Ryan Bilszta has decided to go down the low price, high volume strategy of bicycle retailing. He’s importing container loads of bikes from Asia, made to his own Samson branding and specifications and selling them 12 hours a day, seven days a week through a ‘no frills’ store about three kilometres north of Melbourne’s CBD.
So far, his hard work appears to be paying off.
Bicycling Trade: How did you get into the bike business?
Ryan Bilszta: “Like most mechanics, I started off building bikes in the Christmas period for Goldcross in Epping, quite a while ago. I saw that the industry was something feasible for a young person, and then progressed onto some of Melbourne’s more established shops.
I worked at Rapido Cycles in Essendon for a while. You sort of have a bit of a stepping stone where you go from different shops and learn a lot along the way, I guess. Having worked in different shops with different demographics for each shop, you see different business models and different clientele along the way and this shapes your opinion on how you’d like your ideal shop to run.
BT: Now that you’ve taken the step to start your ideal bike shop, how is it going?
RB: “It seems to be going well. My background with bikes is probably more in the high performance, mechanical area and it’s ironic to be working in a business model that is completely the opposite. Where you’re dealing with entry level bikes with a lot of customers that don’t have a lot of experience.
But I’m enjoying it and it works well. The customers are certainly a lot less particular about different products. Certainly having this business model, we don’t compete with a lot of the online stuff as much, because for example if the customer wants a helmet, the helmets here are $30. It’s a flat rate. No questions, they’re happy to pay $30 for a helmet. It makes things easier for me and my staff to run the business well.
BT: Where did you get your shop name, Samson Cycles?
RB: I’m not overly religious, but if you look biblically it’s a sign of strength and it represents power. We did look at a few different brands, because it is a brand and not just a bike shop we had to find something that was marketable nationally and internationally so that we could sustain it in other parts of Melbourne or Australia.
I mean, calling it ‘Brunswick Bike Shop’ or something is all well and good if you want to stay in Brunswick, but from a growth perspective, it was important to have a brand name that people could recognise and they’ll remember well so Samson seemed to be the most ideal.
BT: When did you open and is this your first venue?
RB: This is the first venue that we have. We opened up just under two years ago based on financial years.
BT: How many bikes are you selling?
RB: Having a basic pricing structure means that we do work off a higher volume of bikes than most normal bikes shops. Obviously your profit margins are significantly lower.
We generally work off a lower margin, just to give us a bit more brand awareness
We have a lot of ‘loss leader’ products in the shop, where people come into the shop just because they’ve seen a product at a very low price. I suppose that helps in terms of high turnover.
Logistically, because of the way the business is set up with multiple warehouses, you do need to have a high turnover just to keep things running. In terms of our container deliveries, everything is based on a high turnover of bicycles.
BT: What’s your typical price point?
RB: The bikes start from $219 and the most expensive bike that we have here is $349. Interestingly, the $349 one is probably the most popular.
BT: Where to from here?
RB: I’m certainly looking more at sustainability over the long term. I don’t want to become a cheap and cheerful cash and carry ‘out the door’ sort of business. We’re trying to develop long term customer bases and things like that.
I’m not in any hurry to expand. The market share is there and I just think it takes time. We need to grow our range a little bit and as an importer that alone takes quite a lot of time. Obviously I’m open to opening up more shops in the future, but we’ll just have to see where we’re up to with staff.
We did look at speaking with a number of wholesalers that were interested in working with us to grow the brand, but I think based on the business model it would be really difficult to please dealers, wholesalers and ourselves. I think after having discussions with various wholesalers, at the moment we’re probably not going to be supplying bikes to anyone else, other than ourselves.
BT: You personally work huge hours don’t you?
RB: The shop’s open from 8am to 8pm every day of the year. Basically the reason why the shop has those hours is because it gives me a good opportunity to get work done and if work’s getting done, I may as well have the doors open.
It’s a good opportunity too for people to come into the shop and drop off repairs or pick up repairs, collect laybys and stuff like that.
It’s an approach that hasn’t been done before in Australia. I think with growth in the industry, I’d be happy to open until 10pm in the future. I guess we’ll see how we go.
BT: Your selling your own brand of bikes from $219. You’ve got to design it, get it made, import it, warehouse it, assemble it, warranty it and sell it. How much margin is left at that price point?
RB: Not a lot! People really need to understand that you have to work excruciatingly hard, that’s the bottom line. I can’t even begin. We clean the warehouse at 11pm and we’ve got a container at 6am. So the day before you start at 8am and finish at 11pm. You’re up the next morning at 6am doing a 40’ container you’ve got to finish work at 8pm.
All it takes is an hour and a half (to unload the container with about 350 bikes). They just drop it here. We do live loading, so basically they leave the truck here and it’s only an hour and a half. I employ staff to do the containers.
BT: And all of those bikes are sold through this one shop?
RB: Absolutely. It’s a fairly inconspicuous location but in saying that, bicycle traffic in Brunswick is fairly high, so obviously we’re taking advantage of that.
BT: How far and wide do your customers come from?
RB: We ship all over Australia but in terms of Victoria, state wide absolutely.
BT: How many of the bikes are shipped out to the customers sight unseen and how many come into the shop?
RB: I’d definitely say it would be 80% of sales through the door. The website’s not overly developed, so our online traffic is fairly slow. I think to be honest the customer service here is pretty reasonable.
I think a lot of it is just word of mouth. Because of my experience there’s a significant amount of multi-tasking. I think that helps the business as well. There’s just a lot that I have to do in a day from warranties to repairs, to technical questions. I’ve got staff obviously, but there’s only so much input that they can do with all of that. I’ve got four hardworking staff.
BT: Are you ever going to be able to step back from the day to day operational work?
RB: Growth of the business requires a significant amount of focus and as a person with a mechanical background, I need to step away from that and become a little bit more focused on growing the brand and less focused on tools and whatnot. That is a hard transition, to be honest.
It’s like serving a customer. If I’m rebuilding a hub I can’t serve the customer because my intuition is to fix the hub because I’m a mechanic by trade, by nature, by background.
I guess it’s one of those things, but it does take time.
