socratease wrote:ITT: (mostly) people who don't understand the business.
(nice) shops don't make much money on labor. Some survive solely on labor, but they are usually one to two man operations that are struggling to get by. Their inventory will be even smaller than most brick and mortar shops.
The purpose of having a service department and stocking parts is almost exclusively customer satisfaction. Many people like to purchase things from businesses that treat them well and are knowledgeable, and a good service department is an excellent way of making sure clothing and new bike sales continue. Gets the word of mouth out to new cyclists, as well.
The shops I've worked at, and frequented before I was a wrench were friendly places where I could test ride new bikes, get advice, talk bikes, find out why my ride wasn't working as good as it should. As a customer, I needed a place like that; a cool place to hang out and spend some money if I could afford it.
On the flip side, I don't understand clothing stores. The added cost isn't worth it. I don't really want to try on clothes all day, and I don't want to talk to the staff about threads. Hence: I buy my stuff online. The value, for me, isn't there.
The model shops are faced with now is about attaching additional value to the brick-n-mortar location. Lowering prices is a losing proposition.
There are obviously different market segments involved here and one approach may not suit all - what you're saying can work for (e.g.) the commuter who'll buy his/her bike at the LBS and pay 15% over online because he wants the advice and help if things go wrong.
On the other hand, for those investing large amounts of £, time and effort in parts, such as us WWs, the balance swings towards online purchase. It's far cheaper, and the choice is far better. For that segment the quasi-goodwill labour/servicing model doesn't work. It's fair play for shops to charge a reasonable rate for their time (i.e with a profit margin) ...problem can be when shops try to be all things to all men - which actually many shops do.