Is there space for non franchised bike shops ?

[forgotten1]

This is an interesting question. I have frequented lots of shops over the years, from all those around Somerset West where I now live, and back to Jo'burg and the North West where I lived for 9 years. From what I hear most shops make very little on selling new bikes, even the franchises, and rather make their money on other merchandise, and the service side of the shop. I think there are some though that do make money on bikes, those that are able to pay for their bikes in cash up front. They get good discounts from the suppliers, and are able to pass these on while smaller enterprises buy on terms and have to sell at full sticker price. Dealing with the guys who pony up front, and there is a very well known bike shop in Rustenburg who I still transact with that does just that, it's amazing the difference in the price of bikes.

But saying all this, having a good relationship with a bike shop that services one's bike properly, doesn't try to rip you off, gives good technical advice and is always there for you is invaluable and I always go back to them. Fortunately the shop in Rustenburg was exactly like that, and down here in Somerset West I have found 2 shops that are great, while there are one or 2 others that can leave a sour taste at times. Case in point, I needed to replace a brake lever on my son's bike broken in a fall. Shop1 - assures me Shimano don't supply just the lever, you'll need to buy a whole set. Oh, and we just happen to have a set right here. Didn't sound right to me so off to another one down the road - no problem we can order the lever from Cool Heat for a 1/4 of that price, except Cool Heat couldn't deliver in time for a race. One phone call later, shop in Stellenbosch has it, rush there but the wrong side. Phone around, land up at Chris Willemse in Durbanville and buy the lever over the counter for a good price.

So, long story short, LBS's can compete, just get it all right and you will keep your customers.

[Edge_Design]

Agreed, but will ad that many of these have also been around for a long time.

Rather than asking if there's place, perhaps we should ask if there's place for more.

I think opening a "non franchised" store could be quite challenging albeit not impossible.

The big brands have largely gone concept and that's where most will flock.

 

That is where my next sentence comes in - "Unfortunately there also isn't space for every single person who once rode in the A group in the Argus to open their own bike shop with R100k they borrowed from their parents. "

 

Just because you are a cyclist doesn't mean you will be good at running a bike shop - you need a lot more than that. If you have what it takes then you will find your niche and probably be very successful. If you think running a shop just involves finding premises, stocking a few brands and hiring a mechanic then you're in trouble - you have to differentiate yourself so you aren't just competing head on with people that have much deeper pockets than you do. Quality of service just seems like the only logical place that a new entrant can compete - many of the well established "independents" offer even worse service than the franchise stores (one well known and highly successful store in the Southern Suburbs of CPT springs to mind immediately).

[forgotten1]

Nice post. However...I own a shop and believe me its not as easy and as rosey as everyone thinks. The whole perception that the shop paying upfront getting a better price is so far from the truth its a joke. Max 2.5% discount on cash paid for stock on delivery. Then you sit...and wait for someone to buy it. And if you stock the same brand as the big franchise store that matches price, then you are literally screwed. And end up selling that particular bike almost at cost just to move it. But at least you had it on your floor and made your shop look cool and represents a brand.

Online is killing us. I would love to be able to sell my parts/accessories at the same price as CWC or Chain Reaction. But its impossible. Most of the time CWC is cheaper than my cost. I dont blame people for going online.

As for the workshop, yes its where in theory you should make most of your money. But ethically I wont charge a R500 amount to fit parts that were bought online. I charge accordingly. Because if I did charge a heavy amount to fit online purchases, I would be flamed and that negatively effects your business.

Believe it or not...people lie as well. They take chances. I had a customer blame me for a broken part in his bike that was fitted over a year ago. But after close inspection and a little detective work, he had frequented 3 other shops that had worked on his bike in that time while my workshop was busy. Any "continuance" he had with my workmanship was out the window. And it is sad because (A) I am flamed to everyone he knows and (B) very few of those people will hear our side. But the truth is a lost customer.

As to the original post...can a shop survive as a non franchised store? Yes. But it takes a lot of work. The big franchises dont come cheap. Believe me. I take my hat off to the smaller guys, because its hard work. It saddens me to see shops closing.

This industry is mind bogglingly complex and difficult. But I have a passion for it and hopefully that is the difference between staying open and closing up shop...because right now thats all I have going for me.

[100Tours]

I might be missing something, but I'm only aware of the Spesh 'franchise' stores. So until the other manufacturers get their own store chains underway I'm not sure that this is even an issue. Am I wrong here?

 

There is no Pinarello franchise store I'm aware of, or Cannondale, or Trek, Giant, etc. Having their own stores (and at least 10 years of good service from Spesh SA) has driven up the number of Specialised bikes in the market, so this has been a good strategy for them, but I don't think they have yet threatened the non-franchise market.

[forgotten1]

All the shops mentioned are associated to a bike brand (and some to a few). In a few years the likes of Giant, Scott, Trek will be HQ controlled in a similar way Specialized is currently. Consumers want clear standardized retail prices and stock available on the interwebs, there are very few agencies that are matching the stock and service levels of real local representation. Agencies simply cannot carry the stock levels in all the sizes and models offered by the big brands internationally, so it is logical that the big brands will be doing their own brand management locally in the near future. Stores will get consignment stock that needs to move in a certain time, or risk it being reallocated to a different dealer (much like the motor industry) which will free up capital for these owners, but it will come at a cost. They will have to conform to the brand identity they are selling and will have to agree on a pricing model, service levels and exclusivity to a certain extent.

 

 

Sent from my iPhone using Tapatalk Pro

[forgotten1]

Consignment stock? Whats that?!

[the nerd]

For me personally I don't set foot in a franchise bike shop. 

[The Ouzo]

That is where my next sentence comes in - "Unfortunately there also isn't space for every single person who once rode in the A group in the Argus to open their own bike shop with R100k they borrowed from their parents. "

 

Just because you are a cyclist doesn't mean you will be good at running a bike shop - you need a lot more than that. If you have what it takes then you will find your niche and probably be very successful. If you think running a shop just involves finding premises, stocking a few brands and hiring a mechanic then you're in trouble - you have to differentiate yourself so you aren't just competing head on with people that have much deeper pockets than you do. Quality of service just seems like the only logical place that a new entrant can compete - many of the well established "independents" offer even worse service than the franchise stores (one well known and highly successful store in the Southern Suburbs of CPT springs to mind immediately).

The same can be said for any business actually.

[The Ouzo]

Nice post. However...I own a shop and believe me its not as easy and as rosey as everyone thinks. The whole perception that the shop paying upfront getting a better price is so far from the truth its a joke. Max 2.5% discount on cash paid for stock on delivery. Then you sit...and wait for someone to buy it. And if you stock the same brand as the big franchise store that matches price, then you are literally screwed. And end up selling that particular bike almost at cost just to move it. But at least you had it on your floor and made your shop look cool and represents a brand.

Online is killing us. I would love to be able to sell my parts/accessories at the same price as CWC or Chain Reaction. But its impossible. Most of the time CWC is cheaper than my cost. I dont blame people for going online.

As for the workshop, yes its where in theory you should make most of your money. But ethically I wont charge a R500 amount to fit parts that were bought online. I charge accordingly. Because if I did charge a heavy amount to fit online purchases, I would be flamed and that negatively effects your business.

Believe it or not...people lie as well. They take chances. I had a customer blame me for a broken part in his bike that was fitted over a year ago. But after close inspection and a little detective work, he had frequented 3 other shops that had worked on his bike in that time while my workshop was busy. Any "continuance" he had with my workmanship was out the window. And it is sad because (A) I am flamed to everyone he knows and (B) very few of those people will hear our side. But the truth is a lost customer.

As to the original post...can a shop survive as a non franchised store? Yes. But it takes a lot of work. The big franchises dont come cheap. Believe me. I take my hat off to the smaller guys, because its hard work. It saddens me to see shops closing.

This industry is mind bogglingly complex and difficult. But I have a passion for it and hopefully that is the difference between staying open and closing up shop...because right now thats all I have going for me.

Thank you for the feedback. Its good to hear from an actual store owner what the perils of doing business are.

 

Do you think if you had a coffee shop or the likes as part of the shop that it would help ?

[droo]

That is where my next sentence comes in - "Unfortunately there also isn't space for every single person who once rode in the A group in the Argus to open their own bike shop with R100k they borrowed from their parents. "

 

Just because you are a cyclist doesn't mean you will be good at running a bike shop - you need a lot more than that. If you have what it takes then you will find your niche and probably be very successful. If you think running a shop just involves finding premises, stocking a few brands and hiring a mechanic then you're in trouble - you have to differentiate yourself so you aren't just competing head on with people that have much deeper pockets than you do. Quality of service just seems like the only logical place that a new entrant can compete - many of the well established "independents" offer even worse service than the franchise stores (one well known and highly successful store in the Southern Suburbs of CPT springs to mind immediately).

 

The only thing I can add to this is that trying to be all things to all people will make you average at everything. Find what you're good at and stick to it, and don't be scared of turning away work that's not in your immediate ambit (although it does help to have a network to refer these cases to.)

[forgotten1]

Ouzo...I do actually have a coffee shop, albeit a very basic one. I have a very different approach to business. I am first in and last out. I do all my purchases and monitor all my stock. The coffee shop is busy for 3 hours twice a week. I am a destination store, so the coffee shop is basically only there for the cyclists.

My road bike is 20 years old. I bought my own MTB from "myself" because it was stock that wouldnt sell and had been replaced with a newer model. (2016 alu model with SLX) I dont push my bike to the front of the queue in the workshop either. A lot of people ask my why I dont ride the top stuff to show it to customers. Simple. Coz it costs a fortune. I dont get it for free!

My customers always come first. I try and be everything to every customer...but that never works.

I honestly wish everyone could see what goes on behind the scenes and what is required from suppliers. It is not easy. I am not complaining, I sell bikes and my workshop is always busy. But its not easy...cyclists, we are a special breed!!

[M L]

Ouzo...I do actually have a coffee shop, albeit a very basic one. I have a very different approach to business. I am first in and last out. I do all my purchases and monitor all my stock. The coffee shop is busy for 3 hours twice a week. I am a destination store, so the coffee shop is basically only there for the cyclists.

My road bike is 20 years old. I bought my own MTB from "myself" because it was stock that wouldnt sell and had been replaced with a newer model. (2016 alu model with SLX) I dont push my bike to the front of the queue in the workshop either. A lot of people ask my why I dont ride the top stuff to show it to customers. Simple. Coz it costs a fortune. I dont get it for free!

My customers always come first. I try and be everything to every customer...but that never works.

I honestly wish everyone could see what goes on behind the scenes and what is required from suppliers. It is not easy. I am not complaining, I sell bikes and my workshop is always busy. But its not easy...cyclists, we are a special breed!!

I take my hat off to you for dealing with people in a customer centric business..

 

And thanks for your input! The grass always seems greener until you peek over the wall.

[The Ouzo]

Ouzo...I do actually have a coffee shop, albeit a very basic one. I have a very different approach to business. I am first in and last out. I do all my purchases and monitor all my stock. The coffee shop is busy for 3 hours twice a week. I am a destination store, so the coffee shop is basically only there for the cyclists.

My road bike is 20 years old. I bought my own MTB from "myself" because it was stock that wouldnt sell and had been replaced with a newer model. (2016 alu model with SLX) I dont push my bike to the front of the queue in the workshop either. A lot of people ask my why I dont ride the top stuff to show it to customers. Simple. Coz it costs a fortune. I dont get it for free!

My customers always come first. I try and be everything to every customer...but that never works.

I honestly wish everyone could see what goes on behind the scenes and what is required from suppliers. It is not easy. I am not complaining, I sell bikes and my workshop is always busy. But its not easy...cyclists, we are a special breed!!

I'm in the motor industry, trust me, I know the pains when it comes to customer expectations.