Originally Posted by
carpediemracing
In that case you just need to pick up the phone and call Specialized and buy a bike from them. Just sell off the other 100-500 bikes that they'll make you buy and you'll be all set.
Oh, wait, you need to have someone assemble it? Will you supply the tools to do so? The space? Warranty it? Deal with any recalls or service issues?
It's not just about the cost of the bike. The average profit margin for a successful shop is in the 5-15% range. Since this includes everything from high margin items (service, tubes) to low margin (bikes over, say, $2000), your $3800 bike will be on the low end. Figure the shop, if it's a current bike and a mid-sized shop, is clearing 3-5% on that bike, all told, without dealing with stale inventory or any other extra headaches.
You can go to the NBDA site to get more info on bike shop business. It's pretty informative if you haven't been on the other side of the counter.
I personally own a Bicycle Shop. I'm pretty sure my response is just a waste of my time and I doubt anyone will even get it but it is 5:45 in the morning and I got some free time. This response above would be one of the best responses in this thread but I wanted to give the shop side of things. Some of these margins you guys are referring to of 50% does not happen even for a Premium level specialized dealer they are not making 50% margins. For some reason people feel that if a local business is charging $500 they pay $250 or $4000 they pay $2000. I can tell you this is not the case. A good margin on a bicycle would be 30%. So lets look at that. A bicycle shop wants to carry Specialized. This requires a Hugh investment typically 100k-200k just in speciallized even more in city areas. So right there typically a Specialized Bicycle Shop is sitting on 100k-200k on inventory just in specialized bikes. Now even if you just walk in and say I want a tarmac for x amount then even if they are special ordering the bike for you they still have to sit on 100k worth of inventory to even be able to special order that bike for you.
So moving on to the sale lets say a $3000 bike at 30% margin (This would be considered a good margin for a bike shop by the way and will be different with brands, location, level of bike. etc) So $3000 bike dealer cost in this example is $2100. So the consumer sees the owner is making $900 wooohooo! this guy is getting rich! let take a closer look at that. $900 made on the bike. any ware from 35-100 to get the special order bike shipped to the shop. Were now down to lets call it $850. UPS walks in with a bike in a box. Lets call it 10 mins between signing for the box and letting someone know the bike is here to build. About another hour to build the bike if it is done right. They call you to let you know your bike is here 10 mins. You come get the bike and most shops will at least set seat height for you. Between a quick set up on the bike, checking you out in the register, shooting the **** about the bike you just bought total time 1 1/2 hours. Just to make sure we are still on the same page we are currently at a $850 profit and about 2 hours of time.
You take the bike home and after a few weeks the bike needs a new bike check as everything has settle and needs to be tuned up. You call to make an appointment 10 mins, you bring the bike by 10 mins talking about whats going on. The tech services the bike which is usually 30 mins on a new bike check. Calls you let you know the bike is done 10 mins. You come get the bike and chat it up about how you love the bike another 15 mins.
Recap $850 profit on bike 3.25 hours spent with you. Typical hourly charge of a shop 60-75 per hour. So lets call it $65. 65x3.25= $211.25. New profit $638.75. Now let not forget about the $5000 spent on tools at the shop needed to service your bike, $5000 in computers/software to check you out and keep inventory control, $2000 a month in rent, $350 electricity, $400 heat in the winter, $5000 in display to show you the product, thousands of dollar in payroll each week. If the shop owner clears $175 on that sale he would be lucky. $175 well you think thats not to bad. BAMM tarmac cracks and you need warranty help. There is another 2-3 hours of time spent making you the customer happy and his $175 profit is out the door. And lets not forget the biggest part of this picture is he still has AT LEAST 100k sitting on the floor in inventory his money his investment and this guy still has to eat and provide for his family.
Now like I said in the beginning this was probably just a waste of time as I'm sure some people wont believe the numbers I just gave or they think I'm exaggerating. Or they just don't care about anyone else but themselves.
With all that being said I absolutely love what I do I work every day 10-12 hours a day. I don't make much money but I love bikes and that is why I do it. Regardless of what some people will think I do not plan on having a private yacht one day just supporting my family while doing what I love. So no complaints here but you asked for insight and I gave it. Good luck and congrats on the New Bike