i tend to agree with cannondale king and mtbfix
i left the bike trade last june, i finally had enough, i had lost my enthusiasm for it, got sick of fixing other peoples stuff and just watching my stuff collect dust. i also got bored of having the same tired old argument of us verses mail order. i can totally understand when owners get soul destroyed by it all.
but as far as the current situation goes i think good shops will survive by being niche market specialists and being good at their jobs and the crap shops will die regardless of internet mail order.
not that the internet hasn't massively changed they way people shop, of course it has. and you have to admire their growth aswel even if you don't like it. it is more convienient/cheaper and you don't have to go anywhere. it's a hard battle to fight.
what always frustrated me was customers who knowingly waste your time by getting all the info and advice then buy the same thing from wiggle/crc/evans etc, you see it on the local club ride and you can't help but think tosser. i know i did.
also the other problem is the internet doesn't give the shop the opportunity of competing, it's open 24/7. atleast when it was a copy of mbuk slapped across the counter 10years ago you could say you'd try and match it and their hours were the same, now the shops don't get the same chance.
i had a conversation with a rep several years ago, the subject being exactly what is happening to the trade now. i think long term shops will become more like quickfit mechanic shops, it's the only thing the most customers can't do.
the way i would do it is this:-
bikes, shit mark up, high stock cost
spares, ok mark up, medium stock cost
accesories, ok mark up, medium stock cost(if you are sensible)
clothes, not great mark up but can be very high stock cost
so l would bin the bikes and clothes, let the mail order guys have it, you'll save a fortune on stock costs and you'll never get into that "will it fit me/is it the right size/ have you got the other colour/what can you chuck in" conversation again. concentrate on workshop, that way you retain the most profitable parts of the shop and on what you are doing you are making more mark up and profit, you are turning over less but the profit is higher. but you can only do this if you have a known and good reputation for mechanical ability.
if you turn over 500,000 in the bike trade you probably make profit about 25,000 (for the owner) after wages and bills, for someone who makes it their life like my old boss that isn't that great really and don't forget that for the first 5-6 years that you'll not make anywhere near that so the profit will be lots less.
the bike trade also depends on young guys having an interest in it, it keeps the sport fresh but they also need to be trained properly, not just in the products either (i was trained at john lewis) they need to be told when to tuck in their pants so the old guy who likes to be called "sir" walks in he can't see their spotty arsecrack.
i always try and buy from smaller dealer if i can (not just the bike trade) i think it's always the smaller dealers who have more individual specialist knowledge in their chosen field.
but if your local shop has gone bust it isn't just his fault, look in the mirror, it's yours aswel.
that's just my opinion, so there.
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