Start a Bike Shop

[PhilipV]

General comment: 

If you are  asking entrepreneurial questions, ask an entrepreneur. 

There are two ways of looking at a problem. The one viewpoint sees all the pitfalls, the other is looking for a creative solution. Listen to wise counsel. 

You'll need  to think way out of the box to procure stock in a time of shortage where suppliers will honor their existing customers first. Maybe partner with a shop in another area. get access to their suppliers, either for a nominal cut or to combine buying power or something like that. 

 

 

[DIPSLICK]

luckily I am not in the cycling industry, my 2C as a business owner if you do not know the answers to get the product already,,,

and you do not know the politics around wholesale distributors and the actual obscene money that is needed to get a wholesaler to pay attention you need to be more active in the industry and you are in for some school fees,,,,,,, YOU are your brand when you starting a new business you should already have some connection some "brand" value,,, as in networking hands on BRAND value

 

that is not built up with emails and promises of what you want to do and what you think you might have to offer

 

if you want a small base of customers who are looking for personal attention and you offer "something extra" THOSE CUSTOMERS UNDERSTAND THAT COME AT A SLIGHT PREMUIM and you then start building your brand, if you as good as you think, you build it up from there,

 

 

 

[Edereese]

32 minutes ago, DIPSLICK said:

luckily I am not in the cycling industry, my 2C as a business owner if you do not know the answers to get the product already,,,

and you do not know the politics around wholesale distributors and the actual obscene money that is needed to get a wholesaler to pay attention you need to be more active in the industry and you are in for some school fees,,,,,,, YOU are your brand when you starting a new business you should already have some connection some "brand" value,,, as in networking hands on BRAND value

 

that is not built up with emails and promises of what you want to do and what you think you might have to offer

 

if you want a small base of customers who are looking for personal attention and you offer "something extra" THOSE CUSTOMERS UNDERSTAND THAT COME AT A SLIGHT PREMUIM and you then start building your brand, if you as good as you think, you build it up from there,

 

 

 

Spot on!

[Nuffy]

I agree with most of what’s been said, but will add that there are some distributors that are a lot more understanding and helpful to the small players and newcomers. Start with them and build from there. Some of them offer more obscure brands and niche products that might help you distinguish yourself in a very competitive market. Keep working on building those relationships, and eventually you’ll either realise it’s not going anywhere or hopefully have something that you can show to the other distributors and get noticed. Network within the industry as much as you can through whatever means you can, even if it’s not directly related to the retail side. Emails will get ignored, so you’ve got to have another reason for a brand or distributor to pay attention to you. Because there is such demand at the moment it might seem like a great business opportunity, but you’ve got no chance of competing against the established players for product, so you’ve got to be in it because you love the sport and industry and can offer something that your target market appreciates and will pay for. Good luck!

[love2fly]

I used to work for one of the aforementioned suppliers wanting huge first orders. I also used to work in big business and understand that things we don't often consider also cost money: Loading you onto their B2B (costs suppliers time and their hosting service provider charges them per user), every invoice, credit note, courier slip and picked order costs money so I can get why they have min. 1st orders BUT, the guys I worked for were ridiculous in wanting I think up to 8k for a first order and I was told that one of the major groupset brands dictate the value of the first order, which is way higher than 8k plus the items you will buy......

 

To suppliers it makes sense to deal with as few customers as possible, while never allowing one customer to become so large they can dictate to the supplier.

I was chatting to someone about this the other day and agree with an earlier post about rather opening a restaurant during COVID - Unless you have a unique location, stay well away. Even if you get exclusivity on a great brand, the cycling landscape in SA is so massively overtraded in respect of outlets/turnover or profit R its scary, Consider what cash you have to outlay on bikes to ensure you have what people want/need on top of all the components to satisfy the matrix of component standards.............PLUS, when you exclude CL, Trek & Spez, there are not too many brands left and in my opinion not enough to deliver the kind of ROI to make it worthwhile.

[The Ouzo]

11 minutes ago, love2fly said:

o cost money: Loading you onto their B2B (costs suppliers time and their hosting service provider charges them per user), every invoice, credit note, courier slip and picked order costs money so I can get why they have min.

This just sounds like excuses to me. The above is not unique to cycling equipment suppliers, yet suppliers in other industries have found ways to make it work.

To me it sounds like collusion and protection of existing customers.

[Mountain Bru]

Guys I think the OP has left the chat 

[gerriemtb]

Just now, Mountain Bru said:

Guys I think the OP has left the chat 

Don't come and throw your Hub Police weight around here!

[Mountain Bru]

3 minutes ago, gerriemtb said:

Don't come and throw your Hub Police weight around here!

Don't make me call for back up..... 

[Eddy Gordo]

5 minutes ago, ouzo said:

This just sounds like excuses to me. The above is not unique to cycling equipment suppliers, yet suppliers in other industries have found ways to make it work.

To me it sounds like collusion and protection of existing customers.

This right here. In the current industry I am in, we have 2 suppliers that did not want to supply us with stock. Made all sorts of excuses and then eventually found out because of another store 5km away from us. We made it clear that they 5km away. Since covid, things have changed and we buy cash. Then we also tried buying from another industry supplier altogether. The industry they supply has nothing to do with what we do. But they say straight out that the need to protect their retail customers, which I respect and understand why. In our industry the distributors think nothing of supplying any one instead of directing to the nearest store and keeping the store in business.

[Jewbacca]

This Hub Police posse is a bit close to the old bully brigade that was the sherriff and his gang... I'd disband ????

 

[The Ouzo]

12 minutes ago, Eddy Gordo said:

In our industry the distributors think nothing of supplying any one instead of directing to the nearest store and keeping the store in business.

this I understand can be a problem, and with Johnny customer being able to buy a shelf company and then wanting to buy direct from the supplier instead of through retail stores it can be very difficult to manage. But with some creative thinking a solution can be had that will allow start-up bike shops to get going

[ChrisF]

2 hours ago, ouzo said:

This just sounds like excuses to me. The above is not unique to cycling equipment suppliers, yet suppliers in other industries have found ways to make it work.

To me it sounds like collusion and protection of existing customers.

In the engineering sector we encounter "both" sets of thought on a daily basis :

- real competition - the suppliers fight for market share.  Typically NOT by cutting prices, but by upping their service levels.  GOOD !!

- limited suppliers for specialist goods - service levels drop, and prices go up and up ....

 

 

With geo-locking we are at the mercy of a few importers for the bulk of our goods .... this industry have had its sessions at the competition commission for good reasons ....

 

The average shop cant order in each projects parts, nor can they stock each and every component, so they dont have the luxury of the weekend builder that imports their own parts.

[DieselnDust]

starting a bike shop.... joh! Brave!

There is a no right way and a lot of wrong ways. 

Distributors want surety that you're legit and in it for more than a few months. The reason is simple., they need to work your product demand into their demand plan with the brands they represent. Those demand plans(lies and guesses) are often submitted 12 to 15months in advance.

They also ask for a huge firs order because consignment stock just never works unless you can present a really good business case.  Generally you buy your own stock. I sat down a with a pal of mine in 2017 to help him navigate his way through opening a store in Waterfall.. It was a success but it took the better part of a year for that to be measured. So you need the ability to carry yourself for at least 12months Contacting the right people is no guarantee of supply, there are just too many bike shops out there for distributors to service and when one or two don't pay bills.....

Most offer 30days payment terms, if you look respectable. You may get 60 if you have a great concept in a great location. No one gives 90 days any longer unless you have 10 yr history and buy huge quantities.

Biggest problem with starting a new bike shop is the cartel of old bike shops that manipulate the distributors to play nice to them and make it hard for new entrants. Oh yes that cartel is alive and well, they're just not dumb enough to post the minutes of their meetings on Bikehub any longer

 

Edited August 18, 2021 by DieselnDust

[Hairy]

6 minutes ago, DieselnDust said:

starting a bike shop.... joh! Brave!

There is a no right way and a lot of wrong ways. 

Distributors want assurity that you're legit and in it for more than a few months. The reason is simple., they need to work your product demand into their demand plan with the brands they represent. Those demand plans(lies and guesses) are often submitted 12 to 15months in advance.

They also ask for a huge firs order because consignment stock just never works unless you can present a really good business case.  Generally you buy your own stock. I sat down a with a pal of mine in 2017 to help him navigate his way through opening a store in Waterfall.. It was a success but it took the better part of a year for that to be measured. So you need the ability to carry yourself for at least 12months Contacting the right people is no guarantee of supply, there are just too many bike shops out there for distributors to service and when one or two don't pay bills.....

Most offer 30days payment terms, if you look respectable. You may get 60 if you have a great concept in a great location. No one gives 90 days anylonger unless you have 10 yr history and buy huge quantities.

Biggest problem with starting a new bike shop is the cartel of old bike shops that manipulate the distributors to play nice to them and make it hard for new entrants. Oh yes that cartel is alive and well, they're just not dumb enough to lost the minutes of their meetings in Bikehub anylonger

 

I knew a bike shop in town who encountered a big name bike shop that put pressure on a brand he carried to be taken off this floor as he was selling the bikes at a low price point that other lot could not match. Good guy gets legal eagle involved, and not too long afterwards the brand is back on the floor and not too long afterwards the big name shop leaves the CBD.

This big name shop only had one knowledgeable staff member with rest being really short on knowledge and drive to learn.

I miss the old good guy shop who eventually closed his doors again. That same brand that was on his floor then opened a concept store down the road a couple of months later. With average at best levels of service and a shocking workshop. Our whole commute group no longer visits this store since their workshop messed up many of our repairs every time..

[Kingg]

On 8/16/2021 at 7:57 PM, Christian nieman said:

I feel people rather like buying and getting their bike serviced where they have a more interactive experience with the owner, this is my personal opinion 

I agree with you there, it's more about the experience and customer service. I say this because I got 3 bikes shops within the distance of 14km, one being 4km away, the other 8km but I always go to the one thats 25km away, because it's about the experience and understanding I have with the owners and their mechanics. Another reason is having better and all equipment and tools. They also have a much better shop which gives it a welcoming and comfortable feel.