As a small bicycle shop owner, please allow me to comment. On a 40% markup, one is lucky to clear around 8-10% after all overheads are paid. On big ticket items such as bicycles, the recommended retail price gives us around a 35% markup. When one takes into account giving customers discounts and paying 5% to the credit card machine, etc., your gross profit turns out to be between 20-25%, which dramatically reduces your return. Unless you are a large super store selling a lot of volume, it is almost better to keep your money in the bank. What you cannot put a value on, however, is the interaction with cyclists and being part of the sport - this is why most of us do what we do. In principle, I have no problem in what CWC is doing, everyone should be free to buy where they wish. If one actually looks at the CWC website, the range being imported is actually quite small in comparison to all of the lines that we and other dealers carry, so it seems a little unfair to say that CWC will be the death of the LBS. There will always be a place for online shopping, but there is also a place for the LBS, who will give you direction and advice, fit that broken spoke 5 minutes before we close, battle with a distributor of a customer's warranty issue, pickup a bike or do a drop off outside of the shop's hours and a whole host of customer services that an online service cannot provide. To some people paying a "markup" on product is worth it to have the added services - to some people it is not - and that is the same in almost every industry. Believe me, I wish the cost of cycling would come down and make it more affordable for the public, as this the formula for increasing revenue for everyone! When wholesale prices go up, we also suffer through lack of sales.
