Cycling retailers profit margins

[RecordAceFromNew]

Imho if we talk about profit (income to the Yanks, and alas income could mean sales to some... ) we should specify what profit we are talking about, because there are all sorts. Gross profit of a particular product is sales minus cost of goods. Net profit on the other hand is after everything, labour costs, utilities, rent, depreciation (which is a non-cash cost), tax etc.

I would suggest for this discussion we stick with gross profit (sales minus cost of goods), gross profit margin (gross profit divided by sales) or mark up (which is gross profit divided by cost of goods).

So 100% mark up is 50% gross profit margin. Further I would be very surprised if Evans are unable to secure a rather better gross margin than your LBS due to their buying power (especially given the price fixing evidently rampant in the industry... ). So when the OP was talking about Evans, perhaps some of us (e.g. if our brother is running a LBS in Cornwall) are talking about LBS experience, so perhaps some of us are disagreeing even when we are working on pretty much the same numbers?

Google will throw up all sorts of definitions. However I believe the above terminology would be accepted by most accountants.

 

[Scruffmonster]

For anyone sarf of the river, Pearsons would be my recommendation.

In Sutton? I've been there. Great shop. I'm more South east. But cheers.

 

[threebikesmcginty]

[Pedant} Stock write offs can be sold at 100% profit, as their cost is taken off the books, and therefore zero. Cash loss. P&L profit. [Pedant]

Shouldn't that be [/pedant] at the end?

 

[Scruffmonster]

Shouldn't that be [/pedant] at the end?

Funniest thing I've read in FOREVER.

 

[Shanks]

Pearson's I bought my first road bike from them, must be all of 35 years ago. Good to hear they are still going strong. Sadly the bike has long gone

Sent from my Galaxy Nexus using Tapatalk 2

 

[dellzeqq]

That is so right and is also why a lot of Bike Shops over cook the club feel, isolating potential new customers.

I'm afraid that's sometimes the case. It's also the case that in some bike shops Colnagoman will get more attention than Scruffyhybridman. But......fortunately I'm in a position to pick and choose. I've got eight bike shops within three miles of my front door (and another opening almost within spitting distance), and two of those are superb. That isn't to say that the bike shops I don't prefer are no good - if they were they'd be out of business, but it's no great secret that I've been shopping at Brixton Cycles for 25 years and it's not unknown for them to offer me a discount.

Scruffmonster - if you join the CTC or the LCC you'll get 10% off at a range of bike shops.