It’s a bit like a pub with no beer. Walk into Abbotsford Cycles and you don’t see the usual rows of bicycles for sale. In fact, apart from a few specialist high end touring bikes, they don’t sell bikes at all.
Instead you’ll face a long, low counter, behind which you can see an open plan workshop with mechanics at two rows of work stands, busy servicing all sorts of bikes.
To your right you’ll see extensive displays of P & A including what is most likely the largest range of Brooks leather saddles on display in any Australian bike shop.
Clearly this is not a typical bike shop, but it’s a business model that seems to work just fine for its long-time owner, Peter Moore, who recently shared some of his business secrets with Bicycling Trade.
Bicycling Trade: I see on your website, ‘Since 1980’. Has it been 34 years since you started Abbotsford Cycles?
Peter Moore: No, the shop itself started around 1980. There was a guy who’s a bit of a legend in the industry called Austin Shirreff who started it in Johnston Street Abbotsford just near where I lived. I bought my son’s first bike from him in 1980. I suspect he might have started a year or two earlier. He had come out of Malvern Star like a lot of the industry in those days.
We bought the shop in 1987 or 1988 and I ran it through to about 1994. Then we went away cycle touring for a year and basically closed down because we couldn’t sell it at that stage. When I came back I worked for Ivanhoe and Christies a couple of times and then eventually restarted in 2002 where we are now in Richmond Station.
BT: How have you seen the business evolve since you first started in 1987?
PM: Basically the years that we ran it in Johnston Street, we ran it as a ‘mum and pop’ standard suburban bike shop.
When I restarted I was much more into thinking I would run it as a one person shop based on repairing bikes for people who used them for transport and commuting. So practical, no nonsense everyday stuff.
But effectively it got away from me and got bigger and bigger! (laughs) We still don’t really sell bikes, but we sell lots more P & A than I was ever expecting to and we now employ eight or nine effective full time people, whereas I thought one or two would be what I’d ever get to.
Up until last Christmas I had another workshop in Yarraville on the other side of the city, but it never quite got the traction so we closed at Christmas and I basically went down one person then.
BT: What proportion of your time is spent fitting parts that customers have bought online?
PM: Not a huge proportion. We do it and we don’t discriminate. But because a lot of our stuff is mid to low level rather than mid to high, in the mid to low not as many people will go looking for stuff online and our prices are much more competitive in that sort of area.
Maybe it’s 2% to 5% of repairs that require much in the way in parts that people bring in themselves. More common with wheel building where people will bring in hubs or rims that they’ve sourced and want us to build them.
BT: Have you seen any change in the size or nature of online purchases over recent years?
PM: It’s grown, but from our point of view it’s not a big issue. We still charge our labour and we don’t rely totally on parts sales to make our margins. If everyone bought in stuff that they bought overseas then it would be an issue, but with our sort of business and where we are positioned, it’s definitely not a huge issue.
The corollary of that is that we are now selling online ourselves and online has grown, because we revamped the Abbotsford Cycles website at the start of last year. So last year it turned over about 4% or a bit less than our total turnover and this year already it’s doubled that. So we’re up to 7% to 8% of our turnover is now online.
That’s Abbotsford Cycles which is almost a standard bicycle shop website which up until the start of last year wasn’t really for online purchasing, but we changed it and put in the online purchase facility.
It’s still doing most of our online business, but I realised that it was a very time consuming process to take an individual item and load it onto the website. I was also realising that our market isn’t in the top end and that was where all the competition is. Our market is mid to lower and practical sort of stuff which a lot of businesses, shops and wholesalers aren’t as interested in as we are, because I want people to ride their bikes and I want them to have a bike that’s running properly. I don’t want to add a barrier in terms of price to that.
Then I started looking at Andrew McEwin’s Bicycle Parts Wholesale and thinking, ‘What if we could just shift that across into a retail space?’
I’m really happy that we’ve got an innovative way of bringing most of his product across to a website of ours, which is called ‘Bicycle Parts Warehouse’, not Bicycle Parts Wholesale, in a simple efficient way. I’ve got a really smart IT guy who’s also easy to work, with which helps a lot, but it’s only just starting to get traction. We’ve only had that going for six months so it’s still a very minor proportion of our online sales.
The potential is there for it to be big, but people are buying $2 bolts and $15 headsets and stuff off that site so it’s not your big ticket items by any means.
Effectively, Abbotsford Cycles is almost like our physical shop, the front of the shop online. Whereas Bicycle Parts Warehouse, we’re trying to say to people we don’t have all the stuff. He’s got 10,000 lines and we’ve probably got 500 to a 1,000 in the shop, but we don’t have the whole 10,000. But his dispatch is very good and the other thing with Andrew is that you know he’s 99.9% in stock.
We don’t get any special access to his business at all. I know that other people would struggle to replicate what we’ve done just because you do need someone who’s pretty smart at IT and fairly flexible as well who doesn’t just think in a straight line.
It’s less than 1% of our business so far, but I think it has the potential to be much larger.
BT: Let’s talk about the logistics of running a bike shop that’s mainly a bicycle repair business. I notice that you have an online booking system where customers can book in their workshop repair jobs online. How effective do you find that to be?
PM: It works okay for the customers who want to use it, but still the majority of our repairs, the vast majority, are either booked by phone or people who walk in.
I should actually do the figures, but I reckon at least 50% of our customers are repeat customers and there’s probably 30% who are regulars in terms of every three to six months getting a bike serviced. Which is what I aimed for in the first place. If you look at the car industry and the little car places… there are a number of places that sell new cars but the vast majority of the small businesses don’t. They do repairs and parts and accessories and smash repairs and all that sort of stuff.
BT: How tightly do you record your time on each job and what method do you use to both check in jobs and record that?
PM: I must say that is an area where I don’t do very much and don’t do very well. There are definitely areas of this business that other people with different skills and ideas and energies to me could improve dramatically and that’s one of them.
We have set prices for servicing and then we have a scale of prices for pretty much everything else, which is in our computer system, but we don’t actually look hard at times on jobs.
BT: You just charge the scheduled fee for a particular service?
PM: Yes, pretty much.
BT: So you have manual check in and recording of jobs?
PM: Yes. We then put it into the point of sale system for when people come in to pay for their repair. The reason I keep a manual sheet is because I want a manual record of what’s been done and I encourage the mechanics to write down, not to just tick ‘Service’, but to write down, especially anything slightly out of the ordinary. Because if we then need to follow up, we can go back, not just to the computer which really just tells you some items that have been done and how much was paid for them but doesn’t really tell you anything else. The manual sheets, even though they might be a bit scrawly and scribbly, they do actually have information which is quite useful down the track.
BT: You keep them?
PM: Yes. We probably keep about two years’ worth.
BT: What’s the threshold of market tolerance that your typical commuter will pay on a bike service?
PM: If someone comes in with any sort of bike I would normally be quoting around $120 saying it’s $95 labour for the service, plus parts. It’s unusual not to have to fit a brake pad or a gear cable or something. Occasionally you don’t and occasionally if it’s a fixie and it’s in nearly perfect condition we’d quote that but charge less based on if it only took a short time. Usually it’s $120 as a minimum and most services run out towards $150 and then you have the ones that require drive train replacement etc, etc.
Nearly every day we’d have a job that’s $400 to $500 and most of the rest will be between $100 and $200 and occasionally we get one that’s a lot more than $400 or $500.
BT: And customers are happy to pay that?
PM: There are some who when we quote them say it’s too expensive. Occasionally we’ll say to someone, ‘We’re not going to work on that bike’. Not because it’s a supermarket bike necessarily. We’ll work on pretty much anything. But more because we don’t think that we can economically do the job for them.
But occasionally somebody will say after we tell them, ‘We think you should go and buy another bike’ and obviously we can say that because we’re not trying to sell them a bike, but people will not infrequently say, ‘No, I like this bike. I want you to fix it’.
BT: Let’s talk about accredited mechanic’s training, which I know you’ve been a strong advocate for. Talk about your own mechanics first. Do you train them yourself or where do they come from?
PM: We’ve had a variety of people. I had a mechanical background and did a Certificate III in Bicycle Mechanics. I think three of the four people I’ve got working full time as mechanics at the moment have a formal Cert III and a lot of experience and one’s had a fair bit of experience, I would have got him a Cert III except that it’s just not available any more. Since the time I’ve been here I’ve had two people start as school placement apprentices. One went through and worked for me for two or three more years, did his full Cert III and has moved on. That’s what people do. I’ve got one guy who has just finished his HSC and is about to start work full time and he’s going through his online Cert III at Advance TAFE, which is based in Gippsland, at the moment, but I don’t think Advance TAFE are going to take any more people because it’s just not economic for them. Bicycle mechanics training is in an appalling state. Because bicycle shop owners don’t demand it and are not prepared to put resources into it.
We can’t blame anyone else but ourselves.
Kids who put in that sort of effort deserve to get a piece of paper at the end of that sort of time and it’s wrong that the bicycle industry doesn’t do that for people.
BT: Have you been finding mechanics hard to retain? Is there a high turnover because of demand?
PM: No. There’s not a high rate of turnover with us. I’ve got two of my mechanics who are now up for long service leave and one who’s been here for three or maybe four years and one who’s been here for two years... That’s not a high turnover in most small business terms.
BT: You’ve got a very interesting cycling background outside the shop.
PM: My background before I even got into a shop was riding my bike to work and touring.
I actually wrote an article in 1986 or 87 for Freewheeling magazine about riding with my wife and then seven year old son from Sydney to Bairnsdale (in eastern Victoria) through the Snowy Mountains. We’ve done a fair bit of touring in all sorts of places ever since.
I’ve had two separate years where I’ve basically gone touring with my wife for a year and each of those has including doing Paris-Brest along the way. So I’ve now done six Paris-Brests (referring to the famous 1,200 km endurance cycling event that has be held in various formats since 1891) and heaps of other Audax rides and I still go bicycle touring.
Last year we rode from Montreal to New York. Next year we’re planning to finish the Danube, so we’ll be riding from the Black Sea in Vienna to finish the length of the Danube.
BT: You obviously love doing it.
PM: Yes. It’s a great way to spend a holiday. So while the shop hasn’t paid me a lot of money I have actually taken reasonable holidays out of it and that’s a tribute to the staff that I’ve got that I can do that.
BT: The other area I’d like to talk about is bike advocacy. You’ve had a long involvement in that as well.
PM: I can remember going to an annual general meeting for Bicycle Victoria in 1975. Before I got into bike shops I was working as a recreation officer for local councils. I was involved in writing the first Bicycle Plan for the City of Richmond around 1980 and have always been involved in supporting and lobbying for various things.
I’ve just wrote a letter today about bicycle parking in Swan Street outside the shop. Not for the shop, but people park their bikes there because they get on a train here and they’re having to lock them on fences and all sorts of things. So I’ll keep doing that as long as I’m able to write or speak.
BT: What’s your take on the cycle scene in Melbourne in particular the commuting urban scene. How’s it going?
PM: I think Melbourne is nearly the best place in the world to ride a bike.
BT: That’s a big statement!
PM: It is. But I’ve been a lot of places. I haven’t been to Amsterdam I have to say, but I’ve been to Paris, New York, London, ridden through France etc.
The French countryside is the best place by far to ride a bike, but if you’re looking at commuting, it’s Melbourne.
I just spent a couple of days in Santiago in Chile, which had a bit of a bicycle culture, but riding a bike in Melbourne is far easier than Santiago and much easier than Sydney. Adelaide is probably a good place as well and Perth is probably more spread out in a way so it’s a bit more difficult, but Melbourne’s a pretty good place and it’s improved.
In about 1975 I used to live in Clifton Hill and go to Werribee which is around 30 kms away out in the outer suburbs, when I was working at Werribee Council. I was riding my bike there occasionally and I can see all the improvements that have been made since then.
You can still see things that are missing, but there’s a lot of things that have been done as well.
BT: What about in terms of number of riders?
PM: It’s increasing all the time. Nearly every day there’s one or two more. You stop at intersections now… if you’ve been a commuter for as long as I have, you used to barely see another cyclist on the road 20 years ago and now you stop at an intersection and you’ve got three, four or five cyclists next to you waiting to get across, if not a dozen or more.
When we had the shop in Yarraville, I used to commute out through Docklands, so I was going against the traffic and even in the two to three years I had that shop, the numbers would have doubled on the bike path coming into the city. Which still isn’t a huge number in the terms of cars, but it’s now significant.
BT: Do you think it might be time to retire now? Is that your plan?
PM: I’m 66 ½ and if I don’t start doing something now in another two or three years’ time I’ll be that much older and it will be harder to move on. If nothing happens in the next six months or so then that’s okay. I’ll just look at what my options are and head on from there. I think I’ve got a business that could be improved dramatically by someone with a better business head than I’ve got, but there’s a base to work from. We’ve got over 10,000 customers on our computer database and we’re turning over around a million dollars a year at this one site, so there’s a good cash flow there. It’s not making enough profit, but I think there’s a basis there.
I look out the front window now and can see another eight storey building going up just across the road. Well that’s probably another 200 or 300 people who’ll be living next door in a couple of months’ time. Because of where we are in the city, we pick up the commuters who have ridden into the city and can drop their bike off and catch a train into town to work while their bike’s being serviced.
Also there’s heaps of people around Richmond who are riding a bike just in this area and it’s going to get more because driving your car and parking is getting worse every day.