Following on the LBS theme of the day:

I’ve been toying with the idea of a bicycle cooperative for a while, but not got any further than idle speculation.

I’m membership secretary of a club with 130 members, and we all spend (considerably and regularly) on bike parts. I was thinking of a not-for-profit parts stock for members to get cheap parts. Maybe a low entry fee to keep basic stock on hand (tyres, tubes etc) then if anyone wants anything specific just order it in.

Main questions are:
Would buying limited stock with no on-cost (OHP etc) be cheaper than buying from the internet?
Is there any legislation against this (unfair trading etc)?
Would the suppliers play ball or block me?

I guess i’d have to set up as a LLP or something, no idea how a proper cooperative is formed, or whether i’d need insurances or anything.

Just musing like!

I doubt you’d find any suppliers willing to cooperate.

I think you will find that all is well until you get into a pissing match with someone in the club over a ‘warranty return’. Seems like lots of effort for no real gain.

It might occasionally be worth trying to negotiate a big buy of some sort with a supplier (300 chains?) but you don’t want to be dealing with stock IMHO

maybe a sport pusruit type group buy model but as above, holding stock is just going to be a logistical nightmare.

Nothing to stop you trying, but there’s usualy complaints that shops can buy from CRC cheeper than they get trade from madison etc. So with even less turnover youre even less likley to get cheeper prices.

The closest I’ve seen work is clubs directly aproaching manufactureres or distributors and buying one off bulk’s. e.g. 130 pairs of winter tyres, 130 pairs of 5.10’s, that kind of thing.

Co-ops tend to operate on a non profit distributing basis i.e. they are run at a profit although the intention is not to maximise and distribute profits but to achieve the aims of the members. In your case this would be supplying the services of a bike shop but at a low cost to members. You would essentially be setting up a new shop with all the hassle that would involve but the key difference is that you would have all the customers committed and lined up. It would no doubt be a full time initiative and it would also kick up a stink with the supplies who would probably not want to deal with you. A non starter I would think. Forming a less formal buying club and seeking out discount rates would be a better option.

From what I’ve seen it almost seems more trouble than it’s worth for clubs to get a bulk order of team kit together.

Getting two or more individuals together to set up a “joint account” in one name with Wiggle to stay above their Platinum Customer threshold sounds a more realistic aim.

you would prob be better negotiating club discounts with on line retailers who are already quite cheap.

not a cheap example, but i seem to remember somewhere seeing that howies do discount for groups.

I doubt you’d find any suppliers willing to cooperate.

Nothing to stop you trying, but there’s usualy complaints that shops can buy from CRC cheeper than they get trade from madison etc. So with even less turnover youre even less likley to get cheeper prices.

you likely wont get offered anything at trade if you are not re-selling on at (or around market) price You’re asking suppliers to shit on their own customers doorstep

We wouldn’t supply you I’m afraid.

Active members of a club such as this are probably the very life blood of an LBS somewhere, they should be working with the local shops not against them.

For a supplier to supply them direct is, in my opinion, very poor form.

You probably think this is a good idea as bike shops, apparently, buy water bottles for £1 and sell then at £7 and buy SS MTBs at £300 and sell them for £700. Alternatively, this is a load of twaddle and bike shops are already selling at or near break-even prices.

You probably think this is a good idea as bike shops, apparently, buy water bottles for £1 and sell then at £7 and buy SS MTBs at £300 and sell them for £700. Alternatively, this is a load of twaddle and bike shops are already selling at or near break-even prices.

If that was the case then the shops wouldn’t exist. I believe the average retail margin of LBS is around the 25-45% mark.

It seems like this co-op would be a lot of hassle. For example, our club can barely agree on the colour of the jerseys let alone a tyre/groupset bulk purchase.

Nothing to stop you setting up an actual shop, owned on a cooperative basis by it’s customers (club members). You’d probably need each of your 120 members to cough up £300-£500 to give you some start up cash.

As it would be an actual shop, suppliers would deal with you, but even at trade price you may not be able to beat some online pricing.

Members of the coop (ie those who have paid membership £300-£500) would get trade price (or a big discount, maybe trade plus 10%) on everything, non members would pay normal price, but you would need enough non members shopping at your shop to pay rent and wages.

I can see how it would work as it would be a way of getting enthusiatst riders who more often than not shop online to actually use their LBS, this would mean it would have a bigger turnover and could access better pricing. It would also mean they would help the shop, either by using the workshop or by word of mouth advertising, or by helping to decide what to stock (rather than just complaining to their mates that x shop doesn’t stock x tyres).

The main problem would be finding enough ‘members’ to fund it in the first place.

I’ve thought about converting my shop into a coop with me just being employed by the coop, never quite managed to argue the capitalist out of me though.

Would Perfect Balance not do you guys a deal?

Brixton Cycles is a coop but less than 150 members and run as a shop.

There are quite a few Bicycle Co-ops which are owned by the staff, don’t know of any owned by the customers.

Richiesilverfish – pretty much as I anticipated, and yes I’m not entirely happy about taking business away from the LBS’s, especially as i’m good friends with some of them.

Soma-rich, already exists, infact the club seems to be at the centre of a discount war amongst LBS’s at the moment so can’t really complain.

As i said, just idle musing really, probably would be far too much hassle in reality!

Why don’t you see if you can negotiate a group-based loyalty discount from one or more of your local shops, maybe with a card to identify members? You won’t save as much money, but you’ll be supporting a local business and it would be an awful lot less hassle.

What richiethesilverfish and badlywireddog say ^^.
Get a local shop to support you, offer discounts to club members.

Trying to do it as a club is a massive headache, especially if you’re after Campag for these guys, Shimano for them, SRAM for the other then there’s always the weirdo who wants Sturmey Archer – magnify that against every possible part and you’ve got more hassle than any tiny saving is worth.

Or post up on the club website whenever you’re doing an order online – a lot of companies offer discounts for spending more than £x so if you can put in a combined order, that can work.

Active members of a club such as this are probably the very life blood of an LBS somewhere, they should be working with the local shops not against them.

Thanks for reminding us what we should be doing.

I looked at buying a major brand US sourced frame recently, and it seems once they’ve been through the UK importer and then the LBS, since the importer won’t, or is prohibited from, selling direct, UK customers pay in the order of 50% more than an American customer for the same product.

Import duty, VAT and shipping costs may well have a lot to do with that…

I wouldn’t expect parity Ben but shipping on a frame is what, twenty or thirty quid? And my comparison was against US MSRP which presumably also includes some sales tax.

I wound up buying something else. I guess in the end the market will sort it out.

Anyway I’ve no beef with LBSs, more that I am guessing the poster I quoted works for an importer/distributor and is telling us what we ‘should’ be doing.

US MSRP which presumably also includes some sales tax

It won’t because all states impose their own sales tax which everyone ‘knows’ is added at the till/basket stage.

Depends if they’re shipping one frame (possible for a boutique brand) or a bunch. US prices have no sales tax as most states don’t have a sales tax.

I import quite a bit from the States. Just got myself some new hoses and regulators for my Oxyacetylene torch. As usual, once I’d added on the shipping ($75 for a small box), the credit card exchange rate fee, the duty, the VAT, and UPS’s charge for processing the duty, the effective exchange rate was more like $1=£1.

Mattjg – you, obviously, don’t put a lot of value on having a local bike shop or a UK distributor so you’re always going to feel like you’re being short changed.
A lot of other people have a different opinion though and do see the service that both provide. As neither bike shops nor distys are charities they need to make some profit I’m afraid.

Lots of assumptions about what goes on inside my head there Richie. Mostly wrong.

It was a very long time ago that I stopped trying to assume what goes on inside a STW members head Matt.

I think many people have thought about this over the years.
As richiethesilverfish points out. Distributors are unlikely to let you buy unless there is a retail element as it can undermine the market.

As suggest above, you may be better approaching an LBS that you like and suggest they run a club with a membership which gives them a discount level on new (not sale) items depending on the margin those items are sold at. So for example 20% off complete bikes above a certain price, 10% on components when spending £50 or more etc (some sort of scale) so they dont end up totally out of pocket.

Throw in some events and socials, it could be good fun for members and LBS.

The plus for the LBS is perhaps say a hundred odd members paying them £75 a year and additional business they may have lost to online companies previously.

My LBS gives a years 10% off accessories and components (apart from labour and sale items) when you buy a complete bike. So although not quite as competitive as online, they are close and open at weekends and usually chuck in minor labour (eg mech change) for free when you buy items.

This really comes in handy for warranty replacements and technical help as sending stuff back to online companies and forever chasing by email and phone sometimes isnt worth the effort on a £10 part.

Swings and roundabouts I guess.

Mattjg, the more people there are in the food chain the more a product ends up costing, hence why superstar can sell items made in teh same factory as big name brands for a lot less.

Look at it in reverse

Hub for example

RRP £100
Shop buys from distributor in UK for £60
Distributor in UK takes 40% so they pay £36
International company takes their 40% so they buy from Taiwan for £21
Sourcer/Supplier in Taiwan takes 30%

So you are looking at £100 for an item that started at £15

Shit isnt it, (Advertising isnt cheap!)

Superstar for example can source himself at say £20 as he isnt buying quite the same quantities and sell for £50 giving the customer better value and himself a larger margin.

Everyone wants a slice of the pie!

Sunglasses are the worst, each step the price literally doubles, everyone has 100% or close to!