| |
Main
Date: 10 Oct 2006 10:33:54
From: Al O'Pecia
Subject: LBS and markup on new bikes
|
I am wondering how much profit a LBS makes on a typical (say, sub $500)
bicycle sale...
Does anyone know an approx range?
Basically, I recently bought a bike on costco.com, mainly because I
didn't know if I was going to use it that much, and I figured I could
always return it (for what I paid) to costco if I stopped riding it.
Anyway, I wound up just paying the LBS to set it up for me, as I tried
to follow the directions and got lost about 1/2 way thru.
The LBS charged $50 to set it up, and that includes 1 year of
maintenance.
FYI-the bike I bought on costco.com was approx $200. So, I am wondering
if the LBS made more profit on my setup than if I had purchased a low
end Giant from them (which retails for approx $230)...
Not trying to start a flame, or even a heated discussion on the topic,
just wondering about the economics of the LBS...
PS-the LBS in my case said they would be happy to sell me another bike
when I am ready to upgrade, or that they would be happy to put together
another mail order bike, they would even let me ship it there...
anyway, thanks for listening, and I hope someone can enlighten me
|
|
| |
Date: 14 Oct 2006 20:23:02
From: Johnny Sunset aka Tom Sherman
Subject: Re: LBS and markup on new bikes
|
Mike Jacoubowsky wrote:
> >> You're having trouble differentiating between a Trek, LeMond and Klein
> >> road
> >> bike? How different do they need to be for you? Yes, they share a bunch
> >> of
> >> Bontrager components, but the frames couldn't be much more different,
> >> both
> >> in how they're made and geometry. Very different design teams between the
> >> brands too, with a fair amount of competition....
> >
> > How can these bikes be VERY DIFFERENT when they are all UCI legal road
> > bikes? I think very is much too strong an adjective to use here.
>
> That's an interesting take on the subject. I might think some of the UCI
> regulations are silly, but I don't think they're so stringent that they
> stifle creativity and promote too many similarities across the various
> manufacturers.
This is my idea of VERY DIFFERENT:
<http://hiwheel.com/site_graphics/antique_replicas/superior_561.jpg >
compared to <http://www.trisled.com.au/images/nitro1.jpg >.
--
Tom Sherman - Here, not there.
|
| |
Date: 14 Oct 2006 20:04:50
From: Johnny Sunset aka Tom Sherman
Subject: Re: LBS and markup on new bikes
|
Mike Jacoubowsky wrote:
>
> You're having trouble differentiating between a Trek, LeMond and Klein road
> bike? How different do they need to be for you? Yes, they share a bunch of
> Bontrager components, but the frames couldn't be much more different, both
> in how they're made and geometry. Very different design teams between the
> brands too, with a fair amount of competition....
How can these bikes be VERY DIFFERENT when they are all UCI legal road
bikes? I think very is much too strong an adjective to use here.
--
Tom Sherman - Here, not there.
|
| | |
Date: 15 Oct 2006 03:14:35
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
>> You're having trouble differentiating between a Trek, LeMond and Klein
>> road
>> bike? How different do they need to be for you? Yes, they share a bunch
>> of
>> Bontrager components, but the frames couldn't be much more different,
>> both
>> in how they're made and geometry. Very different design teams between the
>> brands too, with a fair amount of competition....
>
> How can these bikes be VERY DIFFERENT when they are all UCI legal road
> bikes? I think very is much too strong an adjective to use here.
That's an interesting take on the subject. I might think some of the UCI
regulations are silly, but I don't think they're so stringent that they
stifle creativity and promote too many similarities across the various
manufacturers.
--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com
"Johnny Sunset aka Tom Sherman" <sunsetss0003@yahoo.com > wrote in message
news:1160881490.517600.96790@m73g2000cwd.googlegroups.com...
>
> Mike Jacoubowsky wrote:
>>
>> You're having trouble differentiating between a Trek, LeMond and Klein
>> road
>> bike? How different do they need to be for you? Yes, they share a bunch
>> of
>> Bontrager components, but the frames couldn't be much more different,
>> both
>> in how they're made and geometry. Very different design teams between the
>> brands too, with a fair amount of competition....
>
> How can these bikes be VERY DIFFERENT when they are all UCI legal road
> bikes? I think very is much too strong an adjective to use here.
>
> --
> Tom Sherman - Here, not there.
>
|
| |
Date: 14 Oct 2006 18:37:17
From:
Subject: Re: LBS and markup on new bikes
|
Mike Jacoubowsky wrote:
> > According to your website, you do not sell 5 brands; you sell one brand
> > under 4 different names. Giving one vendor a huge amount of business is
> > not the same as splitting the pie between 4-5 vendors.
>
> You're having trouble differentiating between a Trek, LeMond and Klein road
> bike? How different do they need to be for you?
The point is that you are dealing with a *single vendor*; this makes
your company much more important to that vendor. Quantity
discounts/rebates/key account adv/extended terms....does any of that
sound familiar?
All of that makes the business model very different than the one Peter
Chisholm was referring to.
>Yes, they share a bunch of
> Bontrager components, but the frames couldn't be much more different, both
> in how they're made and geometry. Very different design teams between the
> brands too, with a fair amount of competition. You sound like Trek is
> similar to the old GM, producing the same car under different labels.
> Someone who knows something about bikes would see through that pretty
> quickly. If they chose to.
>
I'm going to let that cheap shot pass.
> --Mike Jacoubowsky
> Chain Reaction Bicycles
> www.ChainReaction.com
> Redwood City & Los Altos, CA USA
>
> <obs@ozarkbicycleservice.com> wrote in message
> news:1160866772.503506.303870@b28g2000cwb.googlegroups.com...
> >
> > Mike Jacoubowsky wrote:
> >> > Any shop that has a size run of $7000 bikes is asking to go out of
> >> > business. It's like a tailor having a range of suits on the wall in all
> >> > sizes, styles and materials. A shop that sells say 5 brands cannot have
> >> > all sizes, all types, all colors, all brands, cannot be done.
> >>
> >> Oh darn. Do I tell the accountant first, or my wife?
> >>
> >
> > According to your website, you do not sell 5 brands; you sell one brand
> > under 4 different names. Giving one vendor a huge amount of business is
> > not the same as splitting the pie between 4-5 vendors.
> >
> >
> >> And what will I do if I'm no longer running a bike shop? Probably get in
> >> a
> >> lot more riding. Hmm. Life could be worse...
> >>
> >> --Mike Jacoubowsky
> >> Chain Reaction Bicycles
> >> www.ChainReaction.com
> >> Redwood City & Los Altos, CA USA
> >>
> >> "qui si parla Campagnolo" <peter@vecchios.com> wrote in message
> >> news:1160660060.164033.124680@i3g2000cwc.googlegroups.com...
> >> >
> >> > Leo Lichtman wrote:
> >> >> "gds" wrote: (clip) a) They try not to stock the bike for a year. If
> >> >> they
> >> >> can turn over their inventory 5 times a year @5% then the annual
> >> >> return
> >> >> is
> >> >> 25%.
> >> >> ^^^^^^^^^^^^^^^^^^^^^
> >> >> Your reasoning is correct, but a stock turn of 5 x a year is
> >> >> unbelievable
> >> >> on
> >> >> $7000 bikes. Consider that the dealer has to stock a range of sizes.
> >> >> Certainly he is likely to sell one of those bikes in less than a year,
> >> >> but
> >> >> how many will remain unsold, even after two or three years? Then what
> >> >> happens to the selling price when there is a model change? If the
> >> >> gin
> >> >> was only 5% on a new bike, how can he k it down enough to get rid
> >> >> of
> >> >> it
> >> >> without a terrible loss?
> >> >
> >> > Any shop that has a size run of $7000 bikes is asking to go out of
> >> > business. It's like a tailor having a range of suits on the wall in all
> >> > sizes, styles and materials. A shop that sells say 5 brands cannot have
> >> > all sizes, all types, all colors, all brands, cannot be done.
> >> >
> >> > WE do it like Evan the tailor. size, order frame, order components,
> >> > anything the customer wants, any combo, we build bike and wheels,
> >> > resulting bike is unique, like a custom suit. many think the only model
> >> > is like the Toyota dealer, where they try to sell what's on the lot,
> >> > not like the Audi/Porsche dealer, where they have examples of the
> >> > models and you order it.
> >> >> ^^^^^^^^^^^^^^^^^^^^^
> >> >> b) And if they can not achive the turnover needed then that is why so
> >> >> many
> >> >> LBS's are ginal business' and why the industry has a high failure
> >> >> rate.
> >> >> ^^^^^^^^^^^^^^^^
> >> >> Your point b.) is not a counter argument to what I said. It is a
> >> >> confirmation of my point.
> >> >
> >> >
> >
|
| |
Date: 14 Oct 2006 15:59:32
From:
Subject: Re: LBS and markup on new bikes
|
Mike Jacoubowsky wrote:
> > Any shop that has a size run of $7000 bikes is asking to go out of
> > business. It's like a tailor having a range of suits on the wall in all
> > sizes, styles and materials. A shop that sells say 5 brands cannot have
> > all sizes, all types, all colors, all brands, cannot be done.
>
> Oh darn. Do I tell the accountant first, or my wife?
>
According to your website, you do not sell 5 brands; you sell one brand
under 4 different names. Giving one vendor a huge amount of business is
not the same as splitting the pie between 4-5 vendors.
> And what will I do if I'm no longer running a bike shop? Probably get in a
> lot more riding. Hmm. Life could be worse...
>
> --Mike Jacoubowsky
> Chain Reaction Bicycles
> www.ChainReaction.com
> Redwood City & Los Altos, CA USA
>
> "qui si parla Campagnolo" <peter@vecchios.com> wrote in message
> news:1160660060.164033.124680@i3g2000cwc.googlegroups.com...
> >
> > Leo Lichtman wrote:
> >> "gds" wrote: (clip) a) They try not to stock the bike for a year. If
> >> they
> >> can turn over their inventory 5 times a year @5% then the annual return
> >> is
> >> 25%.
> >> ^^^^^^^^^^^^^^^^^^^^^
> >> Your reasoning is correct, but a stock turn of 5 x a year is unbelievable
> >> on
> >> $7000 bikes. Consider that the dealer has to stock a range of sizes.
> >> Certainly he is likely to sell one of those bikes in less than a year,
> >> but
> >> how many will remain unsold, even after two or three years? Then what
> >> happens to the selling price when there is a model change? If the gin
> >> was only 5% on a new bike, how can he k it down enough to get rid of
> >> it
> >> without a terrible loss?
> >
> > Any shop that has a size run of $7000 bikes is asking to go out of
> > business. It's like a tailor having a range of suits on the wall in all
> > sizes, styles and materials. A shop that sells say 5 brands cannot have
> > all sizes, all types, all colors, all brands, cannot be done.
> >
> > WE do it like Evan the tailor. size, order frame, order components,
> > anything the customer wants, any combo, we build bike and wheels,
> > resulting bike is unique, like a custom suit. many think the only model
> > is like the Toyota dealer, where they try to sell what's on the lot,
> > not like the Audi/Porsche dealer, where they have examples of the
> > models and you order it.
> >> ^^^^^^^^^^^^^^^^^^^^^
> >> b) And if they can not achive the turnover needed then that is why so
> >> many
> >> LBS's are ginal business' and why the industry has a high failure
> >> rate.
> >> ^^^^^^^^^^^^^^^^
> >> Your point b.) is not a counter argument to what I said. It is a
> >> confirmation of my point.
> >
> >
|
| | |
Date: 15 Oct 2006 00:56:37
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
> According to your website, you do not sell 5 brands; you sell one brand
> under 4 different names. Giving one vendor a huge amount of business is
> not the same as splitting the pie between 4-5 vendors.
You're having trouble differentiating between a Trek, LeMond and Klein road
bike? How different do they need to be for you? Yes, they share a bunch of
Bontrager components, but the frames couldn't be much more different, both
in how they're made and geometry. Very different design teams between the
brands too, with a fair amount of competition. You sound like Trek is
similar to the old GM, producing the same car under different labels.
Someone who knows something about bikes would see through that pretty
quickly. If they chose to.
--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
<obs@ozarkbicycleservice.com > wrote in message
news:1160866772.503506.303870@b28g2000cwb.googlegroups.com...
>
> Mike Jacoubowsky wrote:
>> > Any shop that has a size run of $7000 bikes is asking to go out of
>> > business. It's like a tailor having a range of suits on the wall in all
>> > sizes, styles and materials. A shop that sells say 5 brands cannot have
>> > all sizes, all types, all colors, all brands, cannot be done.
>>
>> Oh darn. Do I tell the accountant first, or my wife?
>>
>
> According to your website, you do not sell 5 brands; you sell one brand
> under 4 different names. Giving one vendor a huge amount of business is
> not the same as splitting the pie between 4-5 vendors.
>
>
>> And what will I do if I'm no longer running a bike shop? Probably get in
>> a
>> lot more riding. Hmm. Life could be worse...
>>
>> --Mike Jacoubowsky
>> Chain Reaction Bicycles
>> www.ChainReaction.com
>> Redwood City & Los Altos, CA USA
>>
>> "qui si parla Campagnolo" <peter@vecchios.com> wrote in message
>> news:1160660060.164033.124680@i3g2000cwc.googlegroups.com...
>> >
>> > Leo Lichtman wrote:
>> >> "gds" wrote: (clip) a) They try not to stock the bike for a year. If
>> >> they
>> >> can turn over their inventory 5 times a year @5% then the annual
>> >> return
>> >> is
>> >> 25%.
>> >> ^^^^^^^^^^^^^^^^^^^^^
>> >> Your reasoning is correct, but a stock turn of 5 x a year is
>> >> unbelievable
>> >> on
>> >> $7000 bikes. Consider that the dealer has to stock a range of sizes.
>> >> Certainly he is likely to sell one of those bikes in less than a year,
>> >> but
>> >> how many will remain unsold, even after two or three years? Then what
>> >> happens to the selling price when there is a model change? If the
>> >> gin
>> >> was only 5% on a new bike, how can he k it down enough to get rid
>> >> of
>> >> it
>> >> without a terrible loss?
>> >
>> > Any shop that has a size run of $7000 bikes is asking to go out of
>> > business. It's like a tailor having a range of suits on the wall in all
>> > sizes, styles and materials. A shop that sells say 5 brands cannot have
>> > all sizes, all types, all colors, all brands, cannot be done.
>> >
>> > WE do it like Evan the tailor. size, order frame, order components,
>> > anything the customer wants, any combo, we build bike and wheels,
>> > resulting bike is unique, like a custom suit. many think the only model
>> > is like the Toyota dealer, where they try to sell what's on the lot,
>> > not like the Audi/Porsche dealer, where they have examples of the
>> > models and you order it.
>> >> ^^^^^^^^^^^^^^^^^^^^^
>> >> b) And if they can not achive the turnover needed then that is why so
>> >> many
>> >> LBS's are ginal business' and why the industry has a high failure
>> >> rate.
>> >> ^^^^^^^^^^^^^^^^
>> >> Your point b.) is not a counter argument to what I said. It is a
>> >> confirmation of my point.
>> >
>> >
>
|
| |
Date: 14 Oct 2006 09:05:13
From:
Subject: Re: LBS and markup on new bikes
|
qui si parla Campagnolo wrote:
> Solvang Cyclist wrote:
> > "qui si parla Campagnolo" <peter@vecchios.com> wrote in
> > news:1160570428.647482.217820@c28g2000cwb.googlegroups.com:
> >
> > > When the new stuff
> > > comes out, like now, the retailer discounts to move inventory and loses
> > > money when he does this.
> >
> > I used to own a retail business (not related to cycling) and I am happy
> > to not have this headache of obsolete inventory anymore.
> >
> > However, I recently had a rather different and interesting experience
> > with a LBS...
> >
> > It's a small shop outside of San Diego that has elected to specialize in
> > Klein bikes. It appears to be well capitalized and the owner uses this in
> > a very clever way: He buys a large inventory of bikes from Klein at the
> > end of the model year - in the process getting a substantial discount.
> > (Obviously I don't know how much of a discount.) Then he sells these
> > bikes throughout the year at a far better price than the current model
> > year bikes.
> >
> > Last month I was fortunate enough to still be able to buy a 2005 Klein Q-
> > Pro XX for a really great price. What made this an even better deal for
> > me is that the 2005 XX is most likely the last Klein that will be sold
> > with the Campy Record Group. Sure I could have purchased a Q-Pro frame
> > and Record components, but it would have cost double what I paid for the
> > 2005 model, and I was not interested in the 2006 with DA.
> >
> > Everybody won on this deal! I got a great bike and the LBS made a
> > reasonable profit on a last year's model bike.
> >
> > Unfortunately for most LBSs (and small retailers in general) this
> > business model does require much more capital than a typical retailer has
> > available to tie up in inventory, but it's also why this particular shop
> > can profit by being so unique.
> >
> > BTW: The Q-Pro and the Record components are absolutely gorgeous, and
> > rides like a dream. (Nicer than my 25 year old Klein Medusa - which is
> > still a great bike.)
> >
> > Cheers!
> > David
>
> Did he mention that Klein as a brand is gone in 2007..Trek is dropping
> it.
I know this is a business decision, but it is still rather sad news.
Big bike company buys small bike company and, eventually, kills the
brand off. More sameness, less diversity of design, less choice. Is
LeMond the next victim of Trek?
|
| | |
Date: 14 Oct 2006 22:57:37
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
> I know this is a business decision, but it is still rather sad news.
> Big bike company buys small bike company and, eventually, kills the
> brand off. More sameness, less diversity of design, less choice. Is
> LeMond the next victim of Trek?
Klein is not dead. At least not yet. It did suffer greatly, however, in the
mad rush to carbon-everything. Klein is so highly associated with one thing
(aluminum) that it became increasingly difficult to sell to customers. The
product *was* highly-differentiated from the other offerings in Wisconsin;
their product manager was very good at that. But more than anything, Klein
was the source of a great many ideas that were developed first there, and
then moved on to Big Brother (Trek). Among those things were the Aeolus fork
(which became the Bontrager Race XXX-Lite) and the "SPA" elastomer system
(rear road bike suspension, sorta).
Present plans are for the line to continue but almost entirley without a US
dealer network. We could buy in for an absurd amount of money/units, but
unfortunately, it's not worth the risk. Instead, the line will be sold
priily in Japan, where it's very popular (and remains profitable).
The Trek/Klein alliance allowed for a great many of Gary's ideas to go
forward, due to Trek's substantially-deeper pockets. Things *could* have
worked out, but beyond the previously-mentioned deep association with
aluminum product, Klein also suffered from a sales force that was also
selling Trek, Fisher & LeMond... and it was a bit much to expect them to be
able to focus perfectly on so many different offerings.
--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
<obs@ozarkbicycleservice.com > wrote in message
news:1160841913.026444.294290@b28g2000cwb.googlegroups.com...
>
> qui si parla Campagnolo wrote:
>> Solvang Cyclist wrote:
>> > "qui si parla Campagnolo" <peter@vecchios.com> wrote in
>> > news:1160570428.647482.217820@c28g2000cwb.googlegroups.com:
>> >
>> > > When the new stuff
>> > > comes out, like now, the retailer discounts to move inventory and
>> > > loses
>> > > money when he does this.
>> >
>> > I used to own a retail business (not related to cycling) and I am happy
>> > to not have this headache of obsolete inventory anymore.
>> >
>> > However, I recently had a rather different and interesting experience
>> > with a LBS...
>> >
>> > It's a small shop outside of San Diego that has elected to specialize
>> > in
>> > Klein bikes. It appears to be well capitalized and the owner uses this
>> > in
>> > a very clever way: He buys a large inventory of bikes from Klein at the
>> > end of the model year - in the process getting a substantial discount.
>> > (Obviously I don't know how much of a discount.) Then he sells these
>> > bikes throughout the year at a far better price than the current model
>> > year bikes.
>> >
>> > Last month I was fortunate enough to still be able to buy a 2005 Klein
>> > Q-
>> > Pro XX for a really great price. What made this an even better deal for
>> > me is that the 2005 XX is most likely the last Klein that will be sold
>> > with the Campy Record Group. Sure I could have purchased a Q-Pro frame
>> > and Record components, but it would have cost double what I paid for
>> > the
>> > 2005 model, and I was not interested in the 2006 with DA.
>> >
>> > Everybody won on this deal! I got a great bike and the LBS made a
>> > reasonable profit on a last year's model bike.
>> >
>> > Unfortunately for most LBSs (and small retailers in general) this
>> > business model does require much more capital than a typical retailer
>> > has
>> > available to tie up in inventory, but it's also why this particular
>> > shop
>> > can profit by being so unique.
>> >
>> > BTW: The Q-Pro and the Record components are absolutely gorgeous, and
>> > rides like a dream. (Nicer than my 25 year old Klein Medusa - which is
>> > still a great bike.)
>> >
>> > Cheers!
>> > David
>>
>> Did he mention that Klein as a brand is gone in 2007..Trek is dropping
>> it.
>
> I know this is a business decision, but it is still rather sad news.
> Big bike company buys small bike company and, eventually, kills the
> brand off. More sameness, less diversity of design, less choice. Is
> LeMond the next victim of Trek?
>
|
| | | |
Date: 14 Oct 2006 19:22:08
From: Solvang Cyclist
Subject: Re: LBS and markup on new bikes
|
Thanks for the insight Mike.
"Mike Jacoubowsky" <MikeJ@ChainReaction.com > wrote in
news:BXdYg.12829$GR.4683@newssvr29.news.prodigy.net:
> Klein is not dead. At least not yet. It did suffer greatly, however,
> in the mad rush to carbon-everything. Klein is so highly associated
> with one thing (aluminum) that it became increasingly difficult to
> sell to customers.
It's really too bad that people are always jumping on the latest craze
without testing their assumptions. Klein has *ALWAYS* been looked down
upon because of the aluminum frames. When I got my first Klein, it was
very rare to see a "fat tube" bike. I can't tell you how many times I
heard "Wow that bike must be heavy!" only to have people amazed when they
lifted it.
But the materials make far less difference than the design. The
difference between my old Klein and the new one is incredible. Both
aluminum, but the tube shapes have become far more complex and it shows
in the feel and ride of the bikes. If only customers would take the time
to ride each bike they are considering instead of rejecting something
before they know anything about it, then Klein would sell more bikes.
(Note: after writing this, I saw your similar statement regarding LeMond
on your web site.)
> Present plans are for the line to continue but almost entirley without
> a US dealer network. We could buy in for an absurd amount of
> money/units, but unfortunately, it's not worth the risk. Instead, the
> line will be sold priily in Japan, where it's very popular (and
> remains profitable).
That's a bit ironic don't you think? While we are importing low end bikes
and components from Asia (sorry, I don't think much of Giant or Dura-Ace)
they are importing high end bikes from us. ;-)
>
> The Trek/Klein alliance allowed for a great many of Gary's ideas to go
> forward, due to Trek's substantially-deeper pockets. Things *could*
> have worked out, but beyond the previously-mentioned deep association
> with aluminum product, Klein also suffered from a sales force that was
> also selling Trek, Fisher & LeMond... and it was a bit much to expect
> them to be able to focus perfectly on so many different offerings.
True. From the way I see it, Gary Klein brought innovation to the
industry while Greg LeMond brought name recognition slapped on other
people's designs. Sadly, the ket values the latter more than the
former. And while I don't like it, I understand that Trek must answer to
the ket.
|
| | | | |
Date: 15 Oct 2006 02:19:55
From: Diablo Scott
Subject: Re: LBS and markup on new bikes
|
Solvang Cyclist wrote:
> It's really too bad that people are always jumping on the latest craze
> without testing their assumptions. Klein has *ALWAYS* been looked down
> upon because of the aluminum frames.
Bullshit. Klein has *ALWAYS* been considered the pinnacle (note the
pun) of aluminum design. Not everyone bought into the idea of aluminum
frames, but those that did recognized the innovation, creativity, and
craftmanship of the guy that put his name on those frames and defied the
status quo in the early 80's.
Trek will surely one day regret its decision to abandon the brand. Who
can forget the effect these ads had?
http://photos1.blogger.com/blogger/5269/171/1600/Klein-Priorities-Ad-Winning-1989.0.jpg
|
| | | | | |
Date: 15 Oct 2006 21:24:04
From: Solvang Cyclist
Subject: Re: LBS and markup on new bikes
|
Diablo Scott <N0SPAMdiabloscott@terra.es > wrote in news:4531fc98$0$5184
$c3e8da3@news.astraweb.com:
> Not everyone bought into the idea of aluminum
> frames, but those that did recognized the innovation, creativity, and
> craftmanship of the guy that put his name on those frames and defied the
> status quo in the early 80's.
>
My point was that I believe that the vast majority of riders who reject
aluminum frames do so without ever having ridden a Klein.
> Trek will surely one day regret its decision to abandon the brand. Who
> can forget the effect these ads had?
>
I certainly can't forget those ads. I have one of those posters framed and
hanging in my office. <grin >
|
| | | | | |
Date: 15 Oct 2006 16:05:02
From: Mike Kruger
Subject: Re: LBS and markup on new bikes
|
"Diablo Scott" <N0SPAMdiabloscott@terra.es > wrote in message
news:4531fc98$0$5184$c3e8da3@news.astraweb.com...
>
> Bullshit. Klein has *ALWAYS* been considered the pinnacle (note the pun)
Should that, then, be the "punnacle"?
>
> Trek will surely one day regret its decision to abandon the brand. Who
> can forget the effect these ads had?
>
> http://photos1.blogger.com/blogger/5269/171/1600/Klein-Priorities-Ad-Winning-1989.0.jpg
They could re-run that ad today -- just replace the bike and car with
current models.
|
| | |
Date: 14 Oct 2006 21:45:45
From: Mike Kruger
Subject: Re: LBS and markup on new bikes
|
<obs@ozarkbicycleservice.com > wrote in message
> Is LeMond the next victim of Trek?
>
Does Lance get a vote?
--
Mike Kruger
The slowest of the Greek philosophers was Aristurtle.
|
| |
Date: 14 Oct 2006 06:18:53
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
Solvang Cyclist wrote:
> "qui si parla Campagnolo" <peter@vecchios.com> wrote in
> news:1160570428.647482.217820@c28g2000cwb.googlegroups.com:
>
> > When the new stuff
> > comes out, like now, the retailer discounts to move inventory and loses
> > money when he does this.
>
> I used to own a retail business (not related to cycling) and I am happy
> to not have this headache of obsolete inventory anymore.
>
> However, I recently had a rather different and interesting experience
> with a LBS...
>
> It's a small shop outside of San Diego that has elected to specialize in
> Klein bikes. It appears to be well capitalized and the owner uses this in
> a very clever way: He buys a large inventory of bikes from Klein at the
> end of the model year - in the process getting a substantial discount.
> (Obviously I don't know how much of a discount.) Then he sells these
> bikes throughout the year at a far better price than the current model
> year bikes.
>
> Last month I was fortunate enough to still be able to buy a 2005 Klein Q-
> Pro XX for a really great price. What made this an even better deal for
> me is that the 2005 XX is most likely the last Klein that will be sold
> with the Campy Record Group. Sure I could have purchased a Q-Pro frame
> and Record components, but it would have cost double what I paid for the
> 2005 model, and I was not interested in the 2006 with DA.
>
> Everybody won on this deal! I got a great bike and the LBS made a
> reasonable profit on a last year's model bike.
>
> Unfortunately for most LBSs (and small retailers in general) this
> business model does require much more capital than a typical retailer has
> available to tie up in inventory, but it's also why this particular shop
> can profit by being so unique.
>
> BTW: The Q-Pro and the Record components are absolutely gorgeous, and
> rides like a dream. (Nicer than my 25 year old Klein Medusa - which is
> still a great bike.)
>
> Cheers!
> David
Did he mention that Klein as a brand is gone in 2007..Trek is dropping
it.
|
| | |
Date: 14 Oct 2006 13:40:23
From: Solvang Cyclist
Subject: Re: LBS and markup on new bikes
|
"qui si parla Campagnolo" <peter@vecchios.com > wrote in
news:1160831933.408180.3380@f16g2000cwb.googlegroups.com:
> Did he mention that Klein as a brand is gone in 2007..Trek is dropping
> it.
>
We talked about this, but he seemed to feel that Trek was going to keep
the Klein name, but rase the prices and reduce the dealer network to
almost nothing.
But we also discussed that Gary Klein apparently retained his patents and
licensed them to Trek. So if Trek kills off the brand, it's possible (I
don't know how likely) that Gary would be back.
It's sad that such a true innovator of design has never done well in the
ket. First Cannondale (et. al.) ripped off his design and outlatsted
him when he tried to protect his patents in court. Then Trek buys the
company and doesn't do anything with it. If you go to the Klein web site,
you would think there were Klein dealers everywhere (including the one
LBS within a 20 mile radius of where I live), but try to find a single
Klein bike in most of those shops.
No keting, no sponsorships, few dealers that are actually interested
in the product. It's no wonder Trek wants to kill it. It makes me wonder
why they bought it in the first place?
Still, I've had a number of bikes over the years - including a Colnago
and a Masi, and nothing I've been on rides like a Klein. They are light,
responsive, fly up hills (or at least I struggle a little less <grin >)
and they still feel good after a long day in the saddle. Plus the Klein
looks great too! (Okay, not as good as they did in the old days when Gary
running the show, but still very nice.)
In the end, I'm VERY happy with the Q-Pro, especially the fact that I was
able to get it with the Campy drive train. (I just LOVE the Ergopower
shifting.) So if Trek does follow through and kills the Klein brand off,
I'll be sad for those that will never get to ride one, but given that
I've kept my first Klein running like new for almost 25 years, I don't
expect to have problems with this new one.
But getting back to the subject of this thread... I'm sure that the LBS
where I bought the Q-Pro will continue to be successful even if Trek
drops the Klein brand. His bulk purchase method could work with almost
any brand. Also, I watched the owner deal with the other customers while
I was there to pick the bike (it was a long drive home, so I wasn't in a
hurry to leave.) He seemed to take good care of all customers - including
the small sales - and there was always one or two customers at any given
time.
Cheers!
David
|
| |
Date: 14 Oct 2006 06:17:03
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
David wrote:
> "qui si parla Campagnolo" <peter@vecchios.com> wrote in
> news:1160659823.128083.29080@m73g2000cwd.googlegroups.com:
>
> > in other words, we break
> > even, don't lose money and pay all our bills. NOT net profit, which
> > comes after all costs of selling that bike, parts, labor, rent, etc.
> >
>
> Yes, your don't make money, but you're not facturing in the fact that
> you're doing what you love to do. <grin>
Yep, retail and bicycles are indeed a labor of 'like'..Some ask me if
it's 'fun'. NOT fun, Enjoyable, satisfying, but not 'fun'.
|
| | |
Date: 14 Oct 2006 13:52:21
From: Solvang Cyclist
Subject: Re: LBS and markup on new bikes
|
"qui si parla Campagnolo" <peter@vecchios.com > wrote in
news:1160831823.831550.59660@b28g2000cwb.googlegroups.com:
> Yep, retail and bicycles are indeed a labor of 'like'..Some ask me if
> it's 'fun'. NOT fun, Enjoyable, satisfying, but not 'fun'.
>
Well I'll bet it must be fun when working on a high end bike, but I'm sure
that the majority of the time is spent selling bells and tires or working
on old Giants from K-t (with break calipers made from stamped
sheetmetal) that are impossible to adjust right. :-(
|
| | | |
Date: 14 Oct 2006 22:46:56
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
>> Yep, retail and bicycles are indeed a labor of 'like'..Some ask me if
>> it's 'fun'. NOT fun, Enjoyable, satisfying, but not 'fun'.
>>
>
> Well I'll bet it must be fun when working on a high end bike, but I'm sure
> that the majority of the time is spent selling bells and tires or working
> on old Giants from K-t (with break calipers made from stamped
> sheetmetal) that are impossible to adjust right. :-(
To tell you the truth, it's the customer, not the bike, that often
determines whether a bike is "fun" to work on. The person who might be a bit
out of shape but lives for riding a bike, sees each ride as an adventure and
has a cheerful attitude about things... their bike could be a $350 hybrid or
a $6000 super-duper carbon racing bike, doesn't matter, you enjoy working on
it.
--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
"Solvang Cyclist" <news@NOshierSPAM.com > wrote in message
news:Xns985C78C62DB73newsNOshierSPAMcom@216.196.97.136...
> "qui si parla Campagnolo" <peter@vecchios.com> wrote in
> news:1160831823.831550.59660@b28g2000cwb.googlegroups.com:
>
>> Yep, retail and bicycles are indeed a labor of 'like'..Some ask me if
>> it's 'fun'. NOT fun, Enjoyable, satisfying, but not 'fun'.
>>
>
> Well I'll bet it must be fun when working on a high end bike, but I'm sure
> that the majority of the time is spent selling bells and tires or working
> on old Giants from K-t (with break calipers made from stamped
> sheetmetal) that are impossible to adjust right. :-(
|
| | | | |
Date: 14 Oct 2006 18:46:49
From: Solvang Cyclist
Subject: Re: LBS and markup on new bikes
|
"Mike Jacoubowsky" <MikeJ@ChainReaction.com > wrote in
news:ANdYg.12828$GR.9872@newssvr29.news.prodigy.net:
> To tell you the truth, it's the customer, not the bike, that often
> determines whether a bike is "fun" to work on. The person who might be
> a bit out of shape but lives for riding a bike, sees each ride as an
> adventure and has a cheerful attitude about things... their bike could
> be a $350 hybrid or a $6000 super-duper carbon racing bike, doesn't
> matter, you enjoy working on it.
>
Very good point.
I tune up bikes for friends and I find the process of working on cheap
parts (that just won't adjust right no matter what you do) exasperating.
However, I have to agree that there's a lot of joy when seeing someone that
is becoming enthusiastic about riding getting on their freshly tuned bike
and looking forward to their next ride. Fortunately for me, I don't have to
deal with any other attitudes - I just send those people to the LBS.
(Sorry! <grin >)
|
| |
Date: 14 Oct 2006 06:13:49
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
SMS wrote:
> Leo Lichtman wrote:
> > "gds" wrote: (clip) even a 5% net profit on a high end bike might yield
> > them an actual $ profit of $350 (on a $7K bike). (clip)
> > ^^^^^^^^^^^^^^^^^^
> > Let's take a closer look at that. If they're going to sell a $7 bike at a
> > 5% profit, their cost was $6650.
>
> No, he said "net profit." If they are figuring the gross gin by
> dividing their cost, then that $7000 bike cost them around $4500 with a
> 35% gross gin. The net profit is hard to determine because each item
> in a store has a different gin. It's always tough to determine how to
> allocate expenses back to specific products. When a store has a sale,
> they aren't "losing money" by clearing out old inventory, but the gross
> gin goes down. When someone says that a store loses money when they
> put items on sale, they make it sound as if the store would be better
> off if they just didn't sell that item in the first place.
Not true on bicycles. Bicycles are at the gin where a bike shop can
break even. Not lose or make money, net. If you discount a bike below
that minimum, he 'looses' money. If he can sell enough thru volume, he
can make those losses up.
Doesn't mean he goes ot of biz, but end of year discounted sales, for
small shops where volume cannot make up the difference, can hurt a lot.
|
| |
Date: 14 Oct 2006 02:54:27
From: Smokey
Subject: Re: LBS and markup on new bikes
|
bfd wrote:
> "Smokey" <smokeystrodtman@hotmail.com> wrote in message
> news:1160702272.170986.35700@e3g2000cwe.googlegroups.com...
> >
> > Bill H. wrote:
> > > On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
> > > > Leo Lichtman wrote:
> > > > When someone says that a store loses money when they
> > > > put items on sale, they make it sound as if the store would be better
> > > > off if they just didn't sell that item in the first place.
> > >
> > > Sometimes they ARE better off to sell at a loss. They clear up floor
> > > space and get something for the bike, which is better than nothing.
> > > Also, someone who buys a new bike is a prime customer for all the extra
> > > doo-dads and accessories, which are (I imagine) high-giain items.
> > >
> > > "Great, now you've got a bike...and boy is it a beauty! Say, do you
> > > have a helmet? No? Oh, well you're going to need one of those...only
> > > about $50 on sale. And let's get a bottle cage for you...and clipless
> > > pedals will really help you get around quicker. Of course if you've
> > > got the pedals, you'll need the cleats, which will only be about
> > > another $70. You're also going to want a little tools or set of hex
> > > wrenches which we carry...and of course a saddle bag for that. Do you
> > > ever ride at night or early morning? Well, you'll need a front and
> > > rear light, too...gotta stay safe out there..."
> > >
> > > Get the picture? What you sell at a loss on the bike can be made up
> > > MANY times over on the inflated doodads.
> >
> > $70 extra for a pair of cleats? Every set of clipless pedals I ever
> > bought included a set of cleats.
> >
> Yes, but if you ride enough you might actually wear out those cleats. I will
> agree that $70 is a bit steep for cleats. I have used Look and Speedplay
> pedals. Look cleats, especially the off-brand/generic versions, can be found
> as low as $8/pair. Speedplay cleats, however, are alot more expensive. For
> either my X or Frog pedals, cleats usually run in the $25-35/pair range.
> Thus, for $70, you could probably buy a couple of sets of cleats!
I'm well aware that cleats wear out, having bought a few pairs myself.
The way the original poster put it, it sounded like they would have the
buyer buying new cleats at the same time he bought a new set of pedals.
Agreed, $70 should buy several pair!
Smokey
|
| |
Date: 13 Oct 2006 21:26:35
From: Johnny Sunset aka Tom Sherman
Subject: Re: LBS and markup on new bikes
|
Leo Lichtman wrote:
> "Bill H." wrote :in message
> news:1160668168.211508.171400@m7g2000cwm.googlegroups.com...
> > On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
> >> Leo Lichtman wrote:
> >> When someone says that a store loses money when they
> >> put items on sale, they make it sound as if the store would be better
> >> off if they just didn't sell that item in the first place.
> >
> > Sometimes they ARE better off to sell at a loss. They clear up floor
> > space and get something for the bike, which is better than nothing.
> > Also, someone who buys a new bike is a prime customer for all the extra
> > doo-dads and accessories, which are (I imagine) high-giain items.
> >
> >(clip) "Great, now you've got a bike...and boy is it a beauty! Say, do you
> > have a helmet? No? Oh, well you're going to need one of those...only
> > about $50 on sale. And let's get a bottle cage for you...and clipless
> > pedals will really help you get around quicker. Of course if you've
> > got the pedals, you'll need the cleats, which will only be about
> > another $70. You're also going to want a little tools or set of hex
> > wrenches which we carry...and of course a saddle bag for that. Do you
> > ever ride at night or early morning? Well, you'll need a front and
> > rear light, too...gotta stay safe out there..." (clip)
> ^^^^^^^^^^^^^^^^^^
> Anyone who tries that on me loses a customer.
Yes, telling someone they need a helmet when the efficacy of such
devices is in serious question is out of line.
--
Tom Sherman - Here, not there.
|
| | |
Date: 14 Oct 2006 16:14:47
From:
Subject: Re: LBS and markup on new bikes
|
On 13 Oct 2006 21:26:35 -0700, "Johnny Sunset aka Tom Sherman"
<sunsetss0003@yahoo.com > wrote:
>
>Leo Lichtman wrote:
>> "Bill H." wrote :in message
>> news:1160668168.211508.171400@m7g2000cwm.googlegroups.com...
>> > On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
>> >> Leo Lichtman wrote:
>> >> When someone says that a store loses money when they
>> >> put items on sale, they make it sound as if the store would be better
>> >> off if they just didn't sell that item in the first place.
>> >
>> > Sometimes they ARE better off to sell at a loss. They clear up floor
>> > space and get something for the bike, which is better than nothing.
>> > Also, someone who buys a new bike is a prime customer for all the extra
>> > doo-dads and accessories, which are (I imagine) high-giain items.
>> >
>> >(clip) "Great, now you've got a bike...and boy is it a beauty! Say, do you
>> > have a helmet? No? Oh, well you're going to need one of those...only
>> > about $50 on sale. And let's get a bottle cage for you...and clipless
>> > pedals will really help you get around quicker. Of course if you've
>> > got the pedals, you'll need the cleats, which will only be about
>> > another $70. You're also going to want a little tools or set of hex
>> > wrenches which we carry...and of course a saddle bag for that. Do you
>> > ever ride at night or early morning? Well, you'll need a front and
>> > rear light, too...gotta stay safe out there..." (clip)
>> ^^^^^^^^^^^^^^^^^^
>> Anyone who tries that on me loses a customer.
>
>Yes, telling someone they need a helmet when the efficacy of such
>devices is in serious question is out of line.
Rampant hucksterism, more accurately.
|
| |
Date: 12 Oct 2006 18:17:52
From: Smokey
Subject: Re: LBS and markup on new bikes
|
Bill H. wrote:
> On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
> > Leo Lichtman wrote:
> > When someone says that a store loses money when they
> > put items on sale, they make it sound as if the store would be better
> > off if they just didn't sell that item in the first place.
>
> Sometimes they ARE better off to sell at a loss. They clear up floor
> space and get something for the bike, which is better than nothing.
> Also, someone who buys a new bike is a prime customer for all the extra
> doo-dads and accessories, which are (I imagine) high-giain items.
>
> "Great, now you've got a bike...and boy is it a beauty! Say, do you
> have a helmet? No? Oh, well you're going to need one of those...only
> about $50 on sale. And let's get a bottle cage for you...and clipless
> pedals will really help you get around quicker. Of course if you've
> got the pedals, you'll need the cleats, which will only be about
> another $70. You're also going to want a little tools or set of hex
> wrenches which we carry...and of course a saddle bag for that. Do you
> ever ride at night or early morning? Well, you'll need a front and
> rear light, too...gotta stay safe out there..."
>
> Get the picture? What you sell at a loss on the bike can be made up
> MANY times over on the inflated doodads.
$70 extra for a pair of cleats? Every set of clipless pedals I ever
bought included a set of cleats.
Smokey
|
| | |
Date: 13 Oct 2006 13:28:27
From: Jeanne
Subject: Re: LBS and markup on new bikes
|
Smokey wrote:
> Bill H. wrote:
>
>>On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
>>
>>>Leo Lichtman wrote:
>>>When someone says that a store loses money when they
>>>put items on sale, they make it sound as if the store would be better
>>>off if they just didn't sell that item in the first place.
>>
>>Sometimes they ARE better off to sell at a loss. They clear up floor
>>space and get something for the bike, which is better than nothing.
>>Also, someone who buys a new bike is a prime customer for all the extra
>>doo-dads and accessories, which are (I imagine) high-giain items.
>>
>>"Great, now you've got a bike...and boy is it a beauty! Say, do you
>>have a helmet? No? Oh, well you're going to need one of those...only
>>about $50 on sale. And let's get a bottle cage for you...and clipless
>>pedals will really help you get around quicker. Of course if you've
>>got the pedals, you'll need the cleats, which will only be about
>>another $70. You're also going to want a little tools or set of hex
>>wrenches which we carry...and of course a saddle bag for that. Do you
>>ever ride at night or early morning? Well, you'll need a front and
>>rear light, too...gotta stay safe out there..."
>>
>>Get the picture? What you sell at a loss on the bike can be made up
>>MANY times over on the inflated doodads.
>
>
> $70 extra for a pair of cleats? Every set of clipless pedals I ever
> bought included a set of cleats.
>
> Smokey
>
Maybe he meant the shoes? I mean, don't the cleats have to attach to
something?
|
| | |
Date: 12 Oct 2006 20:41:52
From: bfd
Subject: Re: LBS and markup on new bikes
|
"Smokey" <smokeystrodtman@hotmail.com > wrote in message
news:1160702272.170986.35700@e3g2000cwe.googlegroups.com...
>
> Bill H. wrote:
> > On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
> > > Leo Lichtman wrote:
> > > When someone says that a store loses money when they
> > > put items on sale, they make it sound as if the store would be better
> > > off if they just didn't sell that item in the first place.
> >
> > Sometimes they ARE better off to sell at a loss. They clear up floor
> > space and get something for the bike, which is better than nothing.
> > Also, someone who buys a new bike is a prime customer for all the extra
> > doo-dads and accessories, which are (I imagine) high-giain items.
> >
> > "Great, now you've got a bike...and boy is it a beauty! Say, do you
> > have a helmet? No? Oh, well you're going to need one of those...only
> > about $50 on sale. And let's get a bottle cage for you...and clipless
> > pedals will really help you get around quicker. Of course if you've
> > got the pedals, you'll need the cleats, which will only be about
> > another $70. You're also going to want a little tools or set of hex
> > wrenches which we carry...and of course a saddle bag for that. Do you
> > ever ride at night or early morning? Well, you'll need a front and
> > rear light, too...gotta stay safe out there..."
> >
> > Get the picture? What you sell at a loss on the bike can be made up
> > MANY times over on the inflated doodads.
>
> $70 extra for a pair of cleats? Every set of clipless pedals I ever
> bought included a set of cleats.
>
Yes, but if you ride enough you might actually wear out those cleats. I will
agree that $70 is a bit steep for cleats. I have used Look and Speedplay
pedals. Look cleats, especially the off-brand/generic versions, can be found
as low as $8/pair. Speedplay cleats, however, are alot more expensive. For
either my X or Frog pedals, cleats usually run in the $25-35/pair range.
Thus, for $70, you could probably buy a couple of sets of cleats!
|
| |
Date: 12 Oct 2006 08:49:28
From: Bill H.
Subject: Re: LBS and markup on new bikes
|
On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com > wrote:
> Leo Lichtman wrote:
> When someone says that a store loses money when they
> put items on sale, they make it sound as if the store would be better
> off if they just didn't sell that item in the first place.
Sometimes they ARE better off to sell at a loss. They clear up floor
space and get something for the bike, which is better than nothing.
Also, someone who buys a new bike is a prime customer for all the extra
doo-dads and accessories, which are (I imagine) high-giain items.
"Great, now you've got a bike...and boy is it a beauty! Say, do you
have a helmet? No? Oh, well you're going to need one of those...only
about $50 on sale. And let's get a bottle cage for you...and clipless
pedals will really help you get around quicker. Of course if you've
got the pedals, you'll need the cleats, which will only be about
another $70. You're also going to want a little tools or set of hex
wrenches which we carry...and of course a saddle bag for that. Do you
ever ride at night or early morning? Well, you'll need a front and
rear light, too...gotta stay safe out there..."
Get the picture? What you sell at a loss on the bike can be made up
MANY times over on the inflated doodads.
|
| | |
Date: 12 Oct 2006 17:30:33
From: Leo Lichtman
Subject: Re: LBS and markup on new bikes
|
"Bill H." wrote :in message
news:1160668168.211508.171400@m7g2000cwm.googlegroups.com...
> On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
>> Leo Lichtman wrote:
>> When someone says that a store loses money when they
>> put items on sale, they make it sound as if the store would be better
>> off if they just didn't sell that item in the first place.
>
> Sometimes they ARE better off to sell at a loss. They clear up floor
> space and get something for the bike, which is better than nothing.
> Also, someone who buys a new bike is a prime customer for all the extra
> doo-dads and accessories, which are (I imagine) high-giain items.
>
>(clip) "Great, now you've got a bike...and boy is it a beauty! Say, do you
> have a helmet? No? Oh, well you're going to need one of those...only
> about $50 on sale. And let's get a bottle cage for you...and clipless
> pedals will really help you get around quicker. Of course if you've
> got the pedals, you'll need the cleats, which will only be about
> another $70. You're also going to want a little tools or set of hex
> wrenches which we carry...and of course a saddle bag for that. Do you
> ever ride at night or early morning? Well, you'll need a front and
> rear light, too...gotta stay safe out there..." (clip)
^^^^^^^^^^^^^^^^^^
Anyone who tries that on me loses a customer.
|
| | | |
Date: 12 Oct 2006 19:43:11
From: Cathy Kearns
Subject: Re: LBS and markup on new bikes
|
"Leo Lichtman" <l.lichtman@worldnet.att.net > wrote in message
news:ZYuXg.56666$QZ1.38927@bgtnsc04-news.ops.worldnet.att.net...
>
> "Bill H." wrote :in message
> news:1160668168.211508.171400@m7g2000cwm.googlegroups.com...
> > On Oct 11, 10:47 am, SMS <scharf.ste...@geemail.com> wrote:
> >> Leo Lichtman wrote:
> >> When someone says that a store loses money when they
> >> put items on sale, they make it sound as if the store would be better
> >> off if they just didn't sell that item in the first place.
> >
> > Sometimes they ARE better off to sell at a loss. They clear up floor
> > space and get something for the bike, which is better than nothing.
> > Also, someone who buys a new bike is a prime customer for all the extra
> > doo-dads and accessories, which are (I imagine) high-giain items.
> >
> >(clip) "Great, now you've got a bike...and boy is it a beauty! Say, do
you
> > have a helmet? No? Oh, well you're going to need one of those...only
> > about $50 on sale. And let's get a bottle cage for you...and clipless
> > pedals will really help you get around quicker. Of course if you've
> > got the pedals, you'll need the cleats, which will only be about
> > another $70. You're also going to want a little tools or set of hex
> > wrenches which we carry...and of course a saddle bag for that. Do you
> > ever ride at night or early morning? Well, you'll need a front and
> > rear light, too...gotta stay safe out there..." (clip)
> ^^^^^^^^^^^^^^^^^^
> Anyone who tries that on me loses a customer.
Recently I bought a Breezer Uptown town bike. Standard on the Breezer
Uptown is fenders, lights, kickstand, back rack, and a bell! As he was
ringing up the sale he said, "Well, I see you have a helmet." (Needed for
the test ride....) Glances over at the bike, "And the bike has everything
else, so I guess you are set." I guess he figured anyone buying a town
bike doesn't change their own tires or do their own maintenance...
|
| | | | |
Date: MikeKr@mouse-potato.com
From: Breezer
Subject: Re: LBS and markup on new bikes
|
13 Oct 2006 01:02:30
|
| | | | | |
Date: cathy_kearns@yahoo.com
From: Breezer
Subject: Re: LBS and markup on new bikes
|
13 Oct 2006 04:05:17
|
| |
Date: 12 Oct 2006 08:37:12
From: Bill H.
Subject: Re: LBS and markup on new bikes
|
On Oct 11, 5:40 am, "qui si parla Campagnolo" <p...@vecchios.com >
wrote:
> Al O'Pecia wrote:
> > I am wondering how much profit a LBS makes on a typical (say, sub $500)
> > bicycle sale...
>
> > Does anyone know an approx range?Interestingly enough, bicycles are the lowest gin items in the bike
> store.
Reminds me of the iPod I bought recently. $150 for the mp3 player, and
another $40-$50 for accessories. Accessories included a small 3.5" x
1.5" plastic case that probably cost $.50 to make, that sold for $20.
Same way with cell phones (free phone!...but you'll pay $20 for a car
charger, $20 for a case, $30 for headset...)
I'm really frustrated with a lot of bike shops. I frequently go in
looking for a small part that they either don't carry, or basically
roll their eyes when I ask for it. For example, I recently went into a
new LBS by my house that has very little in the way of parts and
accessories and LOTS of new bikes. I asked for a singlespeed freewheel
and was told they don't stock the part but they could order it.
Hmm...okay, I thought. Then the guy asked me "how old is your bike"
and when I told him it was built in the 1980s, he pointed out the new
singlespeed bicycles they carried, suggesting I buy one of those for
$600. I told him I'd think about it and left.
While I understand it from a sales perspective (better to sell a new
bike than a single freewheel) the approach turns me off as a customer.
As luck would have it, I AM going to be in the ket for a new road
bike, but I'll be damned if I buy from this shop, because they tried to
solve a $15 problem with a $600 solution.
-Bill H.
|
| | |
Date: 12 Oct 2006 14:26:19
From: SMS
Subject: Re: LBS and markup on new bikes
|
Bill H. wrote:
> On Oct 11, 5:40 am, "qui si parla Campagnolo" <p...@vecchios.com>
> wrote:
>> Al O'Pecia wrote:
>>> I am wondering how much profit a LBS makes on a typical (say, sub $500)
>>> bicycle sale...
>>> Does anyone know an approx range?Interestingly enough, bicycles are the lowest gin items in the bike
>> store.
>
> Reminds me of the iPod I bought recently. $150 for the mp3 player, and
> another $40-$50 for accessories. Accessories included a small 3.5" x
> 1.5" plastic case that probably cost $.50 to make, that sold for $20.
> Same way with cell phones (free phone!...but you'll pay $20 for a car
> charger, $20 for a case, $30 for headset...)
Only if you buy it from the wireless carrier. I.e. Costco includes a
charger, case, and headset with all phones, and it's equivalent in
quality to the junk that the carriers sell. You can buy OEM accessories
for a lot less, and they're better quality than what the carrier sells.
|
| |
Date: 12 Oct 2006 06:34:20
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
Leo Lichtman wrote:
> "gds" wrote: (clip) a) They try not to stock the bike for a year. If they
> can turn over their inventory 5 times a year @5% then the annual return is
> 25%.
> ^^^^^^^^^^^^^^^^^^^^^
> Your reasoning is correct, but a stock turn of 5 x a year is unbelievable on
> $7000 bikes. Consider that the dealer has to stock a range of sizes.
> Certainly he is likely to sell one of those bikes in less than a year, but
> how many will remain unsold, even after two or three years? Then what
> happens to the selling price when there is a model change? If the gin
> was only 5% on a new bike, how can he k it down enough to get rid of it
> without a terrible loss?
Any shop that has a size run of $7000 bikes is asking to go out of
business. It's like a tailor having a range of suits on the wall in all
sizes, styles and materials. A shop that sells say 5 brands cannot have
all sizes, all types, all colors, all brands, cannot be done.
WE do it like Evan the tailor. size, order frame, order components,
anything the customer wants, any combo, we build bike and wheels,
resulting bike is unique, like a custom suit. many think the only model
is like the Toyota dealer, where they try to sell what's on the lot,
not like the Audi/Porsche dealer, where they have examples of the
models and you order it.
> ^^^^^^^^^^^^^^^^^^^^^
> b) And if they can not achive the turnover needed then that is why so many
> LBS's are ginal business' and why the industry has a high failure rate.
> ^^^^^^^^^^^^^^^^
> Your point b.) is not a counter argument to what I said. It is a
> confirmation of my point.
|
| | |
Date: 14 Oct 2006 22:27:25
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
> Any shop that has a size run of $7000 bikes is asking to go out of
> business. It's like a tailor having a range of suits on the wall in all
> sizes, styles and materials. A shop that sells say 5 brands cannot have
> all sizes, all types, all colors, all brands, cannot be done.
Oh darn. Do I tell the accountant first, or my wife?
And what will I do if I'm no longer running a bike shop? Probably get in a
lot more riding. Hmm. Life could be worse...
--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
"qui si parla Campagnolo" <peter@vecchios.com > wrote in message
news:1160660060.164033.124680@i3g2000cwc.googlegroups.com...
>
> Leo Lichtman wrote:
>> "gds" wrote: (clip) a) They try not to stock the bike for a year. If
>> they
>> can turn over their inventory 5 times a year @5% then the annual return
>> is
>> 25%.
>> ^^^^^^^^^^^^^^^^^^^^^
>> Your reasoning is correct, but a stock turn of 5 x a year is unbelievable
>> on
>> $7000 bikes. Consider that the dealer has to stock a range of sizes.
>> Certainly he is likely to sell one of those bikes in less than a year,
>> but
>> how many will remain unsold, even after two or three years? Then what
>> happens to the selling price when there is a model change? If the gin
>> was only 5% on a new bike, how can he k it down enough to get rid of
>> it
>> without a terrible loss?
>
> Any shop that has a size run of $7000 bikes is asking to go out of
> business. It's like a tailor having a range of suits on the wall in all
> sizes, styles and materials. A shop that sells say 5 brands cannot have
> all sizes, all types, all colors, all brands, cannot be done.
>
> WE do it like Evan the tailor. size, order frame, order components,
> anything the customer wants, any combo, we build bike and wheels,
> resulting bike is unique, like a custom suit. many think the only model
> is like the Toyota dealer, where they try to sell what's on the lot,
> not like the Audi/Porsche dealer, where they have examples of the
> models and you order it.
>> ^^^^^^^^^^^^^^^^^^^^^
>> b) And if they can not achive the turnover needed then that is why so
>> many
>> LBS's are ginal business' and why the industry has a high failure
>> rate.
>> ^^^^^^^^^^^^^^^^
>> Your point b.) is not a counter argument to what I said. It is a
>> confirmation of my point.
>
>
|
| |
Date: 12 Oct 2006 06:30:23
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
Leo Lichtman wrote:
> "gds" wrote: (clip) even a 5% net profit on a high end bike might yield
> them an actual $ profit of $350 (on a $7K bike). (clip)
> ^^^^^^^^^^^^^^^^^^
> Let's take a closer look at that. If they're going to sell a $7 bike at a
> 5% profit, their cost was $6650. If they invested that money at 5%
> interest, it would earn almost as much in one year, with no overhead costs.
> Why would anyone run a business that earns that little on the invested
> capital?
Not how it works...$7000 bicycle actually costs in parts about
$4500...add the cost of labor and all the rest like utilities, rent,
etc and the cost rises to just about $7000, in other words, we break
even, don't lose money and pay all our bills. NOT net profit, which
comes after all costs of selling that bike, parts, labor, rent, etc.
|
| | |
Date: 13 Oct 2006 23:33:34
From: David
Subject: Re: LBS and markup on new bikes
|
"qui si parla Campagnolo" <peter@vecchios.com > wrote in
news:1160659823.128083.29080@m73g2000cwd.googlegroups.com:
> in other words, we break
> even, don't lose money and pay all our bills. NOT net profit, which
> comes after all costs of selling that bike, parts, labor, rent, etc.
>
Yes, your don't make money, but you're not facturing in the fact that
you're doing what you love to do. <grin >
|
| |
Date: 12 Oct 2006 06:26:56
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
gds wrote:
> qui si parla Campagnolo wrote:
> > Al O'Pecia wrote:
> > > I am wondering how much profit a LBS makes on a typical (say, sub $500)
> > > bicycle sale...
> > >
> > > Does anyone know an approx range?
> >
> > Interestingly enough, bicycles are the lowest gin items in the bike
> > store. Typically retailers use a 35-40% gin, that is divide by 60-65
> > to get the retail price. A $500 bike costs about $330 or so. $500
> > retail pays for assembly, service after the sale, lights, rent,
> > etc...and the bike shop owner just breaks eve\n. When the new stuff
> > comes out, like now, the retailer discounts to move inventory and loses
> > money when he does this. Even 'concept' stores are not owned by the
> > manufaturer, and altho they may get better credit terms, they do not
> > get kickbacks or subsidies from the manufaturer.
> > >
> > > Basically, I recently bought a bike on costco.com, mainly because I
> > > didn't know if I was going to use it that much, and I figured I could
> > > always return it (for what I paid) to costco if I stopped riding it.
> > > Anyway, I wound up just paying the LBS to set it up for me, as I tried
> > > to follow the directions and got lost about 1/2 way thru.
> > >
> > > The LBS charged $50 to set it up, and that includes 1 year of
> > > maintenance.
> > >
> > > FYI-the bike I bought on costco.com was approx $200. So, I am wondering
> > > if the LBS made more profit on my setup than if I had purchased a low
> > > end Giant from them (which retails for approx $230)...
> > >
> > > Not trying to start a flame, or even a heated discussion on the topic,
> > > just wondering about the economics of the LBS...
> > >
> > > PS-the LBS in my case said they would be happy to sell me another bike
> > > when I am ready to upgrade, or that they would be happy to put together
> > > another mail order bike, they would even let me ship it there...
> > >
> > > anyway, thanks for listening, and I hope someone can enlighten me
>
> I agree with your point but must add that the profit (net and/or gross)
> needs to be looked at in absolute as well as % terms. So, for a high
> end bike shop even a 5% net profit on a high end bike might yield them
> an actual $ profit of $350 (on a $7K bike). So they would need to sell
> a lot of $50 widgets at 25% to match that.
Actually for us, on bicycles, we pretty much break even. We make our $
on service, custom wheelsets and clothes. Offering things that MO or
other shops doesn't have, particularly service.
|
| |
Date: 12 Oct 2006 06:24:13
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
Jim Higson wrote:
> qui si parla Campagnolo wrote:
>
> > Interestingly enough, bicycles are the lowest gin items in the bike
> > store.
>
> What gives a decent kup? I'd guess the small and cheap to make but still
> quite expensive parts like cleats and bar tape? And that stuff doesn't go
> out of date so you don't have to sell it off cheap later. A bit like how
> hi-fi shops make a lot of their money selling fancy cables.
>
> I'm interested because that's the stuff that's easiest to buy online so if
> they rely heavily on these things for income it could be a big problem for
> the LBS.
>
> --
> Jim
Well, we think our model is a better idea. The labor to assemble, sell
and service after the sale is the question. We think it's better to
sell one $2500 bicycle rather than 3 $850 bicycles. Labor to sell
assemble and service is less and that labor applies to one bike instead
of '3'. Also service is the highest magin thing you can do along with
clothes, soft goods. So we can offer a complete fit, better assembly
and extensive service after the sale.
Also, specializing in service and unique, designed and aseembled in the
shop, bicycles makes it hard to be competed with via MO or the internet.
|
| |
Date: 11 Oct 2006 13:24:38
From: gds
Subject: Re: LBS and markup on new bikes
|
Leo Lichtman wrote:
> "gds" wrote: (clip) a) They try not to stock the bike for a year. If they
> can turn over their inventory 5 times a year @5% then the annual return is
> 25%.
> ^^^^^^^^^^^^^^^^^^^^^
> Your reasoning is correct, but a stock turn of 5 x a year is unbelievable on
> $7000 bikes. Consider that the dealer has to stock a range of sizes.
> Certainly he is likely to sell one of those bikes in less than a year, but
> how many will remain unsold, even after two or three years? Then what
> happens to the selling price when there is a model change? If the gin
> was only 5% on a new bike, how can he k it down enough to get rid of it
> without a terrible loss?
> ^^^^^^^^^^^^^^^^^^^^^
> b) And if they can not achive the turnover needed then that is why so many
> LBS's are ginal business' and why the industry has a high failure rate.
> ^^^^^^^^^^^^^^^^
> Your point b.) is not a counter argument to what I said. It is a
> confirmation of my point.
RE comment on A: Actually it is quite possible to achieve the average
inventory turnover on high end bikes because a large number will be
special ordered. Thus they will be sold before they are ordered (with a
deposit!). This is much more likely at the high end than at other price
points. So, the LBS has a number of demo bikes and when you decide on a
ride you like they order the correct frame size. Yes, this has some
keting disadvantages but given limited capital and borrowing power
this is how it often works.
In my last purchase I was surprised on how my LBS was able to fit a
demo bike so that it was quite a good fit for me even though it was not
the same frame size I ordered. But the fit was close enought to get a
feel for the ride and handling characteristics.
Re comment on B: I wasn't arguing. I agree that with low gins if the
business can not achieve hihg inventory turnover they will not earn an
adequate return on capital.
|
| | |
Date: 12 Oct 2006 02:01:46
From: Leo Lichtman
Subject: Re: LBS and markup on new bikes
|
"gds" wrote: (clip) Re comment on B: I wasn't arguing. (clip)
^^^^^^^^^^^^^^^^^
Sorry, I didn't mean "argue" in the angry back-and-forth sense. To me,
argument means a statement meant to advance a point of view. Now that I
understand your point about low inventory and special ordering of high end
bikes, I can see how this could work.
|
| |
Date: 11 Oct 2006 10:41:45
From: gds
Subject: Re: LBS and markup on new bikes
|
Leo Lichtman wrote:
> "gds" wrote: (clip) even a 5% net profit on a high end bike might yield
> them an actual $ profit of $350 (on a $7K bike). (clip)
> ^^^^^^^^^^^^^^^^^^
> Let's take a closer look at that. If they're going to sell a $7 bike at a
> 5% profit, their cost was $6650. If they invested that money at 5%
> interest, it would earn almost as much in one year, with no overhead costs.
> Why would anyone run a business that earns that little on the invested
> capital?
There are several answers to that. Among them:
a) They try not to stock the bike for a year. If they can turn over
their inventory 5 times a year @5% then the annual return is 25%.
Grocery stores are at an extreme for this tye of turnover calculation.
Many items have gins of only 1 or 2%. But they turn these items over
as much as 50 times a year.
b) And if they can not achive the turnover needed then that is why so
many LBS's are ginal business' and why the industry has a high
failure rate.
|
| | |
Date: 11 Oct 2006 20:16:33
From: Leo Lichtman
Subject: Re: LBS and markup on new bikes
|
"gds" wrote: (clip) a) They try not to stock the bike for a year. If they
can turn over their inventory 5 times a year @5% then the annual return is
25%.
^^^^^^^^^^^^^^^^^^^^^
Your reasoning is correct, but a stock turn of 5 x a year is unbelievable on
$7000 bikes. Consider that the dealer has to stock a range of sizes.
Certainly he is likely to sell one of those bikes in less than a year, but
how many will remain unsold, even after two or three years? Then what
happens to the selling price when there is a model change? If the gin
was only 5% on a new bike, how can he k it down enough to get rid of it
without a terrible loss?
^^^^^^^^^^^^^^^^^^^^^
b) And if they can not achive the turnover needed then that is why so many
LBS's are ginal business' and why the industry has a high failure rate.
^^^^^^^^^^^^^^^^
Your point b.) is not a counter argument to what I said. It is a
confirmation of my point.
|
| |
Date: 11 Oct 2006 09:59:32
From: gds
Subject: Re: LBS and markup on new bikes
|
qui si parla Campagnolo wrote:
> Al O'Pecia wrote:
> > I am wondering how much profit a LBS makes on a typical (say, sub $500)
> > bicycle sale...
> >
> > Does anyone know an approx range?
>
> Interestingly enough, bicycles are the lowest gin items in the bike
> store. Typically retailers use a 35-40% gin, that is divide by 60-65
> to get the retail price. A $500 bike costs about $330 or so. $500
> retail pays for assembly, service after the sale, lights, rent,
> etc...and the bike shop owner just breaks eve\n. When the new stuff
> comes out, like now, the retailer discounts to move inventory and loses
> money when he does this. Even 'concept' stores are not owned by the
> manufaturer, and altho they may get better credit terms, they do not
> get kickbacks or subsidies from the manufaturer.
> >
> > Basically, I recently bought a bike on costco.com, mainly because I
> > didn't know if I was going to use it that much, and I figured I could
> > always return it (for what I paid) to costco if I stopped riding it.
> > Anyway, I wound up just paying the LBS to set it up for me, as I tried
> > to follow the directions and got lost about 1/2 way thru.
> >
> > The LBS charged $50 to set it up, and that includes 1 year of
> > maintenance.
> >
> > FYI-the bike I bought on costco.com was approx $200. So, I am wondering
> > if the LBS made more profit on my setup than if I had purchased a low
> > end Giant from them (which retails for approx $230)...
> >
> > Not trying to start a flame, or even a heated discussion on the topic,
> > just wondering about the economics of the LBS...
> >
> > PS-the LBS in my case said they would be happy to sell me another bike
> > when I am ready to upgrade, or that they would be happy to put together
> > another mail order bike, they would even let me ship it there...
> >
> > anyway, thanks for listening, and I hope someone can enlighten me
I agree with your point but must add that the profit (net and/or gross)
needs to be looked at in absolute as well as % terms. So, for a high
end bike shop even a 5% net profit on a high end bike might yield them
an actual $ profit of $350 (on a $7K bike). So they would need to sell
a lot of $50 widgets at 25% to match that.
|
| | |
Date: 11 Oct 2006 17:32:42
From: Leo Lichtman
Subject: Re: LBS and markup on new bikes
|
"gds" wrote: (clip) even a 5% net profit on a high end bike might yield
them an actual $ profit of $350 (on a $7K bike). (clip)
^^^^^^^^^^^^^^^^^^
Let's take a closer look at that. If they're going to sell a $7 bike at a
5% profit, their cost was $6650. If they invested that money at 5%
interest, it would earn almost as much in one year, with no overhead costs.
Why would anyone run a business that earns that little on the invested
capital?
|
| | | |
Date: 11 Oct 2006 10:47:48
From: SMS
Subject: Re: LBS and markup on new bikes
|
Leo Lichtman wrote:
> "gds" wrote: (clip) even a 5% net profit on a high end bike might yield
> them an actual $ profit of $350 (on a $7K bike). (clip)
> ^^^^^^^^^^^^^^^^^^
> Let's take a closer look at that. If they're going to sell a $7 bike at a
> 5% profit, their cost was $6650.
No, he said "net profit." If they are figuring the gross gin by
dividing their cost, then that $7000 bike cost them around $4500 with a
35% gross gin. The net profit is hard to determine because each item
in a store has a different gin. It's always tough to determine how to
allocate expenses back to specific products. When a store has a sale,
they aren't "losing money" by clearing out old inventory, but the gross
gin goes down. When someone says that a store loses money when they
put items on sale, they make it sound as if the store would be better
off if they just didn't sell that item in the first place.
|
| | | | |
Date: 14 Oct 2006 22:31:53
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
> When someone says that a store loses money when they put items on sale,
> they make it sound as if the store would be better off if they just didn't
> sell that item in the first place.
That is sometimes the case. A local store had trained its customers to buy
only when they had a sale. They were in a perpetual cash-crunch/downward
spiral until they were finally bought out by someone (who came in and
"stabilized" things... they now sell more than they did before, have very
few sales, and can now pay their bills).
There are a number of different business models that can work, some of which
involved heavily-promoted sales. But in most cases, the sale items are being
sold at relatively-normal gins, due to purchase of closeouts or help from
the manufacturer (special buys). Unfortunately, the LBS is still cut off
from the OE excess that the mail-order places get. It's amazing how much
they make on some of the stuff they sell.
--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
"SMS" <scharf.steven@geemail.com > wrote in message
news:452d2e4f$0$96191$742ec2ed@news.sonic.net...
> Leo Lichtman wrote:
>> "gds" wrote: (clip) even a 5% net profit on a high end bike might yield
>> them an actual $ profit of $350 (on a $7K bike). (clip)
>> ^^^^^^^^^^^^^^^^^^
>> Let's take a closer look at that. If they're going to sell a $7 bike at
>> a 5% profit, their cost was $6650.
>
> No, he said "net profit." If they are figuring the gross gin by
> dividing their cost, then that $7000 bike cost them around $4500 with a
> 35% gross gin. The net profit is hard to determine because each item in
> a store has a different gin. It's always tough to determine how to
> allocate expenses back to specific products. When a store has a sale, they
> aren't "losing money" by clearing out old inventory, but the gross gin
> goes down. When someone says that a store loses money when they put items
> on sale, they make it sound as if the store would be better off if they
> just didn't sell that item in the first place.
>
|
| | | | | |
Date: 15 Oct 2006 00:11:22
From: SMS
Subject: Re: LBS and markup on new bikes
|
Mike Jacoubowsky wrote:
>> When someone says that a store loses money when they put items on sale,
>> they make it sound as if the store would be better off if they just didn't
>> sell that item in the first place.
>
> That is sometimes the case. A local store had trained its customers to buy
> only when they had a sale. They were in a perpetual cash-crunch/downward
> spiral until they were finally bought out by someone (who came in and
> "stabilized" things... they now sell more than they did before, have very
> few sales, and can now pay their bills).
Sounds like Bicycle Outfitter. I really liked their Super Bowl sale
where they had 20% off everything, including complete bikes, during the
time the Super Bowl was being broadcast.
In one sense they were trying to do what most businesses with an
essentially unlimited supply of product do--trying to sell to both
price-sensitive and non-price sensitive customers by various means such
as coupons and limited time sales. On the other hand, they were selling
at a lower price to many customers who would have paid the regular price
anyway but that knew a sale worth waiting for would come along soon.
|
| | | | | |
Date: 15 Oct 2006 00:39:21
From:
Subject: Re: LBS and markup on new bikes
|
Mike Jacoubowsky writes:
>> When someone says that a store loses money when they put items on
>> sale, they make it sound as if the store would be better off if
>> they just didn't sell that item in the first place.
> That is sometimes the case. A local store had trained its customers
> to buy only when they had a sale. They were in a perpetual
> cash-crunch/downward spiral until they were finally bought out by
> someone (who came in and "stabilized" things... they now sell more
> than they did before, have very few sales, and can now pay their
> bills).
> There are a number of different business models that can work, some
> of which involved heavily-promoted sales. But in most cases, the
> sale items are being sold at relatively-normal gins, due to
> purchase of closeouts or help from the manufacturer (special
> buys). Unfortunately, the LBS is still cut off from the OE excess
> that the mail-order places get. It's amazing how much they make on
> some of the stuff they sell.
Hey, that's like Coit Cleaners in SF, who continually have a half-off
or other special offer going, year in, year out. My first question
is," Why do they have such high regular prices?" That's all fake,
like the guy who sells redwood burls and chain-saw sculpted teddy
bears on HWY 9 near Boulder Creek, always half off. Half off of what?
Jobst Brandt
|
| | | | | | |
Date: 15 Oct 2006 00:58:47
From: Mike Jacoubowsky
Subject: Re: LBS and markup on new bikes
|
> Hey, that's like Coit Cleaners in SF, who continually have a half-off
> or other special offer going, year in, year out. My first question
> is," Why do they have such high regular prices?" That's all fake,
> like the guy who sells redwood burls and chain-saw sculpted teddy
> bears on HWY 9 near Boulder Creek, always half off. Half off of what?
>
> Jobst Brandt
So you're not the only guy who wonders about the half-price bear sculptures?
Wasn't that guy there when I used to do your rides? Don't even want to think
how long ago that was.
--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
<jobst.brandt@stanfordalumni.org > wrote in message
news:45318339$0$34544$742ec2ed@news.sonic.net...
> Mike Jacoubowsky writes:
>
>>> When someone says that a store loses money when they put items on
>>> sale, they make it sound as if the store would be better off if
>>> they just didn't sell that item in the first place.
>
>> That is sometimes the case. A local store had trained its customers
>> to buy only when they had a sale. They were in a perpetual
>> cash-crunch/downward spiral until they were finally bought out by
>> someone (who came in and "stabilized" things... they now sell more
>> than they did before, have very few sales, and can now pay their
>> bills).
>
>> There are a number of different business models that can work, some
>> of which involved heavily-promoted sales. But in most cases, the
>> sale items are being sold at relatively-normal gins, due to
>> purchase of closeouts or help from the manufacturer (special
>> buys). Unfortunately, the LBS is still cut off from the OE excess
>> that the mail-order places get. It's amazing how much they make on
>> some of the stuff they sell.
>
> Hey, that's like Coit Cleaners in SF, who continually have a half-off
> or other special offer going, year in, year out. My first question
> is," Why do they have such high regular prices?" That's all fake,
> like the guy who sells redwood burls and chain-saw sculpted teddy
> bears on HWY 9 near Boulder Creek, always half off. Half off of what?
>
> Jobst Brandt
|
| |
Date: 11 Oct 2006 09:59:14
From:
Subject: Re: LBS and markup on new bikes
|
Jim Higson wrote:
> qui si parla Campagnolo wrote:
>
> > Interestingly enough, bicycles are the lowest gin items in the bike
> > store.
>
> What gives a decent kup? I'd guess the small and cheap to make but still
> quite expensive parts like cleats and bar tape? And that stuff doesn't go
> out of date so you don't have to sell it off cheap later. A bit like how
> hi-fi shops make a lot of their money selling fancy cables.
>
Well, whatever the kup on cleats, bar tape, etc., at least they are
honest products. Fancy cables, OTOH, are pretty much a complete scam.
The only comparable items in cycling are things like those Bontrager
"buzz killing" bar inserts.
> I'm interested because that's the stuff that's easiest to buy online so if
> they rely heavily on these things for income it could be a big problem for
> the LBS.
>
Yep, that's a problem. And that's why the shops that survive will be
the ones that *earn* customer loyalty by offering good, honest advice,
high quality service work, and great customer service, IMO.
|
| | |
Date: 15 Oct 2006 10:29:21
From: Jim Higson
Subject: Re: LBS and markup on new bikes
|
obs@ozarkbicycleservice.com wrote:
>
> Jim Higson wrote:
>> qui si parla Campagnolo wrote:
>>
>> > Interestingly enough, bicycles are the lowest gin items in the bike
>> > store.
>>
>> What gives a decent kup? I'd guess the small and cheap to make but
>> still quite expensive parts like cleats and bar tape? And that stuff
>> doesn't go out of date so you don't have to sell it off cheap later. A
>> bit like how hi-fi shops make a lot of their money selling fancy cables.
>>
>
> Well, whatever the kup on cleats, bar tape, etc., at least they are
> honest products. Fancy cables, OTOH, are pretty much a complete scam.
Completely agree. Other than them being pretty, there are no advantages of
fancy cables. The whole issue reminds me of this blog post:
http://blog.garrettvonk.com/index.php/2006/06/dont-buy-cables-at-best-buy -
Unbelievable!
> The only comparable items in cycling are things like those Bontrager
> "buzz killing" bar inserts.
Never seem them.
>> I'm interested because that's the stuff that's easiest to buy online so
>> if they rely heavily on these things for income it could be a big problem
>> for the LBS.
>>
> Yep, that's a problem. And that's why the shops that survive will be
> the ones that *earn* customer loyalty by offering good, honest advice,
> high quality service work, and great customer service, IMO.
Yep. I find this is the biggest difference from shop to shop and even person
to person at the same shop. I don't support small shops just because
they're small, they have to offer some of that "small shop service" for me
to want to pay the higher prices.
--
Jim
|
| |
Date: 11 Oct 2006 05:40:28
From: qui si parla Campagnolo
Subject: Re: LBS and markup on new bikes
|
Al O'Pecia wrote:
> I am wondering how much profit a LBS makes on a typical (say, sub $500)
> bicycle sale...
>
> Does anyone know an approx range?
Interestingly enough, bicycles are the lowest gin items in the bike
store. Typically retailers use a 35-40% gin, that is divide by 60-65
to get the retail price. A $500 bike costs about $330 or so. $500
retail pays for assembly, service after the sale, lights, rent,
etc...and the bike shop owner just breaks eve\n. When the new stuff
comes out, like now, the retailer discounts to move inventory and loses
money when he does this. Even 'concept' stores are not owned by the
manufaturer, and altho they may get better credit terms, they do not
get kickbacks or subsidies from the manufaturer.
>
> Basically, I recently bought a bike on costco.com, mainly because I
> didn't know if I was going to use it that much, and I figured I could
> always return it (for what I paid) to costco if I stopped riding it.
> Anyway, I wound up just paying the LBS to set it up for me, as I tried
> to follow the directions and got lost about 1/2 way thru.
>
> The LBS charged $50 to set it up, and that includes 1 year of
> maintenance.
>
> FYI-the bike I bought on costco.com was approx $200. So, I am wondering
> if the LBS made more profit on my setup than if I had purchased a low
> end Giant from them (which retails for approx $230)...
>
> Not trying to start a flame, or even a heated discussion on the topic,
> just wondering about the economics of the LBS...
>
> PS-the LBS in my case said they would be happy to sell me another bike
> when I am ready to upgrade, or that they would be happy to put together
> another mail order bike, they would even let me ship it there...
>
> anyway, thanks for listening, and I hope someone can enlighten me
|
| | |
Date: 13 Oct 2006 23:18:05
From: Solvang Cyclist
Subject: Re: LBS and markup on new bikes
|
"qui si parla Campagnolo" <peter@vecchios.com > wrote in
news:1160570428.647482.217820@c28g2000cwb.googlegroups.com:
> When the new stuff
> comes out, like now, the retailer discounts to move inventory and loses
> money when he does this.
I used to own a retail business (not related to cycling) and I am happy
to not have this headache of obsolete inventory anymore.
However, I recently had a rather different and interesting experience
with a LBS…
It's a small shop outside of San Diego that has elected to specialize in
Klein bikes. It appears to be well capitalized and the owner uses this in
a very clever way: He buys a large inventory of bikes from Klein at the
end of the model year - in the process getting a substantial discount.
(Obviously I don't know how much of a discount.) Then he sells these
bikes throughout the year at a far better price than the current model
year bikes.
Last month I was fortunate enough to still be able to buy a 2005 Klein Q-
Pro XX for a really great price. What made this an even better deal for
me is that the 2005 XX is most likely the last Klein that will be sold
with the Campy Record Group. Sure I could have purchased a Q-Pro frame
and Record components, but it would have cost double what I paid for the
2005 model, and I was not interested in the 2006 with DA.
Everybody won on this deal! I got a great bike and the LBS made a
reasonable profit on a last year's model bike.
Unfortunately for most LBSs (and small retailers in general) this
business model does require much more capital than a typical retailer has
available to tie up in inventory, but it's also why this particular shop
can profit by being so unique.
BTW: The Q-Pro and the Record components are absolutely gorgeous, and
rides like a dream. (Nicer than my 25 year old Klein Medusa - which is
still a great bike.)
Cheers!
David
|
| | |
Date: 11 Oct 2006 17:10:05
From: Jim Higson
Subject: Re: LBS and markup on new bikes
|
qui si parla Campagnolo wrote:
> Interestingly enough, bicycles are the lowest gin items in the bike
> store.
What gives a decent kup? I'd guess the small and cheap to make but still
quite expensive parts like cleats and bar tape? And that stuff doesn't go
out of date so you don't have to sell it off cheap later. A bit like how
hi-fi shops make a lot of their money selling fancy cables.
I'm interested because that's the stuff that's easiest to buy online so if
they rely heavily on these things for income it could be a big problem for
the LBS.
--
Jim
|
| | | |
Date: 11 Oct 2006 10:50:39
From: SMS
Subject: Re: LBS and markup on new bikes
|
Jim Higson wrote:
> qui si parla Campagnolo wrote:
>
>> Interestingly enough, bicycles are the lowest gin items in the bike
>> store.
>
> What gives a decent kup?
Clothing, accessories, helmets, tubes, tires, etc. Almost everything in
the store other than the actual bicycle. Problem is that few stores
stock a good selection of these items, other than REI and Performance,
so there's a big incentive to shop on-line or in these chain stores for
these types of items.
|
| | | |
Date: 11 Oct 2006 16:21:27
From: Ludmila Borgschatz-Thudpucker, MD
Subject: Re: LBS and markup on new bikes
|
"Jim Higson" <jh@333.org > wrote in message
news:36CdnYh3wIzBirDYRVnysg@eclipse.net.uk...
>
> What gives a decent kup? I'd guess the small and cheap to make but
> still
> quite expensive parts like cleats and bar tape? And that stuff doesn't go
> out of date so you don't have to sell it off cheap later. A bit like how
> hi-fi shops make a lot of their money selling fancy cables.
Well. those and other specialty items like needles and cartridges for
turntables, 8-track cleaning cartridges, and inserts for 45RPM records.
|
| |
Date: 11 Oct 2006 05:10:44
From:
Subject: Re: LBS and markup on new bikes
|
Al O'Pecia wrote:
> I am wondering how much profit a LBS makes on a typical (say, sub $500)
> bicycle sale...
>
> Does anyone know an approx range?
>
> Basically, I recently bought a bike on costco.com, mainly because I
> didn't know if I was going to use it that much, and I figured I could
> always return it (for what I paid) to costco if I stopped riding it.
> Anyway, I wound up just paying the LBS to set it up for me, as I tried
> to follow the directions and got lost about 1/2 way thru.
>
> The LBS charged $50 to set it up, and that includes 1 year of
> maintenance.
>
> FYI-the bike I bought on costco.com was approx $200. So, I am wondering
> if the LBS made more profit on my setup than if I had purchased a low
> end Giant from them (which retails for approx $230)...
>
> Not trying to start a flame, or even a heated discussion on the topic,
> just wondering about the economics of the LBS...
>
> PS-the LBS in my case said they would be happy to sell me another bike
> when I am ready to upgrade, or that they would be happy to put together
> another mail order bike, they would even let me ship it there...
>
IMO, that's a st move on the part of the LBS. In the future,
"alternate sources" for bikes, especially internet/mail-order sales,
will grow larger. Taking advantage of the fact that these bikes need
assembly/setup is just common sense.
> anyway, thanks for listening, and I hope someone can enlighten me
|
| |
Date: 10 Oct 2006 12:40:48
From: Al O'Pecia
Subject: Re: LBS and markup on new bikes
|
KM wrote:
> As a 26 year veteran of the retail world...I am most intrigued by your
> comment "I figured I could
> > always return it (for what I paid) to Costco if I stopped riding it."
>
> Are you serious?
totally serious. Costco has an awesome return policy (i.e. you can
return aything to costco for a full refund, except computers). It's one
of the reasons I shop there. Generally speaking, I don't buy from them
looking to return something, but it's nice to have that option. If you
buy a bike and sell it in a year you will probably get around 1/2 of
what you paid. With costco's return, I would get my money back.
However, it is now a moot point, as I am keeping the bike, so costco
did get the sale, and doesn't have to worry about me returning it...
> This is exactly why we are all paying high prices at the stores. Most people
> think that stores today are just rental opportunities. If you stop riding
> it, then sell it in the paper or a garage sale.
> As far a what the bike shop makes....I am going to make a guess of around
> 25-35%.
>
> Sorry to be poopy!
no prob, thanks for your thoughts...
>
> Ride on,
>
> Kyle
>
|
| |
Date: 10 Oct 2006 12:21:43
From: gds
Subject: Re: LBS and markup on new bikes
|
SMS wrote:
> KM wrote:
> > As a 26 year veteran of the retail world...I am most intrigued by your
> > comment "I figured I could
> >> always return it (for what I paid) to Costco if I stopped riding it."
> >
> > Are you serious?
> >
> > This is exactly why we are all paying high prices at the stores. Most people
> > think that stores today are just rental opportunities. If you stop riding
> > it, then sell it in the paper or a garage sale.
>
> But we're not paying high prices at the stores.
>
> Costco has calculated the profitability of having a liberal return
> policy. Indeed, I buy many items at Costco rather than at other stores
> because I know that if I have a problem I can return the item. They even
> encourage it in some departments there. Your basic premise is wrong.
> "Most people" don't return items for no reason, and the few that abuse
> the return policy are offset by the additional business that having a
> good return policy generates.
>
> For example, I recently purchased a Zojirushi small appliance from
> Costco.com. A small store very close to my house carries the item, and I
> went there first. It was $10 more, but that was no big deal. But they
> had a sign on the shelf warning that there were absolutely no returns of
> electrical items. So I passed on the local store, even though the only
> reason I would return the item is if it was defective.
Sure! But that is not quite the way I read the OP. He says he would
return it for full if price if he got tired of riding it. Not that
something was wrong with it.
I understand how liberal return policies foster customer good will.
However, the other side of the coin is that if customers take unfair
advantage of such policies they will become more restrictive- resulting
in a loss for most consumers.
|
| | |
Date: 11 Oct 2006 00:33:33
From: Leo Lichtman
Subject: Re: LBS and markup on new bikes
|
"gds" wrote: (clip) However, the other side of the coin is that if
customers take unfair advantage of such policies they will become more
restrictive- resulting in a loss for most consumers.
^^^^^^^^^^^^^^^^^
Another way that this can work against us: The store has to maintain a
kup sufficient to cover all the unprofitable parts of selling. This
includes unfair returns, shoplifting, damage in handling, and anything else
that eats away at their profit.
I don't know about Costco, but i do know that many large retailers have
enough buying power to enforce a ruthless return policy on their suppliers.
Line to the wholesaler: "If you don't take it back, we won't do business
with you."
|
| |
Date: 10 Oct 2006 23:36:03
From: SMS
Subject: Re: LBS and markup on new bikes
|
Al O'Pecia wrote:
> I am wondering how much profit a LBS makes on a typical (say, sub $500)
> bicycle sale...
Profit or gin. The gins on bicycles are 35-40%, but profit takes
into account all the overhead of operating a shop and is a lot less.
There is probably almost no profit for a shop in a sub $500 bicycle.
though this doesn't mean that they'd be better off not selling sub-$500
bicycles.
|
| |
Date: 10 Oct 2006 18:34:49
From: Werehatrack
Subject: Re: LBS and markup on new bikes
|
On 10 Oct 2006 10:33:54 -0700, "Al O'Pecia" <jaypublix@gmail.com >
wrote:
>The LBS charged $50 to set it up, and that includes 1 year of
>maintenance.
If they did a good job, you got a *bargain*.
>FYI-the bike I bought on costco.com was approx $200. So, I am wondering
>if the LBS made more profit on my setup than if I had purchased a low
>end Giant from them (which retails for approx $230)...
They probably would have made a bit more on the Giant, in part because
it likely would have required less fiddling than the Costco bike.
part of that would be due to their being more familiar with the issues
involved in prepping the Giant, as well.
>Not trying to start a flame, or even a heated discussion on the topic,
>just wondering about the economics of the LBS...
According to several lbs owners whose opinions I value, "tenuous" is a
good description of the economics of the typical bike shop.
>PS-the LBS in my case said they would be happy to sell me another bike
>when I am ready to upgrade, or that they would be happy to put together
>another mail order bike, they would even let me ship it there...
Sounds like a place to keep patronizing.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.
|
| |
Date: 10 Oct 2006 11:24:58
From: gds
Subject: Re: LBS and markup on new bikes
|
Al O'Pecia wrote:
> I am wondering how much profit a LBS makes on a typical (say, sub $500)
> bicycle sale...
>
> Does anyone know an approx range?
>
> Basically, I recently bought a bike on costco.com, mainly because I
> didn't know if I was going to use it that much, and I figured I could
> always return it (for what I paid) to costco if I stopped riding it.
> Anyway, I wound up just paying the LBS to set it up for me, as I tried
> to follow the directions and got lost about 1/2 way thru.
>
> The LBS charged $50 to set it up, and that includes 1 year of
> maintenance.
>
> FYI-the bike I bought on costco.com was approx $200. So, I am wondering
> if the LBS made more profit on my setup than if I had purchased a low
> end Giant from them (which retails for approx $230)...
>
> Not trying to start a flame, or even a heated discussion on the topic,
> just wondering about the economics of the LBS...
>
> PS-the LBS in my case said they would be happy to sell me another bike
> when I am ready to upgrade, or that they would be happy to put together
> another mail order bike, they would even let me ship it there...
>
> anyway, thanks for listening, and I hope someone can enlighten me
I guess my first response is "why do you care?"
To me the question should be "did I get good value for my $?" If so
why begrudge any profit? If not it isn't any good even if they lost
money.
And I must say I don't understand your statement on returning a used
bike and getting your money back. Why should that happen?
|
| | |
Date: 10 Oct 2006 17:41:57
From: di
Subject: Re: LBS and markup on new bikes
|
"gds" <gary_jill@msn.com > wrote in message
news:1160504698.560262.96380@m7g2000cwm.googlegroups.com...
>
> Al O'Pecia wrote:
>> I am wondering how much profit a LBS makes on a typical (say, sub $500)
>> bicycle sale...
>>
>> Does anyone know an approx range?
>>
>> Basically, I recently bought a bike on costco.com, mainly because I
>> didn't know if I was going to use it that much, and I figured I could
>> always return it (for what I paid) to costco if I stopped riding it.
>> Anyway, I wound up just paying the LBS to set it up for me, as I tried
>> to follow the directions and got lost about 1/2 way thru.
>>
>> The LBS charged $50 to set it up, and that includes 1 year of
>> maintenance.
>>
>> FYI-the bike I bought on costco.com was approx $200. So, I am wondering
>> if the LBS made more profit on my setup than if I had purchased a low
>> end Giant from them (which retails for approx $230)...
The bike from the bike shop would not have needed the set-up, it would have
came already assembled and tuned, ready to ride.
|
| | |
Date: 10 Oct 2006 18:42:11
From: Werehatrack
Subject: Re: LBS and markup on new bikes
|
On 10 Oct 2006 11:24:58 -0700, "gds" <gary_jill@msn.com > wrote:
>And I must say I don't understand your statement on returning a used
>bike and getting your money back. Why should that happen?
Some retailers willingly pump out crappy stuff with the expectation
that only 10% of the dissatisfied buyers will actually take the time
to return the junk. If a purchase utrns out to have been unwise
because the item was not as represented, why not return it? (I
suspect that if the OP had bought it and found the the bike was good
but he wasn't as interested in riding as he thought, either the bike
would have been returned in short order in good enough condition to
back on the floor as an as-is sale unit back in the corner, or he'd
have sold it along to someone else.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.
|
| |
Date: 10 Oct 2006 18:11:43
From: KM
Subject: Re: LBS and markup on new bikes
|
As a 26 year veteran of the retail world...I am most intrigued by your
comment "I figured I could
> always return it (for what I paid) to Costco if I stopped riding it."
Are you serious?
This is exactly why we are all paying high prices at the stores. Most people
think that stores today are just rental opportunities. If you stop riding
it, then sell it in the paper or a garage sale.
As far a what the bike shop makes....I am going to make a guess of around
25-35%.
Sorry to be poopy!
Ride on,
Kyle
"Al O'Pecia" <jaypublix@gmail.com > wrote in message
news:1160501634.750134.221700@m7g2000cwm.googlegroups.com...
> I am wondering how much profit a LBS makes on a typical (say, sub $500)
> bicycle sale...
>
> Does anyone know an approx range?
>
> Basically, I recently bought a bike on costco.com, mainly because I
> didn't know if I was going to use it that much, and I figured I could
> always return it (for what I paid) to costco if I stopped riding it.
> Anyway, I wound up just paying the LBS to set it up for me, as I tried
> to follow the directions and got lost about 1/2 way thru.
>
> The LBS charged $50 to set it up, and that includes 1 year of
> maintenance.
>
> FYI-the bike I bought on costco.com was approx $200. So, I am wondering
> if the LBS made more profit on my setup than if I had purchased a low
> end Giant from them (which retails for approx $230)...
>
> Not trying to start a flame, or even a heated discussion on the topic,
> just wondering about the economics of the LBS...
>
> PS-the LBS in my case said they would be happy to sell me another bike
> when I am ready to upgrade, or that they would be happy to put together
> another mail order bike, they would even let me ship it there...
>
> anyway, thanks for listening, and I hope someone can enlighten me
>
|
| | |
Date: 10 Oct 2006 23:43:08
From: SMS
Subject: Re: LBS and markup on new bikes
|
KM wrote:
> As a 26 year veteran of the retail world...I am most intrigued by your
> comment "I figured I could
>> always return it (for what I paid) to Costco if I stopped riding it."
>
> Are you serious?
>
> This is exactly why we are all paying high prices at the stores. Most people
> think that stores today are just rental opportunities. If you stop riding
> it, then sell it in the paper or a garage sale.
But we're not paying high prices at the stores.
Costco has calculated the profitability of having a liberal return
policy. Indeed, I buy many items at Costco rather than at other stores
because I know that if I have a problem I can return the item. They even
encourage it in some departments there. Your basic premise is wrong.
"Most people" don't return items for no reason, and the few that abuse
the return policy are offset by the additional business that having a
good return policy generates.
For example, I recently purchased a Zojirushi small appliance from
Costco.com. A small store very close to my house carries the item, and I
went there first. It was $10 more, but that was no big deal. But they
had a sign on the shelf warning that there were absolutely no returns of
electrical items. So I passed on the local store, even though the only
reason I would return the item is if it was defective.
|
|
