I believe it was Kent Bikes that purchased Kona and then sold back to the founders. I was surprised to hear Kent was the owner. They don't seem to be in the "wheelhouse" of Kona types of bikes. Probably why it didn't go well for them.
Good luck on the venture. You're very lucky to have the support of 3 owners, and be able to launch and go for a certain amount of time without needing to take from the business. I say lucky. I know you've probably saved for years, etc. etc., but still, it's a blessing. Here's the thing with regards to small orders for clients. Most shops already order parts and stuff for clients next day on an almost daily basis. If they're on top of their stuff, they mark up the items slightly across each cart to retain their margin after shipping OR they get the client to directly share the shipping burden. One-person service focused shops may not have the capacity to manage all that every time it comes up unless its for repair tickets already on the schedule. They may not have the means to open a service writing/sales/ordering position in their business. Many shops don't have the means to, or the market to support building and launching an online store capable of drop shipping, and most aren't even interested in that. I hope that helps. If a customer doesn't want to wait a week for a part, all they have to do is ask how much would the shipping cost them, because that is really the crux of the issue. Shops bleed money all year on shipping because customers both don't believe they should have to pay for shipping and believe that the shop should always have everything imaginable in stock for not a cent over retail. At the end of the day, everyone knows that if you start an e-retail side of the business, you're expected to undercut retail pricing on the same items in your brick and mortar. Everyone knows, that if you go online, you're signing up for 30% refund and return rate, over the sub 5% return and refund shops have to deal with. It's not attractive in the traditional way. Maybe you can flesh out the details of how you're doing it differently to show how it could be attractive and actually cheaper than hiring ordering staff.
Good points on the online side. I am still working through all the details. It's a tough business at the moment because of all the bankruptcies with Colorado Cyclists and some other retailers in the USA and the UK. My online store is barely moving product because people can still get things cheaper.
Sourcing from Colombia is such a genius move. I lived there as a teenager in the mid 60's and used to go to different shops to have stuff built. Loved how each specialty had shops near each other. Bicycle culture is very strong and a source of national pride. Hard working and imaginative folks. Again, excellent choice. Another thought. Given your focus, have you considered connecting folks with local manufacturers who can make specialty bags and stuff for the gravel/bike packing community. I have some work I want done but have no way to connect and evaluate makers?
Yes, custom bicycle bags are on my list of discovery areas. I’m working through a couple business concepts around Canyon and another small e-bike company at the moment.
Why risking losing a sale by _pointing_ them to your transactional web site instead of completing the order on the spot ? If they are committed to buy, close the sale. Send only the ones that don't know what they want or are hesitant. But make sure to help them in making their decision and close the sale as often as possible. Because if you don't do add any value, why would people pay for your cut ? Why would I go to a shop (or phone) to be told to go online and buy on THEIR store ? An online shop is not a panacea to cheaply replace competent employees. In the long term, you will be shooting yourself in the foot.
True, I could close the sale right in the store. The website would ease that process but I just had someone in today that said they would rather buy at our website then search online for the part or use Amazon.
Interesting strategy. Like you, I think this being a difficult time for the indistry makes this a time of opportunity. My thoughs (and resources) are more aligned with selling a good selection of quality used bikes and maybe one new brand. The local market is not saturated here, would be interesting to hear about your market. I'm guessing most new start up bike shops will be > 50% revenue from labor. A trek dealer i visted on vacation in Arkansas said they were consistently selling ~50% ebikes per month so that'll be a factor in the future for sales ans servicein independent shops. I haven't pushed any chips in yet. Super motivating video. Good luck! Keep us posted.
Thanks Steven. Yes, I am getting a lot of questions about E-Bikes. I have one on the floor and another unique one coming. The other part of revenue is going to be service work and used bicycles. I am hitting the city yard sales on Sunday mornings to look for the diamonds in the rough. If a bike shop can capture people's attention for service work, you could run a whole business off that.
I think the value add if someone is shipping a bicycle to their house, is they have to be there to sign for the package. That's a day of missed work or two days of missed work if the shipping company is delayed 24 hours. Also, some people just don't want to build it themselves or do not care to buy the tools.
@@gograva Here are some other good reasons why you should charge for bike assembly and setup: 1. The customer CAME to you for the work. They WANT to give you their money. 2. your staff needs to get paid, the materials they consume in service must be replaced, and all that goes on in the service department must be paid for BY SERVICE and by service alone! That's how it works. Retail pays for itself, and service pays for itself. Each have their own liabilities, staff, miniature economies. and on top of that each must contribute equally to, rent, bills, marketing etc., etc. And good god people think when they've spent $500 on bike tools for their garage they've somehow come close to what's in a shop. Dawg I've been doing this 15 years and I'm still catching up to other shops regarding equipment, and I'm still expanding on tools. I'm $20k deep in tools, equipment, and supplies, and set to happily spend another $10k over the next 5 years, because that's what it takes to go pro and keep improving in your craft. Point is, yes, service also pays for all that, whether it was cash investment by the owners, or it was through loans. You the client pay the shop enough per hour for the shop to then pay for all of what I just described. And that's totally legit. Go to a bigger pro shop, you might pay more for some things. Go to a hole in the wall, you may pay less. That's not always true though, and not always healthy. the inverse can be true on occasion. Sometimes the small shop has a better handle on charging what things are worth and the bigger shop shows desperation through discounting because they're overextended financially. $200 for an assembly is average. I serve a lower income client base so I charge $150, but I know it's worth more. 3. businesses pay out of pocket to private companies in most urban areas to collect recycling and waste at a higher rate than residents. 4. The brand manufacturing the bicycle will only honor your warranty if you have proof of professional assembly. So the assembly at the shop is actually the thing which gives you the green to finally use your bike, and the only thing allowing you to access the brand's warranty department should you have a frame failure or something like that. That's worth something, and you can't pretend like it isn't. 5. So you went to the bike shop and looked at the Specialized you wanted or this or that brand bike etc. and didn't like the price. You find the same one (or you think it's the same one) online for cheaper. Like a couple hundred bucks cheaper. You bring it to the shop and say, can you set this up for me? We charge you to assemble it. You have spent the same amount of money because you thought you'd cracked the code, but you didn't. Sometimes you find a different online which you think is basically just as good as the first one, and it's cheaper. It's not necessarily on sale, but it's cheaper. You take it to the shop, same thing happens, and you have a shittier bike. Or, say you buy a bike which is listed as being on sale, but you haven't done the research to know that that dealer is the only one out there carrying this brand or bike. Therefore, what they say is the sale price is actually the only price they've every sold at, meaning you're not getting a deal, you're just getting a cheaper bike. Take it to the shop, same thing happens. The code doesn't need cracking, and when you do find a true deal, take it wherever you find it, but do not be cheap when it comes to paying the shop for work you don't want to or can't do yourself. 6. most people do not want to or like working with their hands, and and even larger number of people don't like to work on bicycles in the least bit. Just because you do doesn't mean the entire profession is a scam or that most people are weak-minded sheeple. Maybe you're just cheap and wouldn't last two weeks in any half-decent pit in your town. These are just responses Off the top of my head which justify getting paid for my time...not that anyone should have to justify that. End of rant.
Love your ideas and optimism. I know you will find success on your terms -- and will provide valuable service to your customers and cycling community!
I believe it was Kent Bikes that purchased Kona and then sold back to the founders. I was surprised to hear Kent was the owner. They don't seem to be in the "wheelhouse" of Kona types of bikes. Probably why it didn't go well for them.
keep pushing up that hill!
Thanks!!
Good luck on the venture. You're very lucky to have the support of 3 owners, and be able to launch and go for a certain amount of time without needing to take from the business. I say lucky. I know you've probably saved for years, etc. etc., but still, it's a blessing.
Here's the thing with regards to small orders for clients. Most shops already order parts and stuff for clients next day on an almost daily basis. If they're on top of their stuff, they mark up the items slightly across each cart to retain their margin after shipping OR they get the client to directly share the shipping burden. One-person service focused shops may not have the capacity to manage all that every time it comes up unless its for repair tickets already on the schedule. They may not have the means to open a service writing/sales/ordering position in their business. Many shops don't have the means to, or the market to support building and launching an online store capable of drop shipping, and most aren't even interested in that. I hope that helps. If a customer doesn't want to wait a week for a part, all they have to do is ask how much would the shipping cost them, because that is really the crux of the issue. Shops bleed money all year on shipping because customers both don't believe they should have to pay for shipping and believe that the shop should always have everything imaginable in stock for not a cent over retail. At the end of the day, everyone knows that if you start an e-retail side of the business, you're expected to undercut retail pricing on the same items in your brick and mortar. Everyone knows, that if you go online, you're signing up for 30% refund and return rate, over the sub 5% return and refund shops have to deal with. It's not attractive in the traditional way. Maybe you can flesh out the details of how you're doing it differently to show how it could be attractive and actually cheaper than hiring ordering staff.
Good points on the online side. I am still working through all the details. It's a tough business at the moment because of all the bankruptcies with Colorado Cyclists and some other retailers in the USA and the UK. My online store is barely moving product because people can still get things cheaper.
Sourcing from Colombia is such a genius move. I lived there as a teenager in the mid 60's and used to go to different shops to have stuff built. Loved how each specialty had shops near each other. Bicycle culture is very strong and a source of national pride. Hard working and imaginative folks. Again, excellent choice.
Another thought. Given your focus, have you considered connecting folks with local manufacturers who can make specialty bags and stuff for the gravel/bike packing community. I have some work I want done but have no way to connect and evaluate makers?
Yes, custom bicycle bags are on my list of discovery areas. I’m working through a couple business concepts around Canyon and another small e-bike company at the moment.
Why risking losing a sale by _pointing_ them to your transactional web site instead of completing the order on the spot ?
If they are committed to buy, close the sale.
Send only the ones that don't know what they want or are hesitant.
But make sure to help them in making their decision and close the sale as often as possible.
Because if you don't do add any value, why would people pay for your cut ?
Why would I go to a shop (or phone) to be told to go online and buy on THEIR store ?
An online shop is not a panacea to cheaply replace competent employees.
In the long term, you will be shooting yourself in the foot.
True, I could close the sale right in the store. The website would ease that process but I just had someone in today that said they would rather buy at our website then search online for the part or use Amazon.
Interesting strategy. Like you, I think this being a difficult time for the indistry makes this a time of opportunity. My thoughs (and resources) are more aligned with selling a good selection of quality used bikes and maybe one new brand. The local market is not saturated here, would be interesting to hear about your market. I'm guessing most new start up bike shops will be > 50% revenue from labor. A trek dealer i visted on vacation in Arkansas said they were consistently selling ~50% ebikes per month so that'll be a factor in the future for sales ans servicein independent shops. I haven't pushed any chips in yet. Super motivating video. Good luck! Keep us posted.
Thanks Steven. Yes, I am getting a lot of questions about E-Bikes. I have one on the floor and another unique one coming. The other part of revenue is going to be service work and used bicycles. I am hitting the city yard sales on Sunday mornings to look for the diamonds in the rough. If a bike shop can capture people's attention for service work, you could run a whole business off that.
I had made some comments about used bikes in a previous video but obviously you've addressed that here!
I can't believe anyone would pay $200 to set up most bikes.
I think the value add if someone is shipping a bicycle to their house, is they have to be there to sign for the package. That's a day of missed work or two days of missed work if the shipping company is delayed 24 hours. Also, some people just don't want to build it themselves or do not care to buy the tools.
@@gograva
Here are some other good reasons why you should charge for bike assembly and setup:
1. The customer CAME to you for the work. They WANT to give you their money.
2. your staff needs to get paid, the materials they consume in service must be replaced, and all that goes on in the service department must be paid for BY SERVICE and by service alone! That's how it works. Retail pays for itself, and service pays for itself. Each have their own liabilities, staff, miniature economies. and on top of that each must contribute equally to, rent, bills, marketing etc., etc. And good god people think when they've spent $500 on bike tools for their garage they've somehow come close to what's in a shop. Dawg I've been doing this 15 years and I'm still catching up to other shops regarding equipment, and I'm still expanding on tools. I'm $20k deep in tools, equipment, and supplies, and set to happily spend another $10k over the next 5 years, because that's what it takes to go pro and keep improving in your craft. Point is, yes, service also pays for all that, whether it was cash investment by the owners, or it was through loans. You the client pay the shop enough per hour for the shop to then pay for all of what I just described. And that's totally legit. Go to a bigger pro shop, you might pay more for some things. Go to a hole in the wall, you may pay less. That's not always true though, and not always healthy. the inverse can be true on occasion. Sometimes the small shop has a better handle on charging what things are worth and the bigger shop shows desperation through discounting because they're overextended financially. $200 for an assembly is average. I serve a lower income client base so I charge $150, but I know it's worth more.
3. businesses pay out of pocket to private companies in most urban areas to collect recycling and waste at a higher rate than residents.
4. The brand manufacturing the bicycle will only honor your warranty if you have proof of professional assembly. So the assembly at the shop is actually the thing which gives you the green to finally use your bike, and the only thing allowing you to access the brand's warranty department should you have a frame failure or something like that. That's worth something, and you can't pretend like it isn't.
5. So you went to the bike shop and looked at the Specialized you wanted or this or that brand bike etc. and didn't like the price. You find the same one (or you think it's the same one) online for cheaper. Like a couple hundred bucks cheaper. You bring it to the shop and say, can you set this up for me? We charge you to assemble it. You have spent the same amount of money because you thought you'd cracked the code, but you didn't. Sometimes you find a different online which you think is basically just as good as the first one, and it's cheaper. It's not necessarily on sale, but it's cheaper. You take it to the shop, same thing happens, and you have a shittier bike. Or, say you buy a bike which is listed as being on sale, but you haven't done the research to know that that dealer is the only one out there carrying this brand or bike. Therefore, what they say is the sale price is actually the only price they've every sold at, meaning you're not getting a deal, you're just getting a cheaper bike. Take it to the shop, same thing happens. The code doesn't need cracking, and when you do find a true deal, take it wherever you find it, but do not be cheap when it comes to paying the shop for work you don't want to or can't do yourself.
6. most people do not want to or like working with their hands, and and even larger number of people don't like to work on bicycles in the least bit. Just because you do doesn't mean the entire profession is a scam or that most people are weak-minded sheeple. Maybe you're just cheap and wouldn't last two weeks in any half-decent pit in your town.
These are just responses Off the top of my head which justify getting paid for my time...not that anyone should have to justify that. End of rant.
Hey Aaron, have you thought about bringing on a part-time intern? Paid in training and help on their own bike, discount on parts.
Yes
In the US you cant pay like that. Training must be paid. And it is illegal for private for profits to take on unpaid interns.
Yes, I would absolutely have to pay something. I've been in software companies where we hired interns and went through that process.