Bricks and mortar bike shops - are they profitable

schred

Likes Bikes and Dirt
Is this a great way to destroy what you love?

Is it a sound business model in this day and age?

Insights appreciated, esp from people who've done it and still doing it.
 

Kind_cir

Likes Dirt
I would say it to be very competitive with the parts and accessory side of things. There is a lot online in that regard these days that pretty much squash the LBS.
All my LBS have super limited spares and accessories these days but a good range of bikes. It makes sense as you like to be fitted and try out and sit on a bike before you buy. Workshop services are also a must with great service in that regard.

If you think there is a need in your area and you want to attend to a shop every day then go for it. I would concentrate on the bikes and workshop and not so much if your mostly parts and accessory based.


I would however build a indoor mountain bike park, rather than go into a lbs business.
 

moorey

call me Mia
I don't know man, I almost think an mtb background & mindset could be counter productive. Depends on the demand from prospective customers I spose.
Sometimes good businesses fail and shit ones thrive.
The lbs needs to know the industry and the product, sure, but what very few do is provide genuine customer service, and actually LISTEN to what we want. They don't need to hold enormous amounts of stock, but they need to be able to get stock quickly. They can't compete with online prices, so they need to give you a reason to still shop there.
I had all but given up on local stores until about 18 months ago. We have a ripper here now. I still buy big stuff online if there is too much gap, but probably spend 50% of my money locally now.
 

schred

Likes Bikes and Dirt
Cheers man, it seems the customer service component is one of the few ways to combat the on-line phenomenon.

The indoor park sounds rad but its entertainment, diff kettle of fish, but worth thinking about.
 

mitchy_

Llama calmer
my favourite LBS is a very small shop. owner runs the workshop with a girl manning the sale counter.
they hold very little stock, mostly emergency spares. they have one brand of bike only with less than 10 on the floor, but their customer service and the owners knowledge is second to none.

they obviously realise that parts isn't going to be their target market, so work on new bike sales and labour to get feet in the door... and boy do they.
 

bikeyoulongtime

Likes Dirt
+1 on service, but service doesn't mean bending over - it means doing what you say you will, doing it promptly, doing it as well as you can, admitting when you fuck up and helping out, and delegating tasks you can't do to the required standard (for example, sending a complicated job to a specialist instead of having a go)

In my book, anyway...

I'd like to open a super niche bike business, based around a service relationship with customers and a small amount of retail. I reckon there are plenty of bike shops trying to capture all the market, and not enough who focus on the 1-2% of the market they do really, really well.

The niche thing might have been tried and failed a lot before... without having actually done it, I figure one would need a lot of good connections and exposure in the relevant niche riding community.

I don't have the time, capital or connections to do it. Yet. My other business issue is that I don't tolerate asshats well.

But I digress. I think a bricks and mortar shop certainly can be profitable. My approach would be to first figure out your market, what you really want to do, what you're good at, and what gives you the shits, what bikes you want to sell (if any - this might determine where you can locate a business relative to existing bike shops), and start building relationships. Hopefully peeps who have actually set up a profitable shop will chime in...
 

Daniel Hale

She fid, he fid, I fidn't
some of the bricks & mortar shops make a decent living -i think they need to of the mindset they are providing a service rather than in it to make money. having plenty of decent spares around is a big plus [went to my lbs shop Wed, he had a sevice kit for rockshox reba in stock]

apparently roadies buy nearly all their stuff online, MTB'ers are more inclined to buy from lbs. also certain brands ie trek force dealers to have no online sales, which helps. a lot of people still want good service, & to be able to take a new bike back because something isn't quite right

bike fit is an increasing area--this makes people feel their $ are well spent, I was at a high volume bike shop last night -the guy looked at a customers height said to him -you want L, the guy shrugged --the service guy git the L down & said there you go. didn't get him to sit on it or anything, i thought the guy could have gone for a M/L
 

Freediver

I can go full Karen
My LBS I'm guessing rakes it in, they don't really do anything well, have shit customer service, the bloke that runs it spends ages chatting with his wife while your waiting to be served and worst of all when I got a wheel trued they took a couple of spacers out of my hub without telling me and I ground away a bit of paint of my frame when I put the wheel back in. I expect an apolology after shit like that but not these clowns.
What they do have going for them is a good location and people getting repairs on there Reid bikes.
 

SF Trailboy

Likes Bikes and Dirt
A workshop with emergency spares and access to bikes (ie no stock just catalogue distribution) would be profitable if you have a GOOD mechanic, good luck finding one.

This is how my LBS operates and it seems to work. Husband and wife team and no staff - both very good at their jobs.
 

Calvin27

Eats Squid
The CBD LBS are miles different from the suburban ones here in Vic.

Chatting to the CBD bike shop owners sometimes they basically say guys would roll in after watching tdf and just put big money on bikes. Then very shortly they find riding mates and double the initial purchase. No shopping, no online comparisons, just basically pick the cream of the crop. I think servicing just keeps the mecs busy and some level of baseline income for these guys, I can't imagine there are too many people forking out the prices they charge unless it was in desperation.

The suburban mob are more about volume I would suspect, with little service departments that do the bare minimum. Basically they move as much stock as they can, as fast as they can.

Then there are more service focused shops. These exist in many forms but basically these are the guys that get business by word of mouth. You go there and then you keep going back.
 

Mail Man

Likes Dirt
Why can't you have both? In my opinion to be most profitable you need to be on line to be able to move volume and open up your market and then you could combine this to to a B&M front that has second to none customer service. By having the online portion of the business you will be able to keep a bigger range in stock to service the walk in customer, like us.

What we have to remember is we are bike enthusiasts but we are a small minority when we look at total market penetration. This is why when you walk into an LBS you see racks full of hybrids and roadies. This is what the majority of the market rides. There would not be sufficient MTBR's in a specific local area to support a niche store, that is why you add the online component, you open it up to the entire population not just the the people in a 10 km radius (the distance people will drive to a specialty store not located in a shopping center, this opens up to approx 60km if you are in a mall type environment with parking).
 

The Duckmeister

Has a juicy midrange
The CBD LBS are miles different from the suburban ones here in Vic.

Chatting to the CBD bike shop owners sometimes they basically say guys would roll in after watching tdf and just put big money on bikes. Then very shortly they find riding mates and double the initial purchase. No shopping, no online comparisons, just basically pick the cream of the crop. I think servicing just keeps the mecs busy and some level of baseline income for these guys, I can't imagine there are too many people forking out the prices they charge unless it was in desperation.

The suburban mob are more about volume I would suspect, with little service departments that do the bare minimum. Basically they move as much stock as they can, as fast as they can.

Then there are more service focused shops. These exist in many forms but basically these are the guys that get business by word of mouth. You go there and then you keep going back.
Some of that I think you've got arse-about, particularly in relation to the suburban shops (I work in one). I don't really have that much insider knowledge on the CBD scene, but I wouldn't really be surprised if the scenario you portray is correct; the "suits" who work in town roll in after watching TdF, hand over a bucketful of cash & walk out with a top-flight bike & the shops move truckloads of them. Service is pretty low on the list of priorities, both for the shop and the bulk of the customers.

Out in the 'burbs it's different, especially the small independent shops. The sales volume isn't there, especially at the really nice level of the market, so it really comes down to the service. Not just the customer service for the guys trying to sell the bikes, but for the techs like me on the tools. Sure there are times when they're under the pump to get things through the workshop as quickly as possible, but there's usually the time available to do that little bit extra that's not on the job sheet; get a bike in that just needs a wheel trued, but the gears are a bit rough. So I'll give them a tweak and lube the cables. I won't replace parts that are not related to the job the bike was booked in for, 'cos that just has the customer going, "what did you do that for?", but make the bike run that bit better & they'll realise, "hey, that runs better than it did, I'll go back next time" and you get repeat business out of it. The problem is customers who don't value the time the tech spends on their pride & joy, and think that charging enough that might just trickle through & enable the mechanic to buy himself a beer after work is ripping them off....
 

bikeyoulongtime

Likes Dirt
Out in the 'burbs it's different, especially the small independent shops. The sales volume isn't there, especially at the really nice level of the market, so it really comes down to the service. Not just the customer service for the guys trying to sell the bikes, but for the techs like me on the tools. ...

The problem is customers who don't value the time the tech spends on their pride & joy, and think that charging enough that might just trickle through & enable the mechanic to buy himself a beer after work is ripping them off....
Familiar stories! There's got to be a balance - my workshop relies heavily on the patience and tolerance of it's mechanics. Let's just say its an ...unusual setup.

..which is why, in the long term, I would do something completely different. mitchy_'s LBS sounds about right, except I would get women on the tools as well.
 

floody

Wheel size expert
I think the best model for a modern bricks and mortar bike shop wouldn't even sell bikes.

Broad and current range of clothing, accessories and parts, really good bike servicing, great customer service principles, combine this and I think it would be a winner. Pitch at adults with money to spend.
 

Milpool

Have knuckles, will drag
From the standpoint of someone who is very new to the push bike world beyond $100 heaps of shit throughout the years, it's actually pretty hard to tell what will be a good or even find a LBS. I'm on the Gold Coast, most the shops I see are either a giant store or 99 bikes. I know of one in Nerang I might take my bike to, it's just about the only one I've found any info on and that was through this forum and I've seen one in Runaway Bay. It's pretty hard to find people's opinions/reviews of places to know wether to trust them before you go in there and it's pretty hard to tell if you're about to get ripped off if you know very little about bikes in the first place.

Also seems to be that once people have the bikes long enough to be familiar with these businesses, they're pretty capable of servicing their own stuff so they would only really require parts which are more available online.
 

ajay

^Once punched Jeff Kennett. Don't pick an e-fight
I'd like to open a super niche bike business, based around a service relationship with customers and a small amount of retail. I reckon there are plenty of bike shops trying to capture all the market, and not enough who focus on the 1-2% of the market they do really, really well.

The niche thing might have been tried and failed a lot before... without having actually done it, I figure one would need a lot of good connections and exposure in the relevant niche riding community.
Super Niche? I'm not sure that should be your target. 1-2% of a small market is tough. If your niche is (for example) high end Xc/trail, and quality servicing/race preparation, what do you say to the guy who walks in wanting a road bike, with cash burning a hole in his pocket?

There's plenty of shops doing really well and servicing a broad range of the market, the thing they have in common is customer service. Hell, the shop I worked at years ago had people just stopping in to say hi, with coffees to go around. The range was broad but people wanted to be there - even just to hang out!
 
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