[Closed] Bike shops and RRPs

Selling at the cost you paid is a loss as you had to assemble it stock it sell it and support it.

My current lbs will ask what online price you can get and make you an offer. If he can't compete he tells you. Ie no margin on Garmin etc. Missus was looking at sram gear. He can get close enough and fit to make it worth doing. Her sister bought a seat he had in stock online as it was a fiver cheaper. She then asked me about road cassettes. I sent her to the lbs as she has no way ogre fitting the part when it arrives.

This place also has a large number of demo bikes as have my previous 2 lbs.

Some great people out there and once you get beyond the ticket price and look at the value it all makes sense to shop local. I can do all the mechanical stuff it need but the offer of fitting a new mech when I snapped mine in the shop there and the while I do something else makes sense. I don't always have the time to do stuff. If I charged it at my charge out rate it would double the price.

My lbs is selling a storck custom build roadie they've had for a couple of years (original 'buyer' fked them over) rrp is £7200, they are selling for £4000, a 'significant' loss. But like has been said before, bills need to be paid.

there is much said for LBS. I bought a full xt groupset from mine with discount and although it was still about £100 more than online prices they stripped the bike and built up with the new groupset for free. Then 4 months later when the brake calliper failed they replaced it as soon as they could and took up the warranty issue with distributor at their risk as it wasn't 100% obvious it was warranty failure and didn't charge me a penny for the labour either.

so currently after a road bike and although I could get a better spec brand online I want to buy a bike from my local guys as I know if I have a problem on a sat afternoon I can just drop it in with them and leave it with them and normally parts dependent they will have it sorted by the Wednesday at no cost if it's a warranty problem. if its something I have done wrong I am more than happy to pay and never quabble.

so as always its swings and roundabouts

Organising bike shops is like herding cats. The Bike Station (a bike charity in Glasgow) had an open evening recently, with all Glasgow bike shops invited for free food and drink, to talk about how we can improve cycling in Glasgow.

I was the only person who turned up. The poor idealistic fools
There have been buying groups, they didn't last.

That's a shame as group buying seems to have worked for the local electrical shops (Euronics)?

The lack of demo bikes is extremely annoying. I'm in the market for a new full suss and the one area that bricks and mortar stores can compete is that I should be able to touch, car park test and for a fee take for a proper demo. On visiting not just a local LBS in the North Wales area but a 'megastore' in Chester I was told they don't do demos and even a car park test was problematic. I have up to £4000 to spend. Why is this so hard?! (Transition dealers in particular - Email in profile!).

Problem you get is when crc did the reverb cheap the other week that was cheaper than most lbs even national shops get them for on trade and if they have a price match like we do we end up out of pocket on that because its lower than trade and to think we have the overheads of our shop with rent, wages and bills still having to be paid. I'm not saying people shouldn't buy of crc or others like that because money is tight and it's an expensive hobby but it could finish off some lbs.

That's a shame as group buying seems to have worked for the local electrical shops (Euronics)?

That's a different kettle of fish really, as it's a totally different marketplace: pretty much everyone buys electric goods, while relatively few people buy bikes.
People buying high-end bikes are generally very specific about the brand they want, whereas the majority of people buying electric goods aren't so fussed. So, if you've got 5 bike shops in one town, they all want to stock different brands to appeal to different customers, while electric retailers can comfortably all stock the same brands as it's the price that's important.
If all bike shops stocked the same brands it would make the industry a bit boring, wouldn't it?

The lack of demo bikes is extremely annoying

Massive costs involved,
They always get the demo bike you don't want - wrong model/size

Demo days from suppliers are the way most most brands seem to be going. It does means less chance to try the bike but means LBS stores don't have the overheads in a demo fleet.

Would you buy the transition frame for the full RRP if it had been built up to the shops spec for you to ride around the carpark then split down again for you?

I have demo bikes - but that's because you really need to try recumbents. I can afford it because most recumbents only come in one size, they don't change models every year, and they don't depreciate like they've fallen off a cliff.

So I can have one demo bike per model, keep it for a few years until it gets scruffy, then sell it for at least cost price. Can't do that with MTBs I guess.

But can't shops have demo bikes shipped to them when requested by a customer? I'm sure they would if they could, but this seems like a shift from a few years ago when both Lapierre and Orange (for examples I have experience of) were supplying shops with demo bikes on request. I can understand a shop not being able to carry the cost but if brands that use stores want to sell bikes, they should give us an incentive not to use online retailers (Canyon/YT).

The building up of a bike sounds like a pain in the proverbial for the shop, but any sense that I can get that a bike might be right for me would be useful. To add an edit for the point about full RRP the answer is yes, assuming that online prices and store prices are not worlds apart. My fettlng skills are less than impressive so a good relationship is needed!

But can't shops have demo bikes shipped to them when requested by a customer?

The building up of a bike sounds like a pain in the proverbial for the shop, but any sense that I can get that a bike might be right for me would be useful.

fourbanger - Member
Don't believe they're selling at less then they are buying for 1 second.

Just brilliant.

I won't type it again myself:

then your either naive or stupid.

saxabar - Member
The lack of demo bikes is extremely annoying. I'm in the market for a new full suss and the one area that bricks and mortar stores can compete is that I should be able to touch, car park test and for a fee take for a proper demo

Trouble is there are people out there who get sized up , test ride the bikes and then buy on line which is pretty demoralising for the shop .

I don't believe CRC for a minute.
They claimed the rrp for the Garmin Fenix in Australia is $549, & they have it for $471.
I bought one at my LBS for $449.

The market's changed for me as a LBS in the last 9 years since I started. At my first shop which was very tiny and back street I used to regard XT mechs and cassettes as essential stock. Nowadays I'm in a more central location with a larger shop but anything over Deore is just a liability.

Not all brands will pick up the £15 or so each way postage for a demonstrator. I'm happy to let anyone have a roll around outside the shop on any stock bike but £30 on a maybe struggles to compete with using the time to make progress on the pile of Claud Butlers and Apollos awaiting repairs.

How about a scheme where you pay a fee - say £50 - to try out something which is then refunded if you buy?

Or there's a scheme I've been thinking of for the bikes I don't have demonstrators of - a guaranteed buy back scheme. Buy the bike, decide you don't like it, I'll buy it back at some decent price (exact figures to be worked out).

Think a lot of shops do charge a fee for demo and then refund it off a purchase
It works ok for the place I'm in apart from one being stolen while on test and my boss taking a large hit

But much like many lbs high end shiny bits are just a waste of money
Changing tubes for people and fitting tyres is far higher margin

The interwebz is changing retail. Not just the bike industry, but everything.

Anyone can compare prices for just about anything on their computer at home, in a store on their smartphone, and just about anywhere else that they can get online. In the US, Amazon is on a warehouse building spree. Their goal is same day delivery in larger metro areas. Order by lunch time, it will be delivered that evening.

The LBS almost certainly can't compete on price. Their ace in the hole is service. Amazon can't/won't fix your bike, the LBS can/will. That is their strength and they need to play to that.

Google shopping makes it real easy to compare prices. The problem is that a lot of vendors say that they have items in stock when they do not. I do think that google and pressure from customers will fix this over time, though. And I could see this working to the advantage of the LBS in certain instances. Need an XT rear derailleur now so that you can ride this weekend? Use google or whatever to find one in stock close by. Maybe even schedule the installation or repair. LBS may be able to charge more for same day service or something like that. As the consumer, you don't waste time calling or going to shop after shop. Win, win.

Or there's a scheme I've been thinking of for the bikes I don't have demonstrators of - a guaranteed buy back scheme. Buy the bike, decide you don't like it, I'll buy it back at some decent price (exact figures to be worked out).

That sounds like a huge can of worms. Trying to agree a buyback price on something hardly used then trying to sell on something a bit niche that has been used?

They claimed the rrp for the Garmin Fenix in Australia is $549

No, surely they claim the UK RRP when converted to AU$ is 549? I don't think they can be expected to cross reference RRPs in every country they ship to!

Is it just me or has the industry as a whole added 30% to the price of everything only to then discount it off with a big % discount taglines?

It isn't just the bike industry, it's the whole retail industry. The rise of online retailers and discounters has led to an entire culture of 'reference pricing', where the RRP is in no way related to the value that the item will EVER sell at.
Often this is achieved by an agreement between a supplier and a/several retailers (for instance, sondico prices its football accessories ridiculously high so that sports direct can slap a 90% discount on £7.99 football gloves that should in reality have an RRP of under a tenner. This makes them look favourable compared to the equivalent Adidas/ Umbro products, and sells more, and sports direct get the sondico products at a far, far lower cost than the equivalent Adidas/Umbro products.)
Otherwise this may just be that through bulk buying contracts online and large chain retailers have managed to batter down the costs of products to the extent that they can make significant profit by selling far under the RRP. Sometimes brands accept this, often they dislike it, but almost always they cannot escape it by not supplying the retailers with the highest buying volumes. Endura’s decision is a brave one that many suppliers would struggle to justify commercially (but I hope it works, as it’s an excellent ‘price defense’ strategy).
Sometimes the LBS’s can negotiate solid trade deals to compete. Often they will simply have to eat into their profits to stay selling.
Annualised production cycles will help with the discount as well. New season bikes will be priced to ‘skim’ the market for those that want the latest and greatest (STW’ers), and priced higher due to this. Retailers would expect to cut this artificially inflated price down when the model year changes, and will buy stock with some expected to sell at the reduced price.

In 1991 it cost £1000 for a Specailized Sun-tour pro with rigid forks and rubbish rim brakes.Look what you can get for a grand now suspension forks, disc brakes and alot more for your money.
Trek 2.3 in 2010 cost £1175 in 2013 the same model is £50 cheaper better spec and much lighter.

That’s just technology. 10 years ago you would struggle to get a 1GHz laptop for lower than £1000. Today you can get a dual core 3/4Ghz for £300.
Several factors are involved in this. The industry has gone much more mass market and standardized than in 1991, meaning cheaper tooling and manufacturing/distributing/retailing economies of scale. R&D costs have dropped as a result (R&D costs will be far lower per unit because many more units are being sold). As such, there is a far lower cost in getting a new bike to market. Annualised production cycles have helped this. Often they are just a facelift and a respec, with minimal R&D involved unless the market changes enough for a full redesign.

Don't believe they're selling at less then they are buying for 1 second.

It depends who you’re talking about; big retail chains and CRC should know better than to have to flog stock off at a loss due to lack of space. They have enough data from their millions of transactions that they should be able to stock efficiently, and not be so overstocked by years end that they have to make a loss on unit costs. They can cut into their margins with big discounts, but still make a profit.
But with a smaller bike shop, it is often a game of luck to anticipate what people will buy, with no statistics on consumer or buying behavior to aggregate likelihood of purchasing. If it doesn’t go to plan, they end up with too much stock in a far smaller marketplace(the local vicinity) and far less warehousing space. Flogging the stock at whatever it will sell at is necessary.

Oh, and apologies to anyone who had to read that. I'm a pricing consultant by trade.

It's why noone ever invites me to dinner parties.

That sounds like a huge can of worms. Trying to agree a buyback price on something hardly used then trying to sell on something a bit niche that has been used?

Possibly. My logic is that very, very rarely do I ever sell something and the buyer decides they made a mistake. So it's more a safety net for the buyer that would almost never get used. Also, the esoterica I do doesn't depreciate like normal bikes, so would have no problem shifting it for at least cost price - or indeed keep as a demonstrator for a while then sell.

What I need to think over is things like the time limit - say a month or so - and the buy back price. Need to price it so people aren't just renting a bike for a month 😉

James - interesting, but most of the bike industry isn't that sophisticated, most pricing is still done on a "cost plus" basis - take the cost of manufacture, add on margins for manufacturer, distributor and retailer, and that's your retail price.

often said that if i ever decide to open my own shop ill be operating it like a car garage.

repairs and spares.

bike sales account for such a small portion of the profit in a bike shop ime. - thats not to say they are insignificant but you certainly waste alot of workshop time in the sales side.

Plenty retailers in the city i live in - all of them have perminant 4-6 weeks + wait lists for repairs.

cazum - Member

my LBS just seems to sell either BMX's or TOP of the line roadies and pivots ect..... i went in looking to spend about £1500 NOTHING the best they could do was a whyte 120 (2012) for £1899..... had a quick google and ended up getting a rocky mountain altitude 50 for £1500.....down from £2300.... if my LBS had better ranges of stuff for all budgets then there would not have been a problem now everytime i go in i get comments about "you not get that on the clicky clicky shop" just making me not want to go there for anything....

I could live without the BMXs (but kids round here seem to like them), but they usually have a reasonable range (of reasonable MTBs), maybe they'd run out that day. Having said that i didn't get any discount on the TLD gloves i bought just before christmas (despite giving them some really useful tips on recovering a flite saddle), if they give me a cup of tea next time i'll let them off 🙂

interesting stuff, james. The big mail order houses often buy grey market/OE stuff, sidestepping importers and rrps, or in the case of CRC [i]become[/i] the importer. I think the notion of RRP has gone out the window and I was always suspicious there was deliberate pricing for discounting, like your gloves example. On One is good example of this, with own-brand stuff and stuff you've never seen for sale elsewhere listed as being on sale. Havent figured out what the smorgasbord tyre costs as theyve been various "offer" prices since their release. I bought some Carnac Notus shoes from them, selling for £45 with an rrp of £145. Never seen Notus for sale anywhere, but comparing the shoes to others in the market I was happy they were a bargain.

Dont think I've ever paid RRP for anything bike-related in 20 years.

It's a difficult one, I remember from my days of working in a bike shop that there was little money to be made in selling bikes, all of the mark up was on stuff like tubes (what we paid for Spesh tubes versus what we sold them for was crazy). We also used to get good deals from the distributors when they had stock to get shot for, which meant we could sell it for less ( I got a cracking deal in my Demo 9 s Spesh had one left that they needed to get shot of ).

However, we were useless at stocking stuff that would sell ( I.e. the management completely ignored the local riding scene ). A lot of people got frustrated because we went from being able to do ad hoc orders as needed to a stupid online system and weekly orders. This meant that it became quicker to get stuff from CRC et al.

I do think shops need to innovate and provide a good reason to get stuff through them. I'll admit that I buy mostly mail order, but that's because there isn't really a local shop I can get to easily. The demo ideas are good; I'd be reluctant to drop some serious cash on a new bike without a good test ride.

(what we paid for Spesh tubes versus what we sold them for was crazy)

The % mark up might be huge but you need to sell a lot of tubes to keep a business going!

LBS will never be able to compete successfully on price. They can, and often do, compete very successfully on value. People who don't understand the difference will keep buying from the internet.

edlong - I buy shoes from my lbs because I like to get the right fit. I would not try in the lbs and buy online as that's taking the piss imo. I see no added value however In buying chains, cassette etc from my lbs and will always buy such items online. As most shops cannot let you demo bikes I am also quite happy to buy my bikes online.

I've been biting my tongue regarding this thread for such a long time now but I do need to throw my 2 cents out there.

Firstly I think the way that people are shopping is changing, the attitude towards the high street is starting to come full circle as a lot of people, like edlong suggests, are staring to understand the distinction between price and value. The average lbs cannot compete on price and often, those that try, fail. As a prime example, we've a John Lewis round the corner from our shop; a high street retailer that thrives by offering a level of service and support that couldn't be offered by a warehouse on an industrial estate. I think that's the model that will help the high street retailer survive and it's certainly the model we are trying to follow, and we're thriving

Secondly, I think there is a real danger here that all bike shops are being tarred with the same brush, in a lot of cases unfairly. We, for instance, spend 10's of thousands of £s on demo bikes and can often arrange demos on models we don't possess within a matter of days. There's no excuse other than laziness.

a high street retailer that thrives by offering a level of service and support that couldn't be offered by a warehouse on an industrial estate. I think that's the model that will help the high street retailer survive and it's certainly the model we are trying to follow, and we're thriving

Completely agree. The list of companies that I know that have successfully defended against price competition by offering something new, or better, than their competitors is almost endless.

The list of companies that have survived such a price war by nostalgia, relying on customers paying a higher price simply due to loyalty despite commercial sense, is slim-to-nil.

If you look at the case of John Lewis, or Richer Sounds, both high street retailers who are doing relatively well, they pride themselves on impartial, informed service, in depth demonstrations, long warranties and no-hassle returns.
If you look at comet, HMV or most of the plethora of big name retailers that have gone under recently, they simply offered very little to differentiate their customer experience.

In this case, good old fashioned service, flexibility and the ability to touch, see, try on and test items is what will save the LBS, not trying in vain to slash prices and slashing service as a result.

I do love these threads where LBS owners start talking about how much they are suffering. 🙄

At the moment we are seeing a huge boom in cycling. For the last few years we've had the MAMIL thing, the 'cycling is the new golf', C2W and last year the biggest ever year in British cycling with Wiggo, Cav and the Olympians inspiring people to dig out their bikes.

In all the years I've been riding I've never seen so many people out on bikes - even at this time of the year.

I've even seen Welsh cyclists wearing Rapha! In the Valleys!

I bumped into a LBS owner a few weeks ago at a cross race and was chatting to him about how popular everything is at the mo - the cross season has had huge numbers entering compared to 10 years ago. He agreed and said that his business has quadrupled. Yes, quadrupled! (Note to pedants: he didn't tell me if this was turnover, pre-tax profits or what, just 'business'.)

And last summer, our local evening ride had newbies joining us every single week.

Seriously, if a bike shop is struggling in the present boom then maybe they just aren't meant to be in business.

Oh, I'm certainly not struggling - but it's equally amusing to see experts who are absolutely certain we must be making fortunes from the bike business and it's massive mark-ups 😉

I know a LBS shop very well.They do well between March and November.But dont do much now.As for big mark ups on bikes thats a pipe dream.Take out all the over heads wages/etc doesnt go far.How many bikes do you sell over 2k a week Hmmm.The owner does ok but will never be a rich man thats for sure.