Read this: BIKE INDUSTRY IS SICK.
I have a million opinions on that. First off, she is spot on with many (or all) points she makes. I could write 10 posts on this. But I’ll zero in on one today.
“Run your store like a business”
Im only six years or so years into my bike store. And I came from a somewhat business background. What a shock it was learning the bike biz. I found out quickly (two years) that normal business practices were non existent. I pretty much just threw away all I learned about running a business and that’s just sad. Its such a great industry to be in.
So many store owners have the hobby of cycling before they enter the business side of it. I was one of those. But after they start the store, continue to run the store as a hobby. No budgets or plans. Nothing.
They figure that they have lots of friends who ride. They head out to the local MTB race a figure that the exposure of them doing a wheelie across the finish line is good business. Well, its good marketing but you need to follow up marketing with profitable sales. And that means hanging on to your margins.
Selling below margin is common practice for the hobby bike store owner. To him (or her) it’s just cool to see all the people on his\her bikes. Everyone is his\her freind. At the bike events you’re the big man on campus.
But I can guarantee you when they looks at the numbers (if they do that sort of thing), they will see not good news. You can only survive so long on volume. Its just a matter of time.
Not that I don’t understand the evil. I do. It is fun selling cool stuff to cool people. Even if you don’t make enough profit to keep the lights on. There’s always a little room for that. But don’t make it common practice.
To all store owners: Just think if we held onto the already shrinking margins the manufacturers and distributors give us. How wonderful this business would be. Every year a Trek rep comes in and does what they call a “continuous improvement” They look at every number and suggest things. One thing the show me is that if I just improve my margin by 2 measly percent how huge that is on the bottom line. While its easier said than done its not impossible and I try my best but I know of people who drive 50 miles to save $50 on a bike. It happens all the time.
And don’t try to explain that they are paying more overall for that bike. They dont understand. After all, the owner can do really good wheelies. Or wins the local road races. Or whatever.
So while she makes a ton of valid points in that article, to me the main one is run your store like a business, not a hobby. We would all be better off. Even the consumer in the long run. Stores stay open, service levels can stay maintained. Every once in while I hear of a store closing. Sometimes a very well established store. And thats sad. For a consumer its a bummer as you now need to find another outlet. All the new bikes sold have lost all their free adjustments. Its a lose\lose.
Its Friday and I have another busy weekend planned. Again working all day Saturday and Sunday. I hope to ride a bit before work on Saturday and a bit after work on Sunday.
Have a good weekend.