Small Bike shop owners… would you do it again??

[love2fly]

As someone with cycle industry experience working for some of the bigger importers in SA, Restaurant experience as well as some Hardware and my wife is in the Beauty industry:

To the comment above about appreciative customers thanking you for getting a new item in: Yes, there are some appreciative customers but there are also some that are downright nasty and expect you move heaven and earth but don't want to pay.

People by and large don't understand that retailers have a family behind them that need a roof over their head and food on the table as well as education for children and medical aid etc etc.

They think we as retailers are making exorbitant profits and that we have room to discount everything by many%.

The retail landscape in SA has changed significantly over the last years, mostly due to global recession and recently COVID which has seen many people either lose their employment or have the incomes cut.

The conundrum is that as a smaller bike shop the importers don't care who you are and many won't supply you unless you buy significant volumes, so if you make a deal with a large LBS to buy from them, you are outpricing yourself as customers want it for nothing.

I would hazard a guess that were you to inspect the books of a LARGE LBS (even that one that is a national "chain"), you would see that they are not making bucket loads of cash because of high expenses and inefficiency's due to mismanagement.

I would suggest you rather work in another industry or open a different business and do the bike servive/shop thing as a hobby. That way you will have an income AND be happy. 

[The Ouzo]

25 minutes ago, love2fly said:

They think we as retailers are making exorbitant profits and that we have room to discount everything by many%

you should see what its like in the motor industry. Its like people think you're making 100% profit on each vehicle, when most of the time its less than 8% if sold at full list price.

 

Had a customer 2 months back cancel a deal he put a deposit on as he thought he'd get 10% discount. He came back this month hat in hand, apologized saying he thought he'd get his 10% elsewhere but that I was right when I said to him nobody will give him that kind of discount on the car he wanted.

 

27 minutes ago, love2fly said:

u make a deal with a large LBS

what about a few small bike shops getting together to buy direct from the importers ? Would that not be a better idea ?

[Cycle Fan]

4 minutes ago, ouzo said:

you should see what its like in the motor industry. Its like people think you're making 100% profit on each vehicle, when most of the time its less than 8% if sold at full list price.

 

Had a customer 2 months back cancel a deal he put a deposit on as he thought he'd get 10% discount. He came back this month hat in hand, apologized saying he thought he'd get his 10% elsewhere but that I was right when I said to him nobody will give him that kind of discount on the car he wanted.

 

what about a few small bike shops getting together to buy direct from the importers ? Would that not be a better idea ?

That had crossed my mind

[love2fly]

2 minutes ago, ouzo said:

you should see what its like in the motor industry. Its like people think you're making 100% profit on each vehicle, when most of the time its less than 8% if sold at full list price.

 

Had a customer 2 months back cancel a deal he put a deposit on as he thought he'd get 10% discount. He came back this month hat in hand, apologized saying he thought he'd get his 10% elsewhere but that I was right when I said to him nobody will give him that kind of discount on the car he wanted.

 

what about a few small bike shops getting together to buy direct from the importers ? Would that not be a better idea ?

Yip, people seem to think car dealers make the standard "retail" 30% + on a vehicle and that because you "know someone" or your wife also owns a car, you should get fleet discount. These days business is so tight, all dealers squeeze their margins and it is very difficult to get a better price...Plus, car dealerships generally belong to a couple of large groups such as Unitrans etc....

Remember the days of the Rand Show? and their special pricing? Now every day is a "Rand Show" day...

Re bike shops banding together to buy....Nice idea but difficult to put into practice. The one large importer I worked for won't supply you unless you have a retail storefront not to mention minimum first order!

[love2fly]

The issue with several smaller bike shops buying collectively is when you need that "emergency" part for a customers bike and add a few other items to make it a worthwhile order - now you have to co-ordinate with your 5 mates and THEN, you have to disseminate the parts to eachother.

Too much hassle. In theory things may seem simple but to apply them in practice complications arise.

[Scary Rider]

1 hour ago, Wayne pudding Mol said:

I’d heard that but definitely doesn’t seem to be the case around me - I suppose lots of water and fertile soil means low feed costs and more cows per hectare. As my not poor dairy farmer mate says, they (the cows) even work on Christmas 

that said I see a lot of the dairy farmers here have accommodation as another revenue stream 

seems better than a bikeshop 

Unfortunately the dairy farms on the Highveld have to do the mixed ration thing all year long, and that's where the costs go up. They say up here that all dairy farmers go to heaven, because they had hell on earth!😱

[BaGearA]

17 minutes ago, ouzo said:

you should see what its like in the motor industry. Its like people think you're making 100% profit on each vehicle, when most of the time its less than 8% if sold at full list price.

 

Had a customer 2 months back cancel a deal he put a deposit on as he thought he'd get 10% discount. He came back this month hat in hand, apologized saying he thought he'd get his 10% elsewhere but that I was right when I said to him nobody will give him that kind of discount on the car he wanted.

 

what about a few small bike shops getting together to buy direct from the importers ? Would that not be a better idea ?

look up cycles united , not exactly that but kind of the idea 

[Shebeen]

1 hour ago, Wayne pudding Mol said:

I’d heard that but definitely doesn’t seem to be the case around me - I suppose lots of water and fertile soil means low feed costs and more cows per hectare. As my not poor dairy farmer mate says, they (the cows) even work on Christmas 

that said I see a lot of the dairy farmers here have accommodation as another revenue stream 

seems better than a bikeshop 

yes, but don't they milk themselves?!

here's a cool story of a young farmer who took the gap recently, pioneering dairy farming in tanzania

 

https://astreambeyond.wordpress.com/

 

he does some fishing too

[love2fly]

12 minutes ago, BaGearA said:

look up cycles united , not exactly that but kind of the idea 

Cycles United is a VERY different thing as they got together to bring in NORCO and cut out the middleman importer. I was once in one of the stores and heard how much the owner had to put in to fund another bike order from the US..........eye-watering.

They each buy independently so there is generally no getting together to build volumes. At least one significant member has left the collective but that's another discussion. 

[madmarc]

I've commented lots on this subject on other threads - As i did a full business case study for exactly the same idea. I wanted to start something that i could have up and running for retirement. - So in summary.

Having only a bike maintenance workshop won't generate enough income on its own as a business. it will be a hobby business at best.

You will need wholesale prices on components and spares from the big brand importers - they won't even talk to you unless you have a proper bike shop and initially it will all be COD if you convince them to supply you

To generate any meaningful turn over you will need 2 or 3 qualified mechanics and you will need to be billing at least 140 hrs a month for each Mechanic - That there in + profit on components is the secret to a profitable workshop.

Go onto the Torque Zone academy and check what it will cost to qualify and certify a mechanic, it will make your eyes water. also build in the risk that they can leave afterwards and go work for your competition for a few 100 ronds extra a month.

You will struggle to get walk in business without a retail section, which is a whole new ballgame, here again getting importers to put their products in your retail section is a challenge and big investment. On top you will need to develop an online presence - even more investment.

Go trade Bitcoin its a far easier and exciting way to lose money - In fact I did that and actually made money 😁

[Shebeen]

following with interest, a bikeshop in a small town is a difficult one. you look at Grabouw with all it's trails and there's no bikeshop because it's weekend traffic only. BUT if it's part of a larger enterprise/not your main bread and butter then i guess it could be a lot of fun.

 

20 minutes ago, love2fly said:

The issue with several smaller bike shops buying collectively is when you need that "emergency" part for a customers bike and add a few other items to make it a worthwhile order - now you have to co-ordinate with your 5 mates and THEN, you have to disseminate the parts to eachother.

Too much hassle. In theory things may seem simple but to apply them in practice complications arise.

https://cyclesunited.co.za/#about

 

was going to mention this, not sure how succesful it has been

[Wayne pudding Mol]

16 minutes ago, Shebeen said:

yes, but don't they milk themselves?!

here's a cool story of a young farmer who took the gap recently, pioneering dairy farming in tanzania

 

https://astreambeyond.wordpress.com/

 

he does some fishing too

actually they pretty much do milk themselves these days....well almost

The farm I know is quite fascinating - the cows "plug" in and get milked then go through to a stall where their chip is read and they are fed according to the scale measuring them.  The warm milk is cooled by the water from the mountain stream and the heat exchanged is used elsewhere.

Nothing is wasted and it's super efficient, compost water, emergency feed crops, solar - location plays a massive part in the energy and feed savings and its still probably not how the cow would choose to live its life.

He does well but he doesn't have an account with Shimano

[Jewbacca]

I have a weird view on the whole 'work your passion' bla bla, especially in an industry that is also your hobby.

Often, when one spends too much time dealing with problematic clients and issues beyond their control, their 'passion' is often shadowed by frustration, anger and ill will.

If you want to keep cycling as a passion, do it as a hobby, on your own terms, in your own time.

I'd say work to fund and fuel your passion and see it as such. No one enjoys work all the time, no matter what you do and how passionate you were to start. Work is work, it is relentless and it is unfortunately, not rainbows and marshmallows.

One way it might work is by buying into an existing network. It might not have your name but if you're there every day it will have your soul.

An existing, established supply chain with proven business acumen and set up. It might not be your dream, but it might be a close second and be more viable in the long run. 

[Wayne pudding Mol]

St Francis Bay has had a bike shop since around 2009 when the total population was 3000 mostly retired people with 450 in cape st francis plus a township. Lots of holiday trade but not exactly a nice place to cycle

Admittedly the owner didn't get rich but even he would admit that he could have run it better - he fed his family and pursued his passion for bikes.

It was recently taken over by Coimbra PE who I believe are part of Cycles United.  The area has grown and I'm sure they are doing just fine

Point is, you can make it work, nothing is easy.  It depends on your goals.  Want to get rich?  Probably not a good idea opening a bike shop.  Want to be happy, follow your heart and get by, definitely achievable with sufficient homework

Want advice, come to the hub, need good advice, maybe not available here unless you want to have your dreams shattered and sucked into a black hole a of negativity.

 

 

[The Ouzo]

All I'm reading here is that importer and distributors are making almost impossible for a LBS to exist and that soon we will all be visiting chain store bike shops only. this saddens me.

Much like the disappearance of your local corner cafe, local hardware store etc.

 

Another aspect affecting small bike shops in my area is operating times. Now as someone in the retail industry who absolutely detests working saturdays I understand both sides of the coin. 

But take saturday for example, I needed some spares for my bike, I worked until 1pm so could only realistically get to any bike shops after 1. I really wanted to support a non franchised store, but the store that was my first preference closes at 1pm, the second store closes at 2pm but I know they carry very limited stock so did want to take a chance by going there and then having to go somewhere else after, so I landed up at a franchise store purely due to convenience.

[madmarc]

3 minutes ago, ouzo said:

All I'm reading here is that importer and distributors are making almost impossible for a LBS to exist and that soon we will all be visiting chain store bike shops only. this saddens me.

Much like the disappearance of your local corner cafe, local hardware store etc.

 

Another aspect affecting small bike shops in my area is operating times. Now as someone in the retail industry who absolutely detests working saturdays I understand both sides of the coin. 

But take saturday for example, I needed some spares for my bike, I worked until 1pm so could only realistically get to any bike shops after 1. I really wanted to support a non franchised store, but the store that was my first preference closes at 1pm, the second store closes at 2pm but I know they carry very limited stock so did want to take a chance by going there and then having to go somewhere else after, so I landed up at a franchise store purely due to convenience.

Haha this was part of my idea as well - To have a drop box delivery system for customers like you - Order it online arrive after hours with a pin sent via sms that opens a dropbox door and collect your goodies. Very much like some courier companies do at petrol stations