[Closed] brass neck in LBS

Sorry, I wasn't really considering 'small' orders as in some bolts, or a front mech, but...

Most LBS will stock Shimano and deal with Madison(?)... they probably won't hold a Saint crankset in stock on the off chance of selling it. IMO it's stupid of them to offer to get you it at RRP because you'd have to be stupid to buy it from them.

sillyoldman - Member
Does 10% margin on a small sale really contribute anything when you factor in the time to order the item, create a part code etc on an epos system, unpack and label the item, inform customer of it's arrival, and then sell the item to the customer?

It's a funny one. The guy described in the original post is being a little bit cheeky indeed. But I doubt there's anyone here that hasn't been in a shop, ad a look at a product, thought it looked tasty and then bought it online at a cheaper price. So I'm not sure anyone's innocent.

It's good that the guy's honest I suppose. At least it gives the LBS an opportunity to engage in some bartering. And the only thing LBS's have going for them these days is their ability to be helpful, offer good advice, and provide an instant service. Even if the customer is openly shopping elsewhere, if you can offer good advice, they're more likely to come back. And if they come back they're more likely to spend money with you.

Al - you're not sustaining the shop on 10% are you? You're getting an extra bit of money in the till. An extra contribution towards your fixed costs of running the shop.

You'd still be making your normal margin on other stocked items.

What percentage of your shops sales are on items that you don't hold in stock and order in for the customer? If this is a key component of your total revenue then I'm talking s h 1 ...

Druidh - how much would you say it costs the shop to do all that?

I kind of take the view now that normal (RRP) no longer applies if you want to sell stuff as there are so many shops and online stores both here in the UK and in Europe that are 'price shagging' that you have to discount stuff substantially to compete.
Customers get a better deal but after sales can often be rather lacking, as they have made the money but not a huge margin to invest in staff to deal with aftersales issues.
As for the OP that used to really annoy me when I worked in biek shops, but could usually match the online price even if it meant not making any money as you'll get return custom, reapeat tryeroners that never bought used to get little time though.

But Yeti when do you stop selling at 10% margin?

Al doesn't the shop make the bulk of their income from service and repairs, most of my mates shops seem to do very well on these.

Yeti - If you start down that route then your probably finished and into the eternal closing down sale.

When you walk into a shop (costs money) it has staff (not cheap order pickers) and stock. Any shop selling specialist kit will keep enough to satisfy most of the market in stock. As most say you can't keep everything and if you do, you will be selling it off later for no margin.

CRC/Wiggle/Merlin have distorted the market. Everyone remembers the cheap mech etc they got but they are not there all the time. I also see loads of old stock on there. Half of the stuff I have had has come in plastic bags (OEM)

One local shops gripe was at the difference between OEM prices (IE sold to a bike builder) and trade. Over here in Oz Fox OEM is less than trade price. A lot more fox forks would be sold if the maker/dealer margins came down.

The LBS is where we go when we need help, assistance, somewhere to get out of the rain or talk sh*t for a bit. All that is provided Free of Charge sometimes with a cuppa or a beer. I know if I buy something there I can get it sorted.

So many threads on here about bikes asking if it will fit etc as the buyer has no intention of going to a shop where the sales/after sales service would be great.

The internet has given the LBS a kick up the arse need to stop it going for the jugular - they aren't charities and wont be there soon.

The O.E market for cheap parts will apprantly be being shaken up in the coming year I know of two major manufacturers who are taking a very keen interest in the sources of discount O.E items.... although this may just be a line to keep 'bricks and mortar' retailers happy, we shall see

Maybe the LBSes could form a co-op and set minumum and maximum prices, so wherever people buy from in a particular locality the prices will always be reasonably stable. The LBSes could also use their new improved purchasing power afforded by being part of the co-op to buy from distributors at a better price and compete online with the big players like CRC.

This is what my local golf clubs do and it works well.

Maybe the LBSes could form a co-op and set minumum and maximum prices

It's called a cartel and not allowed

random,
the issue is with pricing that O.E items that CRC e.tc sell are alot cheaper than official parts from uk distributors even with bulk discounts hence the online guys can do them so cheap and stay in business.

druidh - Member

No. Which is why there are so many retail experts on here and so few successful small bike shops.

I'm always surprised at how many bike shops there are.

There are 6 within an easy ride of my house, not including Halfords type places. This may not be representative of the whole country, but you can normally find a half decent shop in most places.

TSY - your plan only works if you have staff and money floating around doing nothing else - "[i]might as well make 10% margin off something than 20% of nothing[/i]". I don't recall much time standing around doing nothing when I worked in a bike shop, so selling stuff at minimal margin would have taken me off more profitable activities or from actually dealing with needy customers. Folk are happy to repeat the mantra that LBSs need to provide a better level of service than an online price-cutter but that activity also has to be funded. Bike shop workers are not unpaid volunteers.

@LoCo yes that is pretty bad, but to play devil's advocate, what's stopping the LBSes forming a super company and doing the same as CRC et al?

Random - because some of us like plowing their own furrows.

i ll put my hand up.. i went to my LBS talked through the bike options and simply couldnt justify paying even the ex demonstrator price for a Five Pro so paid 500 less for a minter on ebay. went straight back to lbs and bought all top line clothing shoes etc and go back every couple of months for consumables.
cheeky may be but they gained a loyal local customer for lines they probably make more on.
oh and on the margins coversation. my family have an interest in a large garden centre business and minimum mark up is 120% so even in half price sales theres a tasty profit.

random,
the issue is with pricing that O.E items that CRC e.tc sell are alot cheaper than official parts from uk distributors even with bulk discounts hence the online guys can do them so cheap and stay in business.

Why are they so much cheaper though? Is it just because there is no middle man (distributor?) that needs their slice?

Bike shops aren't garden centres - nowhere near that kind of mark-up...

Why are they so much cheaper though? Is it just because there is no middle man (distributor?) that needs their slice?

Pick a random example of, say, some forks. The retail version comes in a proper box, with full instructions, often a pump, some spare parts and a full warranty. The OEM version comes with nothing else, in a plastic bag, as it's intended to be fitted by the manufacturer in the factory.

That's even if it's the same fork - often OEM parts are not the same as the retail version, they're pared down to keep the end bike price low.

And then, yes, there's the fact there's no distributor in the middle holding stock and looking after warranty problems.

OEM tends to be heavily discounted or sold at loss to get the volume or market.

If you get XT drivetrain onto a bike then you know you will probably sell another couple of mechs chains etc for that one. Not sure on forks/shocks etc.

Once asked a shop how to build a £1k Hard Tail answer was to find a £1k full sus and strip the parts and e-bay the frame

I've never subscribed to the "buyers are liars" line, but I do know that a buyer is under no obligation to divulge his motives.

It doesn't really matter what a customer's opening line is. But as a shopkeeper you at least have the opportunity of putting your case. It's just the numbers game then - some of these customers will buy from you.

Worth remembering that CRC was once a small local bike shop - they just managed to get it together at the start of the internet age - skill or luck who knows... so I have little sympathy for other bike shops moaning about CRC undercutting them.

As a consumer I don't really care about a shops profit margin, I'll buy at the place that offers me the skill and product I need for the cheapest price. Normally I need 0% skill as pretty much everything on a bike is doodle to do yourself with the correct tools, so I'll buy online. If I'm looking for a specific skill (e.g. rear shock serviced) I'm happy to pay a premium for that service (e.g. from Loco). That's just how business works - I'm never offended when customers at work look for the lowest price / greatest value...

Ewan - Member
Worth remembering that CRC was once a small local bike shop - they just managed to get [s]it together at the start of the internet age[/s] government funding as part of a drive to make Northern Ireland a more attractive place to invest.

As a consumer I don't really care about a shops profit margin, I'll buy at the place that offers me the skill and product I need for the cheapest price. Normally I need 0% skill as pretty much everything on a bike is doodle to do yourself with the correct tools, so I'll buy online. If I'm looking for a specific skill (e.g. rear shock serviced) I'm happy to pay a premium for that service (e.g. from Loco). That's just how business works - I'm never offended when customers at work look for the lowest price / greatest value...

It's also useful to understand why so much cheap OEM stuff ends up on the market. Imagine you're a bike manufacturer - you might sell 5000 of a particular model, but to get really good pricing from Rock Shox you need to order 10,000 forks. It's better to buy 10,000 and then sell whatever you use on at cost than it is to buy 5000.

It's more the expectation that a small shop will provide "free" advice and assistance so that the larger retailers don't have to.

Yeah fair point - that's taking the p1ss.

On the CRC point, yes they got government funding, but there are a bunch of other enterprise zones etc and there was nothing else to stop anyone else setting up another bikeshop in NI. CRC didn't get special treatment as far as I know.

the chance of passing trade on an industrial estate isn't high though is it

Next time you're furiously trawling through websites looking for the one that will save you £5 off that chain/cassette/rear mech, keep a note of the time you're spending (including any time spent flicking through the latest "Massive Sale" which appears to consist of MX kit from 2003).

I reckon that placing a notional value of £10 an hour on your time, you're probably better off nipping to the nearest LBS and just plonking down the cash.

druidh, of course the bike industry in Scotland has never benefitted from outside funding. Nosiree.

Next time you're furiously trawling through websites looking for the one that will save you £5 off that chain/cassette/rear mech, keep a note of the time you're spending (including any time spent flicking through the latest "Massive Sale" which appears to consist of MX kit from 2003).

I reckon that placing a notional value of £10 an hour on your time, you're probably better off nipping to the nearest LBS and just plonking down the cash.

Personally I quite enjoy looking at 'stuff' on bike websites 😀 Anyway to get to my nearest decent bike shop would take longer than an hour anyway and cost me fuel. Not to mention having to do it during their opening hours.

These arguments never cease to make me laugh.

I say to all the people who think shops by default should discount stuff: When you sell things do you try to get the highest or lowest price for the item?

And to all the retailers/distributors who think RRP is a divine right: When was the last time you didn't try to get a better deal from a supplier?

druidh, surely taking advantage of enterprise zones that exist/existed throughout the UK is good business.

mikewsmith - Member

the chance of passing trade on an industrial estate isn't high though is it

You'd be surprised Mike. The factory shop is always pretty busy. I haven't visited the city centre shop, but i'd imagine it's does good trade also.

I reckon that placing a notional value of £10 an hour on your time, you're probably better off nipping to the nearest LBS and just plonking down the cash.

I'd guess that most of this [i]research[/i] takes place during working hours.

In all honesty you lot are very well off in the UK, prices here in Oz are still high, LBS will try and match where possible or at least get close.

Some stuff isn't translating despite the strong $ it's still cheaper to buy hope from the UK (tax free) than the trade price.

As usual, it's all about mutual respect. Us punters should show some respect to retailers, and not leech their time and advice about upgrades which we were always going to source online.

But it cuts both ways, and I've had experiences with one shop (trying to flog me an obviously used part as new at full RRP) which means it won't get repeat business off me except for minor consumables which I need that day.

The best thing any retailer can do is sell you what you need, not what you want. A few in climbing and biking have sold me something cheaper than I originally intended to buy. Life long customer after that

Euro - Member
druidh, surely taking advantage of enterprise zones that exist/existed throughout the UK is good business.

One hundred! 😛 ish

If someone asks for a discount and justifies it I'll do what I can/my boss will alloy. I'm not asleep to the fact that folk can shop online, I've done so myself.

I agree most profit should be made in the workshop, I don't know our figures tho.

Richie the silverfish, aren't you an importer?

Don't the importers/suppliers/distributors have to take some blame for the plight of the undercut lbs - they're the ones selling stock to the online retailers without seemingly caring what they then charge the consumer - they get paid regardless.

Don't some brands have fixed prices whether online or shop, which must level the playing field?

Don't the importers/suppliers/distributors have to take some blame for the plight of the undercut lbs - they're the ones selling stock to the online retailers without seemingly caring what they then charge the consumer - they get paid regardless.
Don't some brands have fixed prices whether online or shop, which must level the playing field?

Yeah, price fixing should be allowed 🙄

Recommended Retail Price - recommended by whom?

I've said it before and I'll say it again RRPs just leads to lazy retailing. Think how much you can/need to make on a sale and price accordingly . Simples!

[url= http://www.velominati.com/the-rules/#58 ]Rule #58[/url] has this covered...

Don't the importers/suppliers/distributors have to take some blame for the plight of the undercut lbs - they're the ones selling stock to the online retailers without seemingly caring what they then charge the consumer - they get paid regardless.

Quite often, and especially with OEM stuff, the online retailers get it without going through the official distributor. Most distributors aren't daft - they know a retailer that's still there next year is better than one that buys lots now, discounts it, then vanishes. Why do distributors have dealer networks? So there's a network of local shops to sell stuff, and just as importantly sort out problems.

As soon as I started selling BionX electric kits, Zyro sent several people to me for repairs - even before I had my first stock of parts! I don't mind in the slightest - that's the deal of being a retailer - but it shows that distributors really want local shops to work with.

My LBS always says to tell them the cheapest I've found an item for (I only bother with the big stuff - frames, wheels forks, brakes) and they'll usually match or better it. For the convenience of their service I usually add a bit onto whatever price I've found as it just seems fair to me.

Richie the silverfish, aren't you an importer?

Yes.

Don't the importers/suppliers/distributors have to take some blame for the plight of the undercut lbs - they're the ones selling stock to the online retailers without seemingly caring what they then charge the consumer - they get paid regardless.

There's no part of me telling you not to buy online. My point is that the opinion that any store who tries to sell you a brand new, perfectly good product at the retail price is 'outrageous' is, in itself, outrageous.
As a company we are very IBD centric, we offer a variety of schemes and initiatives that can only be effectively excecuted in person (demo programmes, etc) as we know of the huge benefit that good bike shops offer to the industry but we'd fools to ignore the fantastic job that the online boys also do.
As for not caring about the price they sell at - trust me, our network of IBDs across the country ensure that I care!

Don't some brands have fixed prices whether online or shop, which must level the playing field?

No. This is called price fixing and is illegal.

TSY - your plan only works if you have staff and money floating around doing nothing else

Indeed Druidh... the money shouldn't be an issue though, I'd hope that the biking industry still allows for shops to get credit terms from the distributors.

If the staff are too busy to sell stuff at a reduced margin (10% was illustrative as I don't imagine that's how low the general internet prices would drive it) then they don't need the sale then that's fine.

I don't see it as the first step to the perpetual 'closing down sale' that someone mentioned. Just a way for the LBS to close in on some of the 'big ticket' items that they've lost to online sellers.

As I said... I don't know how much business LBSs make out of selling such items on demand... from the general attitude on here I'd imagine not a lot.

Edited - due to dislike of banging head against brick wall.