Wiggle have been unbelievably successful, it hard to see how anybody can catch them really.

As of end of the last period, they have got distributable reserves of £31m, a wage bill (including directors) of £14m, and they are making 40% gross profit on £180m. Staggering, really.

I heard Carlton Reid speak today in Leeds. Some of the standout things he said:

There is no cycling boom, bike sales, miles ridden all static for years.

There were 3000 bike shops when he began his career. Now there are 1000.

The only growth area is E bikes – he had some interesting stuff to say about the future if this market!

The MAMIL and MAMIBA is a shrinking market – but that where the advertising is aimed (and is also the vast majority of people working on the industry too)

I also heard that around half the stuff that the ‘box shifters’ sell is a loss leader. Having had a bit of a look on the Madison dealers only webpages it is clear that loads of the Shimano stuff they are selling is well below trade price. That’s just crazy, how can I buy an item for less than a shop – with free postage – and why are Shimano letting this happen. It’s clearly not sustainable.

I guess my point is that it’s no surprise that a seemingly good LBS has shut. Sadly…

I believe e bikes is a growing market for sure .

How ever it too is in danger of being infected by some of the cheap crap bikes putting those that would be off.

You can buy an e bike for 500 quid. It wont last itll be heavy as shit and have a 10-15mile range. And wont ride particularly well without power itll be like riding a 50quid supermarket special. Through trecle

You can buy a bosch motored bike which would be the equivalent of buying a 1000pound bike – but itll cost you 2500 quid. It rides like a real bike just a bit heavier.

But people will associate with number 1 as its just a bike isnt it ? – when a decent batery costs 500 quid. Something gotta give.

Wiggle s figures aren’t that good hence why they had to buy crc to deliver growth. Their gross profit is about 22% and net profit about 1.5%. They do not have 31m distro mutable reserves either that is mostly retained profit which is mostly tied up in stock if you look at the balance sheet.

It was a pretty terrible post by me, I’m sat in the dark in the garden drinking Black Sheep 🙂

Agree on 22% GP, it’s still not shabby when you think how much they sell is promotion driven.

Also, the £30m of shareholders funds: it’s hardly a weak balance sheet. I had no idea they were that big.

Out of interest, how many of your local shops are open to drop off or pick up from the workshop outside of office hours? Independent ones, I know Evans and CycleSurgery manage it.

Mine all seem to be broadly 9-5, maybe one later evening if you’re lucky. I’d consider giving them more work but now it’s a case of dropping one evening and picking up Saturday at best.

Wiggle are reselling Havebike’s mobile servicing, pick up and drop off 7 days a week within the M25. That model makes a lot of sense, why do spannering in a prime retail space on the high street when you could do it in a cheap spacious unit elsewhere?

Simon g, I agree with what you say, That’s why i thought about BIGGER on line retail sites setting up a fitting service, One bike shop poster “tongue in cheek” likening working on a bike to performing brain surgery, well i’ve known other bike shops give it the smoke and mirrors approach to working one of mans most simple yet most ingenious inventions and it’s not worked for them.
And why spend thousands of pounds on Tools and then send a huge proportion of potential turnover on to some one else?

What is happening is just a sign of the times, Like pubs closing their doors and being re opened as Chinese Restaurants or Indian Restaurants or being demolished completely to be replaced by a a few houses or a Tesco Express. I’m sure there is a dark corner of the internet dedicated to once great pubs that had to close because Supermarkets sold Beer cheaper or people preferred to go out for a meal and drink a beer or two instead of cracking open a pay packet and sneaking out a fiver to have a pint on the way home from work.

I work In California a few months of the year and i’ve had a similar discusiion with a colleague over there reagrds Panda Express Chinese Fast Food outlets. If they opened over here i’d bet that would be the demise of many Local Chinese restaurants. A bit like LBS’s over here. but one selling food and the other selling bike stuff.

before some one else does…..

http://www.independent.co.uk/news/business/news/uk-pubs-closing-at-a-rate-of-27-a-week-camra-says-a6853686.html

Cyclists are the worst possible customers for a bike shop.

I think there’s an element of truth to that. Cyclists are a pretty mercenary bunch. I thought recently of opening a bike shop, but it was in a very specific location and it would have been a good coffee shop with a workshop, opening early and late to catch the commuters. I would actively be targeting the Rapha and Castelli crowd (and triathletes). However I just don’t want to work in a bike shop again.

I love the threaded rod and washer kit people make up to fit headsets and press fit bb’s. It just ends up making the workshop more money.. especially the one’s who use this botch on press fits.

I love the threaded rod and washer kit people make up to fit headsets, that I’ve used on umpteen bikes with no drama or issue.

DrP

Well done Dr P, guess you manage where others don’t personally having used many methods the Park tool headset press is one of the easiest I’ve used. I’ve also made the walk of shame to the shop to sort the things that went wrong, always more than getting it done properly…

to be fair – i dont think its the tool choice so much as the user.

ive seen headset cup where the lower lip has been folded by folk trying to press in using the “bearing cup” to press against.

Ive seen folk who have used the correct press tools wrong to the same ends.

Ive seen all manor of rounded bolts , bits of allen key , bits of stud extractor , drill bit stuck in places they shouldnt be etc …..

The right tools are as dangerous in the wrong hands as the wrong tools. The wrong tools in the right hands can be used to a reasonable ends if no other option but id still prefer to have the right tools.

“I’ve also made the walk of shame to the shop to sort the things that went wrong, always more than getting it done properly…”

see my previous post under “if you worked on it first ” 😀

Actually, I don’t ‘love’ it – a proper tapered headset press (or, i might find a lathe and turn a stepped-taper) would be much easier!
I was just playing devils advocate!

DrP

What’s to stop ANYONE selling online?

I imagine a lack of understanding or will to change are two reasons for more traditional shops, or those with previously very reliable local trade, which is before you get into the the capital required to buy the volume of stock needed and still have a semblance of a profit margin whilst being vaguely competitive online.

What’s to stop ANYONE selling online?

Nothing to stop you trying. eCommerce software is relatively cheap, but there’s still a requirement for knowledge of how to use it, which you either have to have, acquire, or pay someone for.

You’ll also be facing months and months before your site starts appearing anywhere in search rankings, and even then it’ll be pages and pages down, and that’s assuming you have anything to sell at a competitive price.

^ And that will likely be reliant on either word of mouth (very slow and limited) or a substantial advertising budget to create awareness, which is even harder than promoting in your own local area as you have to target nationally.

And after all that see how well you do against the big boys who are already there!

Some have made a decent go of it, CTBM springs to mind amongst others, but they’ve got some niche products to tip things in their favour, or rely on selling their own produce (SuperStar), or have a business model of buying up a lot of end-of-line stock in bulk to resell. It would be VERY hard to start up a new generic online cycling store without some significant up front money or playing the very long game.

I’m another who rarely actually buys stuff from high street bike shops but do use them for servicing.

My LBS (Bromley bikes) usually has two mechanics working flat out, with the boss pitching in when really busy. There is normally a queue of people on a Saturday morning dropping off bikes for service work.

I’m mechanically minded + have a roll-cab full of tools.
Given the time, I would quite happily have a go at anything – bikes are not that complicated . (compared with pulling engines apart.

However, cycling is my hobby and with a young family I don’t have whole evenings or weekends free to play about with gears/truing up wheels.

Bike shop labour rates are not expensive, and I’d rather pay my local shop £20 to sort my gears, or £15 to straighten a wheel, than waste an evenings riding time doing it myself.

I’m sure when I’ve retired (in about 25 years) i’ll be happy to spend the day tweaking wheels and gears!

What’s to stop ANYONE selling online?

If you can buy parts at the same price as CRC-Wiggle (one company now) or Rose etc. then go for it. You can then compete. Lots of bike shops will happily point out and some have shown me trade price lists where the online price is lower than the trade. So they can’t compete. Merlin were sending Pikes (Boxed with all spares that RRP ones had) to Australia for less than the trade price here.

A simple way of looking at it;

Everyone can buy something online – shops can’t compete/provide
Not everyone can fix their own bike – shops can compete/provide

Opening longer hours and 7 days for customer convenience costs a whole kit more money in staff that most likely is not covered by the extra trade. Shops I know are busiest Mon to Fri duringn 9-5, I have known some to try later opening and found it was the quietest time as were Sundays.

the Park tool headset press is one of the easiest I’ve used

Which can be bought and sold on again for very little (if any) loss each time every 2-3 years when you actually need it. Or chip in with a crowd of mates who all buy one ‘specialist’ tool each which can then be shared around when needed.

The idea that people should think about value rather than price and that they’ll miss bike shops when they’re gone is something that most people would have some sympathy with I think. But in practice it’s too frequently undermined by shops themselves. It’s true that ‘the internet can’t fix your bike’ but IME sometimes LBSs can’t either, or at least to a standard and level of service that doesn’t leave you thinking you should have done it yourself.

Obviously this isn’t true for everyone but shops do need to actually provide this value that they want people to pay extra for. I appreciate there are reasons this might be difficult though, as in special’s post.

Given the web is not going away why not find the opportunity, perhaps offer a collection serivce with basic bulid or even a bike fit?

Did you really just suggest a collection service bike fit?

Interesting thread. Trying to compete on-line as a small business is damn near impossible unless you have a niche that the big boys are not interested in and you’re not up against smaller businesses that are desperate to sell at any price because they are going down the pan. Not only are you disadvantaged by you lack of buying power on the products but the same is true of shipping too, which is exacerbated by the distance selling rules which make postage refundable as well as the product what every the reason for the return. Adding to that is your inability to compete on Google shopping – it’s now done on a bid basis, so if you can’t bid high enough you won’t appear, even if your the cheapest around. Google also changes its requirements on data feeds on a fairly regular basis, the cost in time for a small business to keep on top of that alone is just crippling. I was in the outdoor industry which seems to be going down the pan quicker than the bike trade. I’m not a Luddite, I realise change happens but those smugly stating “its just the way thing are man up” should be aware that this can happen to any business sector and probably will – they may well be next to be saying it’s not fair, something need to be done, etc.

Did you really just suggest a collection service bike fit?

Yep, customer orders a bike from Tredz, gets it delivered to LBS so doesn’t have to be at home, gets it t
recieved and built for £50 or fitted for £100.

Customers gets a service, LBS gets £100 possibly some accesory sales and probably ongoing custom.

Just a suggestion as an alternative to going online and moaning, I’m sure theres other options too.

Fitted without the customer present, interesting…

They have to collect it.

But then the customer still has to find time in their busy schedule to go to a shop anyway – and isn’t the point of buying online the convenience and not having to talk to feckless bikeshop types who are only out to fleece you to enlarge their mansions?

Possibly inside your head, anyone who thinks like that deserves to gonout of business pronto.

Wow, you sound cross.
Need a hug?

Its a competitive market. As bikes get more expensive and reviews extol the virtues of the top end kit, buyers will want it (no one wants second best) and have to find it as cheaply as possible to afford it – i.e. online.

Bike shops have to find a unique selling point to stay around. If they think customer loyalty alone will do that then they are kidding themselves. Shop rides, weekends away, discount schemes, coffee, cake, advice, a good atmosphere, old fashioned salesmanship, servicing, suspension tuning, free bike demos, stocking non-discounted brands etc. All things you can’t get online easily.

When I was in my teens I was good friends with the LBS owner, talking to him was enough to put me off a career in a bike shop. He used to hate Christmas, lots of cheap kids bikes to assemble and parents whining about £75 being too much. He had to sell to that market to keep afloat though as the roadie/MTB scene wasn’t enough to support the shop (not helped by the attitude of expecting free repairs for life if you bought the bike there) and a lot of that was before Internet sales being a big thing.

Eventually there will be a correction and cafe/workshop/collect+ business will pop up to take the place of the majority of LBS’s and the bigger traditional retail LBSs will still be around, just not so many of them and not so local for most.

Adam@BikeWorks – Member
Wow, you sound cross.
Need a hug?

Is that your attempt to divert an argument you cant support?

BikeWorks is the analogue answer to your bicycle needs in an age of digital disappointment.

and this

– and isn’t the point of buying online the convenience and not having to talk to feckless bikeshop types who are only out to fleece you to enlarge their mansions?

Suggest you are the one with a chip on the shoulder.

Given the high price of top end bikes, surprised not to see a webuyanybike business. Reselling a £6000 pinarello for 20% for example might be viable business?

wilburt – Member
Is that your attempt to divert an argument you cant support?

I wasn’t aware that I’d made an argument. Could you point me to it so I can see what it’s all about?

Suggest you are the one with a chip on the shoulder.

Not at all – last I checked my shoulders were surprisingly chip free!

Given the high price of top end bikes, surprised not to see a webuyanybike business. Reselling a £6000 pinarello for 20% for example might be viable business?

Google seems to think there are such businesses…

I’ve never been tempted to go into Blazing Saddles purely because of the kit their roadies wear. Some of the riders you meet at races are nice, some not so much, as you’d expect, but the kit was gopping.

Still sad to think you won’t see them around and the shop will be gone though, but like others have said there is no shortage of other local shops around, and quite a few have been springing up in slightly more prominent places like in Shoreham.

I’ve heard Freedom bikes in Brighton will probably be gone soon as well, which is another shop that would do a lot better in a different location.

It’s always interesting how we blame “market forces” when we want to justify being a selfish arsehole. We usually don’t even realise we’re doing it.

Well of course we’re all going to pay as little as we can – market forces, innit? Whether that’s bike bits, milk, taxis or music downloads. If you can’t compete with the market, you don’t deserve to be in it. Logic.

So if the LBS needs to charge the retail price on parts, or a labour rate that I think is expensive, so they can keep afloat while maintaining a location and opening hours that are convenient for we customers, that’s “being greedy” and we all start asking who they think they are, trying to make a profit from our demand for instant stuff and free labour.

So we’re not “being greedy” when we decide to pay less to Wiggle/CRC / Amazon et al, because we choose not to see the warehouses full of zero-hours employees on minimum wages working round the clock and the tax-evading company groups making mind-boggling sums of money for venture capital funds, the delivery drivers who earn pennies per delivery and have to pay their own fuel and expenses, and the manufacturers effectively held to ransom by those companies.

Because it’s all market forces, innit.