Bike Shop Failure - Sydney City Bike Depot

[johnny]

Check the cost of renting CBD premises. You are talking 10s of thousands per month. That's before other expenses.

Which is why I suggest that model doesn't work anymore. You have the shop in the CBD for convenience - people hit the spot during their lunch hour.

However it's now more convenient, and cheaper to have it delivered to your home or place of work.

The CDB shop model is a tough one to retain these days.

 

[slippy]

All this talk of service is nonsense. I was a partner in a bike shop for 5 years. We won numerous awards for our service (more than any other bike shop in town), as voted by customers. We barely made enough to pay the rent, let alone pay ourselves. Customers SAY they will reward good service. They even THINK they will reward good service. But what ACTUALLY happens is they buy on price and convenience every time.

That's why Coles and Woolworths are alive and well. They don't provide any level of service. They just have everything you need, in one spot, close to your house. That convenience sucks you in everytime, even if the checkout chick barely makes eye contact and packs your eggs under your juice bottles.

Bike retailing died back when modems made those funny screechy sounds on boot-up.

 

[steve24]

All this talk of service is nonsense. I was a partner in a bike shop for 5 years. We won numerous awards for our service (more than any other bike shop in town), as voted by customers. We barely made enough to pay the rent, let alone pay ourselves. Customers SAY they will reward good service. They even THINK they will reward good service. But what ACTUALLY happens is they buy on price and convenience every time.

That's why Coles and Woolworths are alive and well. They don't provide any level of service. They just have everything you need, in one spot, close to your house. That convenience sucks you in everytime, even if the checkout chick barely makes eye contact and packs your eggs under your juice bottles.

Bike retailing died back when modems made those funny screechy sounds on boot-up.

you shop in the wrong place.....

My Coles are great, all staff friendly and helpful but I rarely set foot in nearest Woolies, have even complained to their management because of rude staff.

 

[bikesarefun]

Well, they've got at better than video rental stores....

 

[pharmaboy]

Check the cost of renting CBD premises. You are talking 10s of thousands per month. That's before other expenses.

Well that shop should be <10k a month for starters, but generally rent is paid on the ability to attract passing trade. Ie it should be multiple times busier than a shop in suburbia. That's how rent is so much higher in a shopping centre - it reflects actual business turnover .

In other words pricing doesn't need to be high to pay rent, turnover needs to be high to pay rent, so it's the same decision all businesses make - can I sell five times as many hans damfps if I price it at $65 to maximise my total profit.

 

[pharmaboy]

@John - Times have changed though. Back then online sales were nothing like they are now, there was Jensons and FTR and maybe a few others. Now there are big orgs like CRC, Wiggle and smaller yet still significant cats like Pushy's, Torp7, etc. and bikes shops also had to live with a few years of a very powerful AUD. With the AUD now sinking back to normal levels the bike retail industry might get a bit closer to the old normal again but the damage of the past few years is already done.

I agree in regards to their local competition. I used to like them but after the treatment I received in there from one young dickhead - seriously, it was either leave or suggest he step outside - I would have gone to BD every time.

The market has changed now though. I get my service from a local shop and buy a few things through them as they've been excellent to me in most departments but anything more than tubes, lubes and impulse buys I go online. Bike shops aren't a charity, they are a profit making venture and if they can't compete with the other guy they have to expect to go out of business.

Gotta change with the times, just ask blockbuster video, the milkman and your local posty.

@ marc - agree 100%

All so true - we have now been trained that online is awesome and convenient - but we only originally went there because Aussie retail had one of the highest margins in the world - it's come down, but the damage has been done.

Woollies and Coles do not have that outdated model however and are doing fine.

One thing can be learned from Coles and woollies though, is that joe public use certain items as cost comparators and if they meet their judgement of fair value then they trust in the rest of the prices. Eg a chain and cassette and tyres would be the classic comparators for me, and maybe xt brakes . Sell those at the right price and then sell more clothing, pumps etc

 

[SummitFever]

Woolies and Coles are feeling the pain from Aldi. Businesses must continuously evolve and adapt or risk going the way of the dodo.

 

[Jubas]

All this talk of service is nonsense. I was a partner in a bike shop for 5 years. We won numerous awards for our service (more than any other bike shop in town), as voted by customers. We barely made enough to pay the rent, let alone pay ourselves. Customers SAY they will reward good service. They even THINK they will reward good service. But what ACTUALLY happens is they buy on price and convenience every time.

That's why Coles and Woolworths are alive and well. They don't provide any level of service. They just have everything you need, in one spot, close to your house. That convenience sucks you in everytime, even if the checkout chick barely makes eye contact and packs your eggs under your juice bottles.

Bike retailing died back when modems made those funny screechy sounds on boot-up.

This is interesting - what awards did you win? How were they judged etc?

I bought all my small stuff at CBD - gels, chamois cream, lube etc.. all marked up, but I was happy to pay a bit more while chatting to the guys. I was scoping out a new bike with them as well, because i'd always had good service there. In fact, I'm scoping out a bike from two (now one I guess) LBS because I've had consistently good service on the small stuff for some time. Even though other brands of bikes are more appealing, I want to support the better service-oriented LBS.

PS, I'm a suit, and I popped into the liquidation sale.

 

[Daetmi3]

Its a pity, as these guys were always really helpful and happy to help out in any way they could for odd parts.
And they had the best knowledge for more DH stuff.... RIP City Depot.

 

[scblack]

Which is why I suggest that model doesn't work anymore. You have the shop in the CBD for convenience - people hit the spot during their lunch hour.

However it's now more convenient, and cheaper to have it delivered to your home or place of work.

The CDB shop model is a tough one to retain these days.

And this further reinforces the fact that bike shops are really surviving on mums, dads & kids bikes.

Even in Australia's biggest CBD where people ARE going to be spending big money on quality bikes, good shops are failing. Fact is, no-one buys their kids' bikes in the CBD. I certainly didn't, I bought from a suburban shop for my kids. Not through bad service or pricing but you have to collect the bike, and that can't happen if you are going home on a bus or train, which 99% of people in the CBD do.

 

[markgab]

Ive come to conclude
Its all about pricing!
Am sure we all wouldnt mind paying afew bucks more ($1-$10) for an item to support a LBS.
In reality, majority of wanted mtb parts in Australia are at least 50% more....
Why? Profit margins.. On whos side (lbs/distributor).. Its questionable...
But hey, we have the luxury of shopping online to get the best deals
Who doesnt want a good deal?

 

[SideFX]

Until we see the end of , Monza , Neezy , dirt works , pacific brands and co , bike shops will still be non competitive in the market .
Great to see a good turn out at the CBD sale , hope they sold all /most stock .

 

[Knuckles]

Until we see the end of , Monza , Neezy , dirt works , pacific brands and co , bike shops will still be non competitive in the market .
Great to see a good turn out at the CBD sale , hope they sold all /most stock .

So until the businesses run by people who are part of the mtb community, bringing high end bikes and components onto the Australian market, and providing local warranty support, fold. So we can be flooded with generic crud, imported by a multinational, or 4000 ebay hawkers. We will never have a competitive market?

Unless retailers stop using 50 year old business models, they'll never be competitive.

 

[willsy01]

So until the businesses run by people who are part of the mtb community, bringing high end bikes and components onto the Australian market, and providing local warranty support, fold. So we can be flooded with generic crud, imported by a multinational, or 4000 ebay hawkers. We will never have a competitive market?

Unless retailers stop using 50 year old business models, they'll never be competitive.

No, until the LBS is able to buy direct from manufacturers rather than buy at inflated prices from local distributors.

 

[pharmaboy]

Until we see the end of , Monza , Neezy , dirt works , pacific brands and co , bike shops will still be non competitive in the market .
Great to see a good turn out at the CBD sale , hope they sold all /most stock .

Wish you were wrong. Giant make it patently obvious that there doesn't need to be a price difference between aus and the USA.

Mind you, seem to be plenty of successful bike shops out there, who have somehow managed to choose the right market to play in with the balance between rent and turnover and brands.

 

[Knuckles]

No, until the LBS is able to buy direct from manufacturers rather than buy at inflated prices from local distributors.

Because the manufacturer's will provide a better deal and cheaper supply chain to a few hundred ma 'n pa operations than to one or two distros? Yeah, nah. At best, it'd be the same, same for the customer, but the best is doubtful.

 

[SideFX]

So until the businesses run by people who are part of the mtb community, bringing high end bikes and components onto the Australian market, and providing local warranty support, fold. So we can be flooded with generic crud, imported by a multinational, or 4000 ebay hawkers. We will never have a competitive market?

Unless retailers stop using 50 year old business models, they'll never be competitive.

Closure of bike shop and retailers all over australia shows that the " 50 year old business model " dosnt work anymore .
And yes I am taking aim at distributors in this country . There a wast of time and only add cost and delay to products . We are in a global economy , we have internet and freight .

 

[Knuckles]

Closure of bike shop and retailers all over australia shows that the " 50 year old business model " dosnt work anymore .
And yes I am taking aim at distributors in this country . There a wast of time and only add cost and delay to products . We are in a global economy , we have internet and freight .

Cell seem to have adapted fairly well. Not a fan of their store front here, but they have found a niche and model that looks to offset the lack of foot traffic.

 

[pink poodle]

Pretty sure we could all name a few brands that self distribute, both in cycling and other markets. I am pretty sure that their prices are very similar to those brands following the traditional model. Did Shimano or Specialized lower their prices when they cut ties with their ye olde business partners? Nope.

 

[SideFX]

Wish you were wrong. Giant make it patently obvious that there doesn't need to be a price difference between aus and the USA.

Mind you, seem to be plenty of successful bike shops out there, who have somehow managed to choose the right market to play in with the balance between rent and turnover and brands.

Totally . but were seeing concept stores now with there branded product . Basically manufactures selling direct and only to there franchises . Were CBD was in the city there are 5 " BIG " bike shops and 4 are branded , all in the space of three block . This is business .