Exciting business opportunity

[Andrew_P]

Always makes me laugh when it is said that you can buy the parts online cheaper than the LBS' can get them wholesale. Why aren't the LBs' also buying them online, if that's the cheaper model? They can then add on their markup and sell cheaper than wholesale too then?

Off topic slightly but in my trade a lot of item can be bought for less on Amazon Prime than they can be from a wholesaler for a £500 order discount. Some even cheaper than a direct order. The largest UK wholesaler holds around 18k SKU's Amazon Prime, sold and dispatched by them around 29k. Having been approached by Amazon to supply them I really do not know how or why they do it.

In my trade they are now trying to concentrate on small niche brands that make the promise of Independent trade only, one of these launched their product like this got the independents flogging it and then supplied Tesco. I think there is quite a big gap in the UK Bike market for one of these non internet\non chain bike brands.

 

[Globalti]

Despite all this internet selling, really good independent bike shops are still thriving. In my area I'm thinking of Cookson Cycles, which has recently enlarged its shop and has a couple of good big brands that it sells well and is, crucially, in a very visible location on the main A56 from Manchester to Bury with a decent car park. It has good showrooms for mountain bikes and kids' bikes and road bikes and a fairly limited rage of clothing and accessories. Further west there's Paul Hewitt Cycles, which is a scruffy shop in a couple of terraced houses, not easy to find and not really visible at all to passing traffic but known as a serious road biking shop amongst local diehard roadies. The major asset appears to be Paul Hewitt himself and his undoubted skill at bike fitting and setup; he is not even a very user-friendly character but despite his taciturn manner I know several people who bought their first road bike, fitted by him and are delighted with what they got. If I want serious roadie stuff and bespoke kit I will go to Hewitt's.

 

[Pale Rider]

he is not even a very user-friendly character .

The staff at Spa Cycles in Harrogate can be the same, but people go there from all over the country for touring bikes and equipment.

 

[screenman]

One of my new customers has just been on the phone, he has repaired 5 screens already this morning and is off to play golf and go swimming. That is an excting business for you, not a 9 till 6 shop.

 

[KneesUp]

That's the other Butterworth!

Indeed - A.E. Butterworth has Edinburgh Bicycle Co-Op, The Giant Store, Evans and Halfords all within 2 miles - and is still always rammed full of bikes in for repair

Unlike the chains, I rather suspect their business isn't much driven by fashion - the bikes in there always look like they are used as a means of transport rather than as a hobby.

I've never been to T. Butterworths as it's the wrong side of town, but closing early on Saturday is, er, novel. I can understand that for about a quarter of the Saturdays in they year trade might be a little slack because of traffic but that still leaves the other 3/4 of the Saturdays!

 

[Dogtrousers]

The staff at Spa Cycles in Harrogate can be the same, but people go there from all over the country for touring bikes and equipment.

Anecdote: I bought my bike from Spa. The guy was, as I expected a dour Yorkshireman, but helpful nonetheless. However I could hardly keep from laughing when I handed him my wheels - I was providing my own wheels for the build, rather than buying theirs, and we'd agreed this by phone. There was an immediate sucking of air through the teeth: "oooh, who built these for you?" Squeezes spokes and shakes his head. Spins wheel, tuts, gets spoke tension meter and shakes his head sadly. I am clearly signing my own death warrant by riding on these terrible non-Spa wheels. Eventually, very reluctantly places my wheels behind the counter. The whole performance was hilarious.

 

[KneesUp]

... Eventually, very reluctantly places my wheels behind the counter. The whole performance was hilarious.

do they have a quarantine zone?

 

[jonny jeez]

The fact that the shop premises are 'To Let' as a premises rather than as a business for sale with premises on a lease, kind of suggests that the business is not really viable and may have just been running the last few years as a pass-time for the owner to reach retirement, rather than as a profit generating entity in it's own right.

There is nothing to stop you or anyone from setting up a similar bike shop in a suitable premises, but I don't expect it to be the utopia you are dreaming of, in fact, far from it.

Or that the lease term has ended and the business has relocated to newer, larger premises.

 

[jonny jeez]

.

Edit: It does say "bike shop to let" rather than just "to let".

Ah, perhaps not then.

Bike shops have to pay huge liscencing costs to sell manufacturers. My lbs went out of business as specialized wanted a guaranteed £200k of sales a year to retain the lbs licence. That's a huge amount of sales for a single manufacturer. Think about how many brands your lbs sells then multiply that by apps £100 to £200k ( depending on the popularity of the brand).

So many now sell obscure or upcoming brands until, they become mainstream...cube did it, orbea are still doing it

 

[jonny jeez]

I have a great LBS near me, I know I pay about double the internet for parts, but I have access to expertise, knowledge, and advocacy, as the owner is also the mayor of thee town. They have a good stock and selection, they have a good mechanic, and they charge reasonable prices and have good bicycles. It ione of three bike shops in town. But you have to go forty miles or so to find the next one. But you see these three LBS stickers on bicycles all over the mid-state area. And yet still, I think they all struggle. I think the time has come to ponder a new model for retail, perhaps more as a center for the cycling lifestyle. (Cafe, meeting space for clubs, group rides, clinics, pastry, etc) I remember how supermarkets got started in my town. A butcher, a greengrocer, and a dairyman all got together under one roof, and carried some other things. Perhaps that sort of thinking is what we need to carry things forward.

Agreed, I see more and more cycle cafes/ maintenance hubs popping up all over se london and Kent. They specialise in bike fit, triathlon advice and specialist components. Joints like VO5 and cadence, don't really sell mainstream bikes but turn a good profit from selling services, components, and workshop time. There is a shop in the east end (aldwych) that won't sell you a bike. You can ride a Planet X there but they direct you to the site to buy the bike, I suspect they take a small introductory commission from px that doesn't hit the end user.

I would love to open a bike cafe, all my locals are packed all day long at the weekend and during the week attract a solid stream of local trade

 

[screenman]

Are they making profit or margin, the two are often miles apart. I would hate to have any business where I was locking in to opening hours, been there and done that with my car sites.

If you look at the accounts of cycle shops, well not many are worth very much. Spa Cycles comes up at £87,00 that is not a lot in todays world. I am sure a few on here are worth a lot more.

 

[KneesUp]

Are they making profit or margin, the two are often miles apart..

Not sure what you mean by this? Profit is the difference between cost price and sale price. So is margin.

Surprised at the valuation of Spa - I've never been but I'd imagine their stock is worth more than that?

 

[Gravity Aided]

The problem with bike cafe is that food service has its' own host of problems. Staffing, production, proper use of the plentiful down time all factor in to making some profit and passing health code inspections. "Leaning time is cleaning time"

 

[Gravity Aided]

Profit is the difference between cost price and sale price, minus operating expenses-payroll, utilities, rent, licensing, insurance, fees, leakage,restocking, shipping, and incidentals.

 

[screenman]

Not sure what you mean by this? Profit is the difference between cost price and sale price. So is margin.

Surprised at the valuation of Spa - I've never been but I'd imagine their stock is worth more than that?

If you were in business you would know there is a huge difference. It is easy for a business to have margin but no profit.