Welcome to our monthly survey of six bicycle shops from across Australia. We always call a mix of city and country shops, large and small and simply ask ‘How’s Business?’
Their answers this month spanned a very wide spectrum. In part this seems to reflect the widely differing economic conditions in different parts of Australia at the moment.
For our follow up question this month we asked, ‘How important is insurance claim work to your business?’
Last week we ran a story entitled ‘Retailers Feel Squeezed by Big Bicycle Insurers’ and we thought it would be interesting to get feedback from more retailers about this topic.
From our limited sample it seems like the answers range from ‘not important at all’ through to ‘very important’.
Jessie Bulkeley of Cycle City in Fyshwick, ACT said:
Business is going well. We have seen a resurgence from let’s say October through to now.
In 2014/15 we were down 20% or so from the previous year. But now we’ve come back and leapfrogged that to about a 30% resurgence in what we’re seeing through the door and converting, which is great.
It’s actually soaring along at the best we’ve ever done at this stage, which is really positive for us. Best summer so far in the shop. This will be our fourth summer.
We’re carrying a really good level of stock that we’re happy with. Obviously it’s a big shop with a large floor space to make the place look full. But our buying has become a lot smarter.
We’re not holding much more in the way of high end bikes other than what you see on the floor, which was done previously.
Now overstock stuff is all high turnover mid to low end stuff where we keep doubles. There’s more cash freed up for other things, so that’s good.
We’re in a good place. We’ve just lost a mechanic who’s moved to another job, so staff numbers have come down a little bit. But we’re not actually going to take another fella back on this side of spring time. We’re going to give it a good crack at running a little bit lean.
The big boss here Garth has got a pretty full plate, but is spending a lot of time at the coalface now, whereas when we had higher staff numbers he spent more time cleaning up odd jobs.
(When they had the previous downturn) I recon we got hit with a bit of shock from outside factors such as the budget, Joe Hockey, Tony Abbott, tight times. I have to put it down to that because nothing else was really being done too differently from the previous year.
Going well, summer 2013. Summer 2014 was a bit of a dip. Now we’ve come back to a more confident customer. Converting sales is a lot easier than it was a year ago.
Now people are much happier to throw the dollars around.
We’ve taken on Scott about 12 months ago and there’s some really hot value in several of the Scott road bikes. So Scott’s been a real edge for us. It has a bit of a premium feel to the brand, but not at some of those epic price points.
Being a big shop, it can be something different every day in here. Road bikes can have their moment, you give it a week mountain bikes will be doing their thing. So it’s hard to pinpoint the type of bike that’s selling best at the minute.
But we do heavy numbers in low to mid end recreational hybrids, commuter bikes and lots of kids bikes.
We’ve doubled the space we’ve got for kids bike storage with a two level racking system. Around Christmas time at its max, we had about 100 kids bikes on the floor, so plenty of colours, plenty of options and that works well for us.
(Regarding insurance work). We do a little bit with insurance claims. There’s quite a bit of theft in Canberra in the CBD area. It’s often in the news. I live in the city myself and I’m pretty wary of it. So it trickles through in insurance claims for stolen bikes.
I’ve got a pretty flash bike in here at the moment which unfortunately has been in an accident.
It comes and goes. I wouldn’t call it a steady thing for us. Not a super big money spinner but it’s there on occasions.
Trevor Crispin of Wellington Cycle Works, in the ‘iron triangle’ industrial city of Port Pirie, SA said:
I’d have to say business is slow. Repairs are pretty continuous, we get plenty of those. Sales are slow.
I retired from the smelters here. When I first finished I did a couple of years with the previous owners of the bike shop. (about eight years ago) Then last year I had a call, ‘can you come back in?’ Because they had a couple of young blokes here and things weren’t going too well.
It’s definitely slower on sales. Apollo and Avanti are our main brands, but we can bring other brands in for people. In our BMX range we do Mirraco, United, Wethepeople, Sunday…
I’m 71 and I think that might put the kids off a bit. Ben the owner has been away for virtually a year. He got a full time job making videos, nitro circus, motorbike, pushbike.
He’s been to America a few times with the people he’s working with.
(Regarding insurance work). When we get customers in here (with insurance claims) we try to help them as much as we can. We’ve sold a few new bikes with insurance claims, but I wouldn’t say it’s a real important part of our business.
Justin Wood of Bundy Bikes in the regional city of Bundaberg Qld said:
Business is not too bad. December and January were really good months. It picked up for once. It hasn’t been that good for a long time. But February has gone bad again, that’s for sure.
February is always hard every year because everyone goes back to school and we’ve got house rates.
You can’t really judge what’s going to happen for the rest of the year from February that’s for sure.
But just talking about business in general in Bundaberg, the car yard next door is doing really bad… the problem with up here is that we’ve got one of the worst unemployment rates in Australia and we’ve also got one of the highest retiree rates in Australia. So a lot of the town doesn’t earn a wage!
I’m probably the busiest bike shop in town, and I’m still not that busy, so I’d hate to think how the rest of the shops are going in the bike shop industry.
I’ve only been here about eight years, from Melbourne. In Melbourne people would walk in and spend $10,000 on a bike and not think twice, but here my average sale is about $800 per bike. And you really have to work hard to get that sale.
Even though we’re four hours from Brisbane, people will drive there to save $50 to $80, which is crazy.
I’ve been in the industry now for 22 years and every year gets slowly worse and worse I guess.
Specialized is my biggest brand, but then I do Scott, Avanti and Fuji. I hadn’t sold a road bike in a few months but then I sold three in the past three weeks. I’m more of a mountain biker myself so we sell more mountain bikes. Path and trail and flatbar roadies are pretty much my markets.
(Regarding insurance work). It’s not a big thing up here. I might have done three in the past year.
In a small town you really see online purchasing more than you would in a bigger town like Melbourne. That’s one thing that’s really killed the bike industry. The internet’s killing everything at the moment.
The other day I was on the Shimano website looking at a new cassette for my new ride bike. It had a 32 rear cassette, and I was going to drop it down to a 25. While I was on there some Wiggle think popped up on the side of my screen and Wiggle was $23 cheaper than Shimano (dealer wholesale price)! (laughs)
How can you live? By the time you put even $10 profit on a cassette and put GST on it, your $40 to $50 more expensive than the internet. People come in and say you’re a rip off. But I say, ‘Mate, I’m making $10 out of that!’
I ended up buying the cassette for myself off Wiggle because it was $23 cheaper. I’d rather support the local industry, but when Shimano is online for cheaper than they’re selling to the dealers for, you’ve got to start thinking about yourself.
Phill Bates of Bates Bikes in Carlton, a southern suburb of Sydney NSW said:
I think business is pretty good. Since we’ve moved we’re now in an ideal location. Right on the highway with 68,000 cars going past every day. It certainly means that we don’t have to do as much advertising. The visibility of the shop is quite enormous actually.
And having a corner block, there’s no problems with parking. You couldn’t have designed the place much better, because not only is it set up for the bike shop, but it’s also for the other businesses that I’m involved in.
I think the best thing that we have to offer as bike shop is real personal customer care. I’ve had quite a few people comment back to me that have gone there unannounced and had incredible treatment from the staff.
What we provide in service, especially repairs, is second to no one and that’s where we get the repeat business.
It’s our experienced staff. Having people like Lenneke (store manager)… she understands cycling really well, is a big bonus.
We don’t go totally top end. We’ve certainly got some top end bikes, but that’s not our focus.
Our focus is the middle of the road bikes and having a shop that sells a great variance of bikes.
We’re fortunate in having some great brands in Cervélo, Giant, Fuji and Focus and people are appreciative of having good quality gear.
(Regarding insurance work). We don’t get any. We don’t pursue it. It’s been stitched up pretty well by one retailer. Craig Milton has got the run of the whole place. He set it up. Good luck to him. He’s obviously done some deals and we don’t get much insurance work whatsoever.
David Tanner of Bicycle Centre Ballarat in the Victorian goldfields city said:
Business has been good since Christmas. Selling has been good. Accessories have been good. The workshop’s been really busy.
It’s an indication that more people want to get out and cycle. They’re not just interested in the new, flashest bike, they just want to ride anything. I’m not sure what’s pushing it, but I’ve had a lot of people telling me that, ‘cycling’s the new golf’.
I think that gets around. A bit like if you look up and point in the sky people will look up to see what you’re pointing at. We tend to be gregarious so we tend to follow.
So I think it’s pushing itself. Once you get this ball rolling it continues to roll. Plus good weather and a general push to get healthy and fit now – getting away from alcohol and cigarettes and exercising more. Cycling is a good easy exercise that people can do and you can make it as hard as you want.
We try and do our own thing (in the shop). We try to provide good service, do what we say we’re going to do, realistic prices, with a smile on our face.
We do Merida, Norco, Lapierre and ByK… they’re our biggest brands.
We’ve done ByK (high end kid’s bikes) for about six years now. We’ve built it from having a couple on the floor until now we’ve probably got 30 ByK bikes on the floor.
There’s massive growth in that area and people can see the benefits… it’s more expensive but people can see the reasons for the more expensive bike if you spend the time and talk to them.
(Regarding insurance work) We’ve had a bit of an increase in insurance work in the past six months. Any form of sales is an important part of your business. Whether it be referred through an insurance company or a broker. Although you don’t get as much money from an insurance broker compared to a retail sale when someone walks on the floor, it’s generally a lot easier and that might be a customer that you haven’t had before, so it could be to your benefit.
We might have done 15 to 20 bikes (through insurance) in the past 6 months. I think that’s an incitement on robberies. I think there seem to be more robberies. There’s more people complaining that they’ve had their bike stolen now. Which is not a good sign at all. It’s an invasion of your privacy.
It’s not too bad considering. Compared to some bike shops out there, we’re still keeping pretty steady.
We certainly haven’t had a massive downturn or anything.
The resource industry over here has slowed a bit, but we still have a good following and people are still coming through the door. It could always be better but we can’t complain too much.
(Having new bike shops just around the corner in the CBD) has probably been quite helpful. Giant opened up two years ago maybe and TBE (The Bicycle Entrepreneur, a major Perth retail chain) has now just opened (next door to Giant).
The fact that we were here first is quite good in that you grow relationships with people and they know the service that you offer and keep coming back.
We’re a Specialized Elite store. That’s still our predominant brand, but we’re also doing Focus and Cervélo. That’s changed in the last year or two.
I think it works pretty well between those two brands and Specialized.
We normally have five or six staff on during the week.
(Regarding insurance work). To be honest, it’s something that we’re seeing more and more of. I think that’s purely because there’s more people riding bikes now. More incidents happening, whether that be they’re stolen, crashed, etcetera. The past 12 to 18 months, definitely there’s been more.
We’ve got relationships with a few insurance companies and we’re being contacted by them more frequently than it has been in the past.