Welcome to the first of our monthly surveys of bicycle shop owners and managers from around Australia for 2017.
Because it’s the start of a new year, our follow up question this month was, ‘What sort of a year do you think your business will have in 2017?’
Rick Cooper of Town 'N' Country Bicycles in the famous outback mining town of Broken Hill, NSW said:
Business has been good. In Broken Hill we’ve only got roughly 19,000 people. We get a few new people coming in like the ambo’s, the firies, police, teachers… most of them will bring their bikes with them, but we do sell new ones.
In the summer a lot of people in Broken Hill will go out for a ride at around 7pm, because it doesn’t get dark until around 8:30pm, sometimes even 9:00pm. The days have cooled down a bit by then. This year we’ve probably had five to six weeks of extreme heat, but prior to that, from October right up until the middle of December was absolutely beautiful.
I sold quite a lot of bikes at Christmas time. From the middle of February right through to around April or May it’s beautiful weather. Around the 30’s, you know, 26 to 32.
The shop itself is going well. It’s a big shop. We don’t sell a lot of road bikes. It’s mountain biking. We’ve got some beautiful mountain bike courses in Broken Hill. There’s about six different courses. We’ve got one very good one out near the golf course that has seven tracks within that compound. They race out there. We’ve got a good mountain bike club. A good bunch of guys.
I mainly sell mountain bikes. Probably 90% hard tails, 5% dualies and a few of the normal 700c commuter bikes.
I do Trek, Merida… I don’t stick with just one brand. When you live in the country like this, I say to my customers, ‘I’m not going to stock the floor with bikes that might not sell.’
I ring up and they’ll send me what I want. I normally order three or four at a time. I’ve got two show rooms, one at the front, one at the back.
In the kids ranges I do a lot of BMX’s. They’re popular even though a lot of the young children today want to join the mountain bike club. I do a lot of balance bikes, 12, 16, 20 inch kid’s bikes.
(What sort of year 2017?) I think it will be a big year because we’ve got three big mines opening up. There’s one towards Tibooburra called Ausgold that’s going to employ around 500 to 1,000 people initially then there’s another one towards the South Australian border which is a really big show as well. I had 30 years in the mining industry and the experts tell me it’s going to be bigger than Kalgoorlie and the Pilbara with all the iron ore and gold out there. Broken Hill’s going to be looking very good as we speak.
But as to what sort of year I’m going to have, I think it will be nothing different. The last three years, my turnover has been within $15,000 of each other year.
I get the local figures for births, school enrolments… so many in kindergarten, so many in first year… and I get the bikes in accordingly.
Big W is not selling bikes as much as they used to here, but there are people who go to Adelaide or Mildura and buy bikes and come home. I service those, so we do a fair bit of servicing here as well.
But I’m at the end of my era, as we speak. I had 30 years in the mines and I’ve had the shop for 20 years. I’m 65 years old so it’s time for me to move on. I’m encouraging someone younger to purchase the building and the business. Hopefully someone from town, but anywhere really, as long as they keep a bike shop in the town because I’m the only one.
I did say that when I sell it I will stay here for 12 months and teach them to build wheels, service hydraulic brakes, put bikes together or whatever they need.
They won’t need to pay me for that, but then I’ll know I’ve left the town in a good state, and I’m going to travel a little bit and spend time with my grandchildren.
If they want me to stay on one or two days a week that will be ok, but I think it’s time for me to move on and give some young kid a go.
John Gould of Pista Bikes on fashionable Toorak Road, South Yarra in the inner south eastern suburbs of Melbourne said:
We had a slow September, October and November. It picked up for December and January, but probably not be enough to make up for what we lost in those quiet three months.
What’s kept us going has been servicing. Being an inner city shop, we do a fair bit of commuter bikes. They’ve kept us going.
Generally in January we sell more road bikes but that hasn’t been happening. The interesting, unusual bikes like cyclocross bikes, disc brake commuters and single speed bikes that we’re known for have been selling alright.
I would say that we’re doing reasonably well now, if it wasn’t for those slow three months that we’ve got to make up for.
We’re not far from the Australian Open tennis. For three years in a row we built up Novak Djokovic’s bike (currently world number two ranked tennis player with $140 million career prizemoney).
He stays at a hotel very close to us and he’s sponsored by Peugeot. They actually send two bikes down for him each year, one for Novak and one for his coach. We build them up and deliver them to him.
But this year we didn’t build his bike, hence he lost early in the tournament, because he hasn’t been riding a bike…
Aside from that we don’t get much business from the tournament. We actually do reasonably well with hire bikes and probably a couple of these are for people to get down to the Open.
As we both know, a bike is a solution to everybody’s problems, and a source of good health as well.
(What sort of year 2017?) When we had those slow three months I thought it was just the bad weather that Melbourne was experiencing. But in talking to a lot of people, it seems that bike shops all around Australia were struggling during those three months. And other parts of Australia didn’t have our weather. So I’ve got a view that those slow three months were due to economic factors. Generally people don’t make major purchases when they’re not confident about their future.
So the way this next year will pan out will probably be governed by the confidence people have in the economy. Personally I think it’s going to be a good year for the economy. I think all the fear about the change of leadership in America is not well founded and that Australia is not going to be badly affected by it.
So I think there shouldn’t be any threats to business in Australia in the next twelve months.
My goals for this year are to work harder on our internet and web presence, not to sell online but to drive business to our shop. I’m moderately confident, I should say.
Ross Powell, of Canning Bridge Cycles on the south side of the Swan River in Perth said:
Overall business is slow, but on the rise. There’s plenty of commuting happening. There’s lots of people riding their bikes. It’s just that over here they’re hanging onto their money quite a lot. They’re concerned that if they still have a job, they might not have one for much longer.
I do believe that we’re starting to come out of that downturn now. We’re starting to see signs of that picking up, but they’re slow signs. We’re not going to go back to a boom anytime soon.
We’ve gone back to a lot more family bikes. We used to be quite a good road shop, but I’m pretty much out of road bikes these days. The family stuff is what’s selling. High end road bikes are very difficult at the moment.
We’ve had to reduce a lot. I’m the only one working here now. At one stage we had five full time staff. It’s been a quite marked downturn over here since about 2 ½ years ago. It started slowly but gathered momentum and our turnover reduced significantly.
We’re still making a profit but we’ve had to restructure the shop significantly to make that happen. We’re still in the same premises.
We mostly sell Fuji and Apollo these days.
(What sort of year 2017?) Just steady, is what I would consider. That’s what I’m hoping for. I think slight improvement.
Nathan Morris, of The Bicycle Centre, Mitcham in the quite affluent, long established foothills suburbs of Adelaide said:
Business is really good. We’ve just had one of our busiest Decembers ever. January here is always busy with the Tour Down Under. You tick over from selling a lot of bikes in December to fixing a lot of bikes in January.
We did a rebranding 2½ years ago. We turned over to a Bicycle Centre store. The transition has been quite easy. They’ve got a good business model that looks after us and they’ve now got some really good brands that we carry that makes our life pretty easy.
We’re still predominantly mountain bike focused. We do a lot of full suspension mountain bikes, a lot of fork servicing and that sort of stuff.
We do road bikes more under $4,000 and a lot of family bikes too. In mountain bikes we go up to $9,000 to $10,000 but sell more $3,000 to $6,000 mountain bikes.
We’re selling quite a few ebikes now too – Merida and Lapierre and the BH Emotion bikes.
Since the Lapierre dual suspension e-mountain bikes have come out we’ve been selling quite a few. They’re between $5,000 and $6,000.
Unfortunately they’ve probably sold out of them now, but we had a demo bike, and every person who rode that demo bike ended up buying one. I think we were nearly on 100% success rate. I think it was a bit of a tester year for Advance Traders for ebikes but I think they exceeded what they thought they would, so exciting times for ebike sales in the next few years.
(What sort of year 2017?) I hope that we’re slightly up from last year in terms of overall sales. We’ve just put a new (additional) staff member on here and we want to capitalise on that and get him working to his full potential. We now have three full time and one part time staff members.
Matt King of Blue Cycles who owns two stores in Coconut Grove and Palmerston, which are suburbs at opposite ends of, Darwin NT said:
Business is great. We’ve just come out of Christmas. We sell all types of bikes from kids through to electric, road, mountain, BMX. Our major brands are Focus, Cervelo, Avanti and Scott.
(What sort of year 2017?) I believe that the foundations of the bicycle industry and brick and mortar bike shops are changing quite significantly. Obviously with all the online retailers… we’ve got Amazon hitting Australian shores shortly. So I can see for 2017 and beyond there’s going to be a lot of changes for suppliers and also for brick and mortar stores.
We’ve got to keep up with the online sellers. We’ve got to adapt to this accessible product that people can get online.
I think that’s both one of the biggest challenges and exciting changes that we’ll see over the next 12 to 24 months.
We’ve got to become more efficient in promoting ourselves online.
There’s always room for any new business, as long as it’s done better than the others that are already around you. There’s always room for a better operator. That’s where your Wiggles and Chain Reactions found a good footing and why they’ve been so successful. They’re systems that they have in place a so much more efficient than even some of our suppliers.
We’ve got to catch up with other retail sectors in the way that we deal with customers. It’s a fundamental of where we’ll go in the future. I think it just needs a big shake up all around from suppliers and bike shops.
There’s some suppliers who get stuff to shops really quickly like your FE Sports, Shimano and those guys.
I think we’re in for a big shock when Amazon hit us. Interesting times but not in a depressing way. It’s a time of change and going forward, and even diversifying. That’s why we’ve incorporated café’s and a yoga studio into our shops. We’re diversifying but our core business is still bicycles and service. It’s that customer service, at the end of the day, that’s going to win it.
Troy Dobinson of the Yellow Jersey which has three locations across Brisbane, Qld said:
Business for us has been good. For our last financial year our sales and gross profit has grown.
As far as our portfolio goes we’ve had a 10% increase in sales from last year and we’ve also managed to scrounge a 2% gross profit increase. So we’re happy with our trade.
The climate that we trade in is changing but our values haven’t. It’s really just customer care. We’ve had a really good year with Trek with mountain bikes. Their dual suspension has been incredible and our Project One stuff that we’re known for is carbon road. Our Domane bikes our Madones, they just work for us really well.
At Cycle to City in King George Square (in the centre of Brisbane’s CBD) we run a workshop. What that’s all about is for people who are everyday workers, riding a bike to and from the city. They have a bike storage rack, shower, toilet, bike cleaning service and then they’ve got us. If they use our workshop service they get the other facilities for the day for free. Off the top of my head, it’s normally about $5 per day.
We do anything from spoke repairs to minor adjustments to spare parts and accessories. All our stores run same day servicing. The only thing that can let us down from time to time is parts supply, but we can get parts overnight pretty easily.
(What sort of year 2017?) We’re looking for a big year this year. We’ve got big things that we’ve been working on for the past five years that are coming to fruition this year. I’ve been heavily involved in our charity, ‘24//7 Cycling Safety Fund’ (you can see more about this here in a previous story).
We end up executing a $3 million Safe Cycling Centre in Ipswich. That’s got to be done by Christmas. We’ve got the funding. We’re putting it out to tender now and want to be starting to move dirt by July. And then our events around that, with our two big ones being our road ride and our mountain bike ride.
I’m trying to keep it simple. And then of course, new products will come in July. There will be some fascinating stuff from Trek, I’m sure that will take that next step as far as technology in products.