I think shops do ok on margins, but they also get stuck with stuff that doesn't sell until they close it out at the end of the year. This hurts especially if it took up floor space for 9+ months.
What kills me are the accessories (gotta be 75% margins), and many LBS never discount. One shop even sells jerseys with the shop name in them, but for $75, WTF they should give them out free with a bike - free advertising - right. If Performance/Nashbar can discount accessories then the LBS could to. I was at one shop a couple months ago that always has 50% off all clothing - now selection will vary a lot, but they move a ton of clothing thru the shop. In most of the shops the same shorts and jerseys hang on the racks for months at full price.
I don't think many of the shops are making tons of money, but they could certainly price more aggressively on accessories and move a lot more volume. Bike prices seem ok, for the most part people are willing to pay for quality bikes and a good LBS. A few internet low-dollar internet retailers do well, but the pluses of a test ride and a good LBS usually make up for the difference in pricing.
John
Last edited by R900; 08-11-06 at 06:20 AM.