How about an idea?

daveydave43
daveydave43 Posts: 200
edited October 2010 in Workshop
Not sure whether this deserved to be in Cake Stop or here :/

Anyway, was speaking to a friend who cycles and we both agreed that our LBS is expensive to buy bikes and parts etc. from. We also both agreed that the best thing about our bike shop was the fact that we could speak to an expert personally, and the mechanical services that he offered, because there are some tasks even proficient cyclist/home mechanics either cannot be bothered with, or it's not economical to do so. e.g wheel building/truing.

So, here's the idea. Why not start up a new type of shop for bikes, one that centres on mechanical service ONLY, and does not sell anything like clothes etc.
The advantages would be that the bike shop then only has to pay for the cost of labour (i.e wages), fixed costs such as tools, and parts.
So, a bike shop essentially becomes a bike workshop only.

A good idea?
Is anyone doing it already?
Would it work?
Go for the break
Create a chaingang
Make sure you don't break your chain

Comments

  • Weejie54
    Weejie54 Posts: 750
    http://www.purplebikeshed.com/index.htm

    As far as I know, this place only repairs and sells spares. They seem to offer other things like tuition, however. Perhaps the extra income is needed to survive.
  • I know Laughborough is very good for engineering,

    Now I know whay it doesn't have a reputation for economics...

    Clothing is where LBS make their money, I'm afraid. You have to strip a lot of bottom brackets to make a living.
    left the forum March 2023
  • It's just a potential idea, Sir Alan, not an actual business plan; I'm studying English :)

    Although, seeing as you brought up economics, then actually, wouldn't the above idea follow the principles of following productive (possibly even allocative) efficiency, and the division of labour? The mechanic has a comparative advantage and skill in fixing and maintaining bikes, and therefore this could work to his advantage.

    Right.
    Now that notion to be blown into the water, by someone with a Phd in such things...
    Go for the break
    Create a chaingang
    Make sure you don't break your chain
  • AndyOgy
    AndyOgy Posts: 579
    I work for a place that's exactly like that. Check out:

    http://southcoastbikes.co.uk/

    All servicing. We don't sell any parts or accessories unless they are being provided as part of the service.

    We have 2 vans that go back and forth, picking up broken bikes and delivering nice shiny fixed/serviced bikes to happy cyclists all over the Brighton and Hove area.
  • desweller
    desweller Posts: 5,175
    To be honest I think you'd need something else, e.g. the pickup and return service described by AndyOgy. You have to remember that a bicycle is a pretty easy thing to fix, in general. Car mechanics can make money because cars are flippin' complex (especially these days) so people don't have much choice, but a bike is only marginally more complex than a an ironing board, so most people can attempt the majority of servicing jobs.
    - - - - - - - - - -
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  • this was only blue sky thinking; i wasn't intending to start a business. :) i was just wondering if it made sense; clearly there are examples already, who, fwiw, seem to have a pretty good service going on. possibly, as Des says, due in some part to the periphery benefits.
    Go for the break
    Create a chaingang
    Make sure you don't break your chain
  • AndyOgy wrote:
    I work for a place that's exactly like that. Check out:

    http://southcoastbikes.co.uk/

    All servicing. We don't sell any parts or accessories unless they are being provided as part of the service.

    We have 2 vans that go back and forth, picking up broken bikes and delivering nice shiny fixed/serviced bikes to happy cyclists all over the Brighton and Hove area.

    Very interesting business model... does it work?
    I mean, I am assuming you pay taxes, national Insurance etc. etc... can you make a decent living or it's a part time job?
    left the forum March 2023
  • AndyOgy
    AndyOgy Posts: 579
    AndyOgy wrote:
    I work for a place that's exactly like that. Check out:

    http://southcoastbikes.co.uk/

    All servicing. We don't sell any parts or accessories unless they are being provided as part of the service.

    We have 2 vans that go back and forth, picking up broken bikes and delivering nice shiny fixed/serviced bikes to happy cyclists all over the Brighton and Hove area.

    Very interesting business model... does it work?
    I mean, I am assuming you pay taxes, national Insurance etc. etc... can you make a decent living or it's a part time job?

    The company is open 7 days a week and tax, NI etc are, of course, paid accordingly. Nobody is ever going to get rich from something like this but the business is certainly sustainable. It is of vital importance to ensure that each and every customer receives great service, beyond what they'd get in a regular bike shop. For example - every bike that comes through the system is given a thorough clean and polish, and will then be delivered with a showroom shine. And it is not uncommon to replace broken bells, pedals, reflectors etc FOC as part of the service. If a large chunk of the business isn't coming from referrals or repeat business, then something is going wrong.
  • Monty Dog
    Monty Dog Posts: 20,614
    Bike shops make their money on parts and clothing - you'd have to reduce the fixed cost element e.g. fancy shop premises / business rates to keep it as lean and cost-effective as possible. Labour and quality become big factors - one numbtie mechanic could ruin your business model - it might work for 1-2 people, but less so large-scale. There is relatively little money in bikes - everbody thinks they have a way of doing it better / cheaper - margins are quite tight because of competition and most do it for love rather than money - you'd get far better ROI investing elsewhere.
    Make mine an Italian, with Campagnolo on the side..
  • Johnny G
    Johnny G Posts: 348
    DesWeller wrote:
    ...but a bike is only marginally more complex than an ironing board...

    You obviously haven't seen me trying to put one up!
  • ADIHEAD
    ADIHEAD Posts: 575
    I'm with Monty but give your LBS a break. How much do we pay per hour to get cars service? My LBS appears to charge around £10phr for labour - which I wouldn't work for and I don't have to run a premises also! They have to compete with internet retailers whom we all buy from. Most of them are run by cycling enthusiasts whom don't actually make much money, but enjoy the lifestyle (trade fairs, testing latest gear etc) and get the benefit of writing heir own purchases off against tax etc.

    They have minimum order requirements which dictates a discount tariff. Take Shimano for example, Madisons expect orders in the region of £20000 per year before a shop gets the purchasing power for a shop to make a 33% profit on parts sold at retail price, which is controlled by Madisons. For a shop to stock a brand, they have to agree to buy in several thousand pounds worth of the product before they can become a dealer. They then run the risk of brands selling off in bulk to an online retailer who will discount to a lower price that the shop originally paid for the stock. This happened to my LBS with Santini and Sram gear 2 years ago. IAlso for example, if a frame brakes on a new bike, they have to strip down and return it, rebuild it upon return all at their own costs. So they need make a profit when they sell it in the first place. An online retailer would just send the whole thing back to the manufacturer.

    The only way for a workshop only business to succeed would be for an owner/mechanic to work out of a very low cost premises - home workshop for example. I see in my area there's some local vans such as 'Bike Doctor' for example. These guys probably buy in from internet sources themselves as they wouldn't necessarily be large enough to get accounts with major suppliers unless they're very busy!

    I'm as guilty as the next man for buying cheap online but I also try to spend regularly in my LBS as if they're not there, where do people new to the hobby get things like bike fits and first time advice?
  • Although, seeing as you brought up economics, then actually, wouldn't the above idea follow the principles of following productive (possibly even allocative) efficiency, and the division of labour? The mechanic has a comparative advantage and skill in fixing and maintaining bikes, and therefore this could work to his advantage.

    True, but I think you face a few barriers.

    1. Density (revenue per square foot). Would the work of one mechanic cover the costs (rent, power, tools, materials) of your premises? Better returns could be had by using some of that space to sell things.

    2. You could employ more than one mechanic to increase your density, but they will expect to be rewarded for their "skill advantage". Why do you think Halfords employ under-skilled teenagers? 'cos they're cheap.

    3. Your market. Cyclists are not the most -ahem- price-sensitive of consumers, and many (most?) would rather replace a faulty part (or even a whole bike) rather than have it serviced or repaired, especially if it meant waiting for ages for a workshop to do it.

    4. The supply chain. The supply chain for car parts is extremely fast and efficient, in that a mechanic can place an order by mid-morning for a wildly varied load of parts from different manufacturers, and they will arrive by van by early afternoon. This is how mechanics can repair your car the same day. The same is not true for bicycle parts. You would find yourself having to chase down various distributors then wait days for parts to arrive in dribs and drabs, or else hold a huge inventory of parts in your premises, which ties up your capital unprofitably, and adds to your security costs (and further dilutes your density).

    I'm not saying it can't be done, I'm just pointing out some difficulties you will face.