Trade vs retail: bike shop mark-up

.blitz

My nearest lbs is within walking distance and whenever I pass by I feel compelled to go in. Inside they carry a range of esoteric kit from the likes of Kriega, DT Swiss, Crank Bros, Lezyne, Dainese and Assos as well as million-dollar cf road bikes and full-on DH rigs. The other day I called in with no intention of buying anything (as you do) but I spotted a rather tasty riding jacket and, impressed by the quality and fit, I decided to buy it. It was RRP and then some so I politely asked the assistant for a discount. His response was that the shop had no margin for discounts and the price on the tag was the price you paid, take it or leave it. So I left the jacket on the counter and walked out.

Obv. these are hard times for everyone but I thought the 'no margin' comment was pure BS. Anyone know what typical bike shop mark-up is ? 50% ? 100% ? 200% ? More :shock:

Answers in the form of a poll to protect the innocent

chuckcork

If you had asked for a discount because you are a British Cycling member, or in the CTC, you might have got a different response.

When I think to ask for it (forgot last time :x ) I get 10% from Evans and Sigma in Kingston, 5% from another local shop.

Look online and you'll most likely find the product cheaper anyway.

Hope it fits

BoardinBob

Does anyone have access to the trade side of Fisher

http://www.fisheroutdoor.co.uk/fisheroutdoor.html

Should be pretty easy to see the difference between the trade prices and the public prices.

ratty2k

What difference does it make? I get a discount from my LBS, not much but it adds up. 10% off or so, and maybe a little more if I shave a fair few quid their way. They do understand that some stuff they just cant compete on price with the internet- but a locally bought item is much better if there happen to be any issues further down the line.

ride_whenever

Generally there is around a 50% markup, however this very quickly dissapears once you start factoring in wages, shop rent, etc etc etc.

Hence most bike shops are run pretty close to the wind.

Tempestas

The margins are a lot smaller than you would expect, as the previous poster mentions factors such as wages, rent, rates all need to be taken into account and really eat into any 'profit'.

Maco1

BoardinBob wrote:

Does anyone have access to the trade side of Fisher

http://www.fisheroutdoor.co.uk/fisheroutdoor.html

Should be pretty easy to see the difference between the trade prices and the public prices.

Yes, but that would still not give you the whole story.
There are carriage charges and/or minimum order charges to add for small orders. Most brand names that you would recognise (such as those listed above) have a margin that is far less than 50%. The ever-decreasing pound has meant importers and wholesalers have been forced to put up cost prices substantially this year, while RRP's have increased by a far smaller percentage. LBS's also have the problem that brand name products are generally updated each year so any stock around after October/November is probably sold at cost, or less if cash flow is bad. At this time of year, and for the next 6 months, LBS's need to be seling at full retail price when they can. And then there are the overheads already mentioned...

Having said that, i wouldn't have told you to 'take it or leave it'!

supersonic

Depends on the shop, the goods - can be very very little.

v23

I'd say around 30%. I got something for trade recently and paid 2/3 of the RRP

myopic

v23 wrote:

I'd say around 30%. I got something for trade recently and paid 2/3 of the RRP

If you paid 2/3 of the retail price, that means a 50% mark-up was being applied.

Likewise if there is a 50% mark-up, the maximum discount possible before the shop is selling back at cost agin is 33%

chuckcork

I bought a new cassette recently from Evans, price on the box was £29.99, price sold for was £39.99, markup due to the week pound may take some time to work through but not in this case!

FSR_XC

I'd be surprised if the markup on rrp was less than 100%.

Think about it - in a half price sale, they would be selling for the price they purchased it at.

Profit margins will always shock people who are not in a retail business, yet to realistically run such a business that margin is soon swallowed up by wages and overheads.

If a shop buys a widget for £100 and marks it up by 100%, therefore selling it at £200,
it has already cost them £115 because they have to pay VAT.

Now Joe Bloggs walks in and gets a 10% discount because he belongs to the local widget club, buying it for £180.

Profit is £65.
How many £65 must the widget shop have to sell to stay in business?

Lapierre t 400

the worse thing though is VAT
When I buy a my new bike I am going to give the UK gouv the best part of 400 quid in taxes
easy solution buy in jersey (no VAT)

redvee

As somebody who has worked in the wholesale side of the bike biz the mark-up can vary from shop to shop. Most shops based their prices on tradex1.75 for bikes but accessories were very different. At the time shops were buying innertubes for under £1 and selling for £5, not every accessory had that much of a mark-up. As mentioned before wages, rent etc all had to be factored into the selling price.

supersonic

I think the OP also demonstrtes a reason why the internet can afford to be cheaper in some areas - you have viewed the product and tried it on in a shop.

BlackSpur

It really is much much less that you would think. Obviously it varies for different products - tends to be less on complete bikes.

FSR_XC
It's not often that you see a half price sale in a bike shop. If you ever do it is usually very old stock/difficult to sell items which the shop just wants to be rid of at any cost - a sale making a loss is better than no sale at all.

MeddlE

Always less than 50% on the expensive stuff, smaller/cheaper stuff can be more but not always.

Trade prices are plus VAT, RRP is inclusive of VAT. Makes a huge difference on what you think they are making.

Some brands don't allow discounts. For example shops aren't allowed to discount current Marin bikes, but are allowed to discount last seasons.

There is a minimum markup they have to make to cover costs.

Staff discount where I used to work was 20% off RRP, even if the product was discounted the discount was off RRP!! Friends and Family discount was 10%. Anything over 10% was frowned upon.

Andy B

From my time in the trade, I can tell you that there is not a lot of profit in lower end bikes at all, even up to £300 there is not a lot of mark up & once costs are factored in the actual profit is very low.

Parts vary widely, but there were not many items that gave over 30% mark up

As BlackSpur points out half price sales are usually loss leaders to get stock moving and hopefully sell some accessories to the customers who buy in the sales.

I bought a SLX chainset before they were on general release at trade +10% for the shop, once released CRC was selling them at almost the same price (about £8 more) than I bought mine for.