With the warmer weather well upon us, not surprisingly the dealers we called were a little more upbeat than during winter. But from our tiny sample at least, you wouldn’t say that it’s boom times in the bike industry at the moment.
As always we ask a follow up question. This month it was, ‘What’s the best business decision you've made this year?’ We explained that this could relate to any aspect of their business and their answers varied widely.
Nathan Jackson of Cycle2 in Launceston Tasmania said:
Business, we can’t complain about. We’ve had a good start to the spring season. A lot of activity and a lot of people riding bikes. Our workshop’s pretty cranking, you could say.
We’re finding the new Madone release is sparking a huge interest with the Trek bikes so we’ve kicked off a good season with some high end sales.
All the mountain bike action with the trails has seen a steady flow of dual suspensions still going out the door. And in general recreational mountain bikes are going quite well too.
The past 18 months has seen a huge increase in activity in terms of regenerating some existing trails. But then we’ve had the new trails up in the North-east, as in the Blue Derby and stage two opened not long ago, and then Hollybank, so there’s lots of places to go and ride.
It has sparked an interest in entry level hard-tails around that $700 to $1,100 price point to give people as taste of riding somewhere like that. Then it has rejuvenated your dual suspension sales to that middle age bracket of 30 to 55 year olds who are buying some good dual suspensions to go and muck around with their mates and go and have some fun.
(Best business decision) Just following our plan and tracking our goals and making sure we get there. Our store plan that we’ve set out for the next five years and ticking it off as we go.
We’ve got a good plan which started two years ago with the store refurb. We’re starting to see a bit of fruition from our decision to refurbish the store.
It’s just executing the plan, following it through, which seems to be paying dividends.
Tony Alexander from Ace Cyclery which is in Palmyra a suburb not far from Fremantle WA said:
It’s steady for this time of year. We tend to sell a lot of children’s bikes and flatbar road bikes are going reasonably well. We sell quite a few vintage bikes here, beach cruisers and retro bikes, although they’ve been a little bit quiet at the moment.
We sell bikes that other shops don’t get involved in, like unicycles, tricycles, little metal cars, other things that shops normally don’t have in stock.
We’ve been around for 40 years. We’ve got second and third generation customers still coming back.
I started the shop myself. My father had the shop (building). It used to be a second hand shop and a real estate agent for a while. I was working for Glen Parker at the time who was selling his shop in Nedlands at the time and said, ‘Do you want to buy it?’ I mentioned it to my father and he said, ‘You’ve got a shop here, why don’t you use this?’
So we opened and it grew from there. It was too good to not do it, really. It has been a good little interest. I’ve enjoyed it. We’re making money out of it so why not keep doing it?
We tend to sell more family orientated bikes. Not so much the purist cyclist. More the urban cyclist, people using bikes for transport.
Racing bikes have gone off a little bit. We tend to sell them up to about $1,500 to $2,000. Over that it’s a lot more difficult to sell.
(Best business decision) Not to put in forward orders. We run a really tight ship here. We try to keep our overheads right down. If we did forward orders we’d have to purchase a van, go and rent other premises somewhere, like a storage unit. Then we’d have to employ more staff to pick bikes up.
We will just put in a sprinkling of bikes. What we think we’re going to sell. We may do small forward ordering, but just what we know we’re going to sell. Then if we can’t get it from one supplier, we’ll get it from somewhere else.
We’ve done forward orders in the past. We’ve had a truck roll up with 30 bikes that we just don’t need. Then the bill comes in. You’ve got to pay that and you’re sitting on all these bikes that you don’t need.
We find that one year ladies bikes might be selling really well then the following year it could be mountain bikes, it could be flatbar road, it could be beach cruisers. It does change from year to year and it’s hard to gauge what’s going to sell next year.
Jason Jaffrey from My Bike Shop in the north western Brisbane suburb of Mitchelton said:
It’s been steady for us. To be totally honest, through winter, probably since Easter, we’ve been on a bit of a roller coaster. A really good month and then a really average month and vice versa.
But repairs seem to be ticking through quite well and even P&A. It’s really new bikes for us that’s where we’ve felt it.
Your repairs and P&A from a margin perspective are better but dollar wise your bikes… when you don’t sell a couple of extra bikes that week you tend to feel it.
There’s no need to panic. We had something similar May 2014 when they announced the (federal) budget and it was going to be the toughest budget we’ve ever had.
That May/June after that sales plunged. It literally, that same day, drew to a halt. But it only hung around for May/June then people forgot about it and life went on.
This year we were expecting it to happen again, but it slowed up earlier, the week before Easter. But we’d come out of (previously) the best two years we’d ever had, so we noticed it more than some others might have.
October has started off pretty well. September was down a little bit, but it seems to have kicked on now. New bike sales have definitely picked up.
We pretty much do Trek only, bike wise, plus Electra which is part of Trek.
(Best business decision) We’re pretty serious with the continuous improvement program that Trek run. And sometimes in winter it can be pretty tough, because that’s your time to get things done on your business plan and get things going, but you don’t necessarily have the cash flow.
Our best decision was to push through on our plan. It was a matter of forking out money to do some of these things. Normally we might hang onto our money. But this year we decided to keep investing into the shop.
Two things… continuing to develop the shop generally, the look, going down that experience line. People come in here for the experience so we’re making it a nice place for people to go.
We’ve changed from the old days of, ‘Fill it full of stock and hope for the best!’
It’s about being neat and tidy and clean and wanting people to come in the door.
The other thing is, we’ve never done much in clothing. We decided to set up a proper clothing display and said, ‘let’s have a crack at this.’ It’s been working well for us.
I just got an email from a lady who came in on Saturday. She said, ‘Thanks very much for your help on Saturday. I’ve decided to buy a bike online.’ I don’t know the story behind that yet, but she said, ‘I’m happy to recommend you guys and I’ll be back to buy some bits from you.’
You can’t always sell everyone a bike, but people always need ‘bits’ and those things they need fairly quickly.
Richard ‘Dicky’ Hunter from Waverley Cycles in the eastern suburbs of Melbourne Victoria said:
Business has been great. We’ve been doing a lot of service work. Haven’t been selling a lot of bikes, lots of custom jobs as well – customising people’s bikes.
There’s definitely a lot of interest with people who have a pretty good understanding of what’s out there these days. We’re using that knowledge, with our workshop, to create some of their bikes, which is good. It’s exciting. It’s fun.
Mainly what we’re doing is in the all mountain and enduro mountain bike scene. 140 to 160 mm travel suspension. There’s a lot of carbon out there these days and a lot of people are upgrading and customising little bits and pieces.
Everyone wants a 1x (single chainring) system to start with, then the next major step would be upgrading wheels or custom built wheels – light and strong.
We’ve been here for 3 ½ years now. It’s a start-up shop. Our main brand is Rocky Mountain, but we also do a lot of stuff for general use as well.
We’re affiliated with a lot of the local schools. We have a strong commuting base. People ride all year round. The Gardiners Creek Trail is just around the corner from our shop. We also have a few sneaky high end road bikes that get customised and sent out as well.
We’re just quietly doing our own thing.
(Best business decision) To promote custom builds, not just accepting bikes as they come out of a box. Working with people and customising to their needs.
We do them per their request, but with a lot of our knowledge and input. So they’ll come to us with an idea and a budget and we’ll present them with options within that.
People can get what they can afford and we can give them the best option within that. Everyone would like the $10,000 bike, but that’s not realistic. We’re able to apply what they know, with our skills and they end up with the bike that they want.
I think the days of just handing out bikes are over. It can be a lot more than that and it’s more fun for us this way too.
Greg Bell from Belly’s Bikes in the NSW regional centre of Bathurst said:
I’m pleasantly able to say that business has picked up nicely to a point where we’re quite busy all the time now. I’d had a very ordinary winter period to a point where it was starting to get critical and I had to readjust staffing hours and things like that. It wasn’t a pleasant time at all.
I don’t do the whole business analysis thing too much, but I know that friends of mine in business across the board were having difficulties and generally retail had a downturn. Whether government policy had an impact I’m not sure, but there were some contributing factors on my behalf, whereas I lost a major brand that I’d carried for 10 years and another major brand that I had on the floor changed importers and ran out of stock pre-season.
That made it rather interesting for me.
I’ve just picked up the Giant dealership as it had been dropped in town (by another bike retailer) about 12 months ago. I’m looking at support that 100%. I still do Mongoose. They’ve got a revived level of bikes now. I do Cannondale and I have a sprinkling of other brands. I do Avanti as well.
Growth in the Bathurst are in the 15 years that I’ve been working with bikes has been 10 fold, it’s incredible. It’s mainly a road cycling region. We’ve got a lot of good club road riders here and a lot of social road riders.
Mountain biking is on the increase. I’m more of a mountain biker by choice. We’ve got our own trail in town now so that’s enhancing more and more people getting on mountain bikes.
There’s two bike shops in town, Wheelers and myself.
(Best business decision) To go with Giant Bicycles. We’ve only had them for four weeks so far. I’ve sold a couple of top end bikes already. I’ve moved some kiddies bikes and entry level mountain bikes. I’ve got my floor stock order coming in the next fortnight. That will get another 30 or 40 bikes in the shop which should help pick up turnover now that people are aware that I’ve got it.
I had a lady drive down from the other side of Orange (which is 55 kilometres away) with five Giant bikes this week. She found out I was the Giant dealer so she wanted me to service them. It’s really good.
Bert Heathwood of Oxygen Cycles in the wine growing centre of McLaren Vale just south of Adelaide, SA said:
Business is getting better as the weather is turning. It’s (the SA economy) not as vibrant as it has been but I feel like we’re starting to turn a corner again now, at least down this end of the world.
Staples like hybrids and BMX’s are still the easiest things to sell, but an even mix of everything really. Probably a bit more road than mountain for us, but that’s more locale than anything. We stocked ebikes once, but won’t again.
(Best business decision) We’re aggressively minimising our debt in case things get more ‘interesting’. We’re being very careful about what we stock and also paying more accounts up front and aggressively trying not to have things on account if we can avoid it.
It feels slightly safer!
