DMF 

Profit is outdated? Then we're all in big trouble.

terry b

How much time does it take to put the bike in the car, drive it to the LBS, chit-chat with the store person, leave the bike, go home, wait and then go back at a later time to pick it up? The last time I took a bike in for service it was 40 minutes in cross-town traffic each way and a week in between waiting for the work to be done.

It takes me about 3 hours to build a bike from scratch. Once done, I bet I spend less than 1 hour per year cleaning chains and adjusting shifting. A flat tire takes less than 10 minutes to change, I can't imagine loading a bike in the car to get a flat changed.

Not trying to undercut the LBS domain, but taking your bike in for routine maintenance seems like a colossal waste of time unless the LBS is across the street.

Mr. Underbridge

It's not - but charging a 20% markup over wholsesale on consumer-replaceable parts is.

kandnhome

If my shop sounded half like yours: great prices (i.e. below retail) or knowledgeable and helpful (i.e. friendly, not elitist) sales/mechanical staff, I'd have no problem eating some cost over mail order/dealing with limited stock. If I had a shop that did both, I'd buy their jersey and wear it everywhere.

I shop at grocery stores that are considered high-end (and still meet a budget) for precisely the same reason: good products in general and a superior deli with real butchers. To me it's a very similar thing. I could get my steaks at Wal-Mart for 1/2 the price, but they wouldn't be as nice and wouldn't be the exact cut I wanted -- and I'd never learn about new cuts from the butcher. I understand and appreciate value-added service -- but it has to actually add value for me to spend money on it.

As far as repairs though, I'm just too much of a DIY type to let someone else mess with my bike. I'd spend as long looking it over to make sure they did a good job as it'd take me to fix it.

I appreciate what you mean when you talk about your sacrifices to do what you want in life: believe me, it's a greater sacrifice to do something that makes you unhappy. Money earned in trade for your happiness cannot buy it back, and who wants to be rich and miserable? Not me anyway.

kandnhome

Profit is not outdated. However the days of 30-50% margins are long gone. Check out the margins in most other businesses, and they'll run in the 3-5% range (especially in electronics, where they can go as low as 1%). And those businesses manage to run loss leaders (that they sell below cost) to get business in the door. They make their money on warranties and accessories.

When was the last time you saw a bike shop selling anything at/below cost? And then they complain of lack of business -- everyone must be going mail order.

Hmmm, I wonder why.

The point is there's profit, and then there's gouging. They might only be gouging because they are incredibly inefficient and require 30-50% of their revenue to pay costs, or they might just be doing such small volume that that's the case. But when I walk into a 5000 square foot store that always has 3-5 customers (at a minimum) in it buying something and I see prices well over retail and get no help unless I hunt it down, and then find out they know less than I do, I know it's not volume that's keeping the prices high.

Rev.Chuck

2:38 was from a really old thread discussing how fast you caould change a tire. I had another employee time me. I started straddling the bike, got off, switched to the smallest gear combo, removed the wheel, removed the tire, checked the tire and rim for damage, installed a new tube, inflated the tire with a frame pump, reinstalled the wheel, checked the brake, and got back on the bike.

I don't average my times but I have changed around 18-20,000 tires/tubes, and if someone hands me a flat tire they will get it back, repaired, in around three minutes.(Unless it has sandspurs, that would add a monute or two)


I think you may be comparing two(or maybe three) different margins. There is fifty margin(keystone) which means that you charge twice what the item cost. It could also be considered a 100% markup, which is typical in most small businesses.
But that is a gross profit(pre salaries, insurance, heat, lights, rent) not a net profit(post salaries, insurance, heat, lights, rent)
. The 3-5% numbers have to be net profit. I have freinds in the grocery business, they make a 1-2% net. That does not mean the box of Cheerios cost them 4.25 and they are selling it for 4.29

Nycycle

GREAT POST,,, I just sent these to my nephew, this will save me cell phone minutes.

DMF 

20% markup at a B&M is hardly profit, much less excess profit. You apparently have no conception of the overhead of a B&M - think more along the lines of 40%. Even on-line sources will often cost 20+% for S&H.

DMF 

There's no such thing as gouging. Except for a monopoly, the laws of supply and demand rule.

For instance, during Katrina when gas spiked above $3 - when you could get it - one station here raised its price to $6. Everyone came unglued and threatened to prosecute for gouging, but how ridiculous! No was forced to pay $6/gal; they simply went to another station. The guy certainly lost business (and profit) in that circumstance.

However, if and when all the others ran out of gas and you really needed gas - needed it enough to pay $6, who would still have some left? Guess who.

Likewise, bike shops used to carry inventory. Inventory costs money and has to be priced up, but the competition isn't a B&M, it's on-line suppliers. So now LBS are going to inventory-on-demand. They don't have what you need but can get it for you in a day or two. This change has been forced by the market (i.e. people like you). But is it good? Answer that for me the next time you need a part before the big ride this afternoon!

DMF 

Actually, it does. The "cost" includes a lot more than the price they paid to the wholesaler.


You're right that he's comparing apples to oranges.

I am simply amazed that so many people have no clue how business works. No wonder so many vote liberal/socialist!

Mr. Underbridge

Let's put it this way, without getting into the weeds of actual profit margins - if a shop is charging a lot more than an online store (after accounting for tax and S&H) for parts a consumer can easily replace, that's the sort of thing that will steer customers away from the store. I generally agree with you, assuming a free market, consumers buy something if they think it's worth it, and if a shop gives good enough service that people don't mind high markups, that's their prerogative.

So the question really is, what's the point in this extended discussion? Is it about shops defending high margins? If they're charging a lot more than online sources, why do they expect to get that sale? If it's about consumers complaining about the high prices at shops, there are other alternatives (like online). If you think a shop is gouging you, don't shop there.

DMF 

Indirectly. It's about what one considers to be a "high margin".

Plus, perhaps, a dawning realization that high margins aren't necessarily bad.

lyeinyoureye

diy

caloso

I do most of my own wrenching. I also garden. I suppose a similar question could be asked "Why do you grow your own tomatoes when you can just buy some at Safeway? Why do you keep planting rose bushes for your wife when you could just call 1-800-Flowers?"

Wordbiker

I'd just like to thank everyone that has posted an opinion in this thread.

As I stated, I have been working on trying to make a "progressive" bike shop, and one that our clients, many longtime cyclists like you, as well as people entirely new to the cycling experience would want to frequent. No, this doesn't even mean that I'd expect you to stop internet store and eBay shopping...I'd be a fool to deny that this is pretty much a standard for anyone capable of doing their own work, and that doesn't need the services of a "traditional" bike shop, or for someone without the financial means to transport themselves otherwise. I know that price happens to be the overriding factor for many of you to continue as cyclists in this age of very expensive components, bikes and accessories, but I'd also like for you to consider a few things in the defense of local bike shops:

A) Where did you learn what you know?
If you've been a cyclist for even a modest amount of time, then you'd have to confess going to a bike shop in the past for advice, service, products, information...or just a feeling of 'bike culture'...of belonging with those that share your passion for pedaling. Even if you have "surpassed" the need for such an environment, many other budding or potential cyclists have not, and the shop can still be an effective, perhaps even necessary means of conveying that passion to a new generation...or even an older generation wishing (and finally having the leisure time for) for an activity that not only strengthens character, but promotes health, happiness, social interaction, friendly competition and sportsmanship, environmental responsibility, self reliance and empowerment, a sense of community...and just plain fun. Please, don't forget where you came from.

B) Anyone running a business these days has to respond to current market trends.
These things take time. Call me an optimist, but I'd like to think that the traditional bike shop model can adapt to a newer generation of much more educated consumers, and still fulfill the needs...given time and support. The "Mom and Pop" shops that have always provided great information, service and specialty items can survive by filling in the niches not covered by the corporately-owned mega-box stores...but only if they know their neighborhoods and the niches that need to be filled. I invite you to start conversations with these cherished shops to tell them, not in a blaming way as if they are trying to rip you off, but in a congenial tone that, "Yes, I am willing to support your shop if you are willing to meet my very real needs", and then explain them. You may be very surprised at the response you get from these honest conversations with real human beings versus even an immaculately worded correspondence with the corporate offices of X-Mart. I for one highly value customer feedback, and even more...respond to it as best I can because these are more than clients...they're my friends and neighbors.

C) Where is your money going?
Even if you don't live in a semi-remote, semi-rural place like I do, your hard-earned money still circulates around you, much as your impact as a person influences those around you. We all make choices with our money every single day, voting as it were with what we support by our spending habits. If a local business is doing wrong by your standards, then by all means...vote by withholding those funds they desire. They'll either prove their worth by increasing efficiency, making things right with mistakes made (we're all human...I hope) or be packing their bags. If however they are providing a service that you agree with, then perhaps you may patronize them anyway to keep that service available to you, giving them the opportunity to grow (as I'd hope we all do during our short and precious lifetimes) and to ensure the service and values for our present and future generations. If your values include cycling, then it is something to consider when you "vote" by supporting the income of your "home shop" over a
venture capitalist organization in another state...or country.

Zouf

The nice thing in life is that there is a solution for everyone. There are a (large) number of cyclists that do not know that BikeForums exist, would not want to waste time reading/searching stuff there if they knew it existed, do not want to touch the dirty stuff that makes their bike work, and are glad to have repair services available in bike shops to serve them. That's probably at least 75% of cyclists out there. Maybe more.

Same applies to cars, but with an even higher %: probably 95% of people do not do their car maintenance or repairs themselves. Cars are more complicated, parts more expensive, etc. Changing a tire on a car requires major equipment. Changing a tire on a bike requires two plastic levers. Most people don't even know how to put on the spare tire on their car, and will call out if they flat. All fine.

On the other hand, some (me included) prefer doing their own wrenching (on bikes for me, not on cars), because it's faster, cheaper, done "just the way you like it", and - a big plus - ensures you know enough to get you out of annoying situtations when they happen.

An easy way of seeing this: how many flat tire have you ever had on a car? Now take away those that were flat when you got to the car, and keep only those that happened while you were driving? How many do you have left? One? How many flat tires have you ever had while riding your bike?

For me, it's none vs >10... Am I ever glad I know how to fix a flat on a bike...

rmfnla

And that's assuming the shop gets it right the first time!