How’s Business? February 2015
Welcome to our monthly nationwide chat to bicycle dealers where we simply start by asking, ‘How’s business?’
As always, we ask a follow up question. Because we’re running a feature story in our next print edition of Bicycling Trade (Issue 53 due out March 2015) about cyclocross bikes we thought it would be timely to ask each dealer, ‘Do you sell any cyclocross bikes in your store? If so, what's your experience?’
Trevor Rix from The Cyclery, Lonsdale Street, Braddon ACT said:
It’s very, very busy at the moment which is good, since the New Year things have really gone crazy especially in the repairs department.
This could be due to our shop move. We moved into our new premises, which I showed you under construction when you were down last and we were closed down for six to eight weeks so maybe people thought we’d gone out of business when they couldn’t find us. We closed from 1st July to mid-August 2014.
But now everybody’s finding us and realising that we’re still here.
The new shop’s good. It’s quite different, a very different format for retail with a lot more emphasis on repairs and accessories. It’s been very good, but it’s still not finished yet, we’ve still got a little bit of work to go but we’re getting there.
We’re still running the second shop in Fyshwick and it’s growing well.
We do stock cyclocross bikes and sell a few. Most people use them for commuting rather than actual cyclocross racing but certainly the interest in them is growing. Mostly we sell cyclocross bikes that are around the $2,000 mark predominantly aluminium. It’s very rare to sell a $3,000 or $4,000 carbon one.
We particularly sell ones that you can fit racks and things to, people seem to like that to have versatility built into them.
Our main brands are still Specialized and Cannondale. We sell BH electric bikes and XDS city bikes.
There’s still a reluctance for electric bikes. More and more people are interested, but we’re still not finding people paying the mid end, they’re all after the cheaper end.
I think people are looking for something around $2,000 and we’re trying to sell them something around $3,000 to $3,500 and I’m not quite sure what is out there for that lower price point. We used to sell electric bikes which were a bit cheaper and we were having no end of problems with them.
Someone came in this morning who said they heard a shop in Melbourne was advertising that their ebikes do 40 kilometres per hour! Publicly advertising that… I thought that was an interesting move! (The legal limit at which power assist must cut out is 25 kph)
Robert Astromsky from Busselton Cycles and Repairs, a regional city about two hours’ south of Perth, WA said:
We had a great start to the year in January, but February’s has slumped back a bit.
We’re seeing retail where we are slump in all industries… restaurants, especially discretionary spending. I think it’s a bit of unease with what’s happening with the government.
We have a lot of FIFO customers (‘fly in fly out’ employees who work on remote mining sites) I don’t know if that’s knocked on just yet to our customer base.
Trek and Electra are our two primary brands. We also do GT. We’re basically a family bike shop and we do a fair bit of high end mountain bikes and some high end road bikes as well.
We have competition in Busselton. There’s two other bike shops.
We carry cyclocross bikes, but we haven’t seen a huge impact with them. There hasn’t been a huge interest. At this point there are very few events for people to take them on. There’s a novelty factor in with it like now, I guess like the fat bikes, but it just hasn’t grown a market for using that type of bike.
We’ve sold a few cyclocross bikes but not many.
We’ve got a second store in Margaret River where we’ve sold a few fat bikes.
I’ve lived in Australia 12 years. I’m from America. I used to race road bikes back in the late 80’s early 90’s at a regional level in the US, in Minnesota. That’s my background with bikes and I worked in bike shops to help with the high cost of racing bikes! (laughs) When I moved to Australia I bought the shop in Margaret River and bought my own job, we’ve grown it up with two shops that are trading ok.
I think it’s the best part of Western Australia. I’ve got that enviable lifestyle and job. People say, ‘I’d like to sell up and move to the coast and own a little shop,’ well I’ve done that. (laughs)
We opened the Busselton shop from scratch eight years ago. We used to be AvantiPlus when we first opened and then we found that that business model and the company itself lost their way. That wasn’t working for us so we went back to independent and I think we’re getting better traction by building our own brand in the region.
Gavin Nugent of AvantiPlus Salisbury in the outer northern suburbs of Adelaide SA said:
Business is exceptional. Absolutely! For us, I’ve had this discussion with a couple of people recently because we sit down and check numbers, January is looking fantastic and December finished another great year for us. We’re four years in and just starting our fifth year so still fairly new, on a growth spurt and we’re still turning record numbers.
January’s gone and we’re into February now and it’s just flowing through. Our theory is that we’ll keep going now until the sun stops shining and in Adelaide that could be as late as May, depending on how the weather goes.
We’re actually pretty lucky because Tour Down Under, summer, all that road bike recreational stuff, that’s our market, but we also have a mountain bike park which is less than two kilometres away from us with 25 kms of mountain bike trails. As the weather turns, the roadies all pack up and the recreational guys go into hibernation, out come the mountain bike riders and we go crazy.
We’re an AvantiPlus shop. We’re ranked generally in the top four or five in the country and we’re pretty proud of that being a northern Adelaide suburbs store. It’s an area that’s not considered for being high profile, but we run the store right up there.
We’re 25kms from Adelaide CBD, and we draw in customers from all that 25kms and then we go out the other side too right out to Barossa and Clare Valley (100 km to the north.)
We have a 700 square metre floor area. We’re a good size. There would be around 250 bikes on the floor and we have a great turnover where it’s in the back door and out the front. That’s one of our great challenges, to keep up with bike assembly. We have to have that selection of bikes on the floor to make our business plan work. If we keep up the assembly, that keeps them going through.
It’s a family business, so we’ve got three family members full time on the floor, my wife in administration full time and then we’ve got a fantastic team of about seven casuals that come in and fill in the rest of the time.
Cyclocross is starting to take off in Adelaide. It’s a small niche thing at the moment and we’re watching it carefully. We have cyclocross bikes on the floor, but I don’t think any of ours that we’ve sold, and we have sold a few, have ended up actually CX racing.
Avanti has their Giro model they call the AR (all road) and I reckon all of ours have ended up as ‘all road’ bikes. So yes, we are selling them but I don’t think they’re actually going to that CX race market.
For every 50 road bikes we sell, only about two of those would end up in the race market, so it’s probably following similar lines. For me that’s a good healthy business because the race market is not necessarily where I live and die. It maybe where I die but not where I live!
This is my 30th year as an Avanti dealer, I was there at day one in Darling Harbour. This is their 30th year in Australia, 1985 to 2015.
Someone asked me at the counter the other day, ‘What did you do before this?’ and I told them, ‘I went to school!’ I finished school on the Friday went to my part-time job at the bike shop on Saturday morning then started full time on Monday at the same bike shop. It’s been nice for me.
Keith Carroll from Wilcox Bike Shop in Maryborough on the east coast of Queensland, 255 km north of Brisbane said:
Business is steady. Summer didn’t break any records but we just kept our head above water. A bit quieter than what it was last year. Internet sales knock us around a fair bit.
It just depends. Some people they buy over the internet, but some people just want to get a decent bike. We do a fair bit in the work shop so that keeps us going.
The bike scene in Maryborough is reasonably ok. We get road bikes and people are going into fixies now. A lot of BMX for the kids. Mountain bike is up and down. Most people just like mountain bikes to just ride around the streets with. There are a couple that go down to Toogoom to the trails down there. Hervey Bay pick up a fair bit of the mountain bike scene there because they’ve got a club down there.
A lot of the road bike boys unfortunately do buy online.
We’re the only bike shop in town. Our brands are Colony BMX, Avanti and Merida. We’ve sold a few SE fixies lately too.
The only main competitor for us is Big W. They’re good for us in one way because we get the repair all their rubbish, but unfortunately they do take a fair bit of the market because of their price on bikes. I think everybody has that same problem. People buy what they can afford at the time unfortunately.
The economy is a bit ‘iffy’ mainly because of the EDI Rail, (train manufacturing is a big employer in Maryborough). The government is up and down with contracts with them and people hold off a fair bit. We’ve lost a lot of government departments from this town through the Newman government. Getting rid of the hospitals and things like that and nursing homes so there’s a lot of people lost their jobs in that area.
We don’t sell any cyclocross bikes at this stage. We’ve just been taken over by another gentleman who’s bought the business and he’s going to try and get that type of thing going if he can. We’ll just see how it goes down the track.
Ross Thomas from Steel City Cycleworks in Thirroul, on the coast 60 kilometres south of Sydney, NSW said:
Business is okay, overall sales are down from last month, but still steady. Repairs are good. I’m building a wheel right now. We’ve still got lots of repairs on. We’re doing a lot more mountain bike stuff. I’ve noticed that mountain bike stuff has picked up again, road stuff’s okay, tri… bits and pieces are still moving along. But mostly, as it is always with this store, repairs are pretty strong.
I’m not a brand biased so we don’t have one particular brand that we sell more of. At the moment we’ve been with Merida for a long time and we’re still selling those guys. We’re also selling Fuji from Oceania. We have Felt, we have Kona, we have 15 brands all up. We don’t keep them all in the store, but we have access to all of those brands. We go okay. We keep our overheads low and keep the stock levels pretty tight on bikes and order them as we need them. We’ve got under 90 square metres in floor space.
At the moment repair wise, I’ll just do a quick count… we’ve got over 30 repairs on the floor.
That’s 30 bikes to be repaired. I’ve got repairs in the showroom because I’ve run out of space out the back.
(Regarding cyclocross…)
I’ll sell one if someone wants one. I’ve kind of got one on the floor, but it’s not traditionally a lightweight cyclocross bike. It’s one of the heavier bikes, it’s got disc brakes and semi-knobby tyres. It’s not something that’s happening out here as far as I’m aware. I don’t cater for the whole of the town but a substantial part of it I’m sure would come through the door, but cyclocross, nothing really. I haven’t even repaired any.
I’ve got a guy in here helping me. He said he was down in Canberra and he says it’s big down there, but nothing here.
Mostly, seriously, we’re doing more and more of the enduro mountain bike market, 160mm travel full suspension bikes. Servicing and sales. I think this is the growth area and I’m not sure if it’s peaked yet, but it’s definitely up there. We’re still selling probably hybrids more than anything else, but if you want to look at the higher end of the market, that’s where it would be for me.
Peter Hepworth of Topgear Cycles in the north eastern suburbs of Melbourne said:
Business is good. Christmas wasn’t as busy as it was last year, but our January and February have definitely picked up more so than what it was the previous year. So we’re probably about where we were this time last year, probably about the same over that three month period.
Some of the high end bikes I think are probably the ones we’ve notice some difference on. The bulk and the units are pretty similar from previous years, but some of the higher end models haven’t sold as well, in the December period anyway.
We do a couple of other brands, but I’d say it’s probably about 95% Specialized. Jamis is our other main brand.
We do sell cyclocross bikes and they’ve been strong for a couple of years now. We’ve been proactive in going out to races and setting up a shop tent and getting down to most of the local races. They’ve got a couple of different venues that they race at, but we’ve been quite proactive there and seen the sales come through.
Even this year, Specialized have released a gravel road bike called the Diverge which has been very popular in the demand of that as well. Everything from a commuter rider to a road rider or mountain biker who wants to get into cyclocross racing, so it’s been a good mix of customer base as well.
Previously we would have sold the Tricross and the Crux model where again it’s a new segment that Specialized has released. The Crux has been their cyclocross bike for the last few years, which again has been very popular.
For us the most popular would be between the $2,000 to $3,000 price point. Most of the bikes in the low $2,000’s would be an aluminium frame with a hydraulic disc brakes and then up towards the $3,000 mark would be a carbon frame with a similar sort of spec. That’s definitely been our biggest area there for cyclocross sales.
