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When Performance's Going Out of Business Prices Are More Than Online Store Prices ...

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When Performance's Going Out of Business Prices Are More Than Online Store Prices ...

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Old 12-22-18, 10:43 PM
  #26  
CliffordK
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Originally Posted by cb400bill View Post
I can't speak of every store, but a couple years ago a near to me LBS changed their name to Trek Bicycle Store. However, they are under the same local ownership. https://www.battlecreekenquirer.com/...tore/90852866/
Hopefully they won't follow the Schwinn Bicycle Store model.

Since Trek/Bontrager have vertically expanded, putting their name on almost everything they sell, that may be a dangerous proposition for a store. Yes, limited inventory, but what if a customer really doesn't want Bontrager?
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Old 12-23-18, 07:13 AM
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Originally Posted by raria View Post
Any thoughts on why? And where did you read this?
I think it's observational, as it's difficult to find anything where Trek acknowledges this. In my area, Trek purchased a bunch of Danny's cycles; so in NYC Manhattan alone, we now have 4 Trek Bicycle stores

https://www.dannyscycles.com/about/u...side-pg252.htm
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Old 12-23-18, 08:05 AM
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Originally Posted by Zaskar View Post
ALL of the Performance stores are closing - even the top stores.
They are saying ('cause I think they believe it to be true) that they will NOT remain as an online retailer.
This is correct. Initially my local store employees were told, they were to remain open. Then literally a few days later they were told no your closing.

When you say "they will not" do you mean performance, nashbar or ASI?

Originally Posted by CliffordK View Post
Hopefully they won't follow the Schwinn Bicycle Store model.
I really hope no good American company follows that model. The whole idea of having ultra cheap Schwinn bikes at Walmart and then top end ones at bike stores was confusing to everyone. ironically Schwinn did put some nice Schwinn bikes at Walmart (I owned one and it was a well designed non-BSO for $270 at Target. But no one appreciated it since it was a Schwinn at Target ....
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Old 12-25-18, 12:23 AM
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I spoke with the managers of two performance shops in my general area and both said that an auction on January 15th will dictate which stores close and which stay open. I don't know if Performance or their parent company have submitted their Chapter 11 reorganization plan. It could be submitted after the auction based on the results of the auction, investor interest, etc. After, or soon after, January 15th we'll know what the future holds for Performance and its sister corporations.
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Old 12-28-18, 05:02 PM
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Originally Posted by raria View Post
I still dont know what's going on with Nashbar. Is that going out of business or scaling back or effected by this bankruptcy?
Nashbar filed for bankruptcy on 11-19-2018
https://businessbankruptcies.com/cas...bar-direct-inc

and apparently, they're all tied together:

https://www.bicycleretailer.com/indu...ile-chapter-11

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Old 12-29-18, 11:08 AM
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Originally Posted by noodle soup View Post
I buy these whenever I place an order. It's hard to beat $1.99 each.

https://www.chainreactioncycles.com/...rod155230?mx=a
I might have to start stocking the store using tubes from them.

My Wholesale on tubes ranges from $1.25-$4.99 depending on what the tube is for the most part. Cheapest no name branding is usually in the $1.25-3.00 range at wholesale.

At my shop I charge a flat $5 a tube. Walmart here is $4-$5/tube. The people that buy tubes from me are not people who have the luxury of shopping and buying tubes on the internet. They are people with flat tires.

Regardless - if anyone thinks $5 for a tube is highway robbery - we charge $10 in labor to swap it. :OMG: $15.45 out the door with tax for a tube and for me to swap it. Number of times people opt for that? All of the times. Number of people who think it's a bargain? Vast majority. Number of people who say I'm "cheaper" than everyone else or what they expected? ~80% (Statistically proven using 4 terabytes of raw data).

Based on the above I'm hoping some of you are beginning to understand that you (collectively) really, really aren't the brick and mortar bike shop's customer. This includes the Performance brick and mortar bike shops.

Keep in mind average margins for P&A in shops is 40%-80% and most average ~60%. That means a tube they paid $2 should be sold for $5.

I also sell coffee. Most expensive part of my coffee is the cup, lid and sleeve. By far. Still we sell it with a roughly 70-80% margin (we are super low volume). Armchair business people flip at that. OMG That's usury! No....that's $2 in profit. $2. My monthly rent is many times that $2. Gross margin, in this context, is meaningless.


Oh - and yeah I have had 2 different industry guys go check for deals in the stores that are definitely closing and there are absolutely zero. Really just a play by the liquidation company to get the most they can and play to the customer that sees a "SALE" sign and thinks they are saving. Can't fault them....but at the end of the day what were any of you really trying to get there? a handful of consumables? Meh.
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Old 12-29-18, 11:13 AM
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Originally Posted by WizardOfBoz View Post
Nashbar filed for bankruptcy on 11-19-2018
https://businessbankruptcies.com/cas...bar-direct-inc

and apparently, they're all tied together:

https://www.bicycleretailer.com/indu...ile-chapter-11
Didn't click the links but hoping they cover it - Yeah - Performance and Nashbar have been the same company since 2000. That was really well established knowledge on this forum back in the day. I am starting to sense all of us old guys left and there's a bunch of young kids here who are now like, "My whole life has been a lie!!!"
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Old 12-29-18, 01:48 PM
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Originally Posted by Psimet2001 View Post
Didn't click the links but hoping they cover it - Yeah - Performance and Nashbar have been the same company since 2000. That was really well established knowledge on this forum back in the day. I am starting to sense all of us old guys left and there's a bunch of young kids here who are now like, "My whole life has been a lie!!!"
Nah, I'm probably as old or older than you. Difference is that you've been paying attention. Sigh.
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Old 12-29-18, 02:06 PM
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Originally Posted by WizardOfBoz View Post
Nah, I'm probably as old or older than you. Difference is that you've been paying attention. Sigh.
HAHAHA - no I meant in terms of time on this forum. I do still like being called the young one though. While listening to my Father-in-law try to give me basic life advice, unsolicited, once again I finally said, "You realize I'm damn near 50, right? At what age do I officially become an adult?"
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Old 12-29-18, 03:52 PM
  #35  
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Originally Posted by Psimet2001 View Post
I might have to start stocking the store using tubes from them.
Keep in mind average margins for P&A in shops is 40%-80% and most average ~60%. That means a tube they paid $2 should be sold for $5.
.
A $5 sale against a $2 cost is $3/$2 or a 150% margin percentage, no? Nevermind.. I'm thinking of markup.

Last edited by Sy Reene; 12-29-18 at 03:55 PM.
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Old 12-29-18, 04:42 PM
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Originally Posted by Sy Reene View Post
A $5 sale against a $2 cost is $3/$2 or a 150% margin percentage, no? Nevermind.. I'm thinking of markup.
Incorrect and correct. yes - You are thinking of markup. When I sell something for $5 and it cost me $2 then I had a 60% margin on that sale. Very uncommon in any retail nowadays unless it's on weird niche or low dollar items.

Some reference....

I have seen automotive parts OEM sales to distributors in the 15% margin range (made up on volume)
I have seen heavy industrial margins in the 200%-400% range
Big Box retail Lowe's when I was in management at one eons ago was daily in the 24-28% margin range
Bike shops - at least according to the last major study before the 2008 collapse of life as we knew it was 34-36%.... but that was before everyone was sending electronic money to Europe to save $3 on a tube
Labor in shops - it's all margin....contribution margin towards labor overhead that is...
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Old 12-30-18, 01:18 PM
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Years ago, a man I knew ran a sizable (and profitable) coffee business, the kind where they delivered coffee and coffee machines to area businesses on a regular basis. He mentioned that he could go down to the local Super Saver store and buy coffee cheaper than he was buying wholesale for his business. Moral from that is that sometimes things are just goofy and make no sense on how the pricing structures get set up.

A prominent local bike store just closed (last day yesterday, in fact). I think they were winding up selling less but then doing service on internet sale bikes. They didn't go bankrupt, just got out of business. I'm thinking maybe the way to do it is to run a business for bike service only, with sales part sales as required, rather than trying to run a bike shop itself.
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Old 12-31-18, 11:00 AM
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Originally Posted by StephenH View Post
Years ago, a man I knew ran a sizable (and profitable) coffee business, the kind where they delivered coffee and coffee machines to area businesses on a regular basis. He mentioned that he could go down to the local Super Saver store and buy coffee cheaper than he was buying wholesale for his business. Moral from that is that sometimes things are just goofy and make no sense on how the pricing structures get set up.

A prominent local bike store just closed (last day yesterday, in fact). I think they were winding up selling less but then doing service on internet sale bikes. They didn't go bankrupt, just got out of business. I'm thinking maybe the way to do it is to run a business for bike service only, with sales part sales as required, rather than trying to run a bike shop itself.
that’s the direction just about all of us are going if you’re still an “independent”. Meaning not trek specialized giant or other factory behemoth/single brand store under contract.
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Old 01-04-19, 06:05 PM
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That's always the pattern at store liquidations. When you see the screaming yellow %OFF! signs go up, that signals the official end to almost any good deals. Picked over merchandise, stores full of misguided bargainhunters, and long lines at cash registers. See: Sears, Kmart, many others.

RIP Performance and Nashbar! I've built up several bikes over the years primarily using frames and components from both Performance stores and Nashbar online. Good value from both, with the caveat of the slowest shipping ever from Nashbar!
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Old 01-05-19, 07:56 PM
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Originally Posted by CliffordK View Post
Right, I was looking in the wrong place.

https://www.wiggle.com/lifeline/inner-tubes/

So, order 10+ of them, and get a 15% discount, bringing the price down to about $1.69 each.
thanks for the heads up on wiggle.com. i think we need a good thread on what will replace nashbar as our go to online bicycle company.

anyone want to start such a thread? or is there one already?
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Old 01-05-19, 08:42 PM
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Originally Posted by Duo View Post
thanks for the heads up on wiggle.com. i think we need a good thread on what will replace nashbar as our go to online bicycle company.

anyone want to start such a thread? or is there one already?
there are probably 15 different sites that I consistently come across. I looked at them when nashbar was around though too since nashbar was good for really random things, but terrible for a lot of things(as in didnt carry) that an online retailer should carry.

why shop just one online site? That seems counterintuitive to online shopping.
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Old 01-06-19, 06:54 PM
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Originally Posted by mstateglfr View Post
there are probably 15 different sites that I consistently come across. I looked at them when nashbar was around though too since nashbar was good for really random things, but terrible for a lot of things(as in didnt carry) that an online retailer should carry.

why shop just one online site? That seems counterintuitive to online shopping.
i look at a few sites, amazon being another. sad to see nashbar go, and its decline over the years.

one stop shopping appeals to many of us who are busy, and not big dollar shoppers. free shipping is great but they require a minimum for that too.
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Old 01-07-19, 01:54 PM
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Originally Posted by Sy Reene View Post
I think it's observational, as it's difficult to find anything where Trek acknowledges this. In my area, Trek purchased a bunch of Danny's cycles; so in NYC Manhattan alone, we now have 4 Trek Bicycle stores

https://www.dannyscycles.com/about/u...side-pg252.htm
I'm glad I happened upon this thread. I was actually looking at shops in Manhattan for my work trip that will have me there next weekend. I'm kind of a trek fanboy so I was curious as to why there are so may Trek stores there. The upper West Wide location is a short walk from where I'm staying. I'll probably pop in and check it out.
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Old 01-12-19, 06:32 PM
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Stopped in to performance today, ended up picking up new bikes for my kids (teenagers, finally large enough for adult bikes) because they were actually discounted down below what I could find online for the same bikes by a significant margin. All Fuji's, and good enough for the casual riding they do. Picked up a Fuji Finest 2.5 for my youngest who wants to get into road biking with me. For $290 not bad until I see if she catches the fever or not. Definitely wasn't a lot of stuff there that would interest me, but decent options for the kids still at least.
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Old 01-15-19, 08:46 PM
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That is why they are going out of business.
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Old 01-16-19, 10:36 AM
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Oddly, even though I live in Performance land of the US.......Raleigh/Cary where the base is, I don't frequent them much for other than an emergency tube/tire.

The staff is often Walmart stupid. I tried to shop for my bike there cross shopping a Transonic and a Propel. I asked if they had a Transonic in 105 build and looked at me cross eyed and started trying to figure out what groupsets even were.

I think with rents and labor costs where they are, these type stores need to move into self-checkout like the grocery stores for the cheaper/consumables. Under $50.

Hell, Europe has tube and tire VENDING MACHINES for a long time.

I see lots of managerial oversight in brick/mortar stores also. In the middle of the day on a week day why do you need more than 2 people present in a Performance store?

I'm guessing lots of places ship bike boxes to stores to build. That's some expensive labor doing that. Why not figure out a safe/cost effective shipping method and have lower cost bike builds at a central hub?

I don't think these businesses "think LEAN", you know the manufacturing principle, when thinking about their processes.

Also, why the **** is a Performance or most any other bike shop (or most any brick/mortar) open even 10-6 on normal work weeks? The average consumer is coming in from 10-5 on a Saturday or 1 to 5 on a Sunday.

Lean that staffing and hours down. Why be open 7 days a week?

I think if you mapped sales and traffic at these stores they could whittle hours/staffing down to the below and still net 99% of their revenue:

-Friday 4:30 to 7:00 PM
-Saturday 9:00 to 7:00 PM
-Sunday 12:30 to 7:00 PM

Then have a solid website or call-in # to schedule appointments otherwise for bike viewing/fits.

For when closed, have the European vending machine of tires/tubes and cheap stuff outside the shop doors.
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Old 01-16-19, 10:42 AM
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I miss the cigarette vending machines. Add bike tubes, condoms and panties.....and a 5 hour energy drink and it'll be a hit!
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Old 01-17-19, 03:16 PM
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I'm definitely going to miss Nashbar. I bought quite a bit of "clearance" items back in 2004/2005 at great prices. I haven't cared much for them in the past few years though. Just not the same.

I'm bummed about CRC no longer selling Shimano to the States also. For a DIYer, such as myself, that really bites.
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