Settle my pub arguement..... Bike Shops

Bmjboy
Bmjboy Posts: 680
edited November 2008 in MTB general
Chatting over a beer with mates and we discussed the benefits of owning a bike shop, almost all of them said they would rather run a bricks-n-mortor bike shop over going balls-out and having an online bike shop selling almost everything...

Which in your opinion would be easier to setup and which do you think is best?

Personally I'd go for Online due to the sheer volume of potential customers, but can see potential problems in sourcing all the suppliers as you would need to be a big store online.

What do you guys think? Am I the one who's wrong?

Of course maintenance is a benefit for a real store, but volume of customers may not be as great?
"I don't do double-entendres, but I do like to slip a big one in occasionally"

Giant Trance X2 / Garmin Edge 305 / Empty Wallet

Comments

  • supersonic
    supersonic Posts: 82,708
    depends on start up costs. The big online dealers will always be cheaper than the small ones. Some places are online and shop combined. No right or wrong answer really.
  • P-Jay
    P-Jay Posts: 1,478
    Personally I'd go for a combined. After all there are easier ways to make money, so you might as well spend your days talking bikes with punters and the like rather than just going on-line only and spending all day dragging boxes around a warehouse.
  • dave_hill
    dave_hill Posts: 3,877
    Online every time. Easier to set up, low overheads and really you would only need storage premises so you could operate off an industrial estate instead of having to find shop premises.
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  • Bmjboy
    Bmjboy Posts: 680
    dave_hill wrote:
    Online every time. Easier to set up, low overheads and really you would only need storage premises so you could operate off an industrial estate instead of having to find shop premises.

    That was my arguement also, plus my "shop" would be open technically 24/7.

    I might start one up to prove a point! - Anyone got a magical list of wholesalers for all those biking goodies???? :lol: Would just need a shed load of cash and Im in business! :lol:

    I do see the point about a high st shop being more personal, but at the end of the day, 99.9% of shop owners are doing it for the money.

    I struggle to see how some shops in smaller towns make enough money to cover overheads, with an online store, you dont necessarily have such financial commitment.
    "I don't do double-entendres, but I do like to slip a big one in occasionally"

    Giant Trance X2 / Garmin Edge 305 / Empty Wallet
  • Spider987
    Spider987 Posts: 189
    dave_hill wrote:
    Online every time. Easier to set up, low overheads and really you would only need storage premises so you could operate off an industrial estate instead of having to find shop premises.
    Or do what Hotwheels do and have some of there bikes stored at a company, then they just give them the address and they ship it to them. Saves alot of hassle.

    However id prefer to work in a shop. Not online, as at the moement i can talk to the customer face to face and make sure they leave happy.
    Also online you dont get unique bikes coming in for repairs. Or even unique customers like Jack Taylor!
    Plus when a customer comes into the shop and ive sold them a bike i can have a chat with them unlike online stores.

    Although i wouldnt mind where i work setting up a online store.

    Another thing about online stores is that they dont always keep parts in stock.
    If it says 5-7 working days of how long it takes to get a product in, it tends to mean they just get them straight from supplier!
  • http://www.bikebiz.com/


    There is your magic list of whos who!!!
  • Bmjboy
    Bmjboy Posts: 680
    Spider987 wrote:
    Or do what Hotwheels do and have some of there bikes stored at a company, then they just give them the address and they ship it to them. Saves alot of hassle.

    Thats known as Drop-Shipping - Something Id never do personally in my "mythical online bike store"

    You rely so much on someone else sending something out correctly, packed accordingly etc.

    I run my own retail website (not bike related at all) - so Im quite online biased anyway.

    I find that having the phone number right at the top of the site helps everyone, you'll be amazed how many people will pick up the phone to order, shopping will always be "personal" to a lot of people.

    My thoughts are swaying though, as biking is a very personal sport, but I like to think that the more exposure a shop has the more money someone would make, therefore I would say online must be better(?)
    "I don't do double-entendres, but I do like to slip a big one in occasionally"

    Giant Trance X2 / Garmin Edge 305 / Empty Wallet
  • Bmjboy
    Bmjboy Posts: 680
    lucafour wrote:
    http://www.bikebiz.com/

    There is your magic list of whos who!!!

    Ha! :lol:

    Looks like someones been doing their homework.

    Im afraid I dont have the money to set one up, although its a very cool idea to be doing something Im very keen on.
    "I don't do double-entendres, but I do like to slip a big one in occasionally"

    Giant Trance X2 / Garmin Edge 305 / Empty Wallet
  • Spider987
    Spider987 Posts: 189
    So are you saying the more money they make the better they are?
    Because Halfords make alot of money on bikes and most of there shops have bad customer service. Which is the best thing you can get from a shop.

    Thats another reason shops can be better.
    If i bought a bike from you and something was broke legally you dont have to pay postage for me. So i might save £30 but if i have to send it back i could end up loosing more.
    Where as a quick trip in a car isnt a problem and if i dont have car some shops offer collection.

    Aswell the bike comes in a box whereas most shops have them built for you within 30 mins.
  • Bmjboy
    Bmjboy Posts: 680
    Spider987 wrote:
    So are you saying the more money they make the better they are?

    No, my question is "personally" which would you prefer to run/own.

    Quite clearly Halfords does make money, and agreed some of their service isnt up to par. I personally enjoy going to my LBS for help and advice, BUT I know that on a lot of clothing or consumable items, online is always cheapest, so I shop there.

    Depending on the circumstances is dependant on what is better for the consumer. In my mythical online shop, I probably wouldnt want to sell bikes, purely as purchasing a bike is a personal thing, something which needs sitting on testing and tweaking especially after sale.

    Whereas in my friends personal choice of high st shop, they would sell bikes as its a customer facing transaction.

    If you wanted to buy some cleaning gear for your bike, where would you buy it from? - personally, I would buy online as its often cheaper and not much can go wrong in the transaction, eg fit/sizing issues etc.
    "I don't do double-entendres, but I do like to slip a big one in occasionally"

    Giant Trance X2 / Garmin Edge 305 / Empty Wallet
  • Spider987
    Spider987 Posts: 189
    Where i work cos i get discount
    I am in a biased view as work in my LBS
    Id like to to try clothing on tho before buying it.
    Things like rear mechs, chains etc. Yer id buy online but clothes, shoes, helmets and me bike id get from a shop.
  • zero303
    zero303 Posts: 1,162
    I own a retail biz - clothes not bikes, but it's 2x bricks and mortar and online too.

    Online is much harder work and the lower overheads is a myth on every level.

    - you still have to buy the stock
    - you still have to pay staff, even if it's you
    - you still need to hire premises (if you're remotely successful you wont be able to cope with storing everything at home)
    - any website remotely capable of launching a successful e-commerce business will be pricey (I was able to build ours thank god)


    Basically the costs are pretty much the same as Bricks and Mortar and the other myth is the whole bigger market thing. E-commerce is pretty much like being in a giant shopping mall where every shop sells exactly the same thing.

    As well as running my own, I actually do this for a living (I work in a very good Bristol web agency) and even I'd say Bricks and Mortar.

    Although the correct answer is both. With my clothes business we are actually able to save on overheads because we just about manage to run the e-commerce outfit from the two shops and due to some clever stock management/sharing.
  • strodey
    strodey Posts: 481
    You will need to get commercial premises whatever you do as nobody including wholesalers will service a residential adress so for that reason you might as well get a shop and do internet too!
    Carbon is a mans best freind
  • supersonic
    supersonic Posts: 82,708
    when I buy online, I buy the cheapest I can find. Merlin, wiggle, crc are cheap because of big buying power which reduces unit cost. Lbs more dependant on local circumstances, and good mechanics and reputation.
  • for what its worth, i would say on line every time.
    I live local to chain reaction cycles warehouse and shop, i can remember getting on for 13-14 years ago (can it really be that long ago) when that was just a little shop in our town a real one man band, the chap built stuff out the back and there was about enough room in there for 15 bikes and 2 customers. now look at him/them, truly shown what the internet can do for a business if you get in at the correct time.massive warehouse, lots of staff and a shop, sorry a showroom, for those who want to call in. if you can make it a success then the internet is definitely the way forward it all depends on your market and how much advertising/exposure you can get.
    i have also heard of a motor factors that now makes a small fortune selling bulbs and what have you on e bay!
  • supersonic
    supersonic Posts: 82,708
    I think you would need more money to start an online business for it to be competetive. It is all about price and stock. Maybe starting an LBS, building it up and expanding slowly is the way to do it? I can't see a new web business being able to compete with the big boys.
  • Bmjboy
    Bmjboy Posts: 680
    strodey wrote:
    You will need to get commercial premises whatever you do as nobody including wholesalers will service a residential adress so for that reason you might as well get a shop and do internet too!

    Thats not true at all, I know several fairly large online and offline businesses that run from a home/office environment. Wholesalers will sell to whoever, as long as they pay their money.

    In my own line of business, I am served by several wholesalers, manufacturers and businesses and even serve some top premiership clubs, all from a spare bedroom converted into an office.

    If your customer services and prices are right, then it doesnt matter if you run a business from a shed or a multi-million pound warehouse.

    Granted, if you want to hold lots of stock then you need to sort a storagre facility, but good business is mainly about those who run it firstly.
    "I don't do double-entendres, but I do like to slip a big one in occasionally"

    Giant Trance X2 / Garmin Edge 305 / Empty Wallet
  • Online is lonely as f~ck, you really don't get to see or talk to your customers, so that is a definate disadvantage. Once you get big enought to have staff, you are still the boss, and it can get lonely at the top (even if it's not very high! lol)

    Bricks and mortar, you'll spend so much time manning the shop you'll never get to go out and ride. Think probably 6-7 days a week, probaby 10 hours a day, at least for the first year or so until you are established.

    Running a decent online shop from a normal shop would be a nightmare, as you need to have really good stock control for a online shop to work, customers need to know that you have something in stock and can ship it that day (this is why CRC and wiggle are where they are).

    And, yes the costs of setting up online are quite high, especially the marketing, if people don't know you are there, you don't have customers. At least with a high st shop people will see you when they walk past. when did you last 'wlak past' a website?

    Which would I prefer, not decided yet...
  • ST Colin
    ST Colin Posts: 147
    Online for the huge variety of products available and the lbs for the support.
    http://stcolin.pinkbike.com

    BeOne Aspire 1.0
    RS Recon Race Air Solo 100mm
    Raceface XC and Easton
    Mavic 321, DT Swiss spokes, XT hubs
    Panaracer Rampage SC's
  • I wouldn't set up either in this economic climate.
  • ST Colin
    ST Colin Posts: 147
    Well I'd imagine if anything, bike sales should continue to increase.

    If I was closer to work and the route wasn't so tricky, I'd cycle to work every day, rain or shine. Even If I cycle to work say 4-5 days per month, thats £30(my circumstances) in fuel saved. I think the benefits are there for all to see.
    http://stcolin.pinkbike.com

    BeOne Aspire 1.0
    RS Recon Race Air Solo 100mm
    Raceface XC and Easton
    Mavic 321, DT Swiss spokes, XT hubs
    Panaracer Rampage SC's
  • amt27
    amt27 Posts: 320
    i ran a dotcom business selling appliances, it is ultra competitive, a very tough market,

    think why people buy online, what added value are they getting, there are generally 3 reasons
    1. 24 hour convenient shopping
    2. cheap prices
    3. larger choice,

    how to achieve the above:
    1 is easy to achieve, keep your servers running, and have backups,
    2 is very difficult, distributors and manufacturers hate price erosion, they get moaned at by other retailers , you have to be very shrewd, people like merlin buy excess OEM stock for their built bikes, which is cheaper, then sell it as retail,
    you can get suppliers to drop-ship for you, so you dont need a warehouse, just a computer in a bedroom will do, but the prices are higher, you have to way up the difference of buying bulk and the overheads that will incur,
    3. you need a massive warehouse to stock anything and everything, therefore offering products which are not available from a local shop or are out of stock everywhere else, amazon make something like 40% of profit from 10% of stock and 60% of profit from 90% of stock, its whether offering a huge number of SKUs adds any value or is just another overhead, then you have fashions, shelf life and new replacement products, making all those great product you have in the warehouse valueless,

    if you are thinking of selling branded bikes online, forget it, manufacturers like trek have stopped online sales from dealers out of their area, manufacturers generally support their retailers who invest in a high street presence,

    also online retailing costs a small fortune in marketing to get people through to your web site, and then they might not even buy, you might end up having a great deal on a product which lots of people buy, but no repeat business, William Lever "Half my advertising money is wasted. The problem is that I don't know which half !"
  • The next problem is nobody will sell to you unless you have a bricks and motar shop. Its not a cartel, its just a prooven fact that most people who set up a small online shop are just doing it for the money, then dissapear when anything goes wrong.

    Little things like if something goes missing, its the sellers problem. Chargebacks on credit cards, will hit you with no comeback.

    If you sell stuff at a discount like CRC you will make £5 on a set of brakes after costs, and if one goes missing you have to sell another 5-8 sets to get back to square one. Huge risks and the outcome isnt £££ easily.

    I set up on my own because of this and sourced my own parts, any one can do it, but you have to buy in BIG numbers. You want brake pads.... i buy 10,000 packs at a time. hubs??? 100 of each model and 500 minimum. then there is the several thousand pound on advertizing a month, premises, saleries, postal costs, insurance (thousands in itself for a small business), costs of warranty returns, the list goes on.

    If you want any advice feel free to ask, but im working still at 8pm like most nights!

    Still trying to make decent prices on good quality parts, but times are getting harder now the parts cost 35% more beacasue of the exchange rates.

    Neil (superstarcomponents)
  • I ordered some stuff from Chain Reaction. I was at work when the postman turned up, and the packet wouldn't fit through my letter box, so I had to wait a week until my shift patterns let me go to the collection office early enough to pick it up. I might as well have just gone to my LBS!
    Welcome, to my bonesaw!
  • RichMTB
    RichMTB Posts: 599
    I work for a major IT company, not naming names but it rhymes with Nell! Any way I was the account manager of a major online retailer (rhymes with jiggle!)

    They didn't really buy from us so I was trying to engage the people there in a bit of chat to get them onside and position ourselve to sell them IT kit, honestly got the general impression the didn't give a flying what they were selling as long as there was a few quid in it.

    Please don't get me wrong overall these guys are good are what they do. And I personally use them myself but the LBS is always going to provide added value (to use the marketing parlance) that the online guys could only dream of.
    Step in to my hut! - Stumpy Jumpy Pacey
  • think about it?
    What online stores do you use...
    I use CRC and EBAY...
    The only bike shop in my area is excellent so i use that...
    Your gun be able to compete in your area but not in the internet