

See I don't get that. Why would anyone drop any money at Performance? Nobody at this forum claims to shop at Walmart either but I fail to see any difference between the two.

Buying with price as a sole criteria is short sighted at best. In the long run everyone who loves the sport will suffer.

This isn't just meant be a dig at Lifelover. We ride bikes worth $$$$ but can't afford to support our local cycling communities?


Cost is not the only and maybe not the main reason I shop online. My favorite LBS is 20 minutes away (by car) and is not able to stock nearly as much stuff as performance online.

Being able to sit here, make an order and have it show up in a few days is very convenient.

I suspect that if my LBS was closer, stocked everything and the price was even close I would buy from them a little more.

Walmart is not really a fair analogy. They do not carry the same exact items as an LBS. If they ever start to than the LBS will be hurting even more.

[gt6267a]

One pet peeve of mine is the, “… we don’t have it but can order it.”

The benefit of buying local is that I get to see it and have it right now. When I hear this phrase, the first thing that comes to mind, “I can order it too and for less.” Therefore, my rule of thumb is, "if they have it buy it, if they don’t go online."

[nm87710]

Staffed with Hot Chicks in skimpy outfits who ride, are knowledgeable and can wrench. :banana:

[rePhil]

I have an LBS that sounds good on paper.Total remodel, carrying C- dale as their major line,(and could get almost anything) Great coffee bar, Videos going, rides leaving from the shop 3 days a week,plus tri training, lots of tri folks and racers hang out, but thats apparently all they do because the shop is gradually fading. It didn't use to be that way.

They started in a too small location, but that successful location was across the street from a hospital where there was plenty of discretionary impulse buying.The original owner sold out and the new folks relocated to the bigger fancier place. It didn't take long for the word to spread that the cool guys are getting discounts while the rest of us pay way too much over retail.
It appears they recently merged with another shop.I hope they make it but I doubt it.

[Louis]

Buying with price as a sole criteria is short sighted at best. In the long run everyone who loves the sport will suffer.

We've had this discussion before, but what the heck:

To make money you have to figure out where you add value. Bike shops have to do the same thing. They aren't charities and should not be supported just 'cause we're good guys and we don't want them to go out of business. They sure as heck don't add value with 100% markup on small parts (other than having it then and there, which is fine if you want to pay for convenience) and nobody should feel obliged to support that.

So where do they add value? For some folks it's skilled labor, for others it's the vibe of the place where they get to hang out with their buds. Whatever. That's value. Overpriced hardware is not value.


-fill up the space most shops use for three dozen Trek hybrids with useful things.

I think they probably sell a lot more of these than we realize. Let's say they replace the hybrids with Phil Wood hubs, boutique wheels and fancy tires. Which would have a better impact on the bottom line? I think the hybrids. I may be wrong.

[pdxmech13]

I have yet to see any item marked up 100% that has a cost of $5 or more

The average bike bussiness survives on a 30-33% margin.

YOur local grocery store has higher margins but rarley does anyone complain about the price of jonagold apples

[stevep]

I have yet to see any item marked up 100% that has a cost of $5 or more

The average bike bussiness survives on a 30-33% margin.

YOur local grocery store has higher margins but rarley does anyone complain about the price of jonagold apples

not to quibble but margin and mark-up are not eh same thing.
margin is gross profit on an item.
50% margin means it cost you $5 and you are selling it for $10.
50% mark-up means you take the $5 cost item and multiply it by 1.5= $7.50

careful with this one...
not interchangeable/

its a tough way to make a living, the numbers are not great in the big picture. can be done but there are probably 1/2 the number of ibd s than there were 10 yrs ago. for a reason.

[CNY rider]

Not a quibbler either, but I wonder where you buy your groceries.

Whole Foods, an upscale market has the highest profit margin in the industry. Around 5%. The rest of the industry is around 3%. They can try pushing them higher but it won't work. Too many competitors including Wally World.

[bcm119]

I think they probably sell a lot more of these than we realize. Let's say they replace the hybrids with Phil Wood hubs, boutique wheels and fancy tires. Which would have a better impact on the bottom line? I think the hybrids. I may be wrong.

You're absolutely right, these were just my selfish requests for the perfect LBS...not business advice! I figured that PDX just wanted to know what his target customers would like to see, and he'd figure out how to make it work.

[stevep]

Not a quibbler either, but I wonder where you buy your groceries.

Whole Foods, an upscale market has the highest profit margin in the industry. Around 5%. The rest of the industry is around 3%. They can try pushing them higher but it won't work. Too many competitors including Wally World.

the 5%, 3% refers to net profit.
not margin.
net profit..after all expences, salaries, costs, etc. again, these are not interchangeable terms.

[shinomaster]

Big Screen
Now where talking baby

My friends shop in Boston has a movie screen and they play racing videos.. It's pretty cool.

[WickedWheels]

They sure as heck don't add value with 100% markup on small parts (other than having it then and there, which is fine if you want to pay for convenience) and nobody should feel obliged to support that.


Are you kidding? Complaining about 100% markup on small parts?! What do you think your local hardware store is charging. A bike shop is essentially a local warehouse for YOU. If you don't like the markup, you'd have to find a way to get one of the handfull of distributors in your region to ship these items to you. You'd have to wait to get them, pay freight and hope that it's the right item you just received, because the warehouse guy may have picked the wrong item from the shelf to put in your box. And on top of all of that, you'll end up paying a significant markup on what is now "wholesale" because this distributor will have to increase staff to service YOUR individual needs every time you need a waterbottle or a blinky light.

Take a look at any other business and see what the mark up is. Last year I went into a jewelry store to take a look at high end watches. The sales lady told me that the particular watch I was looking at could not be discounted more than 10% because it was their super-low-margin item... only 50%. (By the way, that means 100% markup. If they bought it for $2000, they sell it for $4000). She had a small case with tons of these watches in there. There was a lot of profit sitting in that small case. All profit that does not need to come in 1cm or 2cm increments to fit riders, like road bikes do. All of these items take up so little space and require no assembly, service or warranty on the part of the retailer. How many people here complain about the price of watches or jewelry? How frequently do you see 45-50 year old men with families to support working in jewelry stores? How frequently do you see that with bike shops? Do you realize that it's because bike shops can't afford to pay salaries that allow you to have a family? This is because the markup in bike shops is not high enough!

Why complain that a business is making money from your patronage?! Everyone is making money from you!!! Be glad that in this case it's a bike shop that's working for it and providing something for it in exchange, whether it's assembly, service or simply knowlege. Be glad that finally it's a bike shop and not a jewelry store, an oil company, a coffee shop franchise, Coka Cola, or anyone else out there that's making a profit off of you.

[WickedWheels]

Just before Christmas I went into a Macy's and was walking by their leather jackets. They had quite a few that we 40% off, plus another 20% from the lowest price, plus ANOTHER 15% (or 20%) off if you use their credit card. So with this sale you can buy an item roughly for .40 cents on the dollar. And you know that they're still making a ton of money from that.

Now take a look at the Assos or Castelli jacket that's hanging up in your local shop. If you're spending $100 for it at full retail, then that jacket cost the shop $60 or more. This is all without shipping expenses, by the way.

Now... how often do people here complain about prices at clothing stores, like Macy's? Dollar for dollar, they are making A LOT more money off you than your local bike shop. And chances are, it's with much poorer service, too.

This is why my first advice was not to get a bike shop.

[dave thompson]

You want mark-ups, margins and discounts? Investigate shoe and furniture stores! 100~200% margins are the norm.

[stevep]

what alex is saying is:
when you see the bike shop owner driving a big cadillac escalade..you have every right to complain.
small items require high margins to cover freight, picking, packaging, etc. go to a honda dealership and order a knob for the radio... will probably cost you $20. cry about that when you think about the thing that cost$.00003 to make. its cumbersome to channel small parts and never economical.

[atmo]

i would never deliberately get stevep upset atmo.

[Louis]

Why complain that a business is making money from your patronage?! Everyone is making money from you!!! Be glad that in this case it's a bike shop that's working for it and providing something for it in exchange, whether it's assembly, service or simply knowlege. Be glad that finally it's a bike shop and not a jewelry store, an oil company, a coffee shop franchise, Coka Cola, or anyone else out there that's making a profit off of you.

WW,

You're missing the point. They don't get much of my money for parts because except for the convenience factor (which I acknowledged) they don't add value and I don't use them for that very often.

PDX's question was what do you like in bike shops. My answer is that I like the areas that offer value added to me, which is usually not parts, but service. If others see value there that's fine with me. I was just answering the question.

Clearly a shop has to pay the rent, keep the lights on and pay folks enough for them to live. The real issue is what's the best way to get most money to do that. We were all requested to give our opinions and I gave mine.

Louis

[WickedWheels]

WW,

You're missing the point. They don't get much of my money for parts because except for the convenience factor (which I acknowledged) they don't add value and I don't use them for that very often.

PDX's question was what do you like in bike shops. My answer is that I like the areas that offer value added to me, which is usually not parts, but service. If others see value there that's fine with me. I was just answering the question.

Clearly a shop has to pay the rent, keep the lights on and pay folks enough for them to live. The real issue is what's the best way to get most money to do that. We were all requested to give our opinions and I gave mine.

Louis

You're right. I'm sorry. This was not meant to be a personal attack of any sort. I just got a little irked at bike shop markups being questioned when so many shops struggle to make ends me.

And Steve...
You're right. I don't know any shop owners that are driving Cadillacs, though I've got one guy that's driving a sweet Porsche Cayman. I know that's not helping me any, but what's funny is that he hardly ever gets keystone on anything.

[AgilisMerlin]

Not a quibbler either, but I wonder where you buy your groceries.

Whole Foods, an upscale market has the highest profit margin in the industry. Around 5%. The rest of the industry is around 3%. They can try pushing them higher but it won't work. Too many competitors including Wally World.


don't know about that one. can you show me where you got this figure for whole foods. Their purchase power along with their own brand leads me to believe they are making a killing.

i am a direct competitor at the store where i work, a true veggie head grocery store.......no meat, eggs, booze, etc........and our mark up on groceries is 1.5, supplements is 1.67 and cheeze/deli is 1.75. Me and my boss due the margins.

i know that the figure for whole foods is more.

curious/interested in that percentage

AmerliN

[cdimattio]

don't know about that one. can you show me where you got this figure for whole foods. Their purchase power along with their own brand leads me to believe they are making a killing.

i am a direct competitor at the store where i work, a true veggie head grocery store.......no meat, eggs, booze, etc........and our mark up on groceries is 1.5, supplements is 1.67 and cheeze/deli is 1.75. Me and my boss due the margins.

i know that the figure for whole foods is more.

curious/interested in that percentage

AmerliN

Gross margin versus net margin confusion.

According to Business Week: "Clearly, Whole Foods is thriving in what remains a low-margin and tightly squeezed industry. It is more profitable than peers, with gross margins of 35% over the past year, vs. 24% for Kroger Co. (KR ) and 29% for Safeway Inc. (SWY ), according to market research firm Capital IQ."

[AgilisMerlin]

thanks

"revenue growth at Whole Foods slowed to single digits,"

http://www.businessweek.com/bwdaily/dnflash/content/dec2006/db20061220_027274.htm


amerliN

[CNY rider]

thanks

"revenue growth at Whole Foods slowed to single digits,"

http://www.businessweek.com/bwdaily/dnflash/content/dec2006/db20061220_027274.htm


amerliN


for more info on Whole Foods see also here (http://www.slate.com/id/2156922/fr/flyout)

They talk about "operating income as a percentage of sales" whatever that means. Damn it Jim I'm no accountant!

[stevep]

gross margin does not mean very much in this.
it excludes all overhead, rent, salaries, spoiled food, returns, etc, etc etc.
net is what is left. net is important.
that is likely in the 4-5% range and is quite successful for a food retailer.

[atmo]

gross margin does not mean very much in this.
it excludes all overhead, rent, salaries, spoiled food, returns, etc, etc etc.
net is what is left. net is important.
that is likely in the 4-5% range and is quite successful for a food retailer.
yeah what stevep said.
when he started, his killer team was called
cccccccccccccccccccccccccccccccccccccccccb .
thirty years later all that is left is ccb.
you can't make money it this gig atmo.

[stevep]

yeah what stevep said.
when he started, his killer team was called
cccccccccccccccccccccccccccccccccccccccccb .
thirty years later all that is left is ccb.
you can't make money it this gig atmo.

i lost all those cs in the stock market crash in 1987.
too bad... but i got a bunch of free tires anyway.
at least i got a couple of good rides this weekend.
thug munroe out to get offo.
heavyweight battle... of the millenium

[stevep]

i also think a valuable contribution as mentioned a number of times are shop rides.
critical to this is that the shop actually control the rides and make the rides " as advertised".
if its a 17-19 mph ride... control it and make it that.
if its a beginner ride...make it that
if its a race pace ride...make it that but make it safe by adopting reasonable rules and boot anyone who jumps the traffic, goes up the outside in the middle of the road, etc. nothing worse in my mind that an uncontrolled group ride..dangerous and drivers get bs at all of us.
it is easy for a ride to be co-opted by some idiot that is fitter and cant control him/herself. control/ remove the idiot.
basic courtesy is as a guest on a ride...you learn the ride and do just that...that way everyone on the ride gets to enjoy it.

[atmo]

it is easy for a ride to be co-opted by some idiot
mo atmo?

[stevep]

nay,
mo is good on the rides...he even lets me hang onto his jersey in the middle of the climbs.
free jersey as payment.
the idiots are idiots who have to show how fast they are.
anyone any good does not need to.