It sounds like the former ‘mining boom states’ of WA and Queensland are now doing things tough when it comes to retail sales. Of course our monthly survey of six shops around Australia is far too small to be statistically valid, but this feedback has been coming through quite consistently over recent months, both through calls for How’s Business and other contact with bike trade members.
This month we deliberately avoided the big city shops and called some bicycle shop owners in smaller country towns or outer suburban locations.
We also asked a more ‘left-field’ follow up question, ‘Aside from internet sellers, in terms of your day to day operations if you had to pick one aspect of your shop that gives you the most grief, what would it be?’
Richard Richard Walding of Attadale Cycles, which is on the southern shores of the Swan River between the city of Perth and Fremantle said:
Business is little bit on the quiet side. New bike sales are down a little bit. Repairs are still going alright and part sales are still going alright, so I can’t complain about those two… parts you sell with the repairs side of things, I’ve had some very good ones of those.
Yeah, I get trouble with the internet, but I just don’t worry about it anymore. I get people coming in with parts that they’ve bought on the internet. I just make sure I charge them full price to put them on.
Parts had a bit of a slump for a while but now they’re ticking over as well as they used to. I think some people have just got sick of the internet… hopefully! But loyal customers are always quite good.
I hear around the place that bike sales are up and down like a yoyo. The last couple of weeks haven’t been good, but we’ve finally had the change of weather over here, so winter has come. That slows things down a bit more!
(Referring to the mining boom…) It’s just going to be a struggle for a couple of years and then it will be back again. I’ve been through it before. I’ll just pull my head in, cut the stock level down and cruise along. That’s all you can do, cut your overheads down as much as you can and enjoy the quieter times.
Bike sales are down across the board, a little bit down on last year, which was a little bit down on the year before. It maybe just the area I’m in, with a lot of professional people who are worried about their jobs. It’s just one of those things.
(What causes most grief?) Actually none of it. Maybe I’m just too cruisey. I’m heading towards the end of my career. I just don’t let anything worry me.
There’s always pain in the arse customers that you get. You’ve just got to deal with them.
But nothing gives me any grief. I’m just making sure I keeping my profit margin up so what I sell I make money out of.
I don’t get involved with people who say, ‘I can get it for that price there.’ I just look at what I can do if for and still make a decent margin and I say, ‘That’s my price.’
If I lose it, I lose it. It’s not worthwhile making bugger all on a bike, just to say that you’ve sold one.
If you make a decent margin, try to be fair across the board… Sometimes I win, sometimes I lose.
I’ve had the shop 26 years, but it was already going. It opened in the early 1970’s. It’s never been a huge shop, a two person shop and that’s it.
Wayne Johnston of Ulverstone Bicycles, between Burnie and Devonport on the north coast of Tasmania said:
Business has been really good up until the last couple of weeks when we’ve had some bad weather and things have quietened down a bit. But as soon as we get a nice sunny day like today, everybody comes out and it’s really good. Hopefully a few more fine days and we’ll be going well.
(Busiest part of business…) Repairs mainly, we have a large community of cyclists around here from families to bunch riding and repairs are our biggest work around here.
(What causes most grief?) The number of bikes you have to carry to satisfy everyone’s needs. The number of sizes and colours, there’s no way you can carry that. Some people come in and want a specific bike, colour and size to fit them that day.
Most people are understanding when we say that it will take five days to get that one in. However there’s always that minority that don’t want to wait, and will go elsewhere.
Around this area the economy is not as big as the mainland. The Tasmanian economy is very poor. Especially now that Caterpillar have just announced that they’re going to lay off 250 jobs (in Burnie where they build heavy machinery). Now they’re going to get the same manufacturing done in Thailand.
It’s the same as when people buy online. They think it’s great, but they’re all whingeing now because Caterpillar is moving off shore, which is the same as what happens when you buy online. It costs local jobs and stops the town from growing.
Paul Scott of Berry Mountain Cycles in the southern NSW tourist town of Berry (population 1,485) said:
It’s good. I suppose we all face our different challenges through the year and Berry has a bypass (Highway One), which has started at the Gerringong end and it’s coming towards Berry.
That could present some challenges, but we’re trying to be proactive in dealing with it and bringing people to the store.
But it’s been good. It’s been steady and always positive.
I’m very positive about the town in the future. The bypass could make a difference if you’re not proactive in encouraging people to ride. But for most of our customers, it will make transit time easier to get to us. The road will be a lot smoother and safer and in terms of riding, it will instantly improve massively because the town itself will no longer be a heavy goods vehicle destination and we’ll be able to do more things in future to be able to encourage more people to come and ride here.
There may be a few years of quieter trade, but we’re always working on other ways to encourage people to come to our store and experience Berry and experience what we have to offer as a store.
In terms of the size of store relative to the size of population, it’s a little baffling, but I believe if you build it they will come. If you offer a good product, good space and good service, people will come and that was always the philosophy from the start.
We’ve been open for 5 ½ years now. We’re a Specialized Elite store. We’re not limited to Specialized. We do have other options, but we have the range of bikes for the size of store and the product we can get from Specialized I really believe in. I like it.
Most of our parts and accessories are Specialized too. We do stock Lezyne and some others.
Anyone who walks through the door, they’re our most important thing so we’re not mono-focused. We’re in no way elitist. We do say 30% road, 30% mountain and the rest between recreational bikes and triathlon.
(Most grief?) Ours would be location. We are in such a beautiful place, but with such a low population density, it can be a bit of a challenge for some people to get to us, but we try to make that as easy as possible for them.
The one challenge we all face… it’s not really the internet. If I could be candid with you, I think the internet is partly our own fault. I think most of the bike retailers brought that upon themselves because of poor service and not being quick enough to realise what people are looking for.
They want service. They still want service. Why do Google still send letters to us in the mail? It’s because people still want contact. If it was all about the internet, Google wouldn’t be sending us letters in the mail.
Stores are opening up, brick and mortar stores as well. We need to be aware that people want contact with us. Just being there for them and being less elitist. So cycling becomes a thing that you can get into and not something that feel like you have to earn your stripes. I think that’s most people’s experience getting into cycling. It was mine, for sure.
The final one would be not enough hours in the day to do all the things that we need to do.
Peter Haddin of Hyperdrome CycleMania in the outer south eastern Brisbane suburb of Loganholme said:
At the moment, I’d say, probably the worst it has been in the past eight years. It’s the worst it’s been since we opened the shop eight years ago.
I think the Queensland economy is really struggling compared to the other states. I think Queensland is basically in a recession. There’s no money around. Definitely the mining slowing down, lots of people out of work. Lots of tradies out of work.
The mining and the building industries are the two main players here. A lot of those building tradies were then getting jobs in the mines, but a lot of those jobs have now gone, so a lot of tradies are just out of work, full stop.
Specialized is our main brand. 97%-98% of our stock would be Specialized. It’s one of the more sought after and less discounted brands.
We have a reasonably good BMX market, but I think it’s as much as four weeks, at a rough guess, since we’ve sold a BMX bike.
We’ve managed to sell a few road bikes in the past couple of weeks, which has been hard to do. But our basic core business, which is mountain bikes up to that $1,500 to $2,000 price point has just died. If it wasn’t for the mechanical workshop, we’d probably be gone.
And I think you’d find that if you asked a lot of other shops and they answered you honestly, you’d get the same answer.
I also think the internet has a lot to do with it. A lot of these sites that are bobbing up now like Bicycle Market with all the second hand bikes on it. It bobs up on Facebook and there’s ads on it every day with people selling bikes.
(Most grief?) I would say sales in general due to heavy discounting probably causes more grief than anything, because you can’t make enough money.
If you put all the rest aside and forget about the economy, I would say discounting.
But at the same time, I understand that people are discounting, and we’ve had to do it too, because you have to move some stock to pay your bills.
I tell you something else… I don’t know how many people have picked up on this, but I watch it a lot because I’ve got a couple of other businesses as well. Since the (Qld) election up here when the Labor government got voted back in, the brakes have gone on in this state.
If they look at their figures, since that election three months ago, the brakes have gone on.
Simone Symonds, of Spokes NT in the suburbs of Darwin, Northern Territory said:
Business is good. Dry season has started. So we’re coming into what’s traditionally our busier time of year.
We’ve just gone through a quiet few months, but business is picking up, as we would expect for the dry season.
Darwin is reasonably flat. There’s no hills to speak of, so in terms of a commuting city it’s also good because nine months of the year, the weather is perfect.
It will be two years in July since we took over the shop. Small business is always difficult and it can consume a lot of your time and life. Yes it’s hard, but no, we don’t regret it.
We tend to specialise in mountain bikes and BMX. We cater across all sectors, MTB, BMX, road, commuting and lifestyle bikes like ladies step-through’s.
The main brands we carry are GT, Cannondale, Jamis and Kona. Then we have specialty BMX brands, in race with have GT, Chase, Position One, and then our street brands like Colony, United, Wethepeople. We are big in BMX. We’re also coming into BMX race season, being the dry season. It’s actually due to start this weekend.
So we focus more on the race bikes at this time of year and then as the season comes to an end when it starts raining in November we put more focus back onto Street BMX.
(Most grief?) Being relatively remote from major distribution centres, and you’ll find this if you talk to anybody else in the Northern Territory… freight.
The cost of freight and the time it takes for goods to get from the east coast to the north.
If it’s coming by road which most things do it takes anything from five to nine days, so we usually say to our customers eight to 10 days. It can be anything up to two weeks.
That’s obviously different to what shops in the major cities would experience.
Yes, we try to carry more stock than sometimes you’d feel comfortable with in terms of how much stock you’ve got tied up on your store room, but that’s sometimes a balancing act between making freight work because it’s expensive, versus not tying up all of your cash in stock sitting in your warehouse.
A bike in a box can range anywhere between $25 to $50 freight. We don’t pass all the freight cost onto our customers, but we do pass a proportion on, because we can’t afford to bear all of the cost of the freight.
Peter Sutton of The Complete Cycle, Port Noarlunga South, a coastal outer southern suburb of Adelaide, SA said:
Business is very quiet at the moment. Very patchy. It’s all over the place. One minute you might sell a road bike the next thing it’s a kids’ bike. But there’s no continuity.
A lot of repair work still. Accessories are down a bit. Bike sales are quiet, but it’s the time of year I think more than anything.
The main thing that worries me is that there doesn’t seem to be any move to add GST to online sellers overseas. I think that’s affecting us.
After the budget, they’re already talking about an early election and as soon as you mention, ‘election’ around this country, sales slow down.
I’m still doing long hours on repairs. It’s good bread and butter at the moment. The other thing we’ve started to do is a lot of restoration work on older bikes.
I’ve got one in here from 1938 and another couple about 30 years old, stuff that I sold new because I’ve been here that long. And they want it restored.
They have to pay good money or I won’t touch it. It’s a bit like the motor trade. You won’t pay anything to get an old banger repaired, but if you want it restored, you’re prepared to pay a fortune. And it’s good fun! It’s a market that’s developing and I think it’s going to get better.
We’re also going quite well with electric bikes now. I’m thinking of opening an extra shopfront in this group of shops that we’ve got here, just dedicated to electric bikes.
I’ve already got the hole through the wall, but I’m just using it as storage at the moment.
I’ll put the storage out the back in the containers and then put some electric bikes in.
You only need four or five on the floor and it’s a good market.
The main one I sell is The Electric Bicycle Co from Melbourne (TEBCO). I find that Tony (Morgan, founder) does excellent service, excellent backup and has great knowledge. And they’re not fly by nighters and this is the big thing with electric because so many come and go. I don’t want to be in a situation where I’m left with orphan bikes that I can’t repair and that sort of thing.
We have no trouble selling electric bikes from about $1,800 upwards to say $2,400. I’ve stayed away from the cheapies and I really think it’s going to go more up market.
Especially with this new Bosch stuff in Europe. I know a lot of the big manufacturers like Scott and Orbea are all doing electrics over there. When they hit the market here, a decent carbon fibre electric commuter at $3,500 or $4,000 isn’t going to be out of the question.
(Most grief?) When people bring in chain store bikes, and you give a quote to repair it, and they get really angry with you because the cost to repair it is more than the cost of the bike.
So we’ve taken the stance now, ‘Sorry, we don’t work on them.’ That way, you don’t get into an argument.
