easypedaler
contributor
Reged: 02/08/04
Posts: 149
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I went to a rather large LBS in the area as I was out in that general area. Down the road was a LARGE bike shop that closed a few years ago. I always wondered why. They sold both low and very high end bike stuff. They were decent to deal with and prices were OK. They also had quite a large internet business with a nice 4x per year catalog. One day POOF they are gone. Owner did not drop dead or anything like that.
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Lon
sage
Reged: 12/20/03
Posts: 595
Loc: Pittsburgh, PA
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The margins in the bike industry is the pits. 40 percent is the high end before sales and matching the other guys deals; a large majority of people think the bikes from the big blue box are as good as a bike shop and half as much; parts if they try to be even a little competitive with mail order they are lucky to get 10 to 15%; clothing has a nice markup but many buy that mail order for the greater selection and sale prices; and last but not least the big mail order firms have made it very very very hard on the LBS. Labor is one of the few places they can make a few bucks and even there people complain.
Those are some of the reasons. They don't all count based on where the LBS is located. The better the economy in that area the less they count and the worse the economy in that area the more they count. Since I hang out all over I've seen all variations. My wheel builder is in West Virginia home of the lowest per capita income in the US. All of the above and more are true for him; Pittsburgh is inbetween and a shop in surburban Philadelphia sold 163 bikes from black Friday to Christmas. My LBS in Pittsburgh sold 16 but decent priced bikes; and the one in West Virginia sold the same but mostly low end.
It is a tough business. The key is to open where the average person makes a nice income and people like to cycle.
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easypedaler
contributor
Reged: 02/08/04
Posts: 149
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It is a tough business. The key is to open where the average person makes a nice income and people like to cycle. .
I think this is one of the big keys. It is a average income area. When they closed cycling was not as it is today. That was probably 6 years ago. It was a decent place. Not great but decent. Now the place down the road has a huge mononopoly on the area. Place was packed this weekend. People were spending some money.
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Insightdriver
captain
Reged: 03/07/04
Posts: 472
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My wife and I, sharing a passion for biking have made it a point to stop in and check out every bicycle shop within our greater metropolitan area. There are wide variations in the types of shops out there.
One type is one that has a core clientel of serious amateur and professional riders. This is the kind of shop where you see frames hanging from the rafters, most with Italian names. Their repair area is busy with a half a dozen guys working there. The shop tends to be busy most of the time.
Another type is the one near the mall that tries to appeal to the mainstream. Major label bikes fill the floor. The repair area is empty when the LBS guy is working with a customer. He has a few part-time helpers and is basically a one-man shop. Sales there are to mostly clueless people interested in getting a bicycle.
There are the shops that have a lot of brands and different styles of bikes. They have knowledgeable people that help educate a person and try to steer a person to the right bike for them based on an interview. A lot of know-it-all types frequent these shops, with eyes glittering and salivating over the latest trick gear and bikes.
The retail industry is hard. Most shops can carry only a few brands of bikes and try to carry the lines and price-ranges that move the best in their geographic area. I've noticed that brands vary by geography as well. I originally came from the east coast and moved to California a few years ago.
I happen to be fortunate to live in a bicycle-friendly city. A lot of bike shops here do a good business. The kind of shop I go into today is different than the kind of shop I frequented years ago. Now, having a relationship with a good LBS is more important to me. I have a long-term relationship with my LBS guy. I have not been steeped in the bicycle business. Most of what I learned was from the pages of Bicycling magazine, and that's like the way we learned history in school (it's just not the way it really happened).
Here are some good links I've found that helped educate me:
http://www2.sjsu.edu/orgs/asmtms/artcle/articl.htm
http://www.sheldonbrown.org/bicycle.html
http://nbda.com/site/page.cfm?PageID=63
http://bike.shimano.com/publish/content/cycle/sac/us/en.html;jsessionid=7880b9d7-c701-b54a-8a15-910b78d49c1b
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why do LBS go out of business????
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