Do you remember the days before the emergence of online retail behemoths from the UK? Before local consumers became globally price and product aware, when rents and wage expectations were ‘doable’?

Back then, bike shops with grease on the walls and flickering fluros started Christmas lay-bys in July and could expect ‘double-up’ margins on most products in the store, including many of the bikes. Life as an IBD (independent bicycle dealer) was relatively straightforward and profit margins were good.

Today the old bicycle industry is dead. Dead, like dinosaurs dead (although a few dinosaurs still seem to roam our industry).
The internet was our asteroid. It crashed into our industry in a dramatic and not totally foreseen fashion.

Today, the way our industry works, the way products find their way to consumers, the way consumers engage with and search for products and the way everyone along the industry food chain makes profit has significantly changed. It will continue to do so. Our ‘new industry’ realities will see;

But don’t panic! The IBD is not doomed. All the 3-D goggles and holograms in the world still won’t replicate the tactile engagement of physically picking up, sitting on, trying on, test riding, or being set up properly on bike stuff. You can’t pluck an inner tube out of your smart phone or true your wheel with a return key.

The bike shop is a near impossible beast to fully replace. Especially if retailers invest in the advantages they offer and use their value to distributors and brands to their fullest advantage.

Closer Relationships
Going forward, factories, brands and distributors want a more direct line of sight and purchase pathway to consumers; as well as controls over customer data, retention and lifetime management. So they’ll either set up their own retail channels, which is expensive and draws resources and focus from their ‘day job’, or look to partner and co-invest with the established retail network, which is considerably more affordable and low risk.

This presents a clear opportunity for retailers to have their own levels of risk and investment lowered and supported.

What Else Can You Do to be Profitable in the New Industry?
• Invest in your ‘brand’ and your perceived ‘value-add’.

You can’t be the cheapest and neither should you be aiming to be. Everything about your business – its presentation, its website, communications, staff, services, inventory etc – must be about everything you bring to the customer and the transaction above and beyond just price.

Make price a secondary consideration and you can always be more profitable.

• Invest in your CRM (Customer Relationship Management) software and data management and use tailored and targeted EDMs (Electronic Direct Mail).

Your ‘customer records management’ data is one of the most powerful and important assets you own. Modern CRM software will not only make sure your customer data is properly managed and updated, but also allow you to target and segment your customer base with the right promotions at the right time, at maximised profit.

• Develop Customer Retention Strategies

Happy customers will always be more profitable in the long run, as they value you and your products beyond just price.

• Create integrated sales and marketing plans complete with budgets and targets.

This will not only maximise your sales, but also allow you to better plan your inventory intake, presentation and clearance schedules.

• Invest in professionally training, accrediting, up-skilling and rewarding your staff.

If you do this you can improve your shop’s technical capability and reputation, sales performance, customer retention and staff retention. All of these improvements will grow your profits.

• Build a workshop that could stand alone as its own business.

Your workshop is the key profit and traffic driver in your bike business. Any good workshop could and should be able to run and support itself independent of the retail store.

• Focus on a category you do better than any store in your territory.

Become known as the best store for a particular category in your territory and you will always be more profitable on those products, because customers will seek you out. Price will not be the primary driver of sales. It will be range, stock holding, choice, convenience and expertise.

• Only take ‘advantage’ of supplier overstock when it’s actually something you’d stock and sell comfortably anyway.

Otherwise, you’re the one being taken advantage of.

• Open your arms to drop shipping and technical support for the major online retailers and brands not supported in your territory.

Why not take advantage of their weak points, in terms of assembly, technical or warranty support and offer to be a landing point for their operations? For a negotiated commission of course. You win earnings for sales you weren’t going to get, on products you didn’t have to stock or invest in and potentially win a relationship with a customer you’d lost or never had.

• Expand your service income and provision beyond just the workshop.

Bike hire, guided tours, professional tour operator sales, mechanic training, coaching, bike cleaning, custom fitting, biomechanical improvements, gym bike servicing, bike storage, bike bag hire, aero wheel hire, bike insurance sales… the list goes on.

Yes, I know that implementing many of these ideas costs money which eats at profitability in the short term. But this article is about future proofing and future profitability in an ever more connected, digitally enabled, dynamic and competitive market place.

Its time to invest in the future of your profitability. 

Jonathon Nunan simply describes himself as ‘Australia’s Bike Industry Consultant’.
He can be contacted via or email