The stupidest thing you've heard at a bike shop...

Questions about bike hire abroad and everything light bike related. No off-topic chat please

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tymon_tm
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Joined: Tue Sep 05, 2006 4:35 pm

by tymon_tm

Zitter wrote:Tymon, you're just proving that you don't know how the bicycle industry works and have no idea what kind of money it takes to run a shop.


of course not, I don't even ride or own a bike in the first place

Zitter wrote:Shops aren't making most of their money on bikes; it's on aftermarket components, accessories, and labor.


oh? tell that to shops that sell hundrets of bikes, and stock almost no clothes and maybe some basic accesories. yes, the cheap bikes, they exist too. your own perspective isn't the only one, the high end bike shops aren't the only ones, and your attempt to undermine my words (btw, where have I written "bike shops make most of their money on bikes") is a mishit

Zitter wrote:If a shop isn't making around 30% margin on their total sales, they're most likely running in the red. That few hundred euros you're talking about has to cover rent, utilities, inventory, wages, insurance, store improvements and a myriad of other costs.


no. see, you're missing my point. again. these few hundred are either gonna land in shop's cash register, or not. it's that easy. cost of running the shop is more or less steady - the staff, the bills, in most cases, this is a fixed monthly amount. whether they take my money or not, the cost of doing business remains the same.

Zitter wrote:It's pretty standard to offer a discount on the parts you want to replace on the bike, but to have them do it at no cost is bleeding money on a sale they're already not making much money on in the first place is silly.


where I live less income is still more than 0 income. and please define "much". IMHO selling a high end bike is making a decent coin. for you it's a drop in a bucket. I've no clue how to even discuss this...

Zitter wrote: Some shops are willing to bear the cost and inventory space to sell take-offs to stay afloat, but it's not a standard practice unless they're doing a high enough volume on higher margin parts to offset the cost.


wow, this is a lot of smart words for describing occasional selling goods that are technically brand new, but lack a box, and are more or less 10-15% cheaper (on the shelve) than those ordered from distributor's. again, the costs are fixed. you don't pay extra for every freakin item stored at your shop do you now? you don't even pay more for the delivery, because that one single item will arrive in a larger box with all that nice stuff you'll sell at 100% retail price

Zitter wrote:Maybe you're used to some mom and pop shop who don't mind losing money and don't care about growing as a business.


sure, one of the shops is a father and son, second a bunch of pals. they all make money, live in nice places, drive nice cars, and very nice bikes. oh wait, you're gonna tell me now it's their wifes that support them.

again and again, 0 profit is less than a smaller profit. how's that for losing money

Zitter wrote:You should take a look at this, but then again business practices may be different from where you are

http://nbda.com/how-to/want-to-start-a- ... p-pg70.htm


looks like you're trying to kill a fly with a cannon, throwing bunch of statistics and data to counter the common sense. yes, the environment is different, the costs are different, everything depends on everything. you think you can quantify every business and draw a chart on how to operate? but that's not even the case, but you won't know that, I'm affraid you don't want to



so let me say this one last time, because this is getting way too ridiculous. plain and simple. you can make an effort to make a sale, or let it pass. you can sacrifice few minutes of your precious time to meet your (potential) client halfway, or say no and go pack to playing solitaire. you can either earn less than you would selling at 100% retail (btw, who does that?) or not earn the the full margin. you can either earn a couple hundred or not. you can gain a customer (and that's a conclusion that requires a bit of understading what the costs of gaining a client are in the first place) who will most likely make another purchas(es) at your store (and to assume that, you need to know what type of customer you're dealing with, whether someone who spends a significant amount of money on a single bike is likely to buy other stuff, like accessories, clothes etc) and who can recommend you to other potential clients. or not.
so you can do all that, or tell him to shove it up his arse, because you won't be able to sell an ultegra 12-cassette that's not in the box, and the prospect of ordering, swapping and later having a set of chainrings (or a whole crankset) burning a hole in your inventory is simply unbearable.

and who's talking mom and pop shops here...

this is some coarse math behind my atrocious attempt to sink that bike shop ('my' currency, prices are 'give or take'):

bike price - 15.0000
shop income (at very modest 15%) - 2250

cassette distributor price - 200
crankset distributor price - 700

2250 - 900 = 1350

cassette and cranks MSRP - 300, 1000

selling them at 15% discount gives us approx. 1100

1350 + 1100 = 2450

oh no, we've earned 2450, we'll go out of business soon!
kkibbler wrote: WW remembers.

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tymon_tm
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by tymon_tm

wingguy wrote:
tymon_tm wrote:about not making money by bike shops, what sort of silly urban legend that is. depending on the bike brand the margin's always between, say 10-25%. that's at least few hundret euro from the bike I wanted to purchase. maybe it's not much where you live, but here, that's close to a medium monthly wage.


I really, really hope you're not under the impression that the 'few hundred euros' margin on the bike is money that goes into the shop owner's pocket. Outside of the cost of the stock itself a large portion of the apparent margin is used up just keeping the lights on.

Excellent link there Zitter. Tymon: you really should have a look at it before you sign the contracts on your own shop :roll:


no, this money lands into a cash register. or it doesn't. whether it does or not, the cost or running your shop remains the same. please tell me how am I wrong about this. and it doesn't matter what you sell btw.

edit: or rather don't. please don't tell me, I wanna live the rest of my life being the ignorant jerk I am :lol:
kkibbler wrote: WW remembers.

by Weenie


glam2deaf
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by glam2deaf

You have several people here who own/work in stores telling you one thing, and you're arguing against them based off of how you think things should run?

Also your maths on selling parts to make a profit makes sense, till you factor in that you may not have someone walk in off the street wanting whatever part you have for a long time. You have a part collecting dust owing you money. Bills come in every month. Sure 1 cassette/chain/crankset isn't going to send a shop under, but if all of a sudden every customer starts wanting everything changed you're going to be *f##k* fast.

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bearsdidit
Shop Owner
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by bearsdidit

looks like you're trying to kill a fly with a cannon, throwing bunch of statistics and data to counter the common sense. yes, the environment is different, the costs are different, everything depends on everything. you think you can quantify every business and draw a chart on how to operate? but that's not even the case, but you won't know that, I'm affraid you don't want to


The CODB study done by the NBDA is recognized as a good representation of the bike shop industry in the US. Every shop faces it's own unique challenges but good business practices are pretty consistent.

It's possible to make OK money owning a bike shop but for most owners, it's a passion project. It offers a great lifestyle but in many cases, not a sustainable endeavor. Ironically, most high end shop don't make a ton of money due to the razor thin margins on high end bikes and accessories. If I wanted to make a decent living owning a bike shop, I would selling family style bicycles. The margins are MUCH higher and people hardly ask for a discount on a $300 bike.

BTW, of all the shop owners I know, most have made their money in other areas of life. Odds are, if they drive a nice car and live in a nice house, it's from a previous career. For those guys, their business is a "toy shop" and they are losing money every month.

afalts
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Joined: Thu Mar 08, 2012 3:20 pm

by afalts

The problem here, @tymon_tm, is that what you perceive to be common sense (i.e. 'making' some money off you, vs 'making' no money), isn't actually sensical.

Zitter
Posts: 568
Joined: Fri Jun 03, 2011 9:12 pm
Location: Orange County

by Zitter

Tymon, you're not looking at the long term of running a business; you're describing a 20th century way of doing business where there is not as much overhead cost and global competition. In the modern world, you have many more hidden costs that are explained in that link I provided on top of the competition from online companies who don't have to invest as much in brick and mortar stores which are much more expensive to run than warehouses in cheap locations compared to prime retail locations. On top of that, with the volume that online retailers do, they have extra benefits from distributors/brands who offer additional discounts to them because they sell so much which further increases their margins and therefore allows them to discount more deeply which forces retail stores to match/beat those prices which decreases their margins even more. I know this because I currently work at one of those online retailers who maintain a retail presence for the sake of supporting local customers. 90%, if not more, of our business is done online. This is why so many department stores are downsizing to boutique types because they cannot maintain all the inventory and costs of doing business that are behind the scenes and still make a profit with so much of the market shifting to online sales. Not every sale is a good sale for the shop. You are not their only customer and they need to make a certain amount to even stay in business.
Last edited by Zitter on Tue Apr 26, 2016 3:54 pm, edited 2 times in total.

mattr
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Location: The Grim North.

by mattr

FWIW a "bad" customer is often not worth having, despite spending many thousands on kit. The store will actually lose money. Can be useful for shifting older/volume stock, but quite often customers like that don't want the stock that needs shifting. They want special orders and brand new, fresh to market kit.

wingguy
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Joined: Thu Mar 08, 2012 11:43 pm

by wingguy

tymon_tm wrote:cassette and cranks MSRP - 300, 1000

selling them at 15% discount gives us approx. 1100


15%? I would have wet dreams about selling an OE ultegra crank at 15% off.

You do know the brand new boxed retail cranks are on Wiggle and CRC at less than distributor price all the time, right?

I think you've also neglected to consider a sall concept known as 'precedent'.

Synnove
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Location: PDX

by Synnove

Most idiotic thing would be that I'd need to special order a tandem shifter cable housing for wiring up my Felt IA. Suffice to say, I ran over to Performance bike and was given much better advice.

gravity
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Location: Kuala Lumpur, Malaysia

by gravity

"Have you gained a lil bit of weight?"

jeffy
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by jeffy

"have you lost weight?"

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bearsdidit
Shop Owner
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Location: California
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by bearsdidit

jeffy wrote:"have you lost weight?"


Yup, bought some new wheels for the bike. :twisted:

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mendiz
Posts: 44
Joined: Sat Aug 20, 2005 3:08 am

by mendiz

Great thread. A customer said the seller, " I need a chainring more than 53, is too short fear for me" this man I guess 95 kgs and fat. This is the most stupid comment by far. I laugh every time I recall.
Another, I comment about Émonda in a shop where they sell Scott, Specialized and Orbea, " Émonda is very heavy".
Now, I have asked price about Lightweight wheelset and many bicycle shops do not know the wheels. For me is incredible if you work in the bike industry not know these brand.
You don´t stop riding when you get old, you get old when you stop riding.

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tymon_tm
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by tymon_tm

few weeks ago I bought a 24" bike for my niece. picked one from the shop, paid the price (no discount given or asked for) and we agreed I'll pick it up next morning (I was on my bike) which I did. I packed it into the car, just took of the front wheel and the seatpost off. put a nice big bow on it and took it straight to her birthday party. I haven't noticed anything untill she decided to try it out round the house and said gears don't work - which was the least of problems. stem bolts weren't tighten enough, brakes and shifting weren't calibrated at all. I had to re-check every freakin bolt, even tires weren't inflated properly... as it was already saturday afternoon I just did it myself and piss angry returned to the joint monday morning. and guess what - instead of "sorry I don't know how it happened" or smth like that, I was almost shouted at because "I haven't paid for bike assembly" :unbelievable: "you need to pay extra to have your bike prepared, it's a standard procedure" shop owner said without even blinking once. so I did what I always do in such circumstances, which is take the issue upstairs - I called the producer and explained whole situation in details. as a result I got a nice discount coupon for my next purchase directly from the factory, and said shop lost it's dealership status. apparently it was a standard practice - demanding extra money to make a new bike even remotely rideable, or - like in my case - just selling a bike they took five minutes tops to kinda put together...
kkibbler wrote: WW remembers.

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dgasmd
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Location: South Florida

by dgasmd

A few months ago while in a town an hr away visiting a girlfriend, I passed a bike shop and noticed the big Sign on the window “Campagnolo spoken here”. Surprised and please I stoped and walked in. Lady greets me and introduces herself as the shop owner and manager/mechanic specialist. I browse around and check out all the nice Scott, Cérvelo, and other bikes they have for sale. Not a single Campy item to be seen in the entire shop. This is a town btw that has a very big and strong cycling/racing population not to mention very affluent where it’s not uncommon to see a 60y.o obese customer pull in driving a Ferrari, buy 2 seriously overpriced $12k bikes, and then proceed to complain that they want to charge him $20 to deliver the bikes!!!

Me: noticed the Campagnolo sign on the window. Do you guys work on Campagnolo? I have 2 bikes that I’d like to have the rear deraileur/gears adjusted as I find it tedious and don’t have a lot of patience to get them perfect sometimes. They are 11Sp SR.

Them: yes, you’d have to leave it because I’m the only one that works on Campy here and I’m very busy for such a large job to be done on the spot. Besides, Campy doesn’t make any 11Sp things, they don’t have anything “super”, and I head they are going out of business anyway. So, I’d suggest we just put new Shitmano high end stuff there.

Me: Really?? Just curious, but would that cost me?

Them: labor included it would be close to $5k because we have to put new wheels too so they are compatible.

Me: not a word as I walked out of there......

by Weenie


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