Cycling retailers profit margins

[Scruffmonster]

Hi,

Just a general question to see if I can find out what kind of profit margins that cycling retailers are operating with.

For example, I worked in a running retailer and as a quick pair of examples,

Nike Air Pegasus - Bought for £25, sold for £75
Asics 2170 - Bought for £45, sold for £100

I had a mate that worked for Evans and he assures me that a £1000 Trek/Spesh bike would cost Evans approximately £400. I'm happy to be proven wrong, but I'm just interested as to how much mark up there is.

Cheers

 

[Melonfish]

Hi,

Just a general question to see if I can find out what kind of profit margins that cycling retailers are operating with.

For example, I worked in a running retailer and as a quick pair of examples,

Nike Air Pegasus - Bought for £25, sold for £75
Asics 2170 - Bought for £45, sold for £100

I had a mate that worked for Evans and he assures me that a £1000 Trek/Spesh bike would cost Evans approximately £400. I'm happy to be proven wrong, but I'm just interested as to how much mark up there is.

Cheers

Remember tho, they buy in bulk, thats not per individual item at least i should bloody hope not!

 

[Linford]

About 35% retail markup is a norm in many things, Then you have distributor and wholesaler mareup as well below that in the tier - plus vat. Goods out of a factory for retail is looking at roughly 30-35% of the retail list price. Don't forget all the shipping costs also which is going up all the time with the cost of fuel.

 

[Scruffmonster]

Right... so all we need is to set up an online bike shop. We sell one bike. Once a year. No choice. Just one cheap, highish end bike a year.

Every active forum member commits to buying 1 bike. We put in an order of 5,000-10,000 bikes. Everyone gets the same £1000 bike for £400. Or less if you use ctw vouchers.

Job done.

 

[biggs682]

its that easy

 

[GM]

Are you sure your surname's not Sugar!!!

 

[Archie_tect]

...no it's boardman.

 

[Hilldodger]

I had a mate that worked for Evans and he assures me that a £1000 Trek/Spesh bike would cost Evans approximately £400. I'm happy to be proven wrong, but I'm just interested as to how much mark up there is.

I really, really don't think so.

 

[Noodley]

Have a look at online bike retailer Canyon, then compare the prices of their bikes to "high street retailers" and you'll likely get a rough answer about how much mark up there is.

 

[Andrew_Culture]

I had a record shop and 100% markup was standard.

 

[colly]

I'm not sure what the mark up is on bikes and accessories but you have to remember that off the top of say a £1200 bike the initial £200 is VAT so the retailers doesn't trouser that for a start.
Then he has a shop.
That's easy isn't it ? Just a shop front with a bit of dressing?
Well not really.
The owner has to find the money to get into the shop in the first place.
Maybe a premium has to be paid.
The place has to be fitted out.
Tills bought,
credit card services have to be paid for,
accountancy and book-keeping,
advertising,
lets not forget rates, usually around 50% of what the rent is,
extra payments for waste collection,
staff wages,
national insurance,
pension contributions of staff,
employers liability insurance,
public liability insurance,
telephone costs,
general office costs,
bank charges,
possibly loan/over draught payments,
equipment and tools,
general maintenance,
other stuff I can't think of off hand.
And lets not forget..................stock.

And if there is anything left......................maybe the owner can pay himself a wage and recoup the investment.

All that and more has to come out of the mark up. Of course all the above have to be paid whether you sell anything or not, so the days you sell three £1500 bikes are offset (probably by a long margin) by the days when all you do is fix a couple punctures and sell a saddle or two.

 

[Scruffmonster]

I had a mate that worked for Evans and he assures me that a £1000 Trek/Spesh bike would cost Evans approximately £400. I'm happy to be proven wrong, but I'm just interested as to how much mark up there is.

I really, really don't think so.

Such a solid argument there fella.

I gave you an example with running shoes that I know to be true.
I also quoted a friend that worked for Evans.
Then asked to be proven wrong, in a positive way. It's not that I dont trust my mate, but he worked there 2 years ago and I thought someone here might be involved in the industry.

What you probably dont appreciate is Specialized/Trek et al will make bikes and get them out the door. They dont pay for anything other than manufacture so it's in their interests to get the price so low that retailers will hold them in stock. To sell 10,000 bikes at £400 en masse is better than selling 5,000 at £500 a bike with retailers hedging their bets as to how many they'll sell that quarter and then ordering more later.

 

[dellzeqq]

Hi,

Just a general question to see if I can find out what kind of profit margins that cycling retailers are operating with.

For example, I worked in a running retailer and as a quick pair of examples,

Nike Air Pegasus - Bought for £25, sold for £75
Asics 2170 - Bought for £45, sold for £100

I had a mate that worked for Evans and he assures me that a £1000 Trek/Spesh bike would cost Evans approximately £400. I'm happy to be proven wrong, but I'm just interested as to how much mark up there is.

Cheers

your mate is wrong.

Margins on bikes are about 30%, unless they're discounting. Margins on clothing can be higher, and on little bits like brake blocks, cheap pedals they can be very high - but you have to sell a lot of cheap pedals to make a living! A small bike shop will pay the rent (if they can pay the rent) with repairs, although many undercharge chronically.

 

[dellzeqq]

Such a solid argument there fella.

I gave you an example with running shoes that I know to be true.
I also quoted a friend that worked for Evans.
Then asked to be proven wrong, in a positive way. It's not that I dont trust my mate, but he worked there 2 years ago and I thought someone here might be involved in the industry.

What you probably dont appreciate is Specialized/Trek et al will make bikes and get them out the door. They dont pay for anything other than manufacture so it's in their interests to get the price so low that retailers will hold them in stock. To sell 10,000 bikes at £400 en masse is better than selling 5,000 at £500 a bike with retailers hedging their bets as to how many they'll sell that quarter and then ordering more later.

I think, if I may be so bold, that there isn't much about the bike trade Hilldodger doesn't appreciate. I would go so far as to suggest that he might even know more than your mate that works for Evans. But, that's probably because he's been doing what he's been doing for decades.

 

[Paulus]

My local, ex bike shop that was in existance for decades always said that he made his living from repairs and selling spare bits. There was very little profit to be made from selling bikes.