ButchA

Wow... what a thread!

Allow me to add my input (if possible, since I'm rather "old school", C&V, and perhaps a retrogrouch, etc..) Some LBS's are closing due to cost/pricing. People aren't buying. The general public (comebackers - those who haven't ridden a bike in 20+ years and want to get back into it) basically almost go into cardiac arrest if/when they stop in at a LBS and see all the latest, greatest, high tech, CF, Di2, setups along with a price tag of well over $5000! They can't afford that and or maybe they actually could but they will NOT spend that much for a bicycle. They'll probably go hit up the used classifieds in the paper, Craigslist, eBay, etc... Or worse, they'll get some cheesy dept store bike and ride that instead.

livedarklions

The problem for LBS is they really can't compete with the prices at the low end and still make money. Not much point in driving up the volume by selling cheap bikes if they're losing on the transactions. That said, if I go into a shop and they have nothing under $5000, I'm not staying there long. There's a very large range of pretty terrific bikes at a relatively small fraction of that price.

mr_bill

One of the most successful local bikeshops around here is doing quite well selling bikes at around that price point, but not a lick of "high tech," CF, or Di2. (Well, they have "high tech," but Bosch, Pendix, and NuVinci. And they do have some "low end" bikes. They sell the Strider, to give you a hint.)

Come on, even the forbidden LBS has some stuff for a fraction of $5000. And coffee too.

-mr. bill

livedarklions

I've seen some boutique stores that really didn't, and I was a bit shocked. I didn't bother remembering anything else about them as they're irrelevant to me.

Happy Feet

I think it's not so much a case of LBS'a not being able to compete with online stores, it's that they don't even try.
Do a test to see how stores stack up. Look up some local LBS's and see what their web presence looks like to online shoppers and how interactive it is. Can you see their products and prices... what do their order and delivery times look like?
I do that and often see clunky websites that don't list items (so I still have to visit or call) and haven't been updated in years.. sometimes many years. If it hasn't been updated in years that means the store has not cared to consider the main way people look at products for that length of time. If it's generic and bland and it looks like they don't care about that market base that's the image they portray.

Recent example.
Wanting to order 2 new tires.
Look at local LBS website (50km's away). Price $130 (+tax). Estimated shipping time 10-14 days from warehouse (60km's away), pick up in store.
Look at online store. $83 (includes tax and shipping). Estimated shipping time 4 days (from England). Actual shipping time - 3 days to my door.

Who's trying and who's not.

Even if I accept the price differential how could one justify the shipping time. I can only chalk it up to institutional thinking that probably serves the shop in some way but loses them that sale. They may say, who cares, it's just one sale but it's one x how many others and future potential sales as they see how easy and convenient it is to buy online. The difference is that the online store wants the online customer, thought about the process from the customer perspective and made it work for them. The local LBS did not even try.

Jim from Boston

Quote:

Originally Posted by mr_bill

…BTW, a bike shop that survives a rent crisis *and* an identity crisis (bbb? papa wheelies?) has to be doing something right too.

-mr. bill…

Quote:

Originally Posted by Jim from Boston

Here in Boston, I'm not aware of any reputable, i.e. long-lived shops for the past 10 to 20 years closing. I have been long-settled on my personal bike shop, Bike Bay Bikes, one of a trio of shops, a block away with excellent service, so I can't comment about lesser stores since I have no experience.

BBB almost did close a couple years ago due to a lease problem that was resolved.

Thanks for that note, @mr_bill. That possibility made me sooo nervous. In fact, I once mistakenly replied to this thread:“Back Bay Bicycles, Portland ME – closing”

mconlonx

I just spent some weekends working at a shop. I was a full time mechanic from 2009-2013, then part time for a couple years, and now only on occasion to fill in. In this case, owner was having health issues and the other mechanic/manager was off for the winter.

In Maine, bike shop business nearly zeros out in winter. The owner usually covers a reduced, 4-day schedule, his full-time guy is laid off. This winter, he decided to go teach ski-school and work in a ski shop.

( Aside: I live with his mom, which means basically that I am dating my boss's mom, in one sense... Took him about a year to get over it and talk to me again, I am convinced that this is why I lost even part time or fill-in work for a while there...)

But most of the business while I was in the shop over the last month and a half was service and supplies. I did a drop- to flat-bar conversion, some tune-ups, and sold a bunch of chain lube.

When I was talking to the other guys, the most business they are doing is e-bikes. Some woman, who it turns out is a local influencer, rode one, immediately bought it, and then told all her friends. We sold like 10 of them last year and they are now a mainstay in our floor-stock lineup, specifically the Electra Townie ebikes with the new Bosch system. Go figure. The shop was making money hand over fist through the 90s selling mtn bikes, fat bikes and +tire bikes are showing some decent sales for higher end bikes, but the rage in town right now is ebikes for the older crowd.

Flipside is that we used to turn kids who wanted to work in the shop away. The current mechanic started working in the shop in middle school. When I came on, there were two middle schoolers and two high-schoolers working. Now? No youngsters interested in working at the shop. Sad.

livedarklions

Economies of scale--they either have to put in a huge amount of resources (warehouse, supplier contracts, packing, shipping, tax compliance, etc.) in an online ordering service, front for another one, or just not be competitive per unit/price with big online retailers.

I see pages like that, and it's usually an LBS that's doing ok with in-person service, and hasn't taken down the shopping page after trying unsuccessfully to do online sales on the cheap.

Happy Feet

Not really.
The online store just made it a point to serve the customer. If you consider the context they are at a disadvantage.
The online store used a local delivery service DHS from my regional airport. The local store could have done the same.
The online store had to cover local shipping in England and air freight - the local store got a free ride even though the local store is charging $47 more on an $83 sale.

What the online store does is process the order the day it comes in, has a system of pulling the order at the warehouse and ships as soon as possible. That's the customer service model they have intentionally chosen. A local store could do the same but doesn't. They build a buffer of time for THEIR convenience, not the customers. It harkens back to a time when you could doo that because there was no competitor but fails when a new model comes along.

Another similar experience, different local LBS.
Wanted to buy two smaller front panniers. The LBS said they had some coming in a shipment and took my name/number and said they'd call when it came in. Months later... still no follow up call. Looked online. Similar panniers. Competitive price (even with taxes/duty/shipping). 4 day delivery to my door (again from England but different vendor).

I really don't begrudge price differentials that much (if they are within reason) because I know there are costs involved in bricks and mortar, but I can't accept poor or lazy service that treats me as if I don't matter. And I really try to give local shops first crack. Some step up and some don't.

livedarklions

Jeez did you miss the point--they haven't just "chosen" that model. They have invested and are investing a lot of money to make that model work. That's investment in a warehouse that has the item in stock, the staff to actually process the orders in real time, and transportation of the items to the shipping facilities. That's a bunch of overhead that is only acceptable in your pricing if its costs are distributed across a large number of sales.

Basically, for an LBS to compete on price and time online, they'd have to sink a really large risky investment in an area where there are already a bunch of very large-scale operators. It's the equivalent of claiming that LBS should manufacture bikes at the same price or better than Giant.

Maelochs

How does your bike shop get that price? Are you suggesting the bike shop ignore its relationship with suppliers and buy from the online bike shop and re-sell at a mark-up? Wouldn't you still go online anyway?

Also, tax and tariff structures vary. This was made plain by the brouhaha over Shimano clamping down on UK distributors selling int he U.S. for below U.S. retail. The bike shop can try to back-door its own suppliers ... but it stands to lose access. And when and if the UK seller gets caught up in tax and tariff issues (Hello, Brexit!) then the BS has No supplier.

Are you suggesting that every bike shop open a branch in the UK to take advantage of temporarily favorable exchange rates?

Also ... the LBS needs to Pay Rent. The online store you bought from might be a 10x30 storage shed with a guy on a computer with a lot of boxes and tape. The shed might be in his own back yard. The bike shop has to rent commercial property, pay commercial utilities rates, and commercial taxes, plus FICA and such for all employees. All so you can go get a cable adjusted when you don't want to get grease on your hands.

The Local Bike Shop IS trying ... to not go out of business.

The LBS simply cannot compete online with purely online stores. It would probably need to rent a warehouse and hire more staff---and Hope that people bought enough to keep the warehouse staff paid. but since it wouldn't be able to compete with Chinese or UK sellers anyway ... what's the point?

Say ... Every heard of Performance? The big online retailer with a chain of bike shops which ... Went Bankrupt? The profit margin on online sales is super-slim---hence the low prices---which means if you Want a local bike shop, that LBS has to charge more. And it has to maintain its distributor networks, and pay their wholesale prices, and mark them up to retail.

And if your LBS decided it wanted a Big Web Presence---to try to compete in that already saturated market---it would need to charge Even More to pay for the up-front costs of getting involved---and then it would lose even more business and do a Performance.

To Be Clear---Bike shops cannot compete with online shops because bike shops have to pay for Bike Shops.

When you complain that your local shop cannot match the online price---do you also complain that the online shop doesn't have a mechanic on staff?

Two Different Business Models. Comparing them as you do shows a lack of understanding of either, I think.

Happy Feet

You didn't read a word I said and just quoted it rhetorically to voice your own perspective. I understand business models quite well which is why I can spot poor ones when I see them.

I didn't complain about the price that much and said I could over see it somewhat to shop local as I understand retail costs. I prefer to shop local as I am a tactile person and like to hold the object and ponder it and see if it fits my desired application. What I can't overlook is poor service or service models.

In example A all transactions were in CAD, the local store was charging $47 more on a $83 sale and did not have to contend with international shipping, only local.
In example B the shop did not even do a followup call.

A shop that delivers good personal service and makes the customer feel valued will probably do well and garner a loyal customer base. I frequent one of those. I also am a member of the MEC and really like their service model. I give both first dibs on my business but sometimes they don't carry certain lines so I look around. When I do that I am sometimes underwhelmed by what I see.

It's 2019. The computer is here to stay for the foreseeable future. More and more sales occur through it. Shops can accept that and adapt or not, at their own peril. Gone are the days when bricks and mortars operated on the model that it was the customers privilege to shop there due to geographic dominance. The ones that survive will be those who understand it is their privilege to have customers.

TiHabanero

"What the online store does is process the order the day it comes in, has a system of pulling the order at the warehouse and ships as soon as possible. That's the customer service model they have intentionally chosen. A local store could do the same but doesn't. They build a buffer of time for THEIR convenience, not the customers. "

This statement ends in folly. The local store cannot duplicate the same warehouse operation as the warehouse operation uses because it is not a warehouse operation.

I spent some time in the motorcycle aftermarket biz helping to build an online company. We had lots and lots of competitors. The only way to succeed in the online world is volume. 3 or 4 orders a day will kill you. We needed 200 orders a day to break even. Can you imagine a brick and mortar store having enough space and personnel to process that many orders plus maintain a website with that amount of traffic?

There is a local motorcycle store that has a very successful online biz, however it is run as a warehouse operation out of a separate building using a different name. It is its own entity. The motorcycle shop buys directly from their sister company warehouse as it does not "stock" parts of its own. What I am attempting to demonstrate is that the online biz market is very different than that of the brick and mortar biz and requires a completely different model. Certainly a brick and mortar shop can run an online biz, however to make it profitable it needs to be a serious operation and requires resources outside the realm of most small businesses.

FWIW, that online motorcycle parts biz is doing quite well. Took 8 years of toil and toughing it out, and a large sum of money to rely upon to get it going. Not many bike shops can access enough resources to make it happen.

livedarklions

And focus on niches where online competition can't undercut them. Selling parts and accessories online is not ever going to be that niche if they want to stay a LBS.

Seriously, you really don't get the concept of an economy of scale. Online retailers take orders from basically everywhere, which allows them to aggregate enough of the demand for a niche product so they can sell it at a volume where they can cover the overhead of carrying the product without charging a lot of money per order. In turn, they can do things like get faster delivery because the costs of infrastructure and labor needed to maintain that is spread out over a larger number of sales This isn't even taking into account the bargaining power this gives them with the suppliers to lower their wholesale costs. SO basically, aggregating orders from pretty much everywhere allows them to buy the goods cheaper, process them cheaper, and deliver them faster and still make a profit. The LBS can't ever hope to compete on this basis without completely transforming their operations, and giving up their "local" character.

If they're taking two weeks to get you something you can buy online for $60 cheaper and get in three days, and they're still staying in business, they're obviously making their money doing something else.

I buy most of my parts and accessories online, and I buy bikes from stores and have them serviced there.

TiHabanero

"aggregating orders from pretty much everywhere allows them to buy the goods cheaper, process them cheaper, and deliver them faster and still make a profit."

Correct. Even with discounted volume buying from distributors and manufacturers, it is sometimes not enough to offer a substantial discount to make an item attractive to the "typical" online buyer. It is simply a "tight margin game" in the online resell world for mass market product. Niche products is a different deal and these rules do not apply. Yet.

Happy Feet

The talk about economy of scale is nice and may fit your preconceptions but doesn't address what I wrote about at all. It has nothing to do with not following up on a customer request for a product or about shipping local product to and from local locations as described in post 206. It is neither folly or a lack of understanding when I simply relate my experience that for those who fail in my books it has more to do with how they treat the customer than the bottom line price of a product and I provided some examples. I have also in the past related very good experiences I have had with LBS's too.

Here's a snippet from the local delivery problem I related: ...items may take longer due to inventory and/or availability or if items are being transferred between stores. Store transfers occur several times a week, so if we are transferring an item for you, it may take 6-14 days.
FWIW, all the stores are within 100km of each other and I still have to pick up in store.

I said this was for their convenience, not the customers. That is true. They do it so they can cluster more items and not make as many trips which suits them well enough but they seem to ignore the fact that they are competing against sellers who will get the same product out the door on the way to the customers door in one day. In this case there is no economy of scale when comparing one local delivery to what a UK shipper contends with: two shippers - one on each end, international flight and customs.

I said some stores are good and others not so much and that price was not the most important aspect to me and that I was willing to pay more in consideration of the additional costs of bricks and mortar business. That is a pretty balanced and moderate position to take in today's marketplace. So, despite all that, if I feel some stores have a lousy customer service model - how many other silent consumers who talk with their dollars probably feel the same way. If online sales figures mean anything probably a lot. To suggest they must be doing ok that way if they are still in business is like whistling past the graveyard. LBS's may not be able to compete directly with price but they can always work towards exceptional customer service - especially when it is the one area that may sway consumers in their favour. Telling me I have to pick up in store, it may take 6-14 days to move between local stores and it costs $47 more is just a bridge too far in comparison.

I have participated in three major hobbies in my life that are supplied by shops (and have operated a small business as a service provider for one): Aquarium fish keeping, Scuba/Freediving, and Cycling. The shops even have similar acronyms in online forums LFS, LDS and LBS respectively. On forums for each of these hobbies there is the same talk about the demise of those shops for the same reasons so this discussion is nothing new or unique.

livedarklions

This will be my last head-pound against this brick wall of delusion. They're telling you it's going to take a long time, they know their price is higher. Guess what? They're not expecting to sell much of that. It's pretty obvious if you know anything about this business that most if not all of these alleged store transfers are actually orders to a supplier, or if they're not, it just isn't economical to warehouse much inventory at the stores, and they don't sell enough of it to justify paying someone to drive stuff between stores on anything better than a weekly basis.

Ten to one they're making money selling bikes in store and servicing bikes.

I ask the same question of everyone of you "they are dying" guys, and I have yet to get an answer. Can you name one single sector of retail where small independent retailers are doing better?

Happy Feet

I am not deluded at all but I wonder why you try so hard to prove it. What's in it for you?

All I did was illustrate a couple of examples that I personally experienced that drove me online and away from my preferred option to shop local. If bricks and mortars can afford to do that to customers who are willing to meet them half way then fine. But no complaints about how they aren't supported.

As to your question. Sectors.. I don't know. Individual businesses definitely yes. Some read the writing on the wall and adapt. Others cling to the hope things will stay the way they used to be.

Here's a good example. How many traditional cyclists on this forum have a negative perception of e bikes - quite a few. Now imagine the economic impact, with sales of e bikes making up a huge proportion in total bike sales growth, of having an owner or staff member bad mouth e bikes (and people who ride them) around the shop. Pretty easy to see that happening in small traditional mom and pop shops. They won't see the value, invest in learning, stock material or support riding...

Either adapt and change or lose out on an area of growth just like ignoring the internet means losing out there.

downhillmaster

daviddavieboy

IMO a lot of this can be helped by customer service (not mechanical but personal). In my area there are a few shops. At one the service is excellent but they only carry low end new parts and serve the used market. At the two others they are the typical shops but each have employees that are 'difficult' to deal with yet I still give them both my business because I know the owners well and just have to side step those 'difficult' employees.
As a truck driver I am fortunate that I have found many good shops across the USA and Canada that have helped me and when in the area I visit them even just to browse and say high.

What is this crisis you talk about? Papa Wheelies is one of my faves, 4 miles from the truck stop in Maine.

Sy Reene

Maybe a bit to Happy Feet's point, though he used a UK online place to start as his example, is to take a look at US examples of places that have a local (non-chain) physical presence, and have an online presence. I've found 'good deals' from time to time at all of these places. Places like Brands, for many items, loke like they may be basically fronting for the distributors themselves. Eg. look up a Giant wheel - ships in 3 days from Giant's warehouse to your home. Point being, there's apparently a way to create an online presence, using the preexisting online capabilities offered by distributor system and not requiring a local place to actually warehouse all of the inventory themselves. If for whatever reason, causing customer dissatisfaction, the process the LBS has to get items from same distributor to the store takes longer, and asks the customer to come back XX days later, this can be a simpler solution for the LBS rep to suggest to the walkins (even better -- offer use of the store's online ordering kiosk laptop or somesuch).

https://www.brandscycle.com/
https://www.excelsports.com/
https://www.universalcycles.com/
https://www.cyclefastusa.com/

Dan Burkhart 

Which truck stop? The only one I ever found in that part of the country that I really liked was Dysarts in Bangor. One of my favorite stops anywhere on the continent.

tclune

Yes. At least in the Northeastern US, small independent book stores are coming back to life. My sense is that, with the bricks and mortar presence of Borders and the like in decline, a viable niche has emerged for the independents to provide a community center for book lovers. Amazon may still get the volume business (no pun intended) and be the seller of first resort for hard-to-find books, but there is a real need for a gathering place of like-minded souls that can best be filled by a RL presence.

livedarklions

I'm in NH. I have seen none of that comeback--just some independents that have clung on. But I agree that the ones that have have done so by emphasizing the social aspects. A lot of them really feel like they're coffeehouses that sell a few books. In any event, their numbers are tiny compared to what they were a couple decades ago, and the numbers of books on their shelves absolutely minuscule compared to the pre-Amazon era .

The LBS I've seen doing well in the past decade and a half have done so by emphasizing service, personalized bike sales, and/or social aspects. Their websites are geared towards getting people into the stores, not buying stuff online for quick pickup or delivery.


Anyway, the strategy to dealing with online retailers seems to be the same--don't focus on trying to compete directly with them because you can't win that fight without massive investment and transformation of the business. Focus on the advantages a local personal presence can offer.

mr_bill

Back Bay Bicycles announced that they lost their lease and were closing a few years ago. There was much rejoicing when they found their lost lease and remained at their basement location.

They then purchased the stock and fixtures of the Cannondale Sports Cambridge location, and purchased the Cannondale Sports Natick Location to reopen as Boston Bicycles.

So they had Back Bay Bicycles (in the Back Bay), Boston Bicycles (in Natick) and Papas Wheelies (in Portsmouth, NH). They changed the name of Boston Bicycles to Papa Wheelies, and very recently changed the name of Back Bay Bicycles to Papa Wheelies. The good news if you search for Papa Wheelies in Boston google maps will find it, but calls it Back Bay Bicycles.

BTW, CrimsonBikes recently moved into the empty Cannondale Sports location in Cambridge. (They have a fascinating story of backing into bike retail.)

All is not rosy in the LBS scene however. We lost Hub Bicycle, a service only shop a couple of years ago. They gave up a career as a bike shop owner and are starting a career as an illustrator/designer.

-mr. bill