Bike Shop Failure - Sydney City Bike Depot
- Thread starter scblack
- Start date
MARKL
Eats Squid
Exactly, it's a business they have to work out the equation of income - costs = profit/loss.
No, Giant, Specialized, Trek sell massive volumes compared to Intense, Santa Cruz etc. The mathematical outliers are the low volume brands that are a tiny part of the market. Regardless of what we think, Big W and K-Mart brands are bigger players in the market than our favourite brands.
Some of the distributors seem to be sweet heart deals/ golden handshakes for former riders or similar. Now that may have worked before there was a global market but that model can't continue to work, they need to compete. Then you see the other end of the scale where someone distributes a handful of bikes per year, runs a really inefficient business but expects to derive a high level of profits...again it can't continue.
DJninja
Likes Bikes and Dirt
Riding is only going to get more popular in the future, there's government initiatives at the federal level trying to double the numbers of cyclists from 2011-2016. There's a street in my city that seems to be growing exponentially in bike shops every year. I've surveyed and there are 9 bike shops in a 3km radius, 10 in a 4km. That is in a 300k population city. Not to mention how many others are dotted around.
Mywifesirrational
I however am very normal. Trust me.
Maybe there's no internet up there - hence people are supporting that many shops and not CRC, Wiggle, tubgirl, are you using the psychic internet to post here?
What sort of bike shops? I wouldn't think to many would specialise in high end MTB? more commuter styles shops?
DJninja
Likes Bikes and Dirt
Haha. I haven't reached that level of ascension yet, I'm just part of a special internet to regions campaign for gifted individuals.
This is the breakdown of the stores,
It's quite strange really and would make an interesting economic case study.
Most roadies and the occasionally mountain biker frequent tubgirl so I'm really not sure whats happening.
This is the breakdown of the stores,
- Building custom road and mountain bikes carrying minimal stock
- connected to a kids toy store probably selling a high volume of crud bikes with some high end
- Fixes weird bikes (trikes, recumbent, etc.) and probably targets commuters
- The rest sell a mix of high and low end of their chosen distributor
It's quite strange really and would make an interesting economic case study.
Most roadies and the occasionally mountain biker frequent tubgirl so I'm really not sure whats happening.
Alo661
Likes Bikes and Dirt
Recently in Perth, our CBD has been influxed by the big 3, Specilized (Ride Advise), Trek (Riders Choice) and Giant's own store. All within the last year.
Having worked in arguably the biggest bicycle store franchise in Australia (at the original franchise store) for the last 7 years. It seems that the franchise will die soon, unless the franchise actually allows the shops to work together in order to secure deals within the group. Within our group, this is not happening. It used to, but they are trying to eat each other's tails rather than banding together.
"The staff come across as arrogant", is normal to hear from customers who have been to x shop and never got served or ignored because "the staff were too busy wanting to sell the 3k+ road bike". Shop's think they are delivering great service to their 'core' group of customers, but that is not the group of customers they need to focus on. It's looking after the families, the random kid who wants to get into road riding or saw a Danny Macaskill video and wants to give it a try. This builds a rotating group of customers, once they learn enough from the shop, they out-grow you. This is what most of the people on these forums are, people who have out-grown their LBS because they've learnt from the LBS about buying online and fixing things themselves. It's natural progression. The internet has allowed this natural progression to quicken and many customers wouldn't shop at the same store for more than a year. It's great when those core customers come back to purchase a bike from you! It's a blessing that they remember you served them well and will happily buy a bike, but not much else from you. Take what you can get!
This natural progression also comes with stores who now purchase stuff from wiggle/CRC to compensate for Shimano Australia's pricing and to a lesser extent, Monza's pricing. Once they setup, they always buy from the Australia distro's, but shops that have been around for awhile will buy from cheaper sources where they can get away with it.
Having worked in arguably the biggest bicycle store franchise in Australia (at the original franchise store) for the last 7 years. It seems that the franchise will die soon, unless the franchise actually allows the shops to work together in order to secure deals within the group. Within our group, this is not happening. It used to, but they are trying to eat each other's tails rather than banding together.
This. This is sooo true. We have guys who've spent well over 30k-40k each at our store, but are now getting us to price-match and still expect the same level of "above and beyond service." Some of these guys are now supported riders by brands we don't stock and just come in to chew the fat, but haven't brought a single thing from us in 6 months. There is a stage when the staff and owners need to recognize that they are wasting their time by talking to these guys and letting new customers fall by the way-side.
"The staff come across as arrogant", is normal to hear from customers who have been to x shop and never got served or ignored because "the staff were too busy wanting to sell the 3k+ road bike". Shop's think they are delivering great service to their 'core' group of customers, but that is not the group of customers they need to focus on. It's looking after the families, the random kid who wants to get into road riding or saw a Danny Macaskill video and wants to give it a try. This builds a rotating group of customers, once they learn enough from the shop, they out-grow you. This is what most of the people on these forums are, people who have out-grown their LBS because they've learnt from the LBS about buying online and fixing things themselves. It's natural progression. The internet has allowed this natural progression to quicken and many customers wouldn't shop at the same store for more than a year. It's great when those core customers come back to purchase a bike from you! It's a blessing that they remember you served them well and will happily buy a bike, but not much else from you. Take what you can get!
This natural progression also comes with stores who now purchase stuff from wiggle/CRC to compensate for Shimano Australia's pricing and to a lesser extent, Monza's pricing. Once they setup, they always buy from the Australia distro's, but shops that have been around for awhile will buy from cheaper sources where they can get away with it.
skinnybeans
Likes Dirt
Woolworths have actually been caught out pretty badly recently. Their supermarket business is not doing well compared to several years ago due to having to prop up masters. They have kept margins too high and are being perceived as expensive compared to Coles. They now have to try and reverse that brand image.
http://m.theage.com.au/business/woo...rofit-margins-for-growth-20141104-11gp54.html
http://m.theage.com.au/business/woo...over-drop-in-share-price-20141126-11ue5r.html
All businesses must adapt to the climate they operate in. It used to be the other way around and Coles was struggling but Wesfarmers bought them and turned it around.
http://m.theage.com.au/business/woo...rofit-margins-for-growth-20141104-11gp54.html
http://m.theage.com.au/business/woo...over-drop-in-share-price-20141126-11ue5r.html
All businesses must adapt to the climate they operate in. It used to be the other way around and Coles was struggling but Wesfarmers bought them and turned it around.
pharmaboy
Eats Squid
Masters hasn't looked like a good investment this far, but neither are really been hurt by aldi. Aldi is still at just 10% of the market in spite of massive capital investment! and let's face it! it takes a specially frugal person to shop where there aren't any familiar brands and you have to pack your own bags.
There's a hell of a lot of bitchiness in aus regards Coles and woollies, but our food is cheap and their distribution system is efficient.
A bad outcome of pricing and servicing costs though is the effect it has on non bike riders. I have a friend who was stunned when he got a $200 bill for servicing his sons bike when the bike cost $500 9 months ago.
As to shimano, it's about time that sram was more aggressive in the Aussie market - the only thing keeping woollies honest is Coles - you need the competition.
scblack
Leucocholic
Masters has been a black hole so far, and it really is putting true pressure on the rest of the group to prop it up. Top management are really feeling the heat to get it profitable. Masters is partially owned by a US company and they have a put option to get out of the business in 2016. So far that option is going to be taken up. The losses so far are over $500m which is HUGE.
Aldi does not need a particularly frugal person. We now do about 50% of our weekly grocery shop there. Familiar brands - do you really need the happy Coco-Pops logo to buy choccy cereal? The brand range is smaller, but they are 95% the same as anything else, and are good quality. Not everything is quite what you want there, but the savings are truly substantial. Yes packing your bags is a little pain, but the dollar savings make up for that, it only adds 5mins to the shop.
silentbutdeadly
has some good things to say
I am an acquaintance of an LBS owner and he's one of those bike guys that should never have been a retail guy. Now he's in so deep he's like a mosquito whose just tapped himself an artery and can't get out.
Curiously, through sheer ignorant persistence, he might actually succeed in the long run if he does it right...given his recent moves into direct from distribution sales. We'll see.
In the meantime, way too many LBS seem to have lost sight of the concept of being part of a service industry as well as being a sales industry. And service is not just about staff to customer relationships. It's also about carrying the basic consumables, having what people need when they front up and not fleecing them because you can.
There's been a number of times when our own LBS' don't have simple things like chains and tubes...and when they do they are taking the full margin on them. $60 for SRAM PG-1050 chain and $12 for a Duro 29" tube anyone? These are old school small retail margins...
If the market can develop to the point where it can switch to the retail auto parts model then perhaps the LBS can actually survive - this might still be a franchise arrangement or it could be a company chain store - but it would get wholesale product purchasing to a scale where small margins could be overcome with volume. It's worked for the Brits like Evans.
Avanti and Giant are both distro's that are the closest to this model. Avanti have their company stores plus the Bikehub franchise business and Giant have their company stores but neither are really pushing this industry advantage further into Oz distribution and retail. Which might be telling...
Curiously, through sheer ignorant persistence, he might actually succeed in the long run if he does it right...given his recent moves into direct from distribution sales. We'll see.
In the meantime, way too many LBS seem to have lost sight of the concept of being part of a service industry as well as being a sales industry. And service is not just about staff to customer relationships. It's also about carrying the basic consumables, having what people need when they front up and not fleecing them because you can.
There's been a number of times when our own LBS' don't have simple things like chains and tubes...and when they do they are taking the full margin on them. $60 for SRAM PG-1050 chain and $12 for a Duro 29" tube anyone? These are old school small retail margins...
If the market can develop to the point where it can switch to the retail auto parts model then perhaps the LBS can actually survive - this might still be a franchise arrangement or it could be a company chain store - but it would get wholesale product purchasing to a scale where small margins could be overcome with volume. It's worked for the Brits like Evans.
Avanti and Giant are both distro's that are the closest to this model. Avanti have their company stores plus the Bikehub franchise business and Giant have their company stores but neither are really pushing this industry advantage further into Oz distribution and retail. Which might be telling...
pink poodle
気が狂っている男
Does somebody pack your bags at the self serve in coles/woolworths? There you even run your own checkout...service much?
I shop for food where it is convenient to my whims. I always end up packing my bag...im not letting a shoppy stuff groceries in a back pack. I find service neutral across all my grocery options, sometimes the person is nice sometimes they are cardboard. This has little to do with the business and more to do with the individual. The cross dresser at my local coles is always friendly.
I shop for food where it is convenient to my whims. I always end up packing my bag...im not letting a shoppy stuff groceries in a back pack. I find service neutral across all my grocery options, sometimes the person is nice sometimes they are cardboard. This has little to do with the business and more to do with the individual. The cross dresser at my local coles is always friendly.
scblack
Leucocholic
Basically ALL warranty claims are settled by replacement. They ship to the local shop a new front or rear triangle to replace the offending part. When was the last time you EVER saw a repair made? Other than adjusting/servicing forks or tuning gears or something?
Ah, so your argument is simply supported by knowing one bike shop who imports a container of cheap generic family bikes. Basically on this website that's not what we're talking about. I'd imagine the warranty issues for a kids 12" bike are very different to those faced by Intense/Santa Cruz.
Fine for that shop but its a FAR different market for them than for City Bike Depot.
JTmofo
XC Enthusiast
I think we live in the same suburb?!
pharmaboy
Eats Squid
Wow, for a right winger, you sure like to support ineffecient business models. I'm for free open markets with parallel importing. Fuck the manufacturers who think because the average Aussie is dumb enough to buy at inflated prices.
Do you buy Audis and BMWs as well with their rediculously over inflated view of their worth, maybe you buy Ralph Loren and tommy H from DJs too?
Maybe at heart here is the good ol Aussie saying " you get what you pay for " - completely trite of course, you get for your money exactly what the marketing dept thinks they can get away with charging you.
So far we have giant and specialized and avant, to some degree, trek, in cars we have VW that hasn't played the Mercedes BMW, Audi game. If Aussies keep acting dumb and paying over the odds, we will continue to be treated as such, me - stuff being ripped off, I'd rather give my money to Toll holdings or fedex than prop up some inefficient, greedy distro/LBS who can't compete
The saying 'the customer will vote with his feet' is no more apparent than today's retail market, I'm not just talking bikes but the market as a whole! Unfortunately most retailers haven't been quick enough to react and/or have completely underestimated the power of the internet for retail sales.
Customer service is king, doesn't matter what you're selling! Look at JB Hifi, staff will go out of their way to help you out!
It's sad to see CBD shut down but I can't say I saw value in that shop, I purchased some tyres from them and the mark up was huge!
Customer service is king, doesn't matter what you're selling! Look at JB Hifi, staff will go out of their way to help you out!
It's sad to see CBD shut down but I can't say I saw value in that shop, I purchased some tyres from them and the mark up was huge!
placebo
Likes Dirt
This. Sometimes it's just easier to order off the internet than cajole bike shop staff into selling or ordering something outside their personal area of interest in cycling.
steve jobs' pancreas
Eats Squid
In retail there aint no one gonna give as big a sh1t about the business as the owner.
Further, having a passion for bikes is not a robust business model for running an LBS.
If the owner has a passion for bikes and the people skills to convey it they belong on the floor, employ other numpts to do do the other bits of the business.
High end MTbs aint where its at - better off aiming at a larger market share - dads, kids, mums - affordable quality, and getting em on the right bike.
High end MTB = small niche = low volume
Further, having a passion for bikes is not a robust business model for running an LBS.
If the owner has a passion for bikes and the people skills to convey it they belong on the floor, employ other numpts to do do the other bits of the business.
High end MTbs aint where its at - better off aiming at a larger market share - dads, kids, mums - affordable quality, and getting em on the right bike.
High end MTB = small niche = low volume
whodesigns
Likes Bikes
We regularly do warranty repairs for bike brands, with the specialist equipment required it is not done in the bike shop much these days.
scblack
Leucocholic
OK, I have only ever seen replacements. What brands are you talking about?
floody
Wheel size expert
Each pretty much waxes and wanes, but as a bloc they are continually growing year on year. Aldi are making about as much difference to the duopoly retail bloc as YT are making to Giant.
Probably enough about the supermarket trade though.