Why are bike shops failing? Maybe because when I broke my derailleur, I went to the bike shop and they told my they might be able to get a new one in a month or so, then I went home and bought one myself online and had it in 2 days for half the price.
@@EVO1CYCLINGI think it is a bigger issue than that. Bike shops can’t buy the volume needed to get the best price. They can’t afford to stock all the parts needed to quickly supply customers. I believe it is a change in the industry that has happened in many others. Home Depot and Lowes obsoleted the local hardware store. The same has happened with the local bike shops. I don’t think it will go back.
As an independent I keep parts in stock that I can vouch for the quality, I won't sell junk. My distributors have been cool with letting me buy quantities as low as 1 unit, next day delivery. I charge retail for parts*, I put in the effort to make sure the customer gets the right part for their application and I'll happily replace if there's an issue. I offer local area delivery on parts, but most parts are fitted by me in the workshop during repairs/maintenence. *except SRAM, some of their retail pricing is a bit optimistic, let's say.
Im from the UK and there isn't many proper bike shops left where I live. The owner of my nearest bike shop is really struggling. They make hardly any profit from the few sales they do get, Its only from the servicing of bikes which keeps them afloat.
I feel like the most obvious reason is missed. I want to support my local bike shop, but why go to them when i can get exactly what i want online? For me the only reason to go is repairs but I'm taking over more and more of that myself.
From my experience, most shops will "special order" a component they do not have readily available and will usually sell them at no markup from MSRP. Also full service shops, even though rare, will carry quite a lot of things as well as a huge variety of small parts. Direct to consumer brands do not support bike shops very much whilst providing terrible customer service as it passes down the responsibility of warranty claims to the consumer. Customers don't want to hassle with phone calls and or emails when they can simply have someone else do it. Experienced and honest shop technicians/mechanics are the back bone of any bike shop. They are the ones that keep customers coming and are mainly the reason why consumers will dub their shop as their "main" bike shop.
100% I don’t think shops should stock everything but at the same time what happened to the days of going into your local shop and seeing something crazy cool or a unique colorway and those special things being held back for certain locations… I miss that
Sounds like what you need is a good manufacturers rep, not a distributor or you can do it the old fashion way, door to door. But realistically, you can find a rep by region and approach retailers directly.
It sounds like the only way to get into retail, but then the concern is getting dropped by a retailer when their distributor walks in once a month to audit and collect. I'm getting Tommy Boy vibes thinking about an EVO1 sales roadtrip, might need to make that happen!
I won’t mention the brand but here in Australia to purchase this brand it was definitely premium out of reach price for most people. Then after years going through the one and only importer / distributor they changed hands and the all stores then were allowed to drop their prices. $2200 cheaper. ( when I looked into the new distributor they import into the country many high end variety of goods including Porches ). So sometimes it’s the distributor who being the greedy middle man make it hard for the bike stores being able to move stock.
So local bike shops are essentially using an Amazon equivalent (the distributor) behind the scenes and then applying an _additional_ markup on the distributor price. And then they have the gall to complain about consumers using Amazon LOL
Pretty wild isn’t it, but if there’s little other ways to interact with brands what can they do? Most brands just wanted a way to get into every door as fast a possible without putting in the work and going door to door. So they give up margin to gain scale and the shops get screwed
@@EVO1CYCLING I actually run a small bike accessory brand and so discovered this the hard way. Visit a bicycle shop with a new product and they will suddenly be all arms and elbows. The reason, of course, is that the popular conception of a LBS is a little white lie. In reality, they are fronts for a distributor (with a service department).
Yes, I have been down this road. The one part you missed is the fact that you cannot work with 75% of the brands unless you go through some sort of distributor. I didn't realize the model was that restrictive. However, at least one of the distributors has been very critical in getting my bike shop up and running. So, it does suck when you come in to the industry at try to start your own thing but it also has advantages as a bike shop when you don't have a lot of capital. When I say a lot of capital, I mean millions of dollars.
Been following your story for a bit! I see the attraction and it makes sense to be able to get things going without risking as much or incurring huge debt, but it's almost gotten to a point of total control. And the amount of margin being ate up by these Consolidators is just unreal, no wonder everyone is struggling.
@@EVO1CYCLING It's not just the cycling industry, it's every industry. Try to sell your product at REI and it's exactly the same with their expectations on margin. You could sell your own product online, but the amount of marketing spend is a lot, and by a lot, I means tons of money.
@@dracorosso7129all shops cater to casual riders as well, but what he’s saying is that these young semi-pro cyclists and pro cyclists take biking to the heart and they’re always coming in and buying and upgrading parts and asking questions and stuff. They’re always servicing bikes, getting them checked out, tuned up and buying bikes while the regular folks like us aren’t investing money into bike shops like that. We’re not spending money like that on stuff like they are. We usually just get the bike we want/need, buy whatever tools/extra parts we need at the monent and just ride until there’s a problem(if there ever is one). We’ll hardly ever have to even go to the bike shop unless we absolutely have to unlike pros who are constantly in the shop rather they’re buying something, servicing a bike, getting a checkup, getting a tuneup or just asking questions.
I went to my shop with a 47 dollar gift card to buy bike pants. Their pants range from $67 to 150, and the sizes where limited. I came home and bought pants, shirt, and brake pads online. Price was $55. I think bike shops should focus on repairs, with no appointment, and 1 day return, keep people working all night. Then sell people stuff in addition. Otherwise what do I need them for?
Looking at yout website, here's what see.. I see $20 to $25 items.. That is usually 50 points to a dealer who buys from you. Now, for a distributor wanting a bigger margin is more about paying for the space in the warehouse. When the item is relatively low cost, they need a bit more margin. The upside it that they will get you exposed to a lot more dealers. Shops might be willing to try it just to get a freight discount.. Did you leave enough room in your price structure to make it profitable all the way around?
The big problem with the bike industry is that nobody selling bikes actually knows anything about cycling. The best thing the bike industry can do is to ride a bike.
This isn't exactly new. ~30 years ago in my hometown of Eugene, OR there were roughly 3 main bike shops with 1-3 locations each. Paul's, Collin's, and Hutch's. Hutch's was pretty much controlled by the distributor model, Seattle Bike Supply, who sponsored my BMX team. Paul's and Collin's were pretty independent. I was back there a couple months ago for a visit, and the ONLY one of those three that still exists is Hutch's... Late stage capitalism, my friend...
It's insane to me how embedded these distributors are, and shops who want to bring in anyone outside of that network are then punished. WILD! I'm all for a great business idea but when it comes at the cost of rallying everyone against DTC companies who decide to pave their own way and spreading misinformation about how everyone is out to get the bike shops, that is total BS. Retailers choose who they partner with, and if that partnership becomes the limiting factor for growth they need to exit that relationship, not double down. I'm willing to bet there is a play coming soon where one of these distributors goes DTC with the brands they carry.
@@EVO1CYCLING Uhh... Performance Bike does not immediately come to mind? They were DTC, catalog only back 20, 30 years ago, then they started opening stores, cut the LBS middle man out of the equation.
We might be seeing the start of a 🚲 depreciation era. A three speed internal gear hub belt drive 🚲 was $470 at Costco 54 days ago and is $300 now. That's a loss of more than 1/3rd on a 🚲 I would have paid $1K+ for in 2020. This might be the canary dying.
@@EVO1CYCLING, thanks for the reply! I'm in Idaho Falls, Idaho. In 2024 we have had two local bike shops close, and another two are on life support, and two might survive 2024. Retail companies like Costco, Walmart, Sam's Club, Dick's Sporting Goods, and others are dumping their low to medium 🚲 on a super saturated 🚲 customer market. I have seen carbon fiber frame 🚲 in thrift stores for $100. For the cycling industry 2025 to 2030 will be rough unless we see a ⛽ increase to $10+ per gallon in 2025.
... 😂🤣 I knew that I commented it awhile ago on Reddit and I was crucified, I guess you didn't believe me when I said 50% just to get your shit on the shelf without all the hidden stuff they'll put in the contract, then you'll be eating crumbs. The only way to kick their ass or bypass them is to create a huge demand with marketing or game changing products. If it was that easy...
It’s amazing to me that people just overlook it and don’t connect the dots, but then when you go to market and try and bypass it people lose their minds because you are undermining the bike shops
Truly bummed for you man, one of the worst industries to break into. As someone has pointed out, also from my decade plus in an LBS perspective, this has been the way of the industry for many, many years. Most of the big distributors figured this out in the 90's/00's. That being said, if your product is well made and a genuine innovation, you should hopefully make it. LBS is one of the hardest ways to make money I have ever seen. Absolutely distributors have a choke hold on you and they make the vast amount of money as the middle man. Best of luck dude!
The "Changes" haven't changed. For the most part everything has worked exactly the same in the industry for 20+ years just with shrinking margins (for all) due to increasing fixed costs and brands racing to the bottom undercutting each other for sales.
I didn’t think so, it was a valid comment. I’m by no means an expert and learning as I go in this space. My goal with the channel is learn this kind of stuff as I go through it and hopefully by sharing my experience/journey it will help out the next person who wants to go into the bike space. Don’t be down on yourself for asking a question or checking someone, I’m the one posting this stuff online for the world and I’ve gotten comments 100X worse man. All good and I hope you stick around the channel and follow along!
I lived through this in a different industry. A company local to my state opened a location not far away, they were big enough to be their own distributor where we were limited to ordering from a middle man. I would have customers call saying they saw a sale ad for the other shop and wanted to spend money with us instead. Problem is, their sale price on a 500 dollar item was 75 bucks BELOW our cost through a distributor. These guys were making a killing by being their own distributor but they are a multi million dollar company vs our shop that was 4 employees strong. No need to go through a distributor, offer your product to the shops at a fair price and without requiring insane minimum orders to be a dealer. Some of these companies require so much to become a dealer, including branding and display requirements. Start a real trend and bring the value back to the market!
Why are bike shops failing? Maybe because when I broke my derailleur, I went to the bike shop and they told my they might be able to get a new one in a month or so, then I went home and bought one myself online and had it in 2 days for half the price.
True! But that’s on their supplier versus them working directly with the brands
@@EVO1CYCLINGI think it is a bigger issue than that. Bike shops can’t buy the volume needed to get the best price. They can’t afford to stock all the parts needed to quickly supply customers. I believe it is a change in the industry that has happened in many others. Home Depot and Lowes obsoleted the local hardware store. The same has happened with the local bike shops. I don’t think it will go back.
As an independent I keep parts in stock that I can vouch for the quality, I won't sell junk. My distributors have been cool with letting me buy quantities as low as 1 unit, next day delivery. I charge retail for parts*, I put in the effort to make sure the customer gets the right part for their application and I'll happily replace if there's an issue. I offer local area delivery on parts, but most parts are fitted by me in the workshop during repairs/maintenence.
*except SRAM, some of their retail pricing is a bit optimistic, let's say.
Optimistic is right! Thanks for being here!
Im from the UK and there isn't many proper bike shops left where I live. The owner of my nearest bike shop is really struggling. They make hardly any profit from the few sales they do get, Its only from the servicing of bikes which keeps them afloat.
It’s sad to see them get taken advantage of like this
I feel like the most obvious reason is missed. I want to support my local bike shop, but why go to them when i can get exactly what i want online? For me the only reason to go is repairs but I'm taking over more and more of that myself.
From my experience, most shops will "special order" a component they do not have readily available and will usually sell them at no markup from MSRP. Also full service shops, even though rare, will carry quite a lot of things as well as a huge variety of small parts. Direct to consumer brands do not support bike shops very much whilst providing terrible customer service as it passes down the responsibility of warranty claims to the consumer. Customers don't want to hassle with phone calls and or emails when they can simply have someone else do it. Experienced and honest shop technicians/mechanics are the back bone of any bike shop. They are the ones that keep customers coming and are mainly the reason why consumers will dub their shop as their "main" bike shop.
100% I don’t think shops should stock everything but at the same time what happened to the days of going into your local shop and seeing something crazy cool or a unique colorway and those special things being held back for certain locations… I miss that
Sounds like what you need is a good manufacturers rep, not a distributor or you can do it the old fashion way, door to door. But realistically, you can find a rep by region and approach retailers directly.
It sounds like the only way to get into retail, but then the concern is getting dropped by a retailer when their distributor walks in once a month to audit and collect. I'm getting Tommy Boy vibes thinking about an EVO1 sales roadtrip, might need to make that happen!
I won’t mention the brand but here in Australia to purchase this brand it was definitely premium out of reach price for most people. Then after years going through the one and only importer / distributor they changed hands and the all stores then were allowed to drop their prices. $2200 cheaper. ( when I looked into the new distributor they import into the country many high end variety of goods including Porches ).
So sometimes it’s the distributor who being the greedy middle man make it hard for the bike stores being able to move stock.
I know exactly who you are talking about!
Local shops will slowly disappear. Distribution will all go direct to consumers 3to5yrs tops.
So local bike shops are essentially using an Amazon equivalent (the distributor) behind the scenes and then applying an _additional_ markup on the distributor price. And then they have the gall to complain about consumers using Amazon LOL
Pretty wild isn’t it, but if there’s little other ways to interact with brands what can they do? Most brands just wanted a way to get into every door as fast a possible without putting in the work and going door to door. So they give up margin to gain scale and the shops get screwed
@@EVO1CYCLING I actually run a small bike accessory brand and so discovered this the hard way. Visit a bicycle shop with a new product and they will suddenly be all arms and elbows. The reason, of course, is that the popular conception of a LBS is a little white lie. In reality, they are fronts for a distributor (with a service department).
Yes, I have been down this road. The one part you missed is the fact that you cannot work with 75% of the brands unless you go through some sort of distributor. I didn't realize the model was that restrictive. However, at least one of the distributors has been very critical in getting my bike shop up and running. So, it does suck when you come in to the industry at try to start your own thing but it also has advantages as a bike shop when you don't have a lot of capital. When I say a lot of capital, I mean millions of dollars.
Been following your story for a bit! I see the attraction and it makes sense to be able to get things going without risking as much or incurring huge debt, but it's almost gotten to a point of total control. And the amount of margin being ate up by these Consolidators is just unreal, no wonder everyone is struggling.
@@EVO1CYCLING It's not just the cycling industry, it's every industry. Try to sell your product at REI and it's exactly the same with their expectations on margin. You could sell your own product online, but the amount of marketing spend is a lot, and by a lot, I means tons of money.
Bike shops are for young semi-pro cyclist/pro cyclist and NOT for amateur athletes/senior citizens.
Truth
The shops near me are are cusual rider.
I really like this comment, it’s so true. I get exactly what you mean
@@dracorosso7129all shops cater to casual riders as well, but what he’s saying is that these young semi-pro cyclists and pro cyclists take biking to the heart and they’re always coming in and buying and upgrading parts and asking questions and stuff. They’re always servicing bikes, getting them checked out, tuned up and buying bikes while the regular folks like us aren’t investing money into bike shops like that. We’re not spending money like that on stuff like they are. We usually just get the bike we want/need, buy whatever tools/extra parts we need at the monent and just ride until there’s a problem(if there ever is one). We’ll hardly ever have to even go to the bike shop unless we absolutely have to unlike pros who are constantly in the shop rather they’re buying something, servicing a bike, getting a checkup, getting a tuneup or just asking questions.
Right on the people need people like you
Refreshingly honest. Thank you.
I went to my shop with a 47 dollar gift card to buy bike pants. Their pants range from $67 to 150, and the sizes where limited. I came home and bought pants, shirt, and brake pads online. Price was $55. I think bike shops should focus on repairs, with no appointment, and 1 day return, keep people working all night. Then sell people stuff in addition. Otherwise what do I need them for?
Looking at yout website, here's what see.. I see $20 to $25 items.. That is usually 50 points to a dealer who buys from you. Now, for a distributor wanting a bigger margin is more about paying for the space in the warehouse. When the item is relatively low cost, they need a bit more margin. The upside it that they will get you exposed to a lot more dealers. Shops might be willing to try it just to get a freight discount.. Did you leave enough room in your price structure to make it profitable all the way around?
Making money in arbitrage is an issue in all industries. The customer always suffers.
The big problem with the bike industry is that nobody selling bikes actually knows anything about cycling. The best thing the bike industry can do is to ride a bike.
This isn't exactly new. ~30 years ago in my hometown of Eugene, OR there were roughly 3 main bike shops with 1-3 locations each. Paul's, Collin's, and Hutch's.
Hutch's was pretty much controlled by the distributor model, Seattle Bike Supply, who sponsored my BMX team.
Paul's and Collin's were pretty independent.
I was back there a couple months ago for a visit, and the ONLY one of those three that still exists is Hutch's...
Late stage capitalism, my friend...
It's insane to me how embedded these distributors are, and shops who want to bring in anyone outside of that network are then punished. WILD! I'm all for a great business idea but when it comes at the cost of rallying everyone against DTC companies who decide to pave their own way and spreading misinformation about how everyone is out to get the bike shops, that is total BS. Retailers choose who they partner with, and if that partnership becomes the limiting factor for growth they need to exit that relationship, not double down. I'm willing to bet there is a play coming soon where one of these distributors goes DTC with the brands they carry.
@@EVO1CYCLING Uhh... Performance Bike does not immediately come to mind?
They were DTC, catalog only back 20, 30 years ago, then they started opening stores, cut the LBS middle man out of the equation.
How much for those Atlas bars in the background?
Accepting trade offers valued at no less than 20 tendies! 😂
We might be seeing the start of a 🚲 depreciation era. A three speed internal gear hub belt drive 🚲 was $470 at Costco 54 days ago and is $300 now. That's a loss of more than 1/3rd on a 🚲 I would have paid $1K+ for in 2020. This might be the canary dying.
It’s honestly needed, it sucks but it’s the reality
@@EVO1CYCLING, thanks for the reply! I'm in Idaho Falls, Idaho. In 2024 we have had two local bike shops close, and another two are on life support, and two might survive 2024. Retail companies like Costco, Walmart, Sam's Club, Dick's Sporting Goods, and others are dumping their low to medium 🚲 on a super saturated 🚲 customer market. I have seen carbon fiber frame 🚲 in thrift stores for $100. For the cycling industry 2025 to 2030 will be rough unless we see a ⛽ increase to $10+ per gallon in 2025.
... 😂🤣
I knew that I commented it awhile ago on Reddit and I was crucified, I guess you didn't believe me when I said 50% just to get your shit on the shelf without all the hidden stuff they'll put in the contract, then you'll be eating crumbs.
The only way to kick their ass or bypass them is to create a huge demand with marketing or game changing products. If it was that easy...
It’s amazing to me that people just overlook it and don’t connect the dots, but then when you go to market and try and bypass it people lose their minds because you are undermining the bike shops
Truly bummed for you man, one of the worst industries to break into.
As someone has pointed out, also from my decade plus in an LBS perspective, this has been the way of the industry for many, many years.
Most of the big distributors figured this out in the 90's/00's. That being said, if your product is well made and a genuine innovation, you should hopefully make it.
LBS is one of the hardest ways to make money I have ever seen. Absolutely distributors have a choke hold on you and they make the vast amount of money as the middle man. Best of luck dude!
Thank you! It’s just tough because as a product company do we sell DTC and piss off shops or basically bring a distributor on for half the company 😅
QBP, JBI Junk and Bargains...
Right!
Yeah the Amazon warehouse f that. Go online and find a real bike shop online is better screw them and Amazon go on your own now you have too..
I love and hate Amazon at the same time, it’s hard for any line of retail or CPG company to compete
Seems like someone with little experience (time) in the industry and extremely little experience in shops...
Me or the Distributors I’m talking about? I’m new to the industry by some standards I guess but not the CPG space
The "Changes" haven't changed. For the most part everything has worked exactly the same in the industry for 20+ years just with shrinking margins (for all) due to increasing fixed costs and brands racing to the bottom undercutting each other for sales.
@@EVO1CYCLING also - very candid reply thank you as I am quite a dick mostly and rarely deserve candid answers
I didn’t think so, it was a valid comment. I’m by no means an expert and learning as I go in this space. My goal with the channel is learn this kind of stuff as I go through it and hopefully by sharing my experience/journey it will help out the next person who wants to go into the bike space. Don’t be down on yourself for asking a question or checking someone, I’m the one posting this stuff online for the world and I’ve gotten comments 100X worse man. All good and I hope you stick around the channel and follow along!
@@EVO1CYCLING subscribed :)
how much do owners and executives of bike brands make? I would love to see that data
Right!
I lived through this in a different industry. A company local to my state opened a location not far away, they were big enough to be their own distributor where we were limited to ordering from a middle man. I would have customers call saying they saw a sale ad for the other shop and wanted to spend money with us instead. Problem is, their sale price on a 500 dollar item was 75 bucks BELOW our cost through a distributor. These guys were making a killing by being their own distributor but they are a multi million dollar company vs our shop that was 4 employees strong.
No need to go through a distributor, offer your product to the shops at a fair price and without requiring insane minimum orders to be a dealer. Some of these companies require so much to become a dealer, including branding and display requirements. Start a real trend and bring the value back to the market!
Thank you, Zelensky!
You are welcome! But please send money for bikes, the survival of our channel depends on it!
Vladimir is looking for you 🫵🏻
Shhhh I’m hiding in plain sight!