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Tough situation to be in Steve, no easy answers and no doubt very frustrating.
As a LBS (general question to anyone involved with a LBS) where is most of the money made? I would imagine the workshop or low end complete bikes account for the most income but it would be interesting to know where the financial strengths of a LBS lie...
Interesting letter and valid POV, unfortunately retail changing very quickly. I currently work for 3rd largest chain store bike retailer in UK, even we cannot compete with grey import on-line retailer's on shimano, SRAM,etc. We are still buying from UK distributors, trade pricing typically 10% above grey sale pricing on internet.
It's a problem but until manufacturers stop selling low priced bulk stock to anyone cash rich...it ain't going away
Best solution for lbs is selling 'protected' brands that don't dump stock into aftermarket, bike service, bikefit, shop rides, etc. Anything internet cannot offer!
Best solution for lbs is selling 'protected' brands that don't dump stock into aftermarket
Fairly few and far between though atm, good policy but at the same time unless they're really good products that warrant the extra cost customers will buy the cheaper option
Very valid points. Big challenge for bike biz in the long term. If industry expects or cares for lbs to survive then dual channel approach is unsustainable.
i feel that the lbs is on very thin ice ,we are becoming a free advice /fitting centre ,none of which pay bills .
bottom end has gone the way of sports direct and supermarkets,mid range/higher end is now where shops are targeting.
workshops are sometimes profitable and i'm starting to see some charge for work that was'nt required(bit like my plumber/car repair centres) and try and milk every penny out of every job.
The big shops are paying less ,even when many claim not ,seen it with my own eyes,biggest problem is that it's a world wide market and when taxes/prices vary country to country many retailers will lose out.
That was kind of why I wondered where the money is being made in a LBS. If a LBS can't compete in various areas then where is it likely to focus in the future to survive?
Sounds like high end and workshop is the way forwards but then the market is small. Comparisons to a local butcher dying out aren't quite the same as there isn't really a mass market replacement for workshop repairs for example. Would a future LBS just be a bike repair shop for example?
They're selling them off cheap because they are 26ers 🙂
Its a stock clearance, Halfords aren't dealing with Hope any more in the future so everything is going. There was a memo that went around the stores last week detailing that there was a general unsatisfied feedback from customers who had waited excessive waiting times for products from Hope, despite the fact if you ring Hope direct they normally send the item next day or same day. Ordering through the store was taking 2-3 weeks for parts...
Just a bit of blurb from my store.
low end complete bikes account for the most income but it would be interesting to know where the financial strengths of a LBS lie...
Putting one together probably costs more in workshop/labour time than any profit made.Especially if you have service and repair work waiting where you profit from fitting new parts
There are a lot of people that have made a fantastic living over the past 15 - 20 year through some very strong economic times...these people don't like change or their rich picking being challenged by businesses that have clearly got a stronger business model that works, I'm not just talking bike shops but businesses across the board, smaller bike shops and the like should lower their margins and stop being greedy, they along with a generation had it too good for too long!
i don't think most shop's will survive on a workshop only basis unless you charge top dollar ,i always felt that repairs were a service and that it sold us a few parts and that new bike sales were what payed the bill's ,slowly everything has been eroded away ,not that many years ago 100+ bikes were sold to the insurance customers,last year zero as wheelies now get most of that market,even top end brands are now purchased abroad ,but when things go wrong the same customer expects us to replace there frame for free because we are a dealer for that brand,one way or another sevices cost money ...do you work for free?
like many who work in retail in this trade most have a good relationship with rep's /suppliers,hence shall we say sometimes customer will get what you would call an extended warranty on certain items(i recently got a frame swopped that was a number of years out of warranty as a good will gesture)or sell an item at cost if you fell off and broke it after a few weeks the difference is that your lbs needs repeat customers in a small town to survive,many online think that if they lose one there's plenty more out there.
nwill1 - Member
There are a lot of people that have made a fantastic living over the past 15 - 20 year through some very strong economic times...these people don't like change or their rich picking being challenged by businesses that have clearly got a stronger business model that works, I'm not just talking bike shops but businesses across the board, smaller bike shops and the like should lower their margins and stop being greedy, they along with a generation had it too good for too long!
you sound just like someone who steels artists music & blames the record companies 🙂
when i need some new Hope hoops i'll check out Halfords, had no idea 😀
Halfords probably make 0-5% margin, LBS' 15-30% margin on hope hoops i'm guessing? Loss leader to get traction.
Adore Hope, customer service is supurb too, replies to emails at 10pm and 530am 😯
jolmes - Member
Its a stock clearance, Halfords aren't dealing with Hope any more in the future so everything is going. There was a memo that went around the stores last week detailing that there was a general unsatisfied feedback from customers who had waited excessive waiting times for products from Hope, despite the fact if you ring Hope direct they normally send the item next day or same day. Ordering through the store was taking 2-3 weeks for parts...Just a bit of blurb from my store.
Have you any decent UST hope hoops in stock?
Have you any decent UST hope hoops in stock?
Look on the site mate, although in all fairness, i ordered an IBR that was in stock, got a call off head office that said it wasnt, took 3 weeks to arrive...same with some f20 pedals, was fuming as I was told 3 days, the item was in stock etc etc and I bloody work there! Not only customers that get pissy, the staff do too :p
Bike shops can't buy suspension forks as cheaply as on-line stores are jobbing them out for . How can that be right ?
timc - I've never downloaded music let alone stolen it, I still buy CD's!
I'm just of a generation where I've worked hard for everything I've got not just got lucky cause there's so much money kicking about.
wow what a price! are the flows any good though? i'm tempted!
or this ZTR crest looks decent
I'll give you £20 for one.
😆
I don't know where bike shops will go. Quite a few will just go bust - like the small record shops and the small bookstores, they'll lose out to online retailers and big chains. Others will do well with niche things, or with good workshop service, or by selling online.
Business is harsh. There's always going to be someone selling something cheaper than the next person. The reasons for this can be counteless.
Shifting dead stock, Sourced from outside normal avenues, OE products, the list goes on.
And it's wrong to compare a small independents to a major chain. The business models are completely different. You dont see your local grocer competing with Asda on price yet they still trade and make a successful business, why? because they are 'there' on the highstreet, convenient, sell items that you want. There's a reason they are called Convenient Stores!
The Halfords and the Asda's rely on selling 1000's of items with very little profit whereas the small stores sell fewer items with higher profit margins.
Anyone who trys to run a small independent with the same strategies as a huge chain is destined for failure.
People lose touch of the 'normal consumers' that are out there. The actual number of shoppers that trawl the internet for the cheapest prices and are fluent in 'chainreaction this' and 'wiggle that' are actually in the minority.
The majority of people who ride just want to buy decent products from their local store that they trust and take advice from the chap that's served them for the last 5 years, the sales guy who knows their bike inside out. A good small local store, regardless of what part of the retail sector they're from will stand out for all the right reasons if it's run right.
Biketreks in Ambleside is a perfect example of this. Service and knowledge is in abundance and this draws in customers from far wide. Their customers are REAL customers that dont live online with weary eyes searching for rock bottom prices. They shop their for the RIGHT reasons.
As much as the internet is great for business it's also killing it, but we (us internet geeks) are as much to blame in the constant drive to buy things as cheap as possible. And if you're one of those people who goes into your local shop and asks for something to be price matched then you should hang your head in shame!
Just my views anyway.
Rant over 🙂
Goodnight
The "Don't drop it below" price is not a bad thing really. For every product you sell you need to add in overhead etc. and put a little something aside for dealing with any issues. There is a minimum price for American Classic wheelsets over here in Oz the one of the LBS's did some for less, now all the others if they want to compete are selling at margins that are not unsustainable - most customers expect that when they buy some wheels magically the cassette & rotors get swapped and the brakes reset on their bike for free too.
Another LBS went after a bike sale on a bike that had been out for 1 week (not a brand that was tied into any particular shop) they quoted a price that was $20 above trade just to get a sale, that won't even cover taking it out of the box let alone the fact that this one comes as parts not just stick the bars and wheels on.
The LBS can't win the race to the bottom, I'm happy if brands will work with good local dealers with some integrity. As it sounds like Halfords are getting rid of hope it will be a one off.
trouble is people come in for the excellent advice ,touch it ,sit on it,decide what they want then buy online to save £20.00.
loyalty to the bloke down the road who helped when they were in the shit has gone and i can't be the only one who questions why i go the extra mile to fight for a customer when something goes wrong.
A letter from Hope...
You may have noticed that Halfords are currently offering massive discounts on our products and I wanted to fill you all in on the issues surrounding this. As you may or may not know, we have dealt with Halfords on a small scale for around 20 years. They never really stocked any product and simply offered parts on a sold order basis, however with their online changes they began to offer more products.
In October they asked us for better discounts on our full range of products. We stated that we could only continue to offer them the same prices as we give all our other dealers. They informed us that they would not deal with us unless we offered a discount. Our answer – OK we’ll stop dealing with you then. So the knock on effect of this is that they are “liquidating” their leftover stock at much discounted prices. Their stock holding was quite small so this discounting will be over very shortly.
I also wanted to assure you that we understand how important our IBD network is to Hopes future and that we will continue to fully support you all.
A letter from Hope...You may have noticed that Halfords are currently offering massive discounts on our products and I wanted to fill you all in on the issues surrounding this. As you may or may not know, we have dealt with Halfords on a small scale for around 20 years. They never really stocked any product and simply offered parts on a sold order basis, however with their online changes they began to offer more products.
In October they asked us for better discounts on our full range of products. We stated that we could only continue to offer them the same prices as we give all our other dealers. They informed us that they would not deal with us unless we offered a discount. Our answer – OK we’ll stop dealing with you then. So the knock on effect of this is that they are “liquidating” their leftover stock at much discounted prices. Their stock holding was quite small so this discounting will be over very shortly.
I also wanted to assure you that we understand how important our IBD network is to Hopes future and that we will continue to fully support you all.
In that case, good on Hope. It's good to see someone sticking up for themselves against the big retailers. If only more manufacturers would do this as well.
You beat me to it Simon. Good on you Hope! 😀
to put a positive spin on this, I ordered some wheels through my work which have a trade account after the new price list was published (and supposed to be in place) and hope still charged the company the old price...
Good on you Hope!
This.
Stories about a long lead time from Hope would seem to be a red herring; usually delivered within days (if not next day) to the LBSs I use. Mind you, I'm not [i]that[/i] far from Barnoldswick.
Well done to them! A brave and correct decision, not giving in to the buying power/bullying of large companies and supporting their core values.
Well done Hope.
Halfords are trying to establish themselves as a serious bike retailer at the moment......
Again?
BikeHut 2.0?
I find the idea of 'ethics' in business somewhat confusing; isn't business all about maximising the return for your investment? So aren't Halfords' 'ethics' all about doing exactly that (and delivering the best possible dividends for their shareholders)? Whilst small independent bike shops (which FW Evans was once) might well offer a level of service the corporate giants don't/won't/can't, ultimately they still exist primarily to make as much profit as possible, no? So why should anyone demand Halfords be any different?
Good on Hope though I must say.
I like Hope even more now. A commendable position to take, though I suspect they know their market well enough to know it probably won't impact them much. If you want hope stuff then you'll seek it out. I'm still keeping my 200 quid Hope wheelset though 🙂
Edit... Suppose some of it is also protecting the value of your product. If you give halfords a discount they'll start taking a bigger market share, become a significant part of your business, then start demanding bigger discounts etc. Makes sound sense to sell through lbs and protect margins if you have a strong enough brand.
Google raceface and MEC.
Same Lbs/ supplier concerns as OP.. It wasn't long after that raceface shut their doors!
LBS need to get their act together like electrical shops use Euronics.
These posts about struggling bike shops appear on here very regularly. I always wonder how they'll survive when the current huge boom in cycling ends?
Within walking distance I have 6 decent-ish bike shops, not including Halfords. 9 or 10 shops within 30 minutes ride. Guess how many we had 20 years ago when I first started MTBing........ About the same. So locally at least the LBS doesn't seem to be dying as quickly as predicted.
BearBack - Member
Google raceface and MEC.
Same Lbs/ supplier concerns as OP.. It wasn't long after that raceface shut their doors!
Bit more to it with RaceFace, wasn't there? Some shady goings on with senior staff were rumoured.
better stock up then 😉
As I pointed out before, it's often not the big boys who have the best prices on Hope Hoops - which suggests Hope's side of the story here is accurate.
Wonder if the OP will be back to thank them for supporting small bike shops?
Well, that's all that cleared up.
This thread has turned into a 'support your LBS' thread, which I'm generally happy to do. To a point! Went to get some new shorts at a LBS the other day RRP £79.99. Same shorts at a large online retailer £55.99. i really dont mind paying a little extra at LBS. I can after all touch feel try on but when LBS is 40% dearer... There are margins in there somewhere! And to anyone wishing to educate me in retail theories/practicalities, I say 40%!!!
Wasn't going to reinvigorate the thread, but as it's reappeared anyway I will indeed thank Hope, both for making great products, and for supporting the independent dealer network. The personal phone call I had this morning was much appreciated, and must have taken a little bit of detective work to get my number.
Well done Hope, we will continue to sell as much of your product as we can, but that's because we love it!
Now I wonder if a similar open letter to SRAM/Rock Shox would have the same affect??
I have phoned Hope a few times these past two months and their customer service has been fantastic. Eliminating my need to go to the LBS..........