General Cycling Discussion - I'm thinking of starting a new bike shop.

Questions that are haunting me, besides will I make any money at it are;

Has the economy really turned around?
Do people value service anymore, or do they just shop price?
Have bicycles become like electronics, where if it's broken you set it down by the curb and buy a newer cheaper model.
Is there a good web site to get info on bike shop repair prices, and general costs.
What's the easiest way to get manufacturers to talk with you? It seems I call around to have reps contact me, and nobody breaks a sweat to get back with you.

What do you all think?
What do you all really need a bike shop for?

Thanks

Are you looking to make lots of money at this? If so move to a different profession. Value of service is a minute part. For example look at this board and peoples requests. The cpmstant question is "where to get the cheapest......" there are many cyclists that value quality and if they buy from you they expect alot for their dollar. There are those however that see dept stores as their avenue for bikes, for "its just a bike." However educating your public is the key so they can see what they are getting. There are a few wrenches here and the prices vary on labor. Reps do not want to really get up with you unles you can prove a store front, and have a tax ID#. I called Giant bicycles three times and never heard back from the rep in over two years. Of course the market here is saturated with them as is most places.
What does anyone need a shop for? I dunno ask around to the area you wish to serve first.

As much as I don't like saying it I think the hometown bicycle shop is going the way of the hometown hardware store.

I think if a bicycle shop is to survive today they'll need to offer and display a large assortment of bicycles, offer excellent bicycle repair and service and be well entrenched in the community. The shop will need to be every bit as inviting to the public as a spanking new X-Mart, which is where they are used to shopping.

Bicycle shops can no longer compete with online dealers in the bicycle accessories market. Why should I pay $24 for a shimano 105 chain from the lbs when I can buy a dura-ace chain online for the same price?

As I understand, there's not a lot of markup in new bicycles so I suppose the bulk of your profit will come from service. In order to have enough business you pretty much have to be in the right place at the right time.

Two established bicycle shops have closed in my area in the past three years and no new shops have opened.

The markup on bicycles isn't very much at all. If you depended on sales ONLY, you would close your doors within 6 months. Service? Likewise, that pretty much just covers your employees salaries and/or the utilities. The real place that small shops make $ in order to be profitable is clothing and accessories. This is why online retailers are killing the Mom and Pop shops. Onliners buy in quantity and sell for tiny margins. The exact opposite of what a M and P shop can do.

The service and sales bring the customers in the door, but if they don't leave with a new helmet, gloves, shorts and Camelback, you're losing money!

L8R

Q. Do you know how to make a million in the bike shop business?

A. Start with two million.

I don't have "business" savy experience, but I will reply from a "Joe user" stand point
I hate to admit it, but most people buy where they can get the cheapest price.

Depends how many local store are around. I will call all for a price
For expensive stuff, I won't go to a different store for a $10 difference, but will for more savings. The smaller stuff(gloves, shirts, etc..) I do internet shopping and compare to local shops..

I mainly go to the closest shop for repair type stuff. They are very nice and informative. I wish I could buy the big stuff from them, but they are about 15%-20% more expensive and I have a limited budget to buy things.

P.S... I keep hearing the economy has turned around, but I see no signs of it here in Florida..

What do you do now? Can this be an extension of it. If you already have a ski shop adding bikes might be a good idea.

Joe

Just speculating here, but I think the major factor in your success is location. Do you live in a community in which local businesses thrive, or do the locals not care about such things and just do all their shopping at Mall-Wart, et al? It's true, local retailers of all kinds are suffering in today's globalized, homogenized economy. But there are some places where that just doesn't apply, or at least it doesn't apply as much. Where I live, new mom & pop businesses open up pretty frequently, and although not all succeed, a significant portion do. We've always had a fiercely competitive, but robust LBS market here. In recent years, several "big box" sports stores (REI, and some new one whose name I'm forgetting) have opened up. They've had little if any impact on LBS business, because there are local-business-oriented consumers here who see the value in retailers where they know the people working there, and vice-versa.

So in effect, Moonshot is right, the hometown bike shop is going the way of the hometown hardware. There just happen to be three very prosperous hometown hardwares within a 10-minute bike ride of my house (one still has the old plank floor). But that's how the economy works here. YMMV. So look around. If local hardware stores, coffeehouses, bookstores, etc. are successful in your community, you've probably got a shot. But if everyone where you live goes to Lowes, Starbucks, Borders, etc., I'd seriously rethink it.

the opnly other way to have a bike shop is to only carry the richy brands and sell to racers and rich people.

Just speculating here, but I think the major factor in your success is location.


This is about the only accurate statement in this thread.

Just from the questions you are asking, you need to do much more research to be successful at the retail business- bike shop or otherwise.

I'm in the collection business & can confirm that the economy has been improving for at least 8 or 9 months now. My monthly numbers show a definite upward trend. If I were considering opening a bike shop, I would do a very careful market analysis. Location is definitely key. Our small town is growing & has four established bike shops plus two new ones which have only been around a year or so. Time will tell if we can support this many.

Our community is very, very bike and health oriented. The LBS I use seems to do pretty well - it is a husband, wife, sometimes son when he is back from college, and3-4 other mechanics, sales, etc. He is right on the major bike path, and he and two other quality LBS's have joined together with a common store name (Treads).

However, there are several quality LBS's around competing constantly.

I go there because I know the work will be quality, or if there is anything askew, it will be fixed promptly. I bought my SPD sandals there because I wanted to make sure that my old shoes, new shoes and the pedals would all sync together appropriately.

The SPD sandals were $79.00, the SPD SH55 pedals and cleats were $59.99. He took over 45 minutes installing and adjusting them properly, including a fair amount of time with me on the trainer on the bike to make sure everything fit perfectly.

As I am no expert in adjusting cleats and pedals, I thought htis was money well spent.

I also had a tune up ($50) which included truing the wheels, inspecting the bottom bracket, new brake pads, cleaning the drive train, installing a new cassette and chain, etc., etc. He also did a "fit" on me considering I am getting just a bit older (64) and we made some adjustments appropriate to my slightly different body.

I think he does well because he cares and people know it. He ceratinly has a lot of business everytime I go there, and I see a lot of sales on the cash register.

Although I've been self-employed for over 25 yrs and have made good money and continue to do so, I would be very hesitant about a bike business being my primary source for income. At best, I can make some money selling vintage bike parts on Ebay.

George

Another value add for a shop is to affiliate with or start a community cycling group. Many cyclists would like a "club" to go to for support, sharing ideas, and riding together. A major plus is if group rides start and end from the shop. A local shop here (http://www.summitbicycles.com) is closely affiliated with a women's cycling group/race team (http://www.velogirls.com) and many of the group rides start and end there.

Thanks for the replies. Let me just add a few things. I was a general manager for one of the largest bike shop in Florida - that was 15 years ago. I know about the margins, the crazy customers, etc. Our town has grown so big in the last decade, that I'm wondering if it can sustain another shop. It has five big shops already, but none are serving the market as I see it. My concerns are location, and getting a bike line. The established shops have done a great job of securing the name brands rather well. I'm looking for someone with a little inside info on how to get back into this without alerting the whole biking retail sector in this town. I enjoy reading the bike forums and trying to figure out the current state of cycling in general. I plan to go into this with my eyes as wide open as possible.

Well do not advertise that you are getting ready to open. Cover all of the windows, until you are ready to open. Likewise with any signage. Your distributrs are going to be the same as your competition, however you could request that they say nothing to no one about it. Ironically Hans Johnsen heard we were going to open, funny thing is we did not advertise about it, theyhad just heard it from another employee when we sent in the app. and it spread around the industry distributors. Eventually it got to our only cometition which is 45 miles away.
If you have any specific questions, e-mail or PM me there are a couple of shop owners here, and a seemingly large amount of wrenches that post here.

Thanks for the replies. Let me just add a few things. I was a general manager for one of the largest bike shop in Florida - that was 15 years ago. I know about the margins, the crazy customers, etc. Our town has grown so big in the last decade, that I'm wondering if it can sustain another shop. It has five big shops already, but none are serving the market as I see it. My concerns are location, and getting a bike line. The established shops have done a great job of securing the name brands rather well. I'm looking for someone with a little inside info on how to get back into this without alerting the whole biking retail sector in this town. I enjoy reading the bike forums and trying to figure out the current state of cycling in general. I plan to go into this with my eyes as wide open as possible.

You're wondering if your town can sustain another shop because there are five already there? You want to be number six offering the same products? What makes you think the majors want another distributor when there are five already serving the same community? If the established shops have the name brands, how are you going to get them? Do you really want to get the same thing they have?

I don't know but this sounds like a receipe for disaster. I would look at other towns or major cities that are not being serviced. Five shops in one town is enough. You're looking too close to home. People are going to buy your product not because it's the same as everyone else but becuase it's different. It's highly probable that none of these other shops are making any kind of money but are probably at break even point. This sounds like the perfect opportunity to work long hours for little money. Trust me. The smell of nice new bicycles gets pretty old fast if you have little to show for your efforts.

Questions that are haunting me, besides will I make any money at it are;

Has the economy really turned around?
Do people value service anymore, or do they just shop price?
Have bicycles become like electronics, where if it's broken you set it down by the curb and buy a newer cheaper model.
Is there a good web site to get info on bike shop repair prices, and general costs.
What's the easiest way to get manufacturers to talk with you? It seems I call around to have reps contact me, and nobody breaks a sweat to get back with you.

What do you all think?
What do you all really need a bike shop for?

Thanks

Bike shop owners *don't* have much margin on the bicycles themselves, at least at low and mid-range.

That leaves accessories and service to bring home the bacon.

The former are provided cheaply online, so there's serious competition. The latter is the one thing that can't be done by mail, and that most serious cyclists need done a lot.

A common fallacy about the bike business is that if you don't "support" the shop by buying its expensive accessories it won't "be there" to fix your bike. Obviously not so. If you have a demand for your bike to be repaired, and you it's worth it to you to spend the extra money on the marked-up accessories to begin with, then it will be profitable for someone to meet the demand for repair and charge directly for the repairs.

The shop near me is the only serious bike shop around, but he's had some lean times in recent years. There aren't *that* many serious cyclists about to allow him to make money hand over fist. But he does all right most of the time, by selling bikes, accessories, and repairs to new recreational riders.

A tight business, from what I can tell.

Good luck

Well here is a couple of things. The shop thing is in the back of my mind, as well. Though the risk to capital is what I'm looking at, and it's just too risky for me at least.

I did find a nice article on the subject. You might want to print it off and go over it.
http://www.sbaer.uca.edu/profiles/industry_profiles/06.pdf

There is 1 shop in our town, none of the riders I know like the place, it's inconvenient, the management is reportedly rude at times and doesn't do much to support the community.

This is a town of 100,000+ folks, I think the town is ripe for a really nice rider oriented shop.

Lastly on starting a shop. I grew up in a very small town called Navarre Ohio. It's still only about 3000 residents. Anyhow my little shop that I used to go to as a kid to get my huffy from kmart tuned up(we were poor) is no longer there, but the same guy now has 3 very large and nice shops in the next larger towns. So he must have done something right 20+ years ago.

Here is the shop's. http://www.erniesbikeshop.com/
just remember the shop started very small in the back side of a building that was no larger than a small 1 car garage. I really wasn't "into" biking at the time, I used my bike to deliver papers and explore my town. So I don't remember what brands, though raleight and motobecane come to mind this would have been in the mid-80's.

Good luck on your search. If you really want to start a shop, we need a good one badly, send me a email and I'll give you the best location, heck I'll even help work at it for you. Hahaha.