Start a Bike Shop

[Eddy Gordo]

52 minutes ago, MarcHD said:

Some really interesting opinions and/or experiences here so may as well add to the fire lol.

 

I've been in the industry for just on ten years as of this August.

Spent five of those ten in retail (two as the manager of a bike shop) 

One year as a sales rep for a distributor 

Last four years as a director of a distribution company I co-own, founded as a result of my decision to NOT start my own bike store after my final stint as a manager of a bike shop. More on why I didn't later...

 

Below are some insights, anecdotes and experiences that I hope are of some use to people looking to start any business or just for interest to those on the consumer end of this market.

 

Loyalty

One thing nobody touches on, probably because it's not common knowledge in the service industry is that of the cause for customer loyalty. That is to say: the reason they would come to your store instead of another or buying online. Most people tend to think it's about customer service or customer experience (CX) and as a result I see a lot of new and/or well meaning store owners bending over backwards to please customers thinking this is the answer. 

They're not completely wrong. For sure you cannot have terrible service, and it's a combination of aspects, but statistically speaking, the leading cause for customer loyalty is convenience. Yes, it's a tough pill to swallow, but the sooner people understand that most end consumers just want frictionless transactions that are on their way to work or delivered to their door for example, the less store owners will be so upset when their customer of 10 years who they thought was loyal had no problem going to another store or buying online without batting an eyelid.

Please don't get me wrong, I am not saying convenience is all that counts, I am merely saying it is the primary reason for loyalty in our current market. This is why, for example, when I was the manager of a bike shop that was located on a trail network farm and we wanted to attract repeat customers (and not just rely on post ride foot traffic), I made it clear to my staff that we need to offer the best service the customer's have ever seen due to the fact that they had probably passed 4 other bike shops on their way to us (convenience) and if they do not get the best service ever (service) while creating a memorable experience (CX) there was no way they would come back for anything other than perhaps a post ride tyre or bomb.

Long story short here is that convenience is the driving factor for a lot of consumer behavior and is both a limiting factor (bad location) but also a good motivator such as in my example above.

 

Professionalism

Before you tell me a story about how you prefer customer service and think it's essential for stores to always bend over backwards and that's why you visit store X, it's important to remember that a professional is someone who is consistent. There is no use offering 11/10 service on Monday if you are burnt out and offer 4/10 by Friday... This is the trap many smaller, inexperienced bikes shops fall into as they are [understandably] fighting for market share from the slower moving, poor service bigger stores, and this might be the case, but many of the larger stores with a good following understand this principle of being professional. That is to say consistently good.

 

Customer Experience

There is a great lesson from a book called the Power of Moments, for which the following hypothesis has since been turned into theory by further studies and data which goes something as follows: If you were to rank all your customers from a scale of 1 - 10 with 1 being the most dissatisfied and 10 being the most satisfied. It is proven that attempting to convert a customer who is a 6, 7 or 8 on this scale to a 9 or 10 is literally 9x more profitable than trying to please the 2, 3 or 4 customers and converting them to a 10.

Yes you read that right. Nine times more profitable....

The moral of the story? Again, I have seen many smaller or less experienced stores exclusively adhering to the mantra "the customer is always right" and worrying and slaving and toiling over the 2, 3 and 4's out there when in reality these people will likely be unhappy with your service and life in perpetuity. Don't waste too much time on them. You sanity, motivation and bottom line will thank you for it.

 

Price

Price is not just about price... more often than not what it really is about is value, and when customers are more and more frustrated with lack of value from dealers that offer a mediocre experience, limited knowledge, average or bad service and charge premium prices, all because it's been easy to own a bike shop with this attitude in the past.... who would blame them for buying online? Now add to this that online is increasingly more convenient AND better service (get back to you asap etc) then you can understand why it's not just about price for a lot of people. 

 

Buy ins/MOQ/Opening orders

This is common in lots of industries and as an astute/realistic Hubber pointed out already, is perfectly understandable and should be expected by prospective store owner. I won't say much more on this subject as I know it is bound to offend some people, but I do agree that some of the opening order expectations are truly obscene and one must remember that every business starts somewhere so you cannot be too demanding on the new guy. 

 

So why didn't I open a bike shop of my own? I managed a bike shop for two years with the express purpose of seeing if the experience would make me confident enough to know I could do it my self, after all, if you can manage something you can own it.

This ended up not being the path for me, mainly due to the constraints of being in a fixed location. I would still one day love to open a bike shop that uses the concepts laid out above and with perhaps delusions of grandeur I think I could change the way retail is seen in South Africa, but that is a dream for future perhaps. 

 

Hope this post was of interest to those who read it. please remember the above are relating to bell curve behavior and OF COURSE there are loads of exceptions to what I have said. If you are one of the exceptions, that's great, you're probably helping a little store grow and provide education for their kids, but please remember people are people and bell curves are bell curves for a reason. Failing to recognize consumer behavior is something one does at their peril. 

 

Cheers 

 

I can concur on most of this. 

Convenience is a major factor followed by competitive pricing and variety of stock. The minute you dont have an item, you have problems. 

The customers that are in a bad mood, unhappy etc will always be like that and def not worth trying to please them. Just assist with kindness so that they can get done and leave.

Many opinions and experiences but its not everyone. 

 

[Eddy Gordo]

2 hours ago, Mountain Bru said:

What industry is that?

I buy and sell various items to do with garment making and manufacturing.

[eddy]

2 hours ago, Hairy said:

Eddy is a male stripper!

I'm not.

 

I wanted to be a porn star, passed the theory but failed the oral. They said I had too many short comings...

 

Apologies, different Eddy????

[PhilipV]

4 hours ago, Hairy said:

Last time I chatted to someone the feeling was to drop 1mil on the table and then start from that point on.

Besides stock one has to fit out a store, secure rentals, then insurance, security, etc and money does not go far.

I reckon that sounds right for most high end retail business start ups. You can bootstrap it, but in the cycling market boot strapping doesn't look to great when compared to the concept and franchise stores.

That 1bar could probably carry the shop for the first year if you don't draw a salary and don't run into cash flow issues. 

[Mountain Bru]

3 hours ago, MarcHD said:

Some really interesting opinions and/or experiences here so may as well add to the fire lol.

 

I've been in the industry for just on ten years as of this August.

Spent five of those ten in retail (two as the manager of a bike shop) 

One year as a sales rep for a distributor 

Last four years as a director of a distribution company I co-own, founded as a result of my decision to NOT start my own bike store after my final stint as a manager of a bike shop. More on why I didn't later...

 

Below are some insights, anecdotes and experiences that I hope are of some use to people looking to start any business or just for interest to those on the consumer end of this market.

 

Loyalty

One thing nobody touches on, probably because it's not common knowledge in the service industry is that of the cause for customer loyalty. That is to say: the reason they would come to your store instead of another or buying online. Most people tend to think it's about customer service or customer experience (CX) and as a result I see a lot of new and/or well meaning store owners bending over backwards to please customers thinking this is the answer. 

They're not completely wrong. For sure you cannot have terrible service, and it's a combination of aspects, but statistically speaking, the leading cause for customer loyalty is convenience. Yes, it's a tough pill to swallow, but the sooner people understand that most end consumers just want frictionless transactions that are on their way to work or delivered to their door for example, the less store owners will be so upset when their customer of 10 years who they thought was loyal had no problem going to another store or buying online without batting an eyelid.

Please don't get me wrong, I am not saying convenience is all that counts, I am merely saying it is the primary reason for loyalty in our current market. This is why, for example, when I was the manager of a bike shop that was located on a trail network farm and we wanted to attract repeat customers (and not just rely on post ride foot traffic), I made it clear to my staff that we need to offer the best service the customer's have ever seen due to the fact that they had probably passed 4 other bike shops on their way to us (convenience) and if they do not get the best service ever (service) while creating a memorable experience (CX) there was no way they would come back for anything other than perhaps a post ride tyre or bomb.

Long story short here is that convenience is the driving factor for a lot of consumer behavior and is both a limiting factor (bad location) but also a good motivator such as in my example above.

 

Professionalism

Before you tell me a story about how you prefer customer service and think it's essential for stores to always bend over backwards and that's why you visit store X, it's important to remember that a professional is someone who is consistent. There is no use offering 11/10 service on Monday if you are burnt out and offer 4/10 by Friday... This is the trap many smaller, inexperienced bikes shops fall into as they are [understandably] fighting for market share from the slower moving, poor service bigger stores, and this might be the case, but many of the larger stores with a good following understand this principle of being professional. That is to say consistently good.

 

Customer Experience

There is a great lesson from a book called the Power of Moments, for which the following hypothesis has since been turned into theory by further studies and data which goes something as follows: If you were to rank all your customers from a scale of 1 - 10 with 1 being the most dissatisfied and 10 being the most satisfied. It is proven that attempting to convert a customer who is a 6, 7 or 8 on this scale to a 9 or 10 is literally 9x more profitable than trying to please the 2, 3 or 4 customers and converting them to a 10.

Yes you read that right. Nine times more profitable....

The moral of the story? Again, I have seen many smaller or less experienced stores exclusively adhering to the mantra "the customer is always right" and worrying and slaving and toiling over the 2, 3 and 4's out there when in reality these people will likely be unhappy with your service and life in perpetuity. Don't waste too much time on them. You sanity, motivation and bottom line will thank you for it.

 

Price

Price is not just about price... more often than not what it really is about is value, and when customers are more and more frustrated with lack of value from dealers that offer a mediocre experience, limited knowledge, average or bad service and charge premium prices, all because it's been easy to own a bike shop with this attitude in the past.... who would blame them for buying online? Now add to this that online is increasingly more convenient AND better service (get back to you asap etc) then you can understand why it's not just about price for a lot of people. 

 

Buy ins/MOQ/Opening orders

This is common in lots of industries and as an astute/realistic Hubber pointed out already, is perfectly understandable and should be expected by prospective store owner. I won't say much more on this subject as I know it is bound to offend some people, but I do agree that some of the opening order expectations are truly obscene and one must remember that every business starts somewhere so you cannot be too demanding on the new guy. 

 

So why didn't I open a bike shop of my own? I managed a bike shop for two years with the express purpose of seeing if the experience would make me confident enough to know I could do it my self, after all, if you can manage something you can own it.

This ended up not being the path for me, mainly due to the constraints of being in a fixed location. I would still one day love to open a bike shop that uses the concepts laid out above and with perhaps delusions of grandeur I think I could change the way retail is seen in South Africa, but that is a dream for future perhaps. 

 

Hope this post was of interest to those who read it. please remember the above are relating to bell curve behavior and OF COURSE there are loads of exceptions to what I have said. If you are one of the exceptions, that's great, you're probably helping a little store grow and provide education for their kids, but please remember people are people and bell curves are bell curves for a reason. Failing to recognize consumer behavior is something one does at their peril. 

 

Cheers 

 

Thanks for taking the time to share. I have no ambition to ever loose money owning a bike shop, but there are some super valuable universal principles you shared. 

For 1 - The power of convenience. I've never thought about it that much, but it's so true. There are at least 3 Postnets that are relatively close to where I stay. I always use the one that has by far the worst service because it's next to the Checkers where I do my groceries. Every single time I'm there, I have a terrible experience, hate myself for putting myself through the same torture over and over, and vow that the next time I need to send something, I'll just drive somewhere else. And flippen every time I need to send something, I end up going to the same crappy Postnet after doing groceries. I'm not a moron (I don't think), I'm just flippen lazy, and I'm not going to walk past a Postnet and drive somewhere else just to get better service. I guess the same applies to bike shops. 

I'm also lazy about calling to make a service booking during office hours. I want to be able to remember at 23:30 while I'm lying in bed that I need to service my bike, and then jump on an app and make a booking. Basically, for consumers like me, if your shop isn't on HubTiger, it might as well not exist. I wish more places would have online bookings. I have this argument regularly with doctor/medical friends that their practice should have an online booking system, and they have a 100 reasons why it won't work, but the reality is that you'll win all of my loyalty if I never have to speak to your receptionist and can make a booking online when I go to the doctor/dentist/hair dresser/car service center.

You'll also win my loyalty if you just tell me how much stuff is gonna cost in a simple, convenient way, even if it's more expensive. I can't believe that anyone goes to the trouble of "requesting a quote/price" on some online stores when other stores just tell you what stuff costs and you can order it immediately. 

 

[Mountain Bru]

3 hours ago, Eddy Gordo said:

I buy and sell various items to do with garment making and manufacturing.

Like the kind of stuff someone might need to make velcro seams in pants? ????

[Danger Dassie]

One thing to consider is that MOQ is relative. A 8-15k opening order on something like cable ferrules and alloy bolts is a lot. On workshop spares and/or accessories not so much.
On a COD account, plain stupid. Especially if only carrying niche brands where half of them (which are on the site) are being cleared because they are no longer carrying the brand. Let's compound that with restricting access to a limited time frame of approx two weeks prior to MOQ, on a COD account. 

Do me a favour .... 

[The Ouzo]

10 hours ago, Mountain Bru said:

Thanks for taking the time to share. I have no ambition to ever loose money owning a bike shop, but there are some super valuable universal principles you shared. 

For 1 - The power of convenience. I've never thought about it that much, but it's so true. There are at least 3 Postnets that are relatively close to where I stay. I always use the one that has by far the worst service because it's next to the Checkers where I do my groceries. Every single time I'm there, I have a terrible experience, hate myself for putting myself through the same torture over and over, and vow that the next time I need to send something, I'll just drive somewhere else. And flippen every time I need to send something, I end up going to the same crappy Postnet after doing groceries. I'm not a moron (I don't think), I'm just flippen lazy, and I'm not going to walk past a Postnet and drive somewhere else just to get better service. I guess the same applies to bike shops. 

I'm also lazy about calling to make a service booking during office hours. I want to be able to remember at 23:30 while I'm lying in bed that I need to service my bike, and then jump on an app and make a booking. Basically, for consumers like me, if your shop isn't on HubTiger, it might as well not exist. I wish more places would have online bookings. I have this argument regularly with doctor/medical friends that their practice should have an online booking system, and they have a 100 reasons why it won't work, but the reality is that you'll win all of my loyalty if I never have to speak to your receptionist and can make a booking online when I go to the doctor/dentist/hair dresser/car service center.

You'll also win my loyalty if you just tell me how much stuff is gonna cost in a simple, convenient way, even if it's more expensive. I can't believe that anyone goes to the trouble of "requesting a quote/price" on some online stores when other stores just tell you what stuff costs and you can order it immediately. 

 

the biggest problem there is resistance to change. To many people that are a) set in their ways b) scared of new tech

ESPECIALLY when it comes to doctors and receptionists.

[Eddy Gordo]

11 hours ago, Mountain Bru said:

Like the kind of stuff someone might need to make velcro seams in pants? ????

Are you looking to make you some stripper pants? then dont use velcro, press stud tape is what you want.

[Eldron]

Not so long ago people were banging on about how bike shops were rip offs and making bathtubs full of cash. This thread has balanced that fallacy quite nicely.

8k first order? You can't even put a basic workshop together for that or support 1 brand poorly.

50k sounds like bare minimum.

I have a tiny 1 man shop and I reckon there is close to 2 bar of equipment, tools, spare, stock and clothing in here and even then I still need to place urgent orders and pay extra for shipping because I don't have the part in stock.

It's cool being passionate about biking but before you make the leap consider that from the start you need to have at least moderate skills in marketing/SEO, basic accounting, bicycle mechanics, fitting, industry knowledge, rental agreements, POS software, sales, market Intel etc.

Or just throw yourself into it! I did it in a foreign country and it worked out (with some sleepless nights, good luck, manic work, amazing customers, awesome dealer support and a myriad of other thing I hadn't even considered when I started that could have potentially scuttled all my plans).

 

[_David_]

22 hours ago, Edge_Design said:

Why does every person who rides a bicycle feel they are qualified to run a bicycle business?

 

and why do it anyway? When you turn your passion into a job, it becomes just that - work.
 

Edited August 19, 2021 by _David_

[Eldron]

5 minutes ago, _David_ said:

and why do it anyway? When you turn your passion into a job, it becomes just that - work.
 

I disagree.

Been doing it for quite a while now and love it.

I'm more of a "turn your passion into your profession and you never work another day in your life" kinda guy.

[_David_]

16 minutes ago, Eldron said:

I disagree.

Been doing it for quite a while now and love it.

I'm more of a "turn your passion into your profession and you never work another day in your life" kinda guy.

Well done you are very lucky.

[Trashy]

46 minutes ago, Eldron said:

I disagree.

Been doing it for quite a while now and love it.

I'm more of a "turn your passion into your profession and you never work another day in your life" kinda guy.

It sounds like you are able to work well with your "boss", and therein lies the rub.

I loved working in the industry, it was the best 5 years of my life and the work itself brought bliss like none other.

But.... the bosses.... Eish!

[_David_]

Making money and being able to pay the bills helps as well :-)

Money doesn’t buy happiness, but that the lack thereof will make you miserable.

Edited August 19, 2021 by _David_

[Mountain Bru]

2 hours ago, Eddy Gordo said:

Are you looking to make you some stripper pants? then dont use velcro, press stud tape is what you want.

Thanks... It's always good to get advice from the pros ????