Evolution of a Bike Shop. How you can help.

I’ve read numerous posts on why you should support your local bike shop.  As both a bike shop owner and consumer I thought I’d put my two pence worth on paper on why they need you now more than ever.

Some of you may already be aware but the cycle industry is struggling at the moment, a lot is of its own doing (I won’t get into that now!) but there are a significant number of brands, distributors, and retailers paying the price.

Speaking from a retail perspective, the industry is evolving, as are consumer habits and expectations.  As a sector that has been largely served by independent retailers, the Cycle Industry has struggled to keep up with this pace of change.

It’s commonly believed that bike retailers are making huge sums of money from selling products instore. If you look at margins and gross profit, then yes they are making a fair amount of money.  Look closer at the costs associated with providing that service; I’m not just talking about the staff cost for the time you spend with them. I’m talking about all costs associated with running the shop 12 months of the year.  The rent, rates, utility and staffing, I’ll stop there before your coffee goes cold, but factor this in and no they are not making as much as you think.  You’re looking at single figure % net profit and on relatively small turnovers (£500k – £1m), that profit is just enough to plough back into the business to try to keep up with the times and keep the businesses relevant. I say try because you can only ever try and keep up with the multi-store chains and online retailers to provide your customer with an experience that meets their expectations. The larger the retailer the more they invest in the customer experience and the bigger the gulf between them and the independent. It’s certainly reached a point now where that gulf is impossible to bridge. So what happens now…

Before you think I’m going to tell you to only shop at your local bike shop, boycott the online retailer and pay full RRP for everything, I can assure you I won’t.  I’m a consumer as much as the next person, I’d be lying if I said I didn’t shop online, who doesn’t.  I find what I want and I buy it from where I feel offers the best value. To me this doesn’t mean the lowest price, it’s a combination of factors, the price is definitely in there, alongside convenience, the speed of delivery, experience, and ongoing support. In the cycle industry, for bike purchases, that support is something an online retailer can’t provide as well as a shop and this is why there will always be a place for a local bike shop.  It will just look very different to how it does now.

The bike shop of the future will hopefully feel like that of today, the same faces welcoming you.  A bike shop where you can get your bike repaired, meet friends for a coffee, but it will be a shop that no longer relies on revenue generated from retail sales, these will supplement its service-centric revenue streams.  In the short-term, while this transition happens there will be significant strains on these businesses and this is where you fit in. You can support your local shop by using those services, still purchasing items from them even if it takes that extra day to arrive, as long as it’s good value and I will leave you to judge what that looks like to you.  If you keep using those services, then hopefully you’ll find your local bike shop will survive what is a hugely challenging time.

These businesses wouldn’t be there without you, they know that and they value your custom.  All I ask is that you don’t judge them on the small slip-ups, we’re all human, we all have bad days, and at the moment those days where something happens that significantly impacts the viability of their existing business model are happening more often than not!  Don’t judge them on one bad experience, they don’t have the luxury of hiding behind a corporate front.

Local bike shops are the heart of cycling communities across the country but they need the support of those communities now more than ever.  You can play a huge part in shaping their future, so next time you need something, pop into the shop or pick up the phone to see if they can help.  The worst thing that will happen is they will say they can’t.

Ceri, founder of a bike shop aged 22 when I thought I knew everything…

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4 Responses

  1. This is a brilliant article. Well said. A good LBC is worth its weight in gold. A bad LBC drives cyclists to yhe big chains and online. Great advice and technical expertise can improve your performance and your bike. Yes i, too, shop online sometimes but i always try to buy components and bikes from my LBC and use them for servicing. A great community for shop rides and banter, developing those new to the sport, good coffee and the annual World Biscuit Dunking Competition. Keep up the grezt work, Ceri.

  2. Ceri,
    That was a very insightful article and clearly based on years of real life sharp end retail experience. I do remember you back in the day ………
    My input is to say – impartial advice that stands the test of time is always appreciated and rewarded by loyalty as indeed is an acknowledgement of a ‘mistake’ when occasionally made and it’s subsequent speedy fix.
    Huge respect to you for what have done, what you are doing and what you will do.

  3. I loved reading this Ceri – it’s directly parallel to my own lines of thought.

    The biggest challenge for manufacturers in the cycle industry and the biggest opportunity for the retail outlet is one in the same and it’s on that common ground that the cycle retailer (and the manufacturer) will stand or fall.

    We are selling (by we, I mean the manufacturing sector – the company that I founded and own has a long-term contract with Campagnolo and a close involvement with several other manufacturers) an increasingly technical product. In order to satisfy increasing expectations of performance from our customers at the retail level, that product will continue to evolve and as it does so, it will become increasingly technically challenging to assemble and to maintain correctly.

    Well trained, careful mechanics with experience and knowledge are generally found in IBDs like Ceri’s and it’s for that reason that I am optimistic about the future of the good IBDs – one has only to spend the amount of time on the various forums that I do, to know that the sum of all human knowledge is not to be found on the internet (even if low prices sometimes are) and in many cases, the “knowledge” displayed on the net is occasionally misguided and often just plain wrong. Whist that may also be true in an IBD, at least if you make a buying decision in an IBD and give them your money, if they get it wrong, 99.9%, if approached about it, will sort it out. Try that when you accept advice from “spannermonkey123” on a forum …

    I think Ceri hits the nail on the head when she talks about “value” as distinct from “price”. I’d go further and talk about “added value”. Why should a retailer have access to wholesale prices and make a profit when they sell to an end-user and why are so many ‘net retailers so close to that trade price, in the prices they sell to end-users for? Is it driven by volume? Well, yes, to a relatively small degree. One other thing it is driven by, though, is added value. Ceri has spent a lot of time developing her skill and keeping up to date with her product knowledge – when she helps guide a customer around possible pitfalls and sells her or him the right product for the job, Ceri is adding value in away a box-mover never can. You are buying a tiny slice of that time, in the extra you are paying her. In a way it is a little like insurance, a little like consultancy and a if she then fits that part for you (or one of her equally adept staff do), you are also paying for the time it took to acquire the knowledge and experience that it takes to do that job well and on a completely predictable, repeatable basis.

  4. Interesting entry – all brick and mortar retail will have to convert more to a service model in order to compete against online companies. I’m willing to pay more to support my local bike shop – but sometimes have to go online because of selection.

    Thanks for sharing.

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