Bike shop advice

Meets Melbourne
21

Where the hell did you get these figures from? I know a guy who opened a shop from scratch with about half that amount and is still going strong, also his focus is more retail and less workshop so he needs to own a lot more stock. Also, maybe Titanium needs to be:

a) Less surly in his responses if he is going to open a boutique bike shop/workshop and trade largely on reputation
b) just ask for feedback on whther the concept of the shop is appealing to customers (as oppsoed to being given business advice by interwebs doodz)

If you opened a shop that sold parts cheap and had affordable labour and was of high qaulity, I’d totally go there. In fact can you open it tomorrow so I can get my ss cx build up and running?

22

Register for Jobseeker and get on the NEIS Scheme, and develop a solid business plan.

From a customer’s point of view, if you want a point of difference from the high street shops then there are two main things that will immediately set you apart and will cost you very little: one, knowledge and expertise, and two, a warm and friendly manner. The importance of the latter cannot be understated.

In this thread you come across as a somewhat sociopathic know-it-all. If you want a chance at making it you better try to develop some better social skills, like pronto! There’s enough fuckheads working in this industry already.

And your idea of competing with/undercutting online retailers lacks a basic understanding of finance and economies of scale. Its a joke.

23

Going back to your original business plan where you would sell whatever the customer wanted at just above wholesale. My initial thoughts are cool, awesome, however there are a few questions like:

-If you are selling at just above wholesale, how do you keep your own head above water?
-Can you give specifics of how much of a saving we are talking about, especially with comparison to Wiggle/CRC prices?
-What about the idea of being a good mechanic who is open to the idea of installing parts customers have purchased online?
-I agree with DICE that being knowledgeable and friendly are extremely important. This can make or break ones reputation.

24

I’m pretty sure his post to start the thread didn’t include the sum total of his business plan and thoughts on the topic. I think Titanium wanted our thoughts on his idea, i.e., Would we go if he could pull it off?

My answer, if you can be a shop that does what you say you can do, of course people will go. There will be a few people willing to roll the dice and see how you are, and if you do a great job with them at a great price, word will spread and you will be laughing. For what its worth, I think there is plenty of room for a few more people doing that sort of thing in Melbourne. I know of a lot of people who take their bikes 20km+ to get to a mechanic they trust… locate yourself in the right area and take a bite of that pie. And of course, use ABS data to find that “right area” :slight_smile:

25

+1

26

I can give you an idea of the CRC/Wiggle saving vs just above wholesale.

Most of the shimano products listed on CRC are sold cheaper then what an australian bicycle shop can purchase them from shimano for. I have compared the prices when wanting to purchase my own parts. There would be no saving money. If Titainim (aka Ryan Bilszta, Shop manager of Reid Cycles North Melbourne) wanted to price match crc/wiggle just like 99 bikes do he would be paying customers to take the product out of the store. Would love to see how long you could keep this up with $350,000+

27

to take one piece of the example, you’ll need:
20 each of:
700c tubes in 40, 60 80mm valves
261.95-2.125 in presta and schrader
262.35 in presta and schrader

10 each of
12, 16, 20, 24 in in schrader
freeride and DH tubes (at ~$15+GST, each, wholesale)
700x28-32 presta and schrader
700x32+ presta and schrader
26*1 3/8 schrader

Which is close to 200 tubes and you don’t even have the odd stuff. This isn’t even factoring in that some people will only want to run, for example, maxxis flyweight tubes, or vittoria ultralights, or latex tubes, or the same brand of tubes as the tyre they like. So… factor in 100 more, just for road.

That’s 300 tubes, at an average of, say, $6 wholsale (most are ~$4, but you’re buying a small quantity, so will pay through the arse, and DH/FR tubes are actually ~$12-15 each, as are latex and 80mm valved road tubes.

300*$6=$1800+GST and freight and you have minimal stock levels. Let’s call it $2k even, but you still don’t have much stock and will be paying through the arse until you order in decent quantities.

~20 common lengths of spoke, butted and straight gauge and 2 colours. Boxes of 100 means 4,000 spokes. At an wholesale average of, say, $1.20 per spoke, that means that you have to actually spend $6000 to have anything approaching what would be expected, and you don’t even have anything proprietary yet (most wheels) and if two people come in on the same day with similar road or MTB wheels to be built, you’re going to run out (50 same-length spokes in 32h road wheels x 2 pairs of wheels). Someone is going to have to wait for parts, which IME is the #1 reason, not price, why people go to the internet for stuff.

A mavic spoke book is less thatn $2000, but doesn’t include past model year spokes, and is only one brand of spokes, and doesn’t include really expensive stuff like cosmic carbon SLR spokes. So to be properly stocked up, you’ll need to order significantly more than what comes in the basic kit.

All I was getting at was that the people who I have met who run service-based bike shops have well established reputations as professionals. You’ve got to think: "If I was a customer, why would I go to (you) instead of (other excellent and established mechanic).

If you don’t open with a thoroughly professional level (such as being a campy pro-shop) then you will be stuck in no-man’s land. “No, I don’t have and Shamal rear non-drive spokes, I can order then in for you though… hello?.. hello?”. “No, I don’t have the proper tool to work on your (insert expensive part here) but I shouldn’t have a problem just ghetto-ing something up, becuase I am an awesome mechanic.” “No thanks, I think i’ll go to another awesome mechanic that I know. He has the proper tools too.”

I can think if the following that could be real money spinners as far as services that are not widely available:

  • Chris King hub servicing
  • Damper servicing that doesn’t have to be sent back to a distributor. Get a nitrogen charger from a moto shop.
  • SRM calibration and battery replacement. These currently have to be sent to New Zealand.
  • Reasonable priced campy spares ($130rrp for a cable kit is off putting if you are on, say, an $800 mirage groupset, or whatever)
  • a shop with late opening hours for the rich-dude cyclist on the way home from work (say midday to 8pm)

Cost isn’t really a factor for workshop work. People these days are time poor and will pay for good work to be done efficiently. As far as the customers who are money poor, well, you don’t want them, because they have no money.

If you want to be globally competitive, you’ll have to run (a) a lean margin and (b) stump up for 10+ buys on wheels when they become available, for example. If you don’t do this you won’t even be competitive with big shops in Melbourne.

You sound like you’re not planning on being in business to make money, which means that you’re not really in business. I certainly wouldn’t go near the kind of shop you’re talking about, and I bet you’ll do your dough.

And yes, I do know what I am talking about. I’ve worked in bike shops in Australia and overseas, and managed a ~$2million turnover/year section in a bike shop overseas. In the kindest possible way, you’re getting yourself in pretty deep. I would consider consulting a business broker or an accountant and drawing up an actual business model. They will help you out with identifying the hidden costs of your proposed venture long before they arise.

Also, how do you propose to manage a retail space, telephone and internet inquiries and bill a decent number of workshop hours all at once?

28

Good thoughts +1

I think we need a third category- time poor and money poor :smiley:

29

also have cake

30

^^
This
Neis is great. Apply for it, get paid the dole equivalent to scrape by for 12 months (or is it 6?) so you can invest profit back into the business. If things are still not great afteryour allocated time of getting paid apply again with something similar but different and get the grant again…

31

Hmmm… what you are describing is the sort of store that I like to stay away from. I’d be to afraid of running into people like the ones I see on the Total Rush ads during Le Tour. “I would’ve ridden with the lead pack if my wheels had more dimples” types

Here’s how I see your telephone conversation panning out at some of my favourite shops

Customer - “Hello, I’d like a non-drive side Shamal spoke, pronto. I broke it while trying to climb with the lead pack in a club race that is very important to my cycling career”.
Mechanic - “I bet you do. I can order you one in, along with some white 4XL knicks and the latest Fin Whale oil embro-cream”
Customer- “Nah, I’ll get them online, I can get them cheaper. You guys suck”
Mechanic - “Thank you”

A $2 million section in a bike shop?! Sounds like your experience of customer expectations might not be all that transferable to the types of people Titanium might be trying to serve. That is, if I went into Mellow Jonnys (as if I ever would) I would expect them to be able to everything to my bike right away with all the tools, but I don’t expect the same of even well established shops in Melbourne such as Abbotsford. There will ALWAYS be stuff that people want done that can’t actioned today because of lack of tools/spare parts, and most non-racers accept that.

Give him a break, he’s not trying to “compete” with the big shops in Melbourne, their customers arent the ones he will be trying to entice. There are more and more people riding low/old-tech bikes every day in Melbourne, as well as other cities around Aus. They need their bikes serviced, too.

And for the record, I don’t know anything about starting businesses, but I am trying to balance the “boo-hoo” side with some “yeah buddy!”

And an average of $1.20 wholesale per spoke, butted and non-butted?! Where did that price come from? I think that is about what people are charged retail ($1 champs, $1.50 comps was the norm not long ago, at least, and that included brass nipples). Besides that, a spoke cutter and thread roller are things that every shop should have, along with a bunch blank spokes. Sadly, it seems shops are more likely to have a Mavic SLR spoke in stock. I have to wonder about people who have thousands of dollars invested in spokes that never move from the shelf, but wont spring a grand for a cutter and roller.

32

I think you make some really good points JP.

And realistically Toyko Drifter, how many recreational riders ala fixed.org are rocking SRM’s? I think the OP and yourself have two entirely different markets in mind as JP points out.
Personally I find shops like Evan at Cyclic Cycles in Flemington a good compromise between commuter and high-end bike servicing.

I think there is still money to be made out of focusing on servicing recreational cyclists rather than the businessman/Total Rush customer. And I would have thought the Total Rush sector of the market would be quite saturated?

33

This thread needs one of those little worms along the bottom of the page to reflect changing reader sentiment.

34

And that guy from the electoral commission that ABC get in to do the electoral booth summaries during the Federal elections.

35

I have three… Damn pain with SRM Oceania in NZ taking over servicing from Kinetic in the ACT.

36

Okay so one person. :smiley:

37

You really don’t get the point of this thread, do you?

I did like this gem though “You sound like you’re not planning on being in business to make money, which means that you’re not really in business”. I now picture you as some new school bike shop Gordon Gekko.

38

i think the idea that someone floated re: building bikes, wheels n stuff for those who’ve purchased components from the likes of ribble, wiggle etc could have merit.

39

Wiggle have links with some shops here to pick bikes up, or put them together (to preserve the warranty) or something like that. Might be worth following that up?!

40

Isn’t that what Commuter Cycles is for with there friendly, professional and reliable service.