In the US, conventional (non electric) bicycle sales are declining in units and dollars. E-bike sales are growing strongly. This is on a wholesale basis. E-bikes are still a somewhat specialized category, sold by a minority of bike shops.
https://www.bicycleretailer.com/studies-reports-0
Bicycles are for the most part still subject to the tariffs of up to 25% imposed as part of the trade war. Some niche categories like single speed bikes and 20" bikes are excepted. I believe this has depressed profit margins for retailers. Oregon also has a bike sales tax, it’s small but profit margins on most bikes is already thin.
The bicycle component industry has arranged its pricing such that US retailer wholesale price is not much different from online prices. The more knowledgeable the consumer and the higher end the product, the more likely to buy from online or even UK online (Wiggle).
In Portland, the business tax (city, county, TriMet) is about 4.3% of operating profit.
Bicycle riding is not growing, much, in Portland. Population growth has slowed to about 1% and, anecdotally, the new in-migrants are less likely to commute by bike. E-scooters are taking some share from bicycles, though not clear how much. Despite all the new bike lanes being installed, bike % commuting is flat to declining.
Rents are rising fast. I mostly hear about this in the context of restaurant closures but it must be affecting bike shops too (e.g. Western Bikeworks).
The city’s rules may not affect bike shops too much but do affect businesses that combine bikes with beer. The last straw for Velocult was when the city demanded that the bar area be physically separated from the bike area on the grounds that kids frequented the bike shop.
If someone put a gun to my head and forced me to open a bike shop, I think I’d:
- Focus on repair services. You can flex the labor cost to match demand, lay off mechanics in the slow periods, pay mechanics by piecework.
- Merchandise stocked for sale will be very limited. Only basic stuff that turns quickly, and only limited quantities. I’d have only two or three types of locks and only a few units of each, same with helmets, tires, etc.
- Have other stocked products that are sold only with installation. Don’t sell a set of fenders from your inventory for the customer to take away. If customer wants to take fenders home to install himself, offer to order them. This will turn off many customers but most of them will buy online anyway, unless your retail price is close to the online price which would make your margins too low to justify stocking a low-turn part.
- I think the beer or cafe element is still worth trying but you’d have to be able to run a bar/cafe operation that would survive on its own. Which probably means having food and enough volume to support the labor and equipment/facilities cost. And may mean having someone else run that part of the business.
There’s a couple locations around me that combine a largish front outside area (probably used to be parking) with a small building (set well back on the lot.) I could see a repairs-focused bike shop in the building, with a food cart pod and covered seating in the front area. Try to get enough rent from the carts to help the shop get through the slow season.