How’s Business? November 2014

Once again we phoned a mix of city and country shops from far and wide across Australia to ask them, ‘How’s Business?’
For this month’s follow up question I asked, ‘Have you ever tried to measure how long on average it takes you to sell a bicycle?’ It was one of the few follow up questions that I’ve ever asked that has received a 100% consistent response rate. In this case the response was, ‘No.’
I thought it was a reasonable question to ask, because dealers typically have a very close knowledge of how much they pay for each bike and therefore the margin they’ll make at its retail selling price and sales staff labour is surely a significant cost component of each sale. But several dealers pointed out that customers are so variable that it would be a hard thing to measure.

Ben Mather, of AvantiPlus Launceston, Tasmania said:
Very good. It’s been good for a couple of months here now. After both the federal and the state elections I think things here got a bit more steady, so it’s been pretty good since probably early September.
We operate under the AvantiPlus banner, but we’re still an independent store. In terms of bikes, yes, we do only stock the Avanti and Scott, but in terms of all other products and accessories, that’s pretty much open to us, what we wish to stock.
(Regarding average time taken to sell a bike) No I haven’t tried to measure. It’s not something I could put a figure on.
A lot of retail stores don’t spend enough time trying to sell bikes. I think a lot of places get pretty lazy. If someone comes in and they don’t buy a bike straight away or they don’t flash their cheque book, then the shop is not interested.
But I try to make a really big point to all my staff, ‘If you’re not selling a bike there and then that day to a person, you still at least need their details and send them a follow up email.’
So we’d probably spend a little more time on it. If I’ve been chatting to someone about bikes and they’re not walking out with one. I’ll at least be sending them an email saying, ‘Hey look, this is what we chatted about. This is the bike we looked at. Here are your price points and your options.’
That way as soon as they get home there’s something in their in-box and at least they think that we’ve followed up. We close a lot more sales because of that.
You’ll send them one email, and even if they don’t respond to that, a week later you can send a follow up email, saying, ‘Just making sure you got my email. Have you found something yet?’
A lot of the time they’ll email back and say, ‘I did find one. Thanks for all your help.’ Or they’ll say, ‘I haven’t made that decision yet.’ And then you can continue that process.
That way you’re actually dealing with them when they’re out of the shop too. As much as you try not to intimidate them, a lot of people feel intimidated in a retail store, because they’re out of their comfort zone. But when they’re in the comfort of their own house, they’re happy to be a little bit more open with you via email.
It takes a lot more time than what I guess your traditional selling would, but if you’re looking at a three, four, five thousand dollar bike, it’s definitely worth taking that time.
The other thing that I find by doing that whole email follow up is that if you’re sending them a link to the bike, you can send them a link to the bike brand’s website and give them a retail price, as opposed to them just going back...
A lot of the time people will just say, ‘Have you got a business card? Can you write that bike down?’ So you write it down. But the first thing when they go home they type in the bike model and what’s the first website it brings up? Bike Exchange. Every store in Australia.
But you can sort of dictate where they click to, to look at that bike as opposed to going to Bike Exchange and just looking at price points.
Don’t tell the whole industry that. It might catch on! (laughs)
People can shop as soon as they get home and they’re not just shopping in your store they’re shopping everywhere. The whole world. So the more time you can spend with them and the more contact, the better.

Jim Harper of TRS (The Ride Specialists) Cycle Centre, Port Macquarie on the north coast of NSW said:
Business has been quite good recently. We had a very strong winter. Probably the strongest winter we’ve had in a few years.
We’ve noticed a real pick up across the board in bikes and workshop, so it’s quite positive.
There’s three bike shops in Port Macquarie. We do tend to specialise a little bit in different things. We specialise very much in road and triathlon stuff.
There hasn’t been anything (new stores) open up recently. I understand that Goldcross is coming to town via Rebel, but I’m not too sure what the plan is there.
The cycling scene in Port Macquarie is actually quite vibrant for a town this size. It’s got a strong cycling culture, a very strong triathlon culture with the Ironman and the Half Ironman events that have been here for nearly 10 years. There’s a lot of MTB trail opening up around Port Macquarie as well and we’ve got a very active mountain biking community. There’s some positive things happening with mountain biking.
We’re 90% Trek bicycles and we do Cervelo as well, which is a strong brand for us, being a triathlon town.
There’s just myself and one other staff member. We have had more in the past. But we’ve found that for whatever reason people have left, we haven’t replaced them, we’ve just worked a bit harder ourselves.
For our customer base, we stretch up to Kempsey (about 40 km north) and down to Laurieton (about 30 km south). But we have some really good customers from out west of the range that travel across to see us. They usually call before they’re coming. Some of our most loyal and valued customers are from west in the state. We’ve built up, I think, a good reputation out there.
The spoken word referral is the best PR that you can have.
(Regarding average time taken to sell a bike) I don’t know if I’d want to know! (laughs) No I haven’t. Because we’ve always specialised in mid to upper bracket stuff, particularly for a country town… I opened the store nearly 10 years ago with that in mind. I felt that you didn’t have access to upper end product and expertise here. I spent six years at Clarence St Cyclery prior to moving to Port Macquarie and the best part of a couple of years at Hadley Cycles prior to that.
I’ve always dealt with higher end racing guys. Consequently the time it takes to sell a bike is longer than doing low end family stuff and I’m fine with that. I do it because I enjoy that. That’s our thing.
A fit up of a new road bike is going to take an hour of your time regardless. That’s incorporated into the sale price. For us that’s part of selling a bike. I think that it’s important that you take some responsibility for it fitting the rider. I don’t hand a bike over then charge more.
The actual process of selling a bike, some people might make their mind up in 15 minutes and other people might deliberate over months.
I really couldn’t put a number of it, because people have got different decision making processes.

Rob Crawford, Manger of Melbourne Bicycle Centre, in the inner northern suburb of Clifton Hill, Vic said:
Good. I’ve noticed over the past four to five weeks that business is tracking a little bit better than last year. Possibly Christmas shopping is getting done a bit earlier this year. That might be one of the reasons.
I have no complaints about how the business has gone since the AFL (Australian Football League) season has come to a close. This is generally a turning point. I think it’s a little symbolic, but Saturday is footy day for Melbourne. Partly it’s symbolic because the better weather coming through, but I do think that after Grand Final Day, people go and do other things with their lives on the weekends.
(The State Election due late November) is not affecting sales as far as I can see. I think budgets affect sales more than elections.
Our store has a commuter and family focus, given our location and what we stock. Those are the bikes that are our strength and that’s what we’re selling. Christmas layby’s are up compared to last year, especially in the kid’s bike range.
(Regarding average time taken to sell a bike) Not formally. That would be a difficult thing to do. You’re not in the shop seven days per week. You can have people coming and visiting the store multiple times. You might not be able to measure that very easily. Some sales you can do in five minutes and some sales may take people two or three visits, spending half an hour to an hour each time.
There’s a wide variation in the sales process, and that’s driven by the customer.
Our role is to be responsive to what the customer is wanting and if they’re needing to spend some time in the shop to make a decision, that’s their prerogative. Sales can take five minutes or five hours.

Andy Simpson, Bike Nirvana, Victoria Point, an outer south eastern beachside suburb of Brisbane, Qld said:
Yeah mate, it’s going along pretty strong. Up and down some days, but as an overall picture, going along nicely. We’re always competing against that online trade of course, but we’re going along pretty good.
We’re a Specialized dealer and do BMC as well. Our main bikes at the moment, coming into tri season, are a lot of the road and triathlon bikes, but we’re also pretty big in the mountain bike scene, as well as lots of kids, family bikes, cruisers as well. We cover a pretty broad spectrum of bikes I guess.
The shop’s been going four years and I’ve been here a couple of years.
(Regarding the impact of the G20 global summit meeting in Brisbane) Last Friday was one of the busiest days we’ve ever had. Given that the CBD was closed, we had a massive influx of customers on Friday. But over the weekend, not as many with the heat. I think they’d all gone to the beach because of the heat, but Friday was a crazy day.
A lot of our customers live out here but commute to the city. Obviously they had the day off on Friday so they came in here.
(Regarding average time taken to sell a bike) If it’s a family bike or kid’s bike it may be a half an hour to an hour. High end road or mountain bikes, dual suspension bikes, you spend a lot more time trying to sort the person out with the right bike that’s suited to them. On a higher end bike, you’re probably looking more at two or three hours, setting them up and getting them on the right bike.

Michele Primaro of Corsa Cycle Centre in the city centre of Adelaide, SA said:
Business is not too bad. It’s probably around the mark where it’s been the past couple of years. I think the cycling scene in Adelaide has reached a pretty high point at this stage. I’m not sure that it can grow any more than this.
We only do a few brands and Cervelo is definitely the brand that’s doing really well for us. Probably the S3 model, which was used by the Garmin Sharp team, that’s been a very popular model for us this year. They have released the S5, but we probably won’t get it until the end of the year or early next year.
They released the S3 this year. Normally the R series does well, but as soon as the S3 came out it seems to have taken over sales from the R series. It has been a very popular model.
We do time trial bikes as well, but we’re purely a road, triathlon, time trial bike specific shop.
(Regarding average time taken to sell a bike) It’s a funny thing. You could get a customer who comes through who already knows what they want and wants to put money down. But there’s others that you may have to see the first time, the second time and the third time! (laughs) But on average 30 to 45 minutes.
Our average bike sale price point would be around $4,000. We’re the only Cervelo dealer in Adelaide and we’re probably the third biggest in Australia as far as Cervelo goes. They don’t do a cheap entry level bike. The cheapest they do is around the $3,000 dollar mark and since the S3 was at $4,500 the average is around that model.

Jamie Robertson of Hi-Way Cycles, in the inner south eastern Perth suburb of Victoria Park, WA said:
Not too bad. But it has slowed down, as my boss has been complaining about. People don’t necessarily have as much spare money to spend. So they’re not necessarily coming into the store and buying expensive bicycles.
I’m finding they’re tending more towards a commuting style of bike, as I’ve tried to push them towards because people need something to transport themselves on and they’re finding that bikes are a good alternative. So I think in the long term, it’s actually quite a positive outlook.
We sell all sorts of bicycles. Our main brands are Merida, Norco, Apollo, Lapierre and we’re going to be taking on Cannondale again soon.
(Regarding average time taken to sell a bike) That’s a really different sort of question! Negative… not at all. I never even considered it. Not that I’m a business expert or anything. I’m a bicycle mechanic.
My owner may know. He’s a senior lecturer of business at Curtin University, so it may be something that he may have considered.