Bike shop discounts

[TheExecutiveBoff]

"I just purchased two Specialised Epic models and in general I expect to bargain down 20% off recommended retail. Both these bikes were $3500 plus retail."

This is something that was posted in another thread that just got to me and I had to comment.

First, If you bargain to get 20% off the price of a 3500 bike, the shop is most likely losing money on the sale. Most shops operate only making about 5-10% profit off each sale. Sure its up to the shop to give it to you at that price, but ANY shop marking down current model bikes is not going to be around long. guaranteed. Also, the more expensive the bike, the lower room there is to move when it comes to price. (Now I'm assuming they were current model bikes. otherwise if they were clearance prices, 20% is still quite alot off)

For some reason people believe the bike industry is trying to rip people off. Its not. In fact, when you pay full price, you generally get more out of the shop when it comes to advice and favours. When you buy clothes at the mall do you ask" so whats the best price you can give me?" And chances are that the percentage markup on those fancy jeans is twice the markup on your new epics.

Want to know how to get the best bargain out of your purchase at your local LBS? dont hammer the shop for a discount. Dont ask for things to be thrown in. Its about respect. Chances are, you work somewhere where you dont just give out discounts to anyone who asks for one.

Don't get me wrong, I often give discounts. Want to know how to get one? be friendly, ask questions, be stoked about getting the bike, and dont hammer me for a discount. You wont get it.

I may be alone in this, but I believe bargaining with me for discounts is disrespectful to me and it devalues the products I am selling. When you buy a bike from a shop, you are getting in return more than just the bike. You are getting the experience and knowledge of all the guys in the shop, you will get favours here and there and most importantly, you develop a relationship where both parties win. Don't spoil that relationship for fifty bucks of your new rig. You will lose more in the long run.

To emphasize my point. Want to know how to get your ticket upgraded when you check in for a flight at the airport? A qantas employee told me this once. Be friendly and excited. But if anyone ever asks to be upgraded, guaranteed its not happening.

 

[Tomas]

Wholeheartedly agree with your post Boff.

Just so people know, bikes dont come ready out of the box. There is labour involved in preparing a bike for sale, assembly, free included servicing, booking the stock in, freight, rent, wages, bills and about 10 million other costs you dont see.

The price is the price. Thats whats written on the tag, thats what it is. There is a serious problem with shops running around and lopping off 10-20% whenever a customer winks. Many of these shops dont make money from your sale, they dont guarantee your future business (because you're an anal price conscious person and will shop at CRC whenever you see fit) but devalue the product and their professional sales service in the process.

 

[dain2772]

I have often pondered the question of LBS discounts - particularly considering few other retail experiences have the same expectation of freebies.

Freebies/discounts are often mentioned as one of the reasons why/benefits of supporting a LBS, but it often seems like the people who receive discounts regularly are those who are mates with the people who work there. I have got some things here and there when buying new bikes, but rarely have I got any ongoing discounts - and it wouldn't even cross my mind if I didn't hear about it all the time.

I think that it probably needs to be understood that 98% of the time (as it seems from your post) that it is just a bit of goodwill, and not a 'regular customer gets 20% of the whole store' type thing. And I can completely understand that it would be really frustrating as a bike shop person to constantly have people who expect this kind of gratuity - I also have people who day-in day-out want some kind of special rate or freebie on the basis of nothing more than a little business.

I think it can be a turnoff too, because if I am in a bike shop buying a bike and I see the next guy gets 20% discount and free things and I don't, I would be of the opinion that I am subsidising other customers. I would much prefer to go to a bike shop that all prices are reasonable, rather than being overcharged for things.

 

[Rexy]

Kudo's.
Best post I have read in a long time.
People (in particular those that haggle prices and shop online) just dont realise that a valued customer at a shop will get a decent discount, free (or cheap) labour etc.

 

[AngoXC]

I may be alone in this, but I believe bargaining with me for discounts is disrespectful to me and it devalues the products I am selling. When you buy a bike from a shop, you are getting in return more than just the bike. You are getting the experience and knowledge of all the guys in the shop, you will get favours here and there and most importantly, you develop a relationship where both parties win. Don't spoil that relationship for fifty bucks of your new rig. You will lose more in the long run.

That applies to so many other industries...not just bikes. That really was a fantastic read.

 

[tu plang]

Freebies/discounts are often mentioned as one of the reasons why/benefits of supporting a LBS, but it often seems like the people who receive discounts regularly are those who are mates with the people who work there.

The one thing I'll add there is that they weren't born knowing the bike shop employees, they got to know them. When I was working in shops, you didn't give discounts to make friends or to win customers, you gave discounts because you appreciated that almost every part on a mountain bike is consumable in a sense. When people are coming in day in day out buying tubes and tyres and chains you realise that they will always support your business so there's no need to be making full profit on everything they buy. I enjoyed giving discounts when people were surprised and appreciative, not when they had haggled for 20 minutes.

People who walk into a bike shop thinking they are going to lay down the law with their mighty phrase "what's your best price?" get no attention in any shop.

 

[Arete]

Hmmm, do you expect to get a deal when you buy a car, or a tv? It's a common practice in all sorts of industries when spending large amounts of $$$, to ask for a bit of special consideration. Hell if I walked into a shop with 4k burning a hole in my pocket and they said "there's the sticker price and if you don't like it, there's the door." I'd walk out. If they aren't prepared to offer a bit of incentive when I've got 4k to blow in their shop, how would I expect to be treated when I come in with a minor issue, orjust needing a 5 second job with a specialised tool?

Back in the day, Brad Prescott at Bike Addiction cut me an awesome deal on my first Dh Bike - a Kona Chute with a DHO and a front hayes brake. They tuned it at my first race, they fabricated a new seatpost head for me for free...a decade later and I'd spent god knows how much there, bought 4 bikes there and socially rode with guys from the shop...all initiated by the good deal I got on that inital bike.

As for internet buys, the same arguments pervade the bike, scuba, photography and I dare say countless other industries. Unfortunately, the ball game's changed and it's not the consumer's fault. I generally know what I want and don't need the shop to tell me about the product. If you need to go to a shop to expolit them for their expertise, then go buy it online, well that's shit. However I regularly went to my local whatever shop to see if they could sort me out for a comparable price, but now don't bother:

Scuba eg's

DUI trilam drysuit: Aus rrp $2000. Online $700

2x faber 10L Cylinders: Aus rrp $1200 Online $680

Camera:

80-200mm Nikkor AF Lens: Aus rrp: $749 Online $290

Bike:

Easton Ea50 stem: Aus rrp $89 Online $49

Michelin Road tires: Aus Rrp $120 Online $60

For the customer who knows what they want, what would you have them do?

 

[Tomas]

Hmmm, do you expect to get a deal when you buy a car, or a tv? It's a common practice in all sorts of industries when spending large amounts of $$$, to ask for a bit of special consideration. Hell if I walked into a shop with 4k burning a hole in my pocket and they said "there's the sticker price and if you don't like it, there's the door." I'd walk out. If they aren't prepared to offer a bit of incentive when I've got 4k to blow in their shop, how would I expect to be treated when I come in with a minor issue, orjust needing a 5 second job with a specialised tool?
\

I agree Arete, if you came into my shop with 4G to blow, damn right we'd sort you out. Good customer service, good servicing (a bit of free product to sweeten the deal), fitment and a whole host of other reasons to part with your money.

I wouldnt drop 10-20% off the price at the drop of a hatto seal the deal though. Sorry.

 

[Moggio]

There are those few shops where the haggle is required and expected.. your cheap as chips white goods places come to mind. The other is second hand items like for musical instruments or cars where the mark up is usually quite large. This sort of blurs the line of what is expected or considered possible by the proud "bargain hunter" unfortunately.

Yet people would never haggle at supermarkets, doctor, fruit shops, servo etc... its just people I think expect to haggle on expensive items expecting the mark-up to be proportionally large.

 

[b_S]

Brad Prescott... Bike Addiction ...Kona

Ahh we all make mistakes in life, but you're a better person for it

 

[TheExecutiveBoff]

"It's a common practice in all sorts of industries when spending large amounts of $$$, to ask for a bit of special consideration. Hell if I walked into a shop with 4k burning a hole in my pocket and they said "there's the sticker price and if you don't like it, there's the door." I'd walk out. If they aren't prepared to offer a bit of incentive when I've got 4k to blow in their shop, how would I expect to be treated when I come in with a minor issue, orjust needing a 5 second job with a specialised tool?"

I see your point but you are miss understanding the bicycle business. After you purchase your TV at a discount, do you return to the shop time after time for advice and support? how many times do you have to bring your TV into the shop for a service?

My point is that the 4 G's (or however much you are spending) are buying you alot more than just a bike. In a way you are buying your membership into a mountain bike support group. Those customers who support the shop thus get more support in return. Come in asking for favors right off the bat, dont expect to be supported fully in return to the same level as a full price paying customer. I know shops that discount. Its their customers that eventually come to me for lessons on how to tune their suspension on their brand new bike. Why not return to where they sold it? The shop is more concerned about moving bikes out the door than whether or not people are happy with them.

Another difference is that the margins in the bicycle industry do not give room for discounts. Not on bikes. If they are discounted, they were purchased from the supplier discounted. The shop is making the same amount in profit (again is usually around 5 percent on high ticket bikes with usually a total 35% markup) I bet Bing Lee's Plasma Screen was marked up quite a bit more than that.

Of course,the more you spend, the more you should expect the store will support you. This is totally true. However the support is not just by nocking the price down. Its through advice, little things here and there. Trust me. I give away heaps of little things and do lots of little favors to my favourite customers (not old mates, but customers who I have a good relationship with.) None of my favourite customers have hammerd me for discounts. They know what they are getting is much more valuable.

On a side note, a six pack of green coopers now and then goes along way as well.

 

[TheExecutiveBoff]

b_s is awesome

 

[Tomas]

Ahh we all make mistakes in life, but you're a better person for it

Hahaha quoted for impact. Ill put it in bold as well.

 

[spudatm]

it has to be a two way street. I at one stage was fed up with my local LBS mainly because my bike was giving me trouble i was spending way too much on it to constantly get it fixed. The labor was expensive blah blah. So i started shopping around a bit using the internet, but kept going to them for the big things and stuff i couldn't get cheep on the net. But slowly They started to recognise me would have a chat so on. They were super help full when we bought my wife's bike no discount but the service was great and they upgraded her seat to selle italia worth 200 for which she is eternally gratefully. Then i went in there one day because i wanted to grab a Giant Trance X1 before they sold out. Got chatting to the guy he looked at my old bike saw the shop's sticker on it recognised me from when i bought my wife's bike from them and basically worked out that 1 i have a serious bike addiction 2 i was about to buy my 4th bike from them in 2 years and that i lived in the area. We started talking price I got a 300 discount they swapped the tyres out the seat and grips. They let me lay buy it and refused to sell it to a guy who came in and offered 500 over the sticker price. Bang the start of a long lasting relationship. They automatically discount on every purchase they do simple services for free they let me use their tools for one off jobs {ie bottom bracket} they gave me advice when i told them i wanted to buy a 2nd hand roadie and in return i spend a shitload of money in their shop. i recommend them to my friends i recommended them to the guy who bought my old bike of Ebay the other week. My parents want to buy Hybrids and i said they have to go "my shop" LBS know that i buy the odd thing from the net when needed but they know by looking after me ill spend in a big year 8 grand in the shop and in a quiet year 2-3000 {Its scary when i see it in numbers}

 

[TheExecutiveBoff]

And in response to the comment about the LBS competing with internet sales. There are a number of ways in which the internet will never be able to compete with bike shops.

1) Bikes shops are people. The internet shops are not. You cant ask questions. you cant be sure you are buying the right item.

2) Warranty. Most manufactures of parts and bikes only warranty parts sold by authorized dealers. For all the big names out there, few of them have authorized online dealers. (even if they say they are, they are lying)

3) Installations and after sales service. Say you have a problem with a part purchased online. If you bring it to me, of course I'll help you out, but I'm certainly not going above and beyond like I will for my own customers. Want me to assemble the bike you purchased online? Of course I will. And I will get it done on time and for the price I say I will. But I wont break my back to get it done on the day. I wont push it to the front of the workshop que. And I certainly wont be cutting any deals when it comes to labour and parts charges.

 

[AngoXC]

Just wanted to touch on the subject of using discounts/add ins to 'sweeten deals'. Not naming names but I know back at my old job, we were encouraged to 'throw in' accessories such as helmets and lights etc for little to no cost if the customer was a little hesitant. Any comments there?

My current job almost forbids discounting on the basis that the company is 'very well respected in the industry and discounting is disrespectful'. Try telling a customer that....

 

[wombat]

And in response to the comment about the LBS competing with internet sales. There are a number of ways in which the internet will never be able to compete with bike shops.

1) Bikes shops are people. The internet shops are not. You cant ask questions. you cant be sure you are buying the right item.

2) Warranty. Most manufactures of parts and bikes only warranty parts sold by authorized dealers. For all the big names out there, few of them have authorized online dealers. (even if they say they are, they are lying)

3) Installations and after sales service. Say you have a problem with a part purchased online. If you bring it to me, of course I'll help you out, but I'm certainly not going above and beyond like I will for my own customers. Want me to assemble the bike you purchased online? Of course I will. And I will get it done on time and for the price I say I will. But I wont break my back to get it done on the day. I wont push it to the front of the workshop que. And I certainly wont be cutting any deals when it comes to labour and parts charges.

You have to consider though that many of the people that are buying online don't really care about these points.

For starters, you can ask questions on the internet, if not to the shop directly, there's countless forums where tech queries can be answered. Sure, you have to take all the info with a grain of salt, but the right info can generally be found, and we'd be kidding ourselves if we said everything to come out of a shop monkey's mouth was 100% accurate.

As for warranty, well that's pretty debatable when the service from some online retailers is faster and easier than what you can get through your local. Throw in the fact that in some cases you're making a 50%+ saving, and sometimes you can just buy a second item through the same channels, and still come out ahead!

As for service, I'd agree that it's undervalued by many people. Having said that, enthusiasts that are buying high end parts online are likely to be the sort of people that take care of their own kit. It's not as though service info is hard to find online, and it's not like the work is that difficult in the grand scheme, they're only pushbikes, not space ships. A patient person with the right info and some basic mechanical knowledge can teach themselves to do the vast majority of work on their own bikes (with the exception of some suspension gear, maybe).

This is not to say that everyone will go that route, many don't have the time nor inclination, and for them, the benefits of shop bought parts are much greater.

As for respect? Well if a business holds itself in higher regard than the people they're there to serve, I sure feel no compulsion to give them my money.

 

[MBPL]

Anal price customer

I am "guilty" of buying two cheap Bikes. Get it right they are not discounted as there is only ever a recommended retail price (RRP).

 

[TheExecutiveBoff]

This is good stuff.

A few notes. I know I'm coming across quite harsh and blunt. Just a technique I'm using to get a point across. And I am certainly not abrasive with customers. People consistently come back to me because I always exceed the service expectations of those walking through my door. I use this technique to win sales so I don't have to give discounts.

Also I'm in no way attacking MBPL here. It was just a comment he made which thought I could spark and interesting debate. Every customer has the right to spend their money however they want. The 2800 price was not a discount but a clearance price. Well done shopping wisely. But the point stands that the bike shop made the same amount off that sale because they purchased the bike and a clearance price to begin with.

When I refer to the profit of 5% I am referring to the net profit. Look at it like this.

A bike purchased for 3000 was probably purchased for 2000ish. With most brands, the markup on bikes over 2000 is around 35% so I have 1000 dollars of gross profit. Usually in shops I have been involved with, the cost of doing business usually is around 30% of your sales. On our 3000$ mystery bike, that is $900. This leaves only $100 going into the shop as profit!

100 profit on a 3000 bike? yeah thats the bike business.

So If I give someone a 200 discount, I am operating at a loss of 100! Gross profit from the bike sold is unable to cover all of the costs involved in opening the shop that day. If I sell every bike this way, I will go out of business before you can blink.


So I think Ive commented enough and made my point clear. If you have an opinion, either as an employee or a customer, lets hear it.

 

[TheExecutiveBoff]

The attitude that you would work slow or whatever cos some one purchased parts online and want a bike build is puzzling. Sure I understand that you did not sell the parts or frame etc so missed out on that profit. Why would you go out of your way to not deliver excellent service to this customer? Surely you can still make money by charging for the build? Maybe this person will buy lots of other stuff that it is uneconomical to buy online? Be annoyed that you did not get the original sale BUT change what you do so that in the future you will get the original sale.

Here is something I forgot to address but wanted to. Of course I wont send them away and your right. You do make money from the sale. I am only making a general point that I will place my priority my loyal customers. The internet debate is a tricky one as If I were on the other end, I would end up buying online anyway as shops just cant compete. For most people on this forum, they can do fine purchasing online and doing the work themselves. The lack of backup service for online products only affects those without the knowledge or experience to do it themselves. These customers are the ones who will benefit by making their purchase from a bike shop