As you might have expected, being in the middle of one of the coldest winters for years, the six dealers we phoned around Australia for this month’s How’s Business we’re finding things fairly tough, although there was a lot of variation between their comments.
For this month’s follow up question we asked, ‘How have your sales of winter products such as lights and warm clothing compared to previous winters?’
Andrew Treloar of Wagga Cycle Centre in the inland regional city of Wagga Wagga, NSW said:
Business is pretty solid at the moment. We have our annual sale at this time of year and it has been very positive. Good number of sales. It has definitely given some buoyancy to our sales in the colder months. Bicycle sales are going very solidly.
We’re mainly Giant, Scott and Norco. Wagga is a bit of a unique town in the way the dealerships work. There’s three quite solid bike shops in Wagga. The big three brands are covered but your secondary brands like your Sheppards, Advance Traders and that, I cover a bit of that and the other shops do too.
We have emphasis on Giant. They’ve given us brilliant support over the years, fantastic service and good product. So we’ve got no need to really go down the Avanti road. Whereas Scott is probably in a different league, a different sort of market so that works out well for us.
We’re about a 1,000 square metre shop. We’ve five full time employees. My family has had the shop since 1978. We started as a motorcycle shop but in the early 1980’s turned into a bike shop. As me and my brother Peter grew up we naturally fell into cycling. Dad had already been in cycling for number of years. He was a good cyclist in the mid to late 1980’s and we followed in his footsteps. Both me and my brother have been here for 16 years now.
(Re winter product sales) In comparison to previous years I’d say on par with last year. I’ve found over the past five years it has ups and downs. One year you’ll sell a lot of winter product. It’s almost like you might saturate the market. Then next year, unless a heap of new cyclists get into it in the local market, the numbers drop.
Last year was an absolutely brilliant year for winter clothing and lights and this year would be very close to on par with that.
Rod McDowell of 7 Cycles in the Queensland coastal town of Yeppoon, (population 16,372 ) said:
Retail is down. Repairs don’t stop, but retail is down. October / November was down, and then it hit obviously for Christmas… it’s just, retail is down in this town in general. A lot of places are closing up.
Yeppoon is on the coast. We’re about 50 k’s from Rockhampton. We’ve got Keppel Island. It’s growing. I got here in 1996. I had a bike shop here previously, but I broke my back, so I had to get out of that. Now that’s all good so I’ve been here in this shop five years.
Now we’ve finally got a cycle path in town called the rail trail. That picked things up a little bit. We’ve also got the bicycle users group called the BUG Club on board now, so that helps a little as well.
This town pumps when it’s holidays. When it’s not, it’s more the triathlon boys that keep everything turning over in my shop. We have a lot of triathlon stuff around here and there’s a new one in August.
Our big sellers are hybrids. I don’t really stock road bikes because I could have $50,000 worth of stock here and then somebody six foot four walks in and wants a blue one with SRAM or vice versa.
My main brand is Merida. I’ve got a lot of other brands because I’m the only bike shop in Yeppoon. I’m in an industrial area. It’s relying on the locals. Everybody just Google’s and finds us, so happy days.
I had a shop called R&L Cycles which I closed in 2005 when I broke my back on a motorbike. I couldn’t find any mechanics to keep that shop going. I’ve been through 27 staff here in five years. Now I’ve got a good fellow so I’ll try to hold onto him. Just try to get a good mechanic mate!
I started 20 years ago at Hadley Cycles in Newcastle. The hardest part is staffing the place. I want two staff plus myself. They don’t want to work! Or they go, ‘Yeah I know,’ but then cost you money. I mean, just ask a question!
Kids know what they’re doing on the BMX’ers to a point, but give them anything geared and you walk away because a customer comes in and they’ll fiddle around with it and end up putting a derailleur through the back wheel and costing you money. Where they could just ask again for whatever and the job would be done.
It’s a big mining area around here, but staff wise, there’s nothing really here. I’d have to pull somebody from another shop and offer them good money to keep them here.
So that’s been the biggest challenge, just staffing the place, because I’ve got five kids. I need to try to spend some time with them. Hence why I need staff. Even if I can get out of here by three o’clock and spend a couple of hours with them at the end of the day.
My wife and I are still together and all that, it’s just trying to find that happy medium time I suppose. I’m here six days a week. There’s a lot more than just coming and opening the shop every day, you’ve got to do everything.
(Re winter product sales) Down. Yep. Definitely. Lights have been down. Obviously the internet… you get the odd person who comes in who just wants a light so people will see them and coppers aren’t pulling them over. They’re not after anything in particular. You get what you pay for.
As for clothing, a lot of people around here are tight. Instead of getting overshoes, they’ll wear sandwich bags inside their shoes! That’s how tight they are! (laughs)
It’s more about repairs. If you can find a good mechanic, you stick with them. That’s where I’ve got my return business. Once they find me, then I am their mechanic.
We named the shop 7 Cycles because my family is five kids and two adults. People go, ‘Are you open seven days a week?’ ‘No I’m not!’ The name works out quite well because when you Google anything, numbers come up before letters.
My first shop was R&L because my name’s Rod and my wife’s name’s Leisa.
Scott Main of On the Rivett, Phillip and Tuggeranong ACT said:
It’s been quiet, but saying that, we’re still selling Project One’s (Trek’s high end custom bike ordering system) quite well. And there’s a lot of interest in the new range of Trek bikes.
It’s just very hit and miss. One day you can be doing amazing figures and then the next day you won’t see a customer until 3pm. I’ve never seen it like this, so up and down.
It’s quiet. If other bike shops in Canberra are telling you they’re killing it, they’re not. I know this because my Tuggeranong store is the only bike shop in Tuggeranong and it’s doing the same figures as us. So if I was being affected by the other bike shops close around me in Phillip I could understand it, but because the figures are the same, I think it’s just the general economy in the ACT.
(Re winter product sales) Yeah, that’s been great. P&A has been really good, simply because we do Bontrager P&A and you can’t buy it on the internet.
I know I sound doom and gloom, but as I said, some days we’re having extremely good positive days, but then some days it’s extremely quiet. Like today, it’s (forecast) nine degrees and raining outside. And it’s definitely not nine degrees outside, it’s probably about two! Who’s going to bother to come out in that?
I keep in contact with the food places around me. The guy at Subway is down 30% and Subway is cheap food. So it’s not just the bicycle industry. Retail in general is extremely quiet. He said all Subway’s in Canberra a down too.
The workshop is still ticking along. We’re doing four or five repairs a day. We’re still selling Project One. The average price is about 10 grand. We sold one on the weekend and we’ve got two more in the cart ready to go. A lot of people have been interested and we’ve already sold two of the new Trek mountain bikes. We had a guy today interested in the new Trek Stash oversized 29’er.
There’s money out there, but people are cautious.
The whole Mr Fluffy thing in the ACT has definitely hurt, because if you take 50 families out of one suburb, for example Chapman there’s 50 houses being demolished. (Old asbestos insulation which must now be removed.) There’s 1,200 houses to be demolished in Canberra. Each house is about a million dollars to demolish and the ACT government has got to fund that.
(on the plus side) Parking has gone up. So when it warms up… because this has probably been the coldest winter Canberra has had for a few years, in terms of consecutive cold days. So when winter does end, commuting bikes are really going to take up, because we’ve got a lot of interest in people looking at commuting bikes as well.
But we’ve got a lot of people coming in saying, ‘I really want to get a bike to ride to work. It’s a five k commute.’
The parliamentary triangle where most of the public servants work is now $13 per day to park. And the price of parking in Civic has gone up and now paid parking is extended to 10 in the evening.
It will be good for business. It’s going to pick up. It has been quiet before, but I’ve just never seen it this quiet.
Lia Weston of Bio-mechanics Cycles and Repairs in the city centre of Adelaide, SA said:
Business is pretty good at the moment actually. Our racks of bikes for repairs are looking pretty full. We’re quite happy with how it’s going. We’re getting new customers every day, which is lovely. Lots of referral work, which is great.
Obviously in winter, you get the traditional slow down. Adelaide’s winter seemed to come in early this year. We usually get a dip in July / August, but this year it happened in May, but June/July picked up.
(Re winter product sales) Our sales of winter products are up this year. It also helps that we just received a whole bunch of Pearl Izumi jackets which we hadn’t had before. Previously we had the Vaude range of jackets which are a brilliant product, but unfortunately no longer brought into Australia. We had Vaude for years and we loved them, but the importer stopped bringing them in. So Pearl Izumi is what we’ve had at the moment and they’ve been very popular. We’ve featured them in newsletters and on our website and on our Facebook page and we’ve had a really great response with those.
We’ve brought in Pearl Izumi cold weather gloves which have gone really well. Particularly the soft shell which is a really well padded, quite a puffy winter glove. Glove liners, as usual. Ear warmers. Shoe covers, not so much because it has been pretty dry so far. But the jackets have been really big.
We’ve always maintained that the focus is the workshop. We would say that the business is 80% workshop, 20% sales. The workshop side of things is what we’re passionate about and it also frees us up to only stock product lines that we’re also passionate about.
We can concentrate on bike brands like Surly and Salsa. Things like Pearl Izumi, Schwalbe, Tubus, Tune, Syntace. We’ve also started carrying SQLabs saddles. Ortlieb and Brooks are consistently good sellers for us.
So what we have on our shop floor are products we believe in and that fits in with the general philosophy of our shop. We like stuff that works and stuff that’s going to last well. We’re not interested in selling five dollar tubes or things like that. That’s not where our market lies and there are other shops that will do that for us.
We only have two mechanics and we’ve kept it that way deliberately. We like the control. First of all it’s incredibly hard to find people with the skills that we need to work here. The standard of work is up to a very high level and that’s what we’re known for.
It’s the reason why we don’t take on people for work experience, volunteer work or anything like that. This way we know exactly what’s been done and who’s doing it. So we have my partner Peter who is a full time mechanic and we also have Andrew who is with us four days per week and is very good.
Both Peter and Andrew have been in the industry for a long time. Year round we’re booked out a week in advance. Through spring and the Tour Down Under that blows out to two to three weeks, although if someone’s riding to work and snaps a gear cable we do our best to fit it in. It just means working very long hours during that period.
The booking system is very important. That way we can turn bikes around quickly (when they arrive). We know what’s coming in. People know that when they drop their bike off, they’re going to get it back in a particular time frame. We hear a lot of horror stories of people going into a bike shop with their bike and leaving it there for two weeks and no-one knows what’s going on or when it’s back… not done when they said it would be done and that kind of thing. We avoid all of that by being very strict with the booking and keeping customers informed. Our workshop is open plan so people can always see where their bikes are.
Glen Ward of Speedlite Cycles in the Perth, WA suburb of Maylands said:
As you probably hear, lately it’s a bit up and down. Probably more up than down in the past month or so. We’re seeing a trend where repairs have been pretty consistent and strong for us. High end bikes are not too bad. We’re strong in the mountain bike side of things. We do Norco, Giant and Pivot.
I took over about six years ago, but the shop’s been here since 1948. It’s a Maylands institution.
But we’re finding that we’ve got to adapt. The main player behind that is the internet. We’re quite active out there racing and riding and we’ve got a pretty good following. Without that, to be honest, we’d be struggling. It’s important to get out there amongst it and to be as accessible as possible.
Your bread and butter stuff… we’ve seen falls, to be honest. P&A is pretty good, but we have to be really selective with our stock. The internet is a big killer. We find we’re price comparing against… your benchmark now is good old Pushy’s because they’re local. And that’s hitting us hard.
The ones the internet really kills are higher end, maybe suspension, hydraulic disc brakes, wheel sets… I don’t stock anything over maybe a $450 road wheel set. I can sell that to a customer, but beyond that you get dictated to, big time. In some cases our buy price… something’s got to change because we’re paying in a lot of cases more, after GST and freight, wholesale than what you’re clicking away on Pushy’s for.
It’s harder to walk into a bike shop and see a cabinet full of nice bling. Which is a real shame, but we just cannot be competitive. We know the internet’s there. We’d do the same thing. We can see it from our customer’s point of view. So we try to give them the opportunity to approach us with pricing, otherwise we’ll just miss out either way.
It’s more about getting the customer.
Bike sales can be like that now too. Especially with certain brands. There’s so much competition out there. And dealers are hurting, that they’re just slashing and burning ridiculously. It’s just getting the customer now. The actual margin is bugger all.
(Re winter product sales) Light sales are similar but winter clothing is down. Lighting, not a problem. Apparel is almost a non-event. I stock it, but in some cases got some of last years’ lines sitting on the shelf. Apparel is a real teeth puller. It’s tough.
I don’t get people coming in and trying it on, then buying online, it’s not that sort of angle. I don’t know, I’m assuming it’s just online purchases, but I’m a bit baffled because you’ve got to try that stuff on.
I stock arm warmers, vests, base layers and full length jackets. You’re much better with those layers. I know that from personal experience and what our group rides use.
We do really well with our shop kits and some of the mountain bike stuff, shorts and jerseys, we do pretty well with. But normal winter commuter apparel… dead.
Gordon Lawrence of Lawrencia Cycles, who also sells sporting goods from his large store in the eastern Melbourne suburb of Hawthorn, Victoria said:
I’ve been away for two weeks, only home this week. So far the figures are slightly better than last July. It’s better than last year, but last year wasn’t that great. I’m up a pooftance, if you know what I mean.
I run the sports part of our business… I just sell the main lines. I said to the guy who supplies me with Sherrin footballs the other day, ‘I’m only a piddling little account,’ and he told me he had 16 independent sporting goods stores and that I was his biggest, which surprised me a bit. But we just put it on the wall. There is no backup service. There is virtually no expertise required. You just put it on the wall and away it goes.
We don’t sell sporting software like the clothing and the shoes. I sell the hardware like the balls and the bats and all that kind of stuff. It works quite well for me actually.
You get a family come in on a Saturday to buy a bike for the 10 year old and the 15 year old wants a footy and the seven year old needs a tennis racquet. Often people come in just for sporting goods, but often people come in for a bike and walk out with a couple of sporting goods items (as well).
(Re end of season bike discounting) It’s just getting tougher and tougher, really. You’ve just got to drop your pants as far as you can and hope for the best.
It’s been the case for the past 15 years. Prior to that it didn’t used to be. But this day and age, you’ve just got to move the old models on to make room for the new models.
I think you have to. You turn old stock back into cash and start again. Fortunately I can run a pretty lean business because I’ve been here such a long time. I’m not particularly cash strapped, so it’s not a big deal.
I would hate to think a bike in my shop had two birthdays. One birthday is acceptable. Two is nah uh! Three would never happen. We’d have it ridiculously cheap that it has to go.
(Re winter product sales) That is something that is actually down, to be honest. I think people that do winter riding, your true cyclist, if you understand what I mean, I think they’ve probably got what they need.
The revolution in lights happened about three to four years ago. There were lots of better lights than there were say five or six years ago. But that’s caught up now. So not as great as years gone by.
