Thank you for this. I think more people need to understand this. Bike shop owners and their staff are local businesses that are just trying to send their kids to a summer camp or dance lessons and typically not trying to own a second million dollar home. Stop asking for discounts and get to know your LBS. It’s a passion of love type business, let’s appreciate their dedication to the craft. They need our support and they will keep us on our well tuned bikes happy and riding!
Your accounting of starting and maintaining a bike shop is very similar to my business I started 10 years ago. I have a scuba shop in the Florida Keys, every time you said bike I heard scuba. Small business is very rewarding and very challenging all in the same day. Brick & mortar way of doing business is threaten with online shopping, however I do repairs and service scuba gear which is my ace. They use to say the first 5 years are the make or break period on a small business, well I believe it's now the first 10 years and soon it'll be the first 15 years. Cycling is one of my favorite ways of exercise and escaping the grind . Good luck to you.
I can build and fully maintain a MTB, gravel or road bike. I ALWAYS go to my LBS for quarterly maintenance, I will buy parts and tools et’al when they have them on sale and I will ALWAYS refer them to other people, either new residents or new to the sport etc. YES, it may eventually cost me a bit more more but I am contributing to a viable, healthy, local economy that gives me back the most precious asset of all that no currency can pay: quality life, smiles, banter, socialising, networking and meeting new people! Support your local bike shops folks; support Brian man! Ride on! 🤟
Why pay for milk when you own a cow? Listening to shop owners bleating about people putting them out of business by buying parts for less than wholesale from online sellers is tiresome, and for them, dishonest. Do a better job if you want to compete against talented backyarders.
Great overview. I started working at a bike shop in 1978 and own several since 2004. For the most part we all started in this industry because we love bikes and money was secondary. Since we now own a Bike business, we have to treat it like a business and knowing your numbers is crucial. Your cost of doing business breakdown is very realistic and is a great starting point for anyone thinking of going down this path. Obviously location will alter some of the fix costs. I'm in a 80 to 120 $ per sqft area, so 1/2 a mil is our break even point. Fortunately our industry is cyclical and sales follow a weather correlated curved. In our case it is dual peak bell curve. The bulk of the sales happen between late march and early September, So my rule of thumb is that for every employee we have, the shop has to ring up $500 daily. Therefore from April to September that number should be closer to $1500 to cover for the off season. glad to share more insights, just ask.
Hello Brian . Wow! Incredibly transparent , I own a small bicycle repair shop out of my garage and it is very real everything you said about the cost of setting up a bicycle shop. One of the biggest head aches is doing the taxes at the end of the year. I am retired and thought it would be good to start up a bicycle shop so I enrolled in the Central Alberta Bike School and the instructor Brian was very clear and helpful on the work involved to run a bicycle shop. Three years into the project and I have never worked harder but it does have it's rewards which are wonderful. Wish you well in your endeavors. Did find the Shimano S-TEC courses helpful. My favorite tool for truing wheels is the Islandix wheel truing machine from Victoria BC which saves tons of time truing wheels. Fun Fact 10 times more bike shops in Quebec than the rest of Canada 10 times more bicyclists than the rest of Canada. Saludos John
And this is why there has to be margin in retail. This also doesn’t cover carrying costs, stale inventory, theft/shrinkage etc…. Not an easy gig but an awesome one if you can make it work!
I had someone tell me the numbers I gave we’re optimistic 😅. Stale inventory SUCKS! But we’ve been trying to keep our SKUs super tight now that there’s an abundance of stock. Theft luckily for us isn’t a big problem but I know in larger shops it can be a big issue
I relate to this video so much, been running my small bike shop in Brazil since 2016 and the struggle is real! I've never had a business before and now i've Been trough all sorts of challenges, lost a shop due to an ebike fire, changed cities and started all over again.... Learning every day a little bit and trying to make my business better! Great video, watched every bit of it and saved in my playlist! Thanks
Got my first bike shop job in 1972 and I've seen many many shops close up since then. Paying rent is the surest way to go under. Just like home ownership vs renting. You don't build up any equity with rent that will increase. Watched a few other shops fail due to over spending on advertising such as race team sponsorship. The entire history of bicycles has been booms and fads. Each new design spurs another boom that fades out. 2020 was a record sales year, like the early 1970s when every bike you could get sold fast. The pandemic bike boom is over. The 2019 bicycle tariff increase from 10% to 25% is the main reason prices are up while demand has crashed. Now would be a poor time to open a new shop in many areas. One owner I knew built oversized new buildings and rented out the extra space that paid for the buildings so the bicycle business didn't. Other retail and upstairs apartments covered the bank loan payments. Banks are more likely to loan money for something they can repossess and resell like a building. What are they going to do with specialty fixtures excess inventory. Multiple locations. Yoiks. Two stores means double expenses just so customers won't have to drive as far. Save that for when you are making a lot of money. You will spend more time calling the other store(s) to see if item X is available. Tell the customer "we will have it here in a couple days" and they won't return. Enlarging a single location will bump up some expenses but not all of them. My pet peeve "We can order it..." Yeah in this age of the www so can the customer and it will be delivered to their door just as soon and probably for le$$.
I'm 13 so I don't really have a choice but to use my dad's garage. It's not fully started up tho. But I have ads and a business number. I'll probably be fixing other people's bikes and fixing up old bikes to sell for a profit. I already have 2 on sale. I'll probably get some sales once school starts up.
Invest in tools every chance you get. They never really loose value and you'll be able to earn a living anywhere in the world with your own bike tools and the skills to use them. I hope you do well!
I'm 64, retired and running a similar shop in my garage. I advertise on Facebook Marketplace, Craigslist and Ebay. This year I flipped 29 bikes and repaired about 20 for other customers. My typical customers are single parents who want a reliable $250 bike for their kids and people over 50 who know they will get the same use from one of my $600 bikes that they would get from a new $3,000 bike. It takes a couple years for word of mouth to become known as the guy who has good use bikes for sale or be known as the guy who can make an old bike ride like when it was new. Keep at it, pay attention to details and you can build a nice little business. Two of my favorite tools for fixing a bike to sell are an ultrasonic cleaner and a vibratory tumbler. They can make derailleurs, brake calipers and other small parts shine like new.
@zone4garlicfarm I happy you succeeded I didn't. Luckily I tried again. I now have a business in landscaping. We made around 700 dollars in revenue this year. I know that sounds bad but me and my friend literally started with nothing. We got lucky when an old teacher gave us some mowers for free. Over time we saved up and bought more equipment
@@zone4garlicfarm I also got myself a ATV and a trailer from the money. The ATV drives and the trailer needs to be built. My plan is to get both of them ready for next year when I can drive so our parents don't have to keep dropping us off at the jobs
Ouch! Thanks for breaking it down. That's why I have a garage shop. Yes, it has its own challenges but is way more profitable. I used to work at Retail Tool Kit, and poor inventory management will kill you!
thnx for the insight of how a bikeshop works :) i just resign from my 8-5 work at a bikeshop and planning to start my own shop very helpful video thnx alot
I'd imagine Retail bike shops have a massive uphill against online dealers with bike parts but make up with bike fits, servicing and repairs etc. but I've just started cycling this year, I went to my first credible bike shop and what a difference it makes the experience of me not fully understanding everything but the guy did. Very clued up and left a good impression. And I'll surely be using again and supporting my lthe local and maybe smaller but professional businesses.
I think for a lot of customers, the experience you get at a bike shop kinda determines if you try to get a deal, and if you come back or not. I know of the 2 bike shops in my town, one won me over with their helpfulness and willingness to just help out, while the other just kinda let me wander around without trying to help (I'm one of those $3000 bike guys, but I ride 3 or more times a week haha). Service is huge for you guys, and I feel like most shops understand that.
There’s a shop five minutes from my house and I went into it the other day. Guy at the counter ignored me. Store was empty. After a few minutes, I simply turned around and left and went to another store. That’s 10 minutes further. That other store always has people greet me. A couple days after this my wife bought a new e-bike. I didn’t even bother checking the first store even though I know they carry Trek as well. The older I get the more critical I consider customer service. I will pay for it. I even got a tool from the second store for 45 bucks that I saw moments earlier was 35 online. I’m normally a huge cheapass, bur a friendly smile and attention goes a long way!
Thanks for the video and honesty in the breakdown of the figures. I started a small (workshop based) shop 18months ago on my own dime, and have been very patient gauging the business before expanding into a showroom next spring. Great to see information from some 1st hand experience
Great stuff. I've owned several not bike shop retail stores over the last decade. Got tired of people and closed them all. Obviously these numbers vary depending on one's own market, but pretty much spot on.
Still a great video! When I describe how my shop is just not profitable (I eek out a sub $40k living), while also required taking on a certain amount of debt and moving it around constantly, they are flabbergasted. I send them here, you explain better than me.
Cameraman makes me feel like I'm actually there which is nice, natural movement. Only thing that's missing is looking at random things when I turn my head to listen better. Oh and thank you for all this S-tier information.
Thanks for the brutal honesty. I hope you can keep on serving the Kelowna community. One thing to look forward to is that we've hit peak car, and e-bikes are likely to become the sustainable transportation choice in the face of Climate Crisis and the economic tumult that comes with it. I know the bike industry is feeling much pain this year. I wish people could see tge forest through the trees and start investing in cargo and other e-bikes to help get to where I feel we'll eventually all be. That would also remove the seasonality that I'm sure is disruptive to your shop and your employees.
I worked in two shops as a student, both had skis & snowboards for the winter season. I loved the student gig but I knew for sure it was a cut throat business and not for me 😂
Subbed, nice work. This is why I work out of my garage and basically pay retail for parts. So basically I end up earning only labor, no margin whatsoever. This end of the bike business is kind of like going up to dracula and just bearing your neck. When people talk to me about working in a shop I turn them down. When endeavoring entrepreneurs want to open a shop, I tell them to do something else. Meanwhile, the behemoth vendors, suppliers, and manufacturers are better insulated, to the point that they've put themselves into their current predicament. Even working out of the garage, it's tough to make it work. After accounting for all the stuff listed in this video, lease aside, it's still ridiculous to work on bikes to make a living. This is one reason why factory direct has hurt bike shops. That additional margin made it possible. Now, I just can't see it making sense.
I had one from 2011-2024. I only took in bikes that I knew I could fix easily for max profit. If someone brought in a complicated fix I told them NO. If someone brought in a Schwinn Varsity or other restoration the cost was $125/hr. Swing at pitches you can hit. No bogged in complicated BS. New bike sales NEVER pay for the space needed to heat, display, build, ship, insure. Fixing 10 yr old Giant mtbs is easy big profit.
opening my own bike shop after having a webshop for 2 years and those numbers seem very high. i believe my running costs are around 10k per year because im running it off my own property, because of the locaiton i will loose a little bit of revenue but not paying a lease makes up for it :)
I thought I wanted to own a bike shop until I worked in a few. Forget it. High stress, razor thin margins and often the customers are insufferable to deal with.
That's pretty sobering. My two LBS are in a smaller city in a low cost of living state, which probably helps on rent at least. I have certainly seen the price of parts and service go up significantly, which is to be expected over the 33 years I have been buying stuff. Still, there was a significant jump in all facets after the pandemic. I don't blame the shops at all. Although I am able to absorb these increases many customers are flabbergasted by the cost of a new "entry" bike or the price of a repair. Often, they bought used through Craigslist or something equivalent to a department store bike where the repairs can cost as much as the bike. I appreciate your honesty. I love bikes and have since I first rode a two-wheeler down the street in 1961. My baby boomer colleagues all rode bikes everywhere and many of us graduated into European road bikes in the early to mid-70s. Before I retired from teaching, I discovered that many of my college students had never ridden a bike or experienced the pleasure. I find that very sad.
Really love your videos. Incredibly informative. Question - did you establish relationships with big brands before opening the shop, or after? I'm wondering what comes first, the chicken or the egg. I imagine you don't want to sign a lease on the off chance that Sram or Shimano will work with you, but I also imagine Sram or Shimano will not work with you unless you have a brick and mortar store, like you said. So how do you build those relationships?
You could potentially word your lease to include subject to suppliers in some capacity. A lawyer is likely best to help you word that. SRAM to my understanding has dealer requirements that are very black and white. For us opening Shimano was very straightforward. But our lease came first, along with a good brand story on our vision and mission and why we would be the right people to execute.
I’m starting my own shop soon. Good content. I’m hoping U.S. insurance is less expensive. I think with this I’ll be able to stick to my budget. I also don’t know what kind of tax write offs are available in Canada.
Would love to see a video about determining if your area warrants opening a new shop. The area I live in has one large shop with 2 stores, another small Tr*k takeover shop, a co-op/consignment shop, and another brand new mtb focused shop. I don't know much about your situation, but I have to imagine the market in BC is pretty saturated given the riding quality in the area. Did you have any trouble breaking into the market when starting?
I started a small repair shop and one of the first things I did was screenshot a map of the city. Then I put 1 mile and 2 mile radius circles around every shop. Gives you a good idea of saturation. A lot of customers want something close by.
I was looking to see or hear how many square feet you started I was looking at 800 sq.ft. To start. An yes a million sounds crazy but reality 30% of a million to get real mechanics your own paycheck.
You could scale this down for that size of shop for sure! We started with 1200 sq feet and made that work for a year. Had we stayed that size I would have needed to either found someone really good to be my number 2, worked a ton, or some combination of the two.
It means you can order some or all of the brands they stock. Otherwise the door stays shut. If you’re in the USA I’d expect things to be easier to get off the ground
I make a decent living and I love to just splurge at my local bike shop and I don't return anything. It's hard enough to find an honest good small local business in the US these days, why would you not support them?
Cause their regional distribution manager isn't going to sell a few thousand dollars worth of inventory to some kid with a van. These are HUGE corporations who demand that their products are sold in top tier locations/establishments. Their image is more important to them than your passion.
I'm looking at buying a new mountain bike. Something in the $6k-7k range. I've probably spent $3.5 in part, service, repairs, and accessories at one local shop over the last 3 to 4 years. This shop has a manufacturer's sale on some bikes, and the bike that I like is a bit above my price once you add pedals, taxes, and a few other things. They seem to have no interest in giving a little to make the sale and keep a good customer. I'm not saying I want a massive discount, but some recognition of the amount I've spent would be nice. Throw the pedals or give a small shop credit, perhaps. Am I being unreasonable?
If I can be super candid here. I spend roughly 14,000 bucks a year at my local grocery store and they never offer me any personalized discounts above what they typically put on sale. Comparing industries makes for a bad time, but you get my drift. The business isn’t a high margin business, it’s super easy to let your margin erode and really really hard to maintain. Throw on that manufacturers typically want their bikes sold at MSRP or in this case the discounted MSRP and as a shop it can be a slippery slope real quick. It’s hard to comment on the deal without knowing all the details but it could also be a matter of they have limited supply and if they discount it for you even further then they can’t sell it to someone else, especially if it’s already a good value. I hope that helps explain it from the other side of the counter, I’d also as a consumer look at what they do locally. Do they donate to trail organizations? Do they run group rides? Host events? Can you justify it to yourself based on what they do locally?
@Smith Creek Cycle Thanks for candid feedback. I really do appreciate it. I'm not suggesting that they discount the bike any further than what the manufacturer has authorized. I'm saying throw in something to acknowledge that I have been and would continue to be a good customer. I'm not loyal to any particular grocery chain. Some stores offer reward points to get stuff for free (I do realize that's built into the pricing structure). I guess my point is if the shop is going to treat me the same as the person who walks in, never having purchased anything there before, I can treat them like any other shop. I do like the service, and I spend the vast majority of my mtb budget there.
@@briannyob7799 I will say buying a bike will likely help strengthen the relationship. Maybe offer to pay cash/Debit instead of credit if they throw in the pedals. Visa and Mastercard fees suck!
If he had a UA-cam channel, he could put out a video every month, randomly, that subscribers could watch, to get a service or part from his store at 20% off.
You gotta love it when a Shimano 105 Group from QBP is $200 more wholesale than one shipped free from England. I kicked Shimano out of my shop in 2013 and only used Sram, Microshift, etc. Worst company ever.
I’ve been seeing less and less of this, but it does still happen on occasion. It can be frustrating, but I normally bring it back to a matter of what happens if the parts need warranty? Or the parts are counterfeit?
250k to start a shop?? Just invest that in real-estate. Buy the building and just open up the doors for business. Hopefully the building has an apartment on the second floor for income. This way your double invested. You have real-estate and you have a business. Forget employees, just hire a part-time mechanic if you can't handle the workload. Another option is to buy an established bike shop. You can never know what will come . Any business you have to be able to take risk, otherwise you'll never get started.
@smithcreekcycle to each their own. With the prices where they are, reviews as rabid as they are for wr1, and the fact that one company manufactures nationally and supports north america and the other overseas, it's an easy decision to me. I'm biased, though.
@@BuffiestFluff I’ve got my reasons for using NOBL. Generally speaking I hate warranty issues, and I see almost zero issues with NOBL so I don’t have a need to change it up. Relationships count to me too, and NOBL really has been a great partner for us. Nothing against WR I’ve been to their factory and met a few of their staff, all great people doing really cool stuff.
Thank you for this. I think more people need to understand this. Bike shop owners and their staff are local businesses that are just trying to send their kids to a summer camp or dance lessons and typically not trying to own a second million dollar home. Stop asking for discounts and get to know your LBS. It’s a passion of love type business, let’s appreciate their dedication to the craft. They need our support and they will keep us on our well tuned bikes happy and riding!
Yeppers you hit the nail on the head! That is why I run my shop on my own. Support your local shop and don't ask for freebies or discounts!
Your accounting of starting and maintaining a bike shop is very similar to my business I started 10 years ago. I have a scuba shop in the Florida Keys, every time you said bike I heard scuba.
Small business is very rewarding and very challenging all in the same day. Brick & mortar way of doing business is threaten with online shopping, however I do repairs and service scuba gear which is my ace. They use to say the first 5 years are the make or break period on a small business, well I believe it's now the first 10 years and soon it'll be the first 15 years. Cycling is one of my favorite ways of exercise and escaping the grind . Good luck to you.
I can build and fully maintain a MTB, gravel or road bike. I ALWAYS go to my LBS for quarterly maintenance, I will buy parts and tools et’al when they have them on sale and I will ALWAYS refer them to other people, either new residents or new to the sport etc. YES, it may eventually cost me a bit more more but I am contributing to a viable, healthy, local economy that gives me back the most precious asset of all that no currency can pay: quality life, smiles, banter, socialising, networking and meeting new people! Support your local bike shops folks; support Brian man! Ride on! 🤟
Why pay for milk when you own a cow? Listening to shop owners bleating about people putting them out of business by buying parts for less than wholesale from online sellers is tiresome, and for them, dishonest. Do a better job if you want to compete against talented backyarders.
Great overview. I started working at a bike shop in 1978 and own several since 2004. For the most part we all started in this industry because we love bikes and money was secondary. Since we now own a Bike business, we have to treat it like a business and knowing your numbers is crucial. Your cost of doing business breakdown is very realistic and is a great starting point for anyone thinking of going down this path. Obviously location will alter some of the fix costs. I'm in a 80 to 120 $ per sqft area, so 1/2 a mil is our break even point. Fortunately our industry is cyclical and sales follow a weather correlated curved. In our case it is dual peak bell curve. The bulk of the sales happen between late march and early September, So my rule of thumb is that for every employee we have, the shop has to ring up $500 daily. Therefore from April to September that number should be closer to $1500 to cover for the off season. glad to share more insights, just ask.
Hello Brian . Wow! Incredibly transparent , I own a small bicycle repair shop out of my garage and it is very real everything you said about the cost of setting up a bicycle shop. One of the biggest head aches is doing the taxes at the end of the year. I am retired and thought it would be good to start up a bicycle shop so I enrolled in the Central Alberta Bike School and the instructor Brian was very clear and helpful on the work involved to run a bicycle shop. Three years into the project and I have never worked harder but it does have it's rewards which are wonderful. Wish you well in your endeavors. Did find the Shimano S-TEC courses helpful. My favorite tool for truing wheels is the Islandix wheel truing machine from Victoria BC which saves tons of time truing wheels.
Fun Fact 10 times more bike shops in Quebec than the rest of Canada 10 times more bicyclists than the rest of Canada. Saludos John
Some of the stech is great, some of it is marketing disguised as training. Generally speaking I’m a fan of
And this is why there has to be margin in retail. This also doesn’t cover carrying costs, stale inventory, theft/shrinkage etc…. Not an easy gig but an awesome one if you can make it work!
I had someone tell me the numbers I gave we’re optimistic 😅. Stale inventory SUCKS! But we’ve been trying to keep our SKUs super tight now that there’s an abundance of stock. Theft luckily for us isn’t a big problem but I know in larger shops it can be a big issue
Absolute gold thanks enormously I have studying the bike industry for 3 years and this extremely informative.
I relate to this video so much, been running my small bike shop in Brazil since 2016 and the struggle is real! I've never had a business before and now i've Been trough all sorts of challenges, lost a shop due to an ebike fire, changed cities and started all over again....
Learning every day a little bit and trying to make my business better!
Great video, watched every bit of it and saved in my playlist!
Thanks
Nice delivery of practical numbers......Cheers 👍🏻
Got my first bike shop job in 1972 and I've seen many many shops close up since then. Paying rent is the surest way to go under. Just like home ownership vs renting. You don't build up any equity with rent that will increase. Watched a few other shops fail due to over spending on advertising such as race team sponsorship.
The entire history of bicycles has been booms and fads. Each new design spurs another boom that fades out. 2020 was a record sales year, like the early 1970s when every bike you could get sold fast. The pandemic bike boom is over. The 2019 bicycle tariff increase from 10% to 25% is the main reason prices are up while demand has crashed. Now would be a poor time to open a new shop in many areas.
One owner I knew built oversized new buildings and rented out the extra space that paid for the buildings so the bicycle business didn't. Other retail and upstairs apartments covered the bank loan payments. Banks are more likely to loan money for something they can repossess and resell like a building. What are they going to do with specialty fixtures excess inventory.
Multiple locations. Yoiks. Two stores means double expenses just so customers won't have to drive as far. Save that for when you are making a lot of money. You will spend more time calling the other store(s) to see if item X is available. Tell the customer "we will have it here in a couple days" and they won't return. Enlarging a single location will bump up some expenses but not all of them.
My pet peeve "We can order it..." Yeah in this age of the www so can the customer and it will be delivered to their door just as soon and probably for le$$.
I'm 13 so I don't really have a choice but to use my dad's garage. It's not fully started up tho. But I have ads and a business number. I'll probably be fixing other people's bikes and fixing up old bikes to sell for a profit. I already have 2 on sale. I'll probably get some sales once school starts up.
You have to start somewhere! Nice work
Invest in tools every chance you get. They never really loose value and you'll be able to earn a living anywhere in the world with your own bike tools and the skills to use them.
I hope you do well!
I'm 64, retired and running a similar shop in my garage. I advertise on Facebook Marketplace, Craigslist and Ebay. This year I flipped 29 bikes and repaired about 20 for other customers. My typical customers are single parents who want a reliable $250 bike for their kids and people over 50 who know they will get the same use from one of my $600 bikes that they would get from a new $3,000 bike.
It takes a couple years for word of mouth to become known as the guy who has good use bikes for sale or be known as the guy who can make an old bike ride like when it was new. Keep at it, pay attention to details and you can build a nice little business. Two of my favorite tools for fixing a bike to sell are an ultrasonic cleaner and a vibratory tumbler. They can make derailleurs, brake calipers and other small parts shine like new.
@zone4garlicfarm I happy you succeeded I didn't. Luckily I tried again. I now have a business in landscaping. We made around 700 dollars in revenue this year. I know that sounds bad but me and my friend literally started with nothing. We got lucky when an old teacher gave us some mowers for free. Over time we saved up and bought more equipment
@@zone4garlicfarm I also got myself a ATV and a trailer from the money. The ATV drives and the trailer needs to be built. My plan is to get both of them ready for next year when I can drive so our parents don't have to keep dropping us off at the jobs
Ouch! Thanks for breaking it down. That's why I have a garage shop. Yes, it has its own challenges but is way more profitable. I used to work at Retail Tool Kit, and poor inventory management will kill you!
This is eye-opening. I'm in the UK and now have a better understanding of why so many bike shops are failing.
thnx for the insight of how a bikeshop works :) i just resign from my 8-5 work at a bikeshop and planning to start my own shop very helpful video thnx alot
I'd imagine Retail bike shops have a massive uphill against online dealers with bike parts but make up with bike fits, servicing and repairs etc. but I've just started cycling this year, I went to my first credible bike shop and what a difference it makes the experience of me not fully understanding everything but the guy did. Very clued up and left a good impression. And I'll surely be using again and supporting my lthe local and maybe smaller but professional businesses.
Appreciate the knowledge base and numbers. The business side of the dream always seems to be an eye opener for a lot of folks.
I think for a lot of customers, the experience you get at a bike shop kinda determines if you try to get a deal, and if you come back or not. I know of the 2 bike shops in my town, one won me over with their helpfulness and willingness to just help out, while the other just kinda let me wander around without trying to help (I'm one of those $3000 bike guys, but I ride 3 or more times a week haha). Service is huge for you guys, and I feel like most shops understand that.
There’s a shop five minutes from my house and I went into it the other day. Guy at the counter ignored me. Store was empty. After a few minutes, I simply turned around and left and went to another store. That’s 10 minutes further. That other store always has people greet me.
A couple days after this my wife bought a new e-bike. I didn’t even bother checking the first store even though I know they carry Trek as well. The older I get the more critical I consider customer service. I will pay for it. I even got a tool from the second store for 45 bucks that I saw moments earlier was 35 online. I’m normally a huge cheapass, bur a friendly smile and attention goes a long way!
Thanks for the video and honesty in the breakdown of the figures. I started a small (workshop based) shop 18months ago on my own dime, and have been very patient gauging the business before expanding into a showroom next spring. Great to see information from some 1st hand experience
Great stuff. I've owned several not bike shop retail stores over the last decade. Got tired of people and closed them all. Obviously these numbers vary depending on one's own market, but pretty much spot on.
I totally agree with you as a bike shop owner point of view. If you don't hit the target. Break even doesn't apply, Struggle is real.
Dude, you rock! Thanks for sharing ... good video for anybody who wants to do any business
Still a great video! When I describe how my shop is just not profitable (I eek out a sub $40k living), while also required taking on a certain amount of debt and moving it around constantly, they are flabbergasted. I send them here, you explain better than me.
Cameraman makes me feel like I'm actually there which is nice, natural movement. Only thing that's missing is looking at random things when I turn my head to listen better. Oh and thank you for all this S-tier information.
The ice cold truth! Makes you hate the big sport stores that dump the prices all day with big discounts. #supportyoulocalbikeshop
Thanks for the brutal honesty. I hope you can keep on serving the Kelowna community.
One thing to look forward to is that we've hit peak car, and e-bikes are likely to become the sustainable transportation choice in the face of Climate Crisis and the economic tumult that comes with it. I know the bike industry is feeling much pain this year. I wish people could see tge forest through the trees and start investing in cargo and other e-bikes to help get to where I feel we'll eventually all be. That would also remove the seasonality that I'm sure is disruptive to your shop and your employees.
I worked in two shops as a student, both had skis & snowboards for the winter season.
I loved the student gig but I knew for sure it was a cut throat business and not for me 😂
Wow! Interesting. Thank you.
Subbed, nice work. This is why I work out of my garage and basically pay retail for parts. So basically I end up earning only labor, no margin whatsoever. This end of the bike business is kind of like going up to dracula and just bearing your neck. When people talk to me about working in a shop I turn them down. When endeavoring entrepreneurs want to open a shop, I tell them to do something else. Meanwhile, the behemoth vendors, suppliers, and manufacturers are better insulated, to the point that they've put themselves into their current predicament.
Even working out of the garage, it's tough to make it work. After accounting for all the stuff listed in this video, lease aside, it's still ridiculous to work on bikes to make a living. This is one reason why factory direct has hurt bike shops. That additional margin made it possible. Now, I just can't see it making sense.
Thanks for making this video and being transparent. Super 👍
I had one from 2011-2024. I only took in bikes that I knew I could fix easily for max profit. If someone brought in a complicated fix I told them NO. If someone brought in a Schwinn Varsity or other restoration the cost was $125/hr. Swing at pitches you can hit. No bogged in complicated BS.
New bike sales NEVER pay for the space needed to heat, display, build, ship, insure. Fixing 10 yr old Giant mtbs is easy big profit.
opening my own bike shop after having a webshop for 2 years and those numbers seem very high. i believe my running costs are around 10k per year because im running it off my own property, because of the locaiton i will loose a little bit of revenue but not paying a lease makes up for it :)
Love your videos. Hope you get more popular.
Solid vid - super lean budget.
I thought I wanted to own a bike shop until I worked in a few. Forget it. High stress, razor thin margins and often the customers are insufferable to deal with.
That's pretty sobering. My two LBS are in a smaller city in a low cost of living state, which probably helps on rent at least. I have certainly seen the price of parts and service go up significantly, which is to be expected over the 33 years I have been buying stuff. Still, there was a significant jump in all facets after the pandemic. I don't blame the shops at all. Although I am able to absorb these increases many customers are flabbergasted by the cost of a new "entry" bike or the price of a repair. Often, they bought used through Craigslist or something equivalent to a department store bike where the repairs can cost as much as the bike.
I appreciate your honesty. I love bikes and have since I first rode a two-wheeler down the street in 1961. My baby boomer colleagues all rode bikes everywhere and many of us graduated into European road bikes in the early to mid-70s. Before I retired from teaching, I discovered that many of my college students had never ridden a bike or experienced the pleasure. I find that very sad.
Дякую хлопці. Було дуже цікаво
Really love your videos. Incredibly informative. Question - did you establish relationships with big brands before opening the shop, or after? I'm wondering what comes first, the chicken or the egg. I imagine you don't want to sign a lease on the off chance that Sram or Shimano will work with you, but I also imagine Sram or Shimano will not work with you unless you have a brick and mortar store, like you said. So how do you build those relationships?
You could potentially word your lease to include subject to suppliers in some capacity. A lawyer is likely best to help you word that. SRAM to my understanding has dealer requirements that are very black and white. For us opening Shimano was very straightforward. But our lease came first, along with a good brand story on our vision and mission and why we would be the right people to execute.
That is mind-blowing.
I’m starting my own shop soon. Good content. I’m hoping U.S. insurance is less expensive. I think with this I’ll be able to stick to my budget. I also don’t know what kind of tax write offs are available in Canada.
Less volume was cheaper insurance for sure, the states tends to have more options on everything so I’d hope there is more choice.
Solid breakdown
Awesome video thank you!!!!!
Dropping a comment for the algorithm.
Thanks for the info!
Very helpful validates my numbers
Facts. Solid video.
How about heat/air conditioning, water as well?? Shop owner here as well....
Ours is covered under our triple net.
COGS (inventory)?
great info
Would love to see a video about determining if your area warrants opening a new shop. The area I live in has one large shop with 2 stores, another small Tr*k takeover shop, a co-op/consignment shop, and another brand new mtb focused shop. I don't know much about your situation, but I have to imagine the market in BC is pretty saturated given the riding quality in the area. Did you have any trouble breaking into the market when starting?
Ohhh let’s do it! What city do you live in?
I started a small repair shop and one of the first things I did was screenshot a map of the city. Then I put 1 mile and 2 mile radius circles around every shop. Gives you a good idea of saturation. A lot of customers want something close by.
@@kingcardbeard1471 Was that in North America or EU?
@@dvoob North America.
@@dvoob North America
I was looking to see or hear how many square feet you started I was looking at 800 sq.ft. To start. An yes a million sounds crazy but reality 30% of a million to get real mechanics your own paycheck.
You could scale this down for that size of shop for sure! We started with 1200 sq feet and made that work for a year. Had we stayed that size I would have needed to either found someone really good to be my number 2, worked a ton, or some combination of the two.
How many bikes do you have to sell in a month to be sustainable?
Such a hard question to answer. Us personally? Are we talking 10K Plus bikes? Are we doing service work? Are we assuming we do nothing but sell bikes?
Yes both sales and service work. Price of bike, maybe average sale price?
So I'm able to get them to "open" me? what does that mean? I'm opening a shop as an independent
also this REALLY put a lot in perspective for me
It means you can order some or all of the brands they stock. Otherwise the door stays shut. If you’re in the USA I’d expect things to be easier to get off the ground
I make a decent living and I love to just splurge at my local bike shop and I don't return anything. It's hard enough to find an honest good small local business in the US these days, why would you not support them?
No tax?
Why should you have to have brick and mortar to sell sram or shimano
Cause their regional distribution manager isn't going to sell a few thousand dollars worth of inventory to some kid with a van. These are HUGE corporations who demand that their products are sold in top tier locations/establishments. Their image is more important to them than your passion.
Thanks. Good luck in 2024.
It's going to be interesting, that's for sure!
Tip #1: don't make a tool board out of unfinished softwood plywood. It will get filthy and look skanky in a very short time.
That plywood is actually finished ;)
I'm looking at buying a new mountain bike. Something in the $6k-7k range. I've probably spent $3.5 in part, service, repairs, and accessories at one local shop over the last 3 to 4 years. This shop has a manufacturer's sale on some bikes, and the bike that I like is a bit above my price once you add pedals, taxes, and a few other things. They seem to have no interest in giving a little to make the sale and keep a good customer. I'm not saying I want a massive discount, but some recognition of the amount I've spent would be nice. Throw the pedals or give a small shop credit, perhaps.
Am I being unreasonable?
If I can be super candid here. I spend roughly 14,000 bucks a year at my local grocery store and they never offer me any personalized discounts above what they typically put on sale. Comparing industries makes for a bad time, but you get my drift.
The business isn’t a high margin business, it’s super easy to let your margin erode and really really hard to maintain. Throw on that manufacturers typically want their bikes sold at MSRP or in this case the discounted MSRP and as a shop it can be a slippery slope real quick.
It’s hard to comment on the deal without knowing all the details but it could also be a matter of they have limited supply and if they discount it for you even further then they can’t sell it to someone else, especially if it’s already a good value.
I hope that helps explain it from the other side of the counter, I’d also as a consumer look at what they do locally. Do they donate to trail organizations? Do they run group rides? Host events? Can you justify it to yourself based on what they do locally?
@Smith Creek Cycle Thanks for candid feedback. I really do appreciate it. I'm not suggesting that they discount the bike any further than what the manufacturer has authorized. I'm saying throw in something to acknowledge that I have been and would continue to be a good customer.
I'm not loyal to any particular grocery chain. Some stores offer reward points to get stuff for free (I do realize that's built into the pricing structure).
I guess my point is if the shop is going to treat me the same as the person who walks in, never having purchased anything there before, I can treat them like any other shop. I do like the service, and I spend the vast majority of my mtb budget there.
@@briannyob7799 I will say buying a bike will likely help strengthen the relationship. Maybe offer to pay cash/Debit instead of credit if they throw in the pedals. Visa and Mastercard fees suck!
@@smithcreekcycle that is an excellent suggestion. Thanks. Sincerely.
So essentially, you need to service 3 to 4 customer every day
If he had a UA-cam channel, he could put out a video every month, randomly, that subscribers could watch, to get a service or part from his store at 20% off.
'Promosm' ☺️
You gotta love it when a Shimano 105 Group from QBP is $200 more wholesale than one shipped free from England. I kicked Shimano out of my shop in 2013 and only used Sram, Microshift, etc. Worst company ever.
I’ve been seeing less and less of this, but it does still happen on occasion. It can be frustrating, but I normally bring it back to a matter of what happens if the parts need warranty? Or the parts are counterfeit?
How to make a million dollars owning a bike shop? Start with two million.
250k to start a shop?? Just invest that in real-estate. Buy the building and just open up the doors for business. Hopefully the building has an apartment on the second floor for income. This way your double invested. You have real-estate and you have a business. Forget employees, just hire a part-time mechanic if you can't handle the workload. Another option is to buy an established bike shop. You can never know what will come . Any business you have to be able to take risk, otherwise you'll never get started.
That punching noise got tired after the second time l heard it. Ugh.
If this is the thought process for opening a bike shop it’s no wonder why it’s a “high fail” industry. *where’s the face palm button on this thing?*
Do you have any constructive criticism, or only some vague disdain for the industry that you needed to share with us?
Man, this guy doesn't know anything about anything.
Basically the worst.
I heard that every store that sells WR! convergence wheels, instantly succeeds. Anecdotally, of course ;)
Ironically enough we don’t sell WR, I’m a huge fan of NOBL wheels!
@smithcreekcycle to each their own. With the prices where they are, reviews as rabid as they are for wr1, and the fact that one company manufactures nationally and supports north america and the other overseas, it's an easy decision to me. I'm biased, though.
@@BuffiestFluff I’ve got my reasons for using NOBL. Generally speaking I hate warranty issues, and I see almost zero issues with NOBL so I don’t have a need to change it up. Relationships count to me too, and NOBL really has been a great partner for us.
Nothing against WR I’ve been to their factory and met a few of their staff, all great people doing really cool stuff.