A World of Bicycle Information
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The Two Measures
Location, Location, Location
What You Want in a Lease
Bikes Instead of Signs
Saving Money on Printer Ink
In Addition To Bike Sales
How Much Can You Trust Your Customers?
Music to Your Ears
Open Repair Area
How To Sell a Bike
How To Deal With An Undesirable Person
In the Workshop
How to Write Repair Orders
Labor Prices and Estimates
Rags and Clothing
Welding and Brazing
Commission Or Hourly Pay
Advertising and Publicity
Advertising Vs. Publicity
The Old Fashioned Way
Surviving The Off-Season
Human Powered Machines
Computers and the Internet
Websites That Work
The Guy Who Did Everything Wrong
Competition Or Not?
The Sure-Fire Millionaire
For instance, you'll learn how to bring hundreds more visitors to your website without spending a penny on advertising or depending on search engines. You'll discover the one thing that ought to be written into most leases, You'll find out about ways to fix a floundering business, ways to get good free publicity, ways to make a smaller inventory do more, ways to have more fun with your business, and of course ways to increase your income.
Some may not be for you, but you'll find dozens that are just right, each of which will make a huge difference in your business. Some take a while to implement. Others are a mouse click away. Just pick the ones that resonate with you. If you try to implement everything in this book, you'll probably be overwhelmed.
You might want to blast through this book, read everything and then implement two or three of the strategies that you remember. Fine. That will be very profitable. However, you might also like to read it slowly, or reread it, and examine every strategy in terms of your own situation. Whereas some can be used verbatim, many others can be modified to suit your specific requirements, or merely as food for thought. Then, watch your profit soar!
You may be wondering who I am to write this book. Sometimes, I wonder, too! After, all, I'm not going to sell many copies of such a specialized book. So, evidently, I'm doing this for something besides profit motive. Yup, I feel a need to share this information. By supporting bike shops, I'm supporting bicycling, and we all know the benefits - exercise, reduction of urban noise, danger, and pollution, enjoyment, kids gaining a 'can-do' attitude - the list goes on. I made mistakes when I started out, and I'm still making mistakes. These are all becoming learning experiences that I'll pass on to you in this book. I see so many proprietors mess up in various ways. There is no need! Read a bit, and you can benefit from what I picked up along the way. What way?
I started my first bike shop in 1974 with six used bikes, a handful of tools, a few boxes of used parts and $400. This was in a small city of 350,000 residents, and there were already ten other bike shops. In five years, it grew into the leading 'pro' shop in the city. In the winter I taught framebuilding, wheelbuilding, and general bicycle repair courses. A local newspaper reporter stated that mine was the 'fastest growing retail store in town.' How he compiled that information, I do not know. Perhaps he just guessed. In any case, customers frequently commented on the remarkably rapid growth of the business.
Being young, and full of enthusiasm, I figured I could move on to even bigger and better things, so after five years, I sold my shop, and traveled around the country in a motorhome for several years. Along the way, I coached the owner of a floundering bike shop that had fallen $140,000 in debt. In six months time, we had his debt reduced to $60,000, the owner knew how to move forward, and had his confidence back. That was more than thirty years ago, and his shop still exists today.
I started two other bike shops, one a sole proprietorship, and one was a partnership with two others. I also had several related and unrelated businesses, such as a mobile welding operation, a bookstore and a fairly large eBay business. At one point, in order to support a relative who got himself into a bad financial position, I rented a large house, and started a Craigslist-based used bike business that was as profitable as a typical glass-front retail store.
As time went on, computers started to amuse me more and more, and the Internet came into existence. So I wrote BikeWebSite.com. After it entertained the first 385,000 visitors, I sold it, and moved on to other pursuits. BikeWebSite has changed quite a bit, but here's the original author page. bikewebsite.com/author.htm.
Having been successful in a varied assortment of businesses, I was being asked more and more often to coach people in business, so I became a business coach. By 2004 I was noticing that while several of my clients were doing well, some were evidently coming up against blocks. They seemed incapable of managing even simple changes they so much needed in their businesses. Convinced that the problem was a psychological one, I took two years off, studying Neuro-linguistic Programming, which is the applied study of human nature, and eventually became a certified master NLP practitioner. Now, I can help business owners with blocks, family and employee relations, and so much more. For instance, in studying the subconscious ways we communicate, I have even learned many inner secrets of advertising and publicity, which I will share with you in this book.
I've done all my business in America, so you'll find American prices, and our silly non-metric measurements in this book. If you are outside the USA, I'm sure you can make the necessary conversions. In some of the business details, I discuss the American ways. With a quick check on the Internet or a phone call or two, you will be able to determine any differences in your country.
The Two Measures
Table of Contents
As you may have heard, one out of every four women fail in business. But what about the men? Four out of every five men fail in business! Those who fail are those who haven't learned what works and what doesn't. And the most important things to know are two simple comparisons. If you apply the following measures to every decision you make, you'll always be successful in business.
"You have to take in more money than you spend."
So, anytime you are considering purchasing more inventory, or a new fixture for your store, or hiring another employee, or taking out money for personal expenses, compare it to the the above statement, and see if your plan makes sense. For instance, if you are thinking of stocking 500 more inner tubes than you have been carrying, you can ask yourself whether you'll be taking in more money, when you spend some on those extra inner tubes. If you almost never have to turn away a customer because you ran out of inner tubes in the right size, if repairs aren't delayed because of the lack of tubes, if you don't spend excessive time ordering small quantities of tubes, then it is not a profitable idea at this time, is it? If very rarely being out of an inner tube costs money, but you'd have to pay interest on a loan for those extra tubes, again, it is not profitable.
Let's look at another example. You can buy a 4-1/2" disk grinder for $50. Right now, the mechanics spend quite a bit of time with certain operations that a disk grinder would do almost instantly, such as cutting off a bent one-piece crank so it can be removed from the bottom bracket, or shortening a kickstand by two or three millimeters. Right, assuming your mechanics are being paid hourly, the $50 will be quickly recovered. If your mechanics are being paid by their output, it may still be profitable if throughput is important. Getting bikes back to the customers a day sooner can be accomplished because repairs don't take as long. In the long run, more customers will come to your shop for repairs knowing they won't have to wait very long for completion.
In my early twenties, during the growth of my very first bike shop, I also rented and sold cross-country skis during the winter. I had many requests to do tune-ups on downhill skis, but I did not know anything about that skill. One who does has to know all about inspecting and adjusting bindings, filling scratches with plastic candles, and planing the bottoms good and smooth. I had a friend who was an unemployed ski mechanic. Both of us not knowing any better, I invited him to rent some bench space in my shop and start his own micro-business within mine. He would be our downhill ski expert. The bench rent was to be $80/month, which he could start paying after his first month.
We put up a paper sign in the window advertising ski repair, an in that very first month, he took in quite a bit of money. Feeling successful, he bought things. He didn't like his old beat-up electric drill, so he bought a new top-of-the-line drill. He bought some great bluejeans, and some excellent cowboy boots so he could look better at parties. You know what? When it came time to pay his $80 rent, he didn't have it! After a couple more months of watching him struggle with lack of supplies (although well-dressed), and never, ever seeing my $80 rent payments, I had to throw him out. This poor fellow is destined to be someone's employee forever.
A submeasure of this might be, "Keep your personal expenses low," especially if your store is new. Can you move to a smaller apartment? Can you avoid car payments? Can you cut some channels off your cable bill? Do you really need a new computer right now? Sure the thought of a new computer is attractive, but is it still all that attractive when you consider that it might jeopordize the success of your business?
Start small, and build slowly and carefully.
Even though my own first bike shop grew quickly, I did it using this measure. I had no choice really, because I had very little money at first. When I expanded into new product lines or services, I started each with a minimum of inventory or expense, saw whether it would be profitable, then let it grow.
With just about any way you might consider expanding your business, see if there is a way to get your feet wet, without risking drowning. If you decide you're going to start selling hand-built frames, you can start with an opening inventory of one or two frames. True, this is not very exciting, and you probably won't have the right size for most of your customers. On the other hand, you'll have less than $1,000 invested, and you can use your first frames to gauge interest. If many customers look at the frames and talk about them, if some say, "Oh, if only you had that in my size. . ." then you know it is time to get a few more. Because, you might discover that hand-built frames do not sell as well as you thought. So, instead of tying up thousands of dollars in frames, you may find it is better spent on bicycling clothing, for instance. In time, your shop will grow, and you can have a large inventory in frames, even if they don't sell well.
If you are new to the bicycle business, unless you have inherited a lot of money, I'd advise that you start out with small quantities and a large variety. Even if you have a lot of capital to start, it is best to start with ones and twos of most things, rather than dozens or hundreds, because you need to learn what sells and what doesn't.
Table of Contents
Have you ever agonized over a decision? It might help to realize that once you have collected all the information you can, if all options seem equal, then any decision you make will be the right one. Even if it turns out 'wrong,' you will have made the best decision you could at the time with what you knew.
Conversely, there's no need to beat yourself up over things that turned out wrong. After all, how does that help? Right, it only makes you feel bad. A bike shop owner who is feeling bad is not going to be as successful is one who is optimistic. So, you made a mistake. You learned something. Now you can move on.
Oprah Winfrey once said, "When you know better, you'll do better."
Table of Contents
You may have heard of retail itch, sometimes called the "seven-year-itch." It is about retailers burning out. For many, there comes a day when if one more customer says "rim" when he means "wheel," you'll just explode! Or placing a parts order one more time is just going to kill you. Or if one of your mechanics calls in sick one more time, you'll want to call in sick yourself. Or, you can't face one more tune-up. Or you find yourself being cynical or downright rude to customers. For some, symptoms may include extended lunches or coming in very late in the mornings, hanging out in the office when you should be helping on the sales floor, feeling sleepy in the middle of the day, mild depression, and an inability to concentrate. That's retail itch. It generally occurs around five to seven years into owning your store.
The cure is simple, theoretically. All you need to do is get your inspiration back. When you can be as excited about coming into the store as you were in the first years, that itch will be scratched.
So here's the good news: The itch does go away, if you are patient. It may take a week, a month, or even several months, but even if you do absolutely nothing about it, if you just trust that the mental weather will improve, it will.
However, it doesn't hurt to take some time to remember some things about your business:
* I once read that owning a bicycle store is the number one entrepreneurial dream of Americans, and probably of people throughout the world. You already have what they've been dreaming about.
* You get to be your own boss. You set the rules. You make and benefit from your decisions. (Do you remember when you were someone's employee?)
* You can make more money than most company employees. Oh, it may not be happening right now, but stick it out, and you'll be amazed at the profit. (Especially if you implement what's in this book.)
* You have a business with unlimited growth potential.
* You represent a good product. Bicycles are certainly earth-friendly. A human being on a bicycle is the most energy efficient machine on earth in terms of energy spent for mass moved. A human on a bicycle is also the most efficient animal on earth. Bikes play a central part in childhood, giving kids their first opportunity to expand out into the world, learning to be accountable for their own actions, pride and responsibility of ownership, and even mechanical skills.
Whereas bicycles are a potentially dangerous product, they are far safer than cars. The per-capita injury rate per hour spent in a car is greater than on a bike. By selling bikes, you are reducing use of cars, with all the danger, waste, noise, and pollution they create, and helping people to get healthy exercise.
* As a retailer, you get to meet lots of people and have wonderful conversations.
* You gain the esteem of being a business owner.
* You get to play with inventory management. This is a bit like stamp collecting. You manage an ever-growing collection of bikes, parts and accessories, and get to profit from 'trading' them.
* If you wish, you get to participate in the rewarding craft of bicycle repair.
* As the owner of a bike shop, you have the opportunity to branch out. You can manage a fleet of bicycles for package delivery or rental. You can build custom human-powered machines. You can teach bicycle repair. You can lead tours or sponsor races. Your bicycle shop can even become the stepping stone to philanthropic pursuits.
* Your shop can be your legacy. It can outlive you, being something that can be sold, or passed on to your children.
Finally, think about what it was that made you happy in the early days, and do what you can to recreate that. Was it the camaraderie in the shop? Was it new projects? What have you been meaning to getting around to doing? Move into a larger building? Create new wall displays? Rearrange the repair department? Build a custom frame? Update the bookkeeping system? Do it!
If you already have a bicycle shop, unless it is deeply under water, there are almost no circumstances in which adding a partner is the best choice. If you need more help, then adding employees, or scaling something back, are generally better choices.
Having a partner who has the same strengths and weaknesses as you means something won't be covered. That's a recipe for disaster. So you're specifically looking for someone who can supply what you don't have. Generally, the three ingredients that a partnership (or an individual) needs are time, experience, and money. There's a fourth ingredient - one that all partners need, and that's enthusiasm. You absolutely don't want to start something with someone who is not enthusiastic about the idea.
Before forming a partnership, assess carefully your partner's personality. Will you be able to get along with this person? How about in cloudy weather? Is the person lazy? How is this person with reliability? Does the person have shoddy ethics? Is the person obstinate? I once saw a bicycle shop almost destroy itself because one partner of the three who owned it suddenly decided that they needed new wall-to-wall carpeting just a few months after starting the store. It had a painted concrete floor that was just fine. Carpeting would have cost $10,000. I think any objective person would agree that carpeting was not a top priority in that store. But, he couldn't be talked out of it, and the partners nearly came to blows. Finally, the two other partners bought this fellow out, at an inflated price that took them years to recover.
In another case, a partner got evicted and decided to live in a little room where the inventory was stored. This was entirely against his partner's wishes, leaving less space for the business, and violating the local zoning ordinance. This fellow would do things like wake up and walk out among customers in the showroom at 11am, unshaven and shirtless. Nice partner, eh?
So, if you're going to consider a partnership, think about all the things that might go wrong with your perspective partners. Do not mention the idea of a partnership to any of your prospects until you are absolutely certain. It is harder to burst their bubble after you've created it, than before they know a partnership is being considered.
Family members can be the best, or the worst! I think you know what I'm talking about. A grandfather-grandson (or grandmother-granddaughter) partnership can be wonderful with the right people. I have seen several successful multi-generational bicycle shops.
Let's say you have a brother who has been in jail twice for drunk driving. He's unemployed again because he came to work too hungover. You might think that if you offer this brother of yours a partnership, it will help him. Wrong! You must, absolutely must, consider partners for their strengths, not their weaknesses, if you intend to succeed. And if you don't succeed, it will not help your brother in the slightest. It will probably make his lack of self-esteem worse.
How many partners should you consider? The minimum number you can get away with. If all you need is someone with repair skill, or someone who can greet customers from ten to five, then one partner is sufficient. Additional partners means that the profit is split smaller. It also means it is harder to make decisions. Larry Page and Sergei Brin have been very successful with Google. When it came time to make decisions, they had a brief discussion, came to a consensus, and moved forward.
On the other hand, I knew of an organic restaurant that had seventeen partners. One of their specialties was waffles. They had one waffle iron, and so customers had to wait up to 45 minutes for their orders in the morning. So, the seventeen of them had a meeting to decide if they should buy a second $30 waffle iron. The meeting, argument really, ran until after midnight, and they couldn't come to a consensus. In fact, it was weeks before they could all figure out that $30 was a reasonable price to pay to satisfy their breakfast customers.
Once you've sorted out who your partners will be, you need to state some things up front. Is one going to be a silent partner? If so, how silent? How will various kinds of decisions be made? For instance, the person working the sales floor probably shouldn't have to place a phone call to another partner if a customer wants a $10 discount on a new bike. What happens as the business grows? Do you add more partners? Do you hire employees? How do the partners decide on new employees?
I know of one bicycle store with a rather unique partnership. It consists of four people. One of the partners, Susan, comes from a wealthy family. She put up the initial investment which was enough to start a complete retail bicycle store from scratch. Since most people do not have that kind of money available, I recommend starting something small and building it slowly into a full-fledged retail business. More about that later.
Susan was married to Fred, a fellow who had retail management experience and loved bikes. Their friend Jacques also loved bikes and knew a lot about brands and accessories, so these two men ran the sales department. To break it down a bit further, Fred took care of the inventory and paperwork, and only appeared on the sales floor when Jacques was overwhelmed with customers. Susan didn't work in the shop at all. She took care of her and Fred's children. Finally, there was James, who was the repairman. He didn't have the kind of personality you'd want on the sales floor. But he was a wizard with a wrench in his hand. In this particular store, the repair shop was in the basement, and James was perfectly happy to spend all his time down there. In fact, as I understand it, that was set up as a separate business. The three upstairs partners had a contract to supply James with all the repair work. They get a small percentage of the repair income for writing up the repair orders, handling the credit cards, and so on. They also paid James a flat rate to assemble and adjust new bikes.
In summary, all the terms of partnership need to be discussed. More than discussed. You want the major points in writing, and a contract signed by all partners.
The most important clause in that contract will be an escape hatch for each partner. What happens if the business loses money? What happens if a partner becomes sick or dies? What happens if two partners can't stand the sight of each other after a while? Escape clauses need to be fluid. For instance, if a partner wants to leave early on, her value in the business is worth far less than after five years. These escape clauses must be manageable, so that it is truly possible to make changes in a partnership as needed. For instance, a very bad escape clause would be that if a partner leaves, the others have to immediately pay him $500,000. If an escape clause is spelled out in writing ahead of time, all will be well in these eventualities - or at least as well as it can be.
Another consideration in partnerships is your own personality. Take me, for example. I can't stand having to share my decisions with anyone. I have always been a sole proprietor. I'd make a horrible partner unless I was allowed to run the show 100%.
So, on the opposite end of the partnership spectrum is sole proprietorship. The individual owner doesn't have to defer to anyone before making major decisions. 100% of the profit goes to the individual. That's huge, even with just two partners. Let's say that the profit of a business is $60,000 per year. That means that an individual proprietor takes home $60,000. But two partners owning the same business would only get $30,000 each.
There's also an ego component. I love being able to say, "I own this." For me, it would be horrible to say, "I own a portion of this."
Consider options besides partnerships unless you are just starting your bike shop, and lacking time, experience or money, which partners can bring to the table.
It would be nice to have 10,000 square feet right in the middle of the busiest mall in town. That'll cost you $25,000 per month in most communities. Very few bike shop proprietors can afford that. OK, so maybe starting with 700 to 1,000 square feet in a strip mall or a place where people can see your signs and park is a better choice. That will cost between $700 and $1,400 per month. With first month's rent, security deposit, deposits with the utility companies, and some other startup expenses, that'll work out to $5,000. You might need to buy some furnishings. You might need to expand your inventory. You might not be able to cover the rent out of your gross sales for the first couple of months. We're talking about perhaps $15,000 that you can afford to risk.
If you are looking at 10,000 square feet in a busy mall, you'll want to really understand the expenses involved. Not only are you looking at the first several months' rent until your clientele gets used to finding you at a new location, you'll also have bigger utility bills and a large moving expense. If you can engineer your move so your first store stays open until the very moment the other is ready to run, that will save you many thousands of dollars in lost revenue that being closed during the move would otherwise cost.
If you have to be closed for a long time while moving to a new location, you might also take into consideration that many regular customers will start shopping in other bicycle stores while you are closed. They may not come back.
An option to cover the cost of starting a new bike shop or moving is to draw up a business plan, show it to bankers, or wealthy family members, and borrow the money. I don't recommend this approach. It shortcuts what is typically a necessary learning experience, and puts you in a high-stress situation that tends to last for years. It is also not necessary. Besides that, depending on the nature of the loan, you may feel like someone's employee, who has to do things the way they want them done, and has to explain why the repayment isn't happening as fast as they'd like.
So, looking at possible locations, first, you need exposure. You need to rent a store where your signs can be seen by a lot of traffic. This will work far better than any other sort of advertising. A good location is at busy intersections where people have to wait for red lights to turn green. They'll look around and see your bikes lined up out front. This has to be an intersection where everyone comes by from time to time, not an intersection in a neighborhood where it is only the same 500 commuters every day. Another location is inside a mall where there is a lot of foot traffic. And, not just any foot traffic. These people are there to spend money. Malls can be hard to get into, and expensive. If they're not, there may be a reason. I have seen malls with many closed stores, and very little foot traffic. That's not the mall for your store. If you can locate next to, or within eyesight of a Walmart, a busy movie theater complex, or even a Radio Shack, you'll do well, assuming people can park there.
If people find it hard to park, they may never bother to visit your store, so easy access is essential. Even though your business is bicycles, a majority of your clientele will arrive in cars. Look beyond easy parking. The parking lot should look inviting and have easy access. If people have to make a U-turn, negotiate speed bumps, and wait for an unloading truck to move, they're going to shop elsewhere.
Parking meters can be death to a retail business. If your customers have to put coins in the meters, they'll be agitated, impatient shoppers. Rather than focusing on buying your stuff, they're worrying the whole time they're in your store that their meters will run out of money. Worse, they remember this feeling from other times they have shopped in stores where they had to park at a meter. They may have even forgotten or got tied up, letting their meters expire, and had to pay parking tickets. So, they may never come to your store in the first place. They'd rather drive ten miles to another bike shop than park at a meter.
In many communities, there's the 'good side of the tracks' and the other side. The other side is not always so bad. If you are a good manager of people so that you can deal with the occasional unruly customer, you can save a lot of rent. You'll be serving a grateful clientele, one that consumes bicycle products and services as much as, or even more than a suburban clientele.
Some of the most successful bike shops I have seen are in the worst parts of town. Once the bike shop develops a reputation, people from all sides of the tracks will shop there. On the other hand, the suburban bike shop will tend to service only a local clientele.
My first bike shop was in one of the 'bad' areas. Most of my clients were peaceable, good people that I enjoyed having in my store. A few were real weirdos. One fellow, although very nice, came in and browsed almost every day. He never said much. Oddly, he always wore brown pants and tan shirts. Not a uniform, just his colors, I suspect. But that's not particularly weird.
Now, Larry was really weird. He was an air-traffic controller who became over-stressed in the Vietnam war. He was also one of the highest-ranking chess players in the nation. Very thin - I suspect because he often forgot to notice he was hungry. Sometimes he'd come in during the summer dressed in seven layers of shirts and sweaters. Sometimes he'd wear a huge clunky necklace he'd made out of derailleurs, brake calipers, hubs, and other parts. He was quick and jerky in his movements and in his speech. He became a bike shop regular.
One slow winter day, he challenged me to a chess game. He had a three-minute limit. I had infinite time. He sat on a stool at the sales counter, facing away from the chess set, and blindfolded. I was able to look at the chess set. As soon as I announced a move, he called out a response. Typical of Larry, his responses were lightning-quick, and way too loud. I pride myself in being fairly good at chess. Larry won in 20 moves. with two minutes and twenty seconds left on the clock - two seconds per move! Then, he had me reset all the pieces, and still blindfolded, he replayed the entire game from memory.
You'll soon discover that every bike shop has its groupies. Most of them spend only a little money every month, but they are very worth supporting because they bring all their friends to your store. Larry, however, was a case. He'd do something like start a conversation with another customer. Then, out of nervousness, he'd take a bite out of the newspaper he was holding. Discovering that his mouth was full of newspaper, he felt he had no choice but to chew it up and swallow it. I don't know whether Larry had any friends, but he was so quirky, I enjoyed having him around. That is, most of the time.
I used to keep the phone on the front counter, so I could answer it without having to move anywhere. One day, it rang as usual and I reached to pick it up. Larry snapped it up in a split-second, listened for perhaps five seconds, then yelled, "*%@@&!" into the phone and hung up. I threw him out of the store. The phone rang again. It was the sister of one of my mechanics wanting to arrange a lunch with her brother. For the next 45 minutes, Larry loitered across the street, trying to look casual while leaning on a vending machine. Finally, I let him back in the store.
I wanted to take a moment to point out that this photo, and several others, were taken with a Kodak Instamatic, a state-of-the-art point-and-shoot camera, more than 40 years ago.
I have had a few worse customers. Shoplifters. People who just can't seem to stop yelling. People who are obscenely dressed. They are few and far between, but if you have a sensitive heart, you might prefer to set up in a 'better' part of town, or hire salespeople who have strong people skills.
You must rent space where the zoning is correct. The reason you don't see auto body shops in residential neighborhoods is because they are typically noisy and stinky, and so the neighbors, through local government, have agreed that only homes, and no businesses, can be established in those neighborhoods.
In the middle of the city, where there are stores, factories, offices all lined up, the zoning is much less restrictive. Pretty much anything goes, but before you sign any leases, you'll want to actually google your community's zoning office, then email, phone, or visit them with the address you're proposing to rent to see whether it checks out.
You can email or call your community offices, and they'll tell you how to get in touch with your zoning department. The zoning department can instantly tell you whether a potential building is zoned correctly for a bike shop or not.
Zoning also controls what kind of signage you can display. Be careful about that before renting. You wouldn't want to be restricted to a 2-foot by 3-foot plaque as I once was at a business location in Marin County, California. If you violate signage zoning, they typically issue a notice to quit doing that - take down your offending sign - within 30 days. No fines, no court, no jail time.
Saving rent is essential, especially in the early stages. The difference between $1,000 per month rent and $1,200 is a lot of inventory. On the other hand, if you can get a location with good exposure and parking for $1,200, or a junky location for $1,000, you are way, way better off getting the place with exposure and parking. For the $200 per month you'd save, you could never buy enough advertising to make up the difference.
That's an escape clause. What if you get into your building, and find out that a neighboring dog barks all day long? What if a dry cleaner moves in and fills the neighborhood with toxic perchlorethelyne fumes? (This actually happened to one of my coaching clients. He was able to convince the dry cleaner to put a tall pipe on the roof to carry the fumes higher where they were no longer bothering anyone.) What if road construction starts right in front of your store? What if you need to move to a larger location? What if the traffic patterns don't bring as many customers as you had hoped? You need an elegant way out, because you don't want to be responsible for a year's rent, or even five years.
If you have a clause written into the lease before you sign it that allows you an early exit if needed, your life will be much less stressful right from the start. Oh, you will probably never need to use the escape clause, but it will give you peace of mind knowing it's there.
A typical escape clause is that you can move out immediately if you give the landlord a payment equivalent to three months rent.
Sometimes, a landlord will want to know that you plan to carry liability insurance before they'll grant a lease. But you may want to get insurance anyway, as soon as you can afford it. If you are wealthy and something should happen, you want to protect your assets. You don't want to be sued, or if you are sued, you want the insurance company's lawyers working for you, and you want them to cover any eventual settlement. If you have pretty much nothing, you are not likely to be sued, because the opposing lawyer will see there's nothing to collect, and therefore no incentive take the case. Still, you may want insurance. This is to protect your customers. What if something did happen? In a bicycle shop, there are exposures. A customer may crash on a test ride. A customer may fall on the front step. Once, an eleven-year-old boy tried to ride his bicycle up a stair and into the narrow front door of my shop. He lost control and slammed into a plate glass window. Fortunately, the window didn't break and the kid wasn't hurt, but it could have been a different story.
Another time, I was trying out a new mechanic. She came highly recommended, but she was very shy and nervous about her trial day. If you've ever been nervous, you may remember how you don't see details as clearly as you would if you were calm. We had a chain strung up at waist height across an opening between the sales area and the service area, with a sign that said, "Authorized Personnel Only." Just before lunch, in front of two mechanics, three sales people, and several customers, she came walking through that opening at a fairly good clip, and somehow didn't see the chain. She went head over teacup, or whatever the expression is, doing an almost 360 degree flip over that chain. She wasn't hurt, but she was so embarrassed she ran out of the shop and didn't return. I had to phone her at home and let her know no one was laughing - even though secretly we were.
You get the idea. If something serious happened to a customer, wouldn't you want to know there's a way to pay compensation? For a regular size bicycle shop, general liability insurance costs around $500 to $800 per year. A fringe benefit to the general liability policy is that your own tools and inventory are covered in the case of a fire, major theft, or similar eventualities.
Are you starting to worry that something could happen? In all my fifteen years in the retail bicycle business, I have to admit I took some rather large risks, but I was never sued. I never even came close.
Personality may have been helpful. First, I cared about my customers, so I was always conscious of making sure bikes were safe, and that the store itself was safe - no ice on the sidewalk - that sort of thing.
Another bicycle shop, about the size of mine, had three concurrent lawsuits. What was the difference? I was always polite, and more than polite. I was friendly with my customers. I kind of wanted them all to be friends. They knew this, and loved it. If I had been like the proprietor of the other place, I would have been cranky, and well, just the kind of person you'd sue, given half a chance. He was also careless in his repair work. I think his motto was just get it done, more-or-less, charge the money, and get it out of the shop. The people he hired were the same way, or they became that way once they had been working there a while, having learned the mood of the business in that store.
You may have heard of Patch Adams. He is a doctor, a general practitioner, who practices for free, or for donations. He does not carry malpractice insurance, which is unheard of for medical doctors. One out of sixteen doctors is sued every year. But Dr. Adams is doing good work, really cares about his patients, and they know it. If something goes wrong, they know he did his best. He hasn't ever been sued, as of the last time I checked. But it isn't quite as simple as that. He may be lucky, or probably has little personal wealth, so suing him might not be sufficiently profitable. However, the insurance companies' lawyers do not take into account how likable or how well-meaning a person is. They just look to see if there are assets to be taken, and a legal way to take them. So, as you start to gain wealth in your bicycle business, you may be well-meaning, and you may have a well-meaning client who has been injured. The client would never sue you, but his insurance company will.
Since it is so easy to take and store digital photos these days, it is well worthwhile to go through your shop every couple of months, taking a large number of pictures, so in case of a fire or something like that, you have proof of what was lost.
In America, because you are self-employed, you end up paying 13.5 percent of your personal income in Social Security Tax, which seems like a lot compared to the 7.25 percent that is withheld if you have a job. But the truth is your employer pays the other 7.25 percent. Still, it is a lot of money, and the government doesn't trust you to hold it. Therefore, you are supposed to fill out a 1040-ES four times a year, and pre-pay your taxes. For the average bike shop owner, the income tax situation may seem shocking at first. Instead of getting a big refund at the end of the year, you have to pay thousands of dollars four times a year. To reframe this more comfortably, remember that as a self-employed person, you have the potential to make far more money than most employees will ever get. Once you're making enough, the taxes seem trivial. This is pretty much the same in most countries.
As far as filing your 1040-ES forms, Schedule C, and all that, the online software will guide you. Or, if you like doing things yourself, you can find out everything you need online, and you may discover it is all rather simple in the end. By the way, if you fail to pay the 1040-ES payments, life doesn't end. You just pay it all in April, and a small ($20 - $50) fine for not pre-paying. If you can't pay in April, the IRS will let you make payments, although they do charge a fairly hefty interest rate.
I have seen many proprietors drive themselves crazy to count their entire inventory once a year. Some of these people count and note every little thing in their store, such as individual axle nuts, even bearing balls. Unless you have a business loan arrangement in which this is required, there is no need. For income tax purposes, it is completely sufficient to do a rudimentary count, filling in many details with guesses. In the worst case scenario, an audit, as long as your guessing was honest, you'll be close enough that it will not be a problem. All the Schedule C wants to see is a final number, like "Value of Inventory at End of Year: $186,000." The IRS does not want to know that you have 742 270mm spokes. In the rare case that you might be audited, it is best to have paperwork in your files that pretty much confirms your stated inventory value, but again, it does't have to be "742 10-5/8" spokes." It can be "approx. 750 10-5/8" spokes," or even "approx 3,000 spokes of all sizes."
On the other hand, a good reason to have at least a reasonable inventory list in your files is in case of loss. If your shop is flooded, assuming you have flood insurance, the inventory list is your claim for reimbursement. The more detailed your inventory list is, the more water-tight (pardon the pun) your case will be. If it is backed up with recent photos, that's all the better.
I have tried to be honest in all my businesses when it came time to fill out and pay taxes. It would be inappropriate for me to carry on in this book with my philosophy about income tax, but you would probably agree with me. Whatever your attitude about taxes, it is better to be able to sleep at night, knowing your not in trouble with the IRS - or anyone for that matter - don't you think?
Anyway, what I want you to know is that the possibility of an audit if you don't cheat is very, very low. Even if you make honest mistakes. After all, you're not a trained accountant. You're a bike shop proprietor. The people who work in the tax agencies know this. They don't want to break you down. On the contrary, they want you to be successful, so you can go on paying taxes year after year, so they will support you.
A couple of times, I have made mistakes in which the numbers don't add up right. On one occasion, the IRS sent me a letter saying due to my error, I owed another $320, plus $14 interest. I don't remember the exact numbers. It was something like that. On the other occasion, they gave me back $242 or so due to my math error. Now that I use HR Block Online, these problems don't happen any more.
I have never had an audit in well over thirty years in a wide variety of businesses. I have had two cases where I was contacted by a tax agency, and in both cases, it worked out fine. Here they are:
In my first bike shop, once I converted all my mechanics and salespeople to a commission rather than hourly basis, I didn't quite know the best approach regarding employee taxes. I figured they were actually independent contractors and treated them as such. I didn't collect income and Social Security taxes after they became contractors.
At one point, one of the mechanics consulted the IRS about how to fill out his tax forms. They mailed me a questionnaire that kind of scared me. After all, no one wants to be in trouble with the IRS. They had about twenty questions. Among them were, Do I set the hours or do the employees get to pick their own hours? Do they own their own tools? Do I tell them what to do? Can they refuse to do a job?
I answered every question truthfully. I sent the letter back to the IRS and waited six worrisome months before they finally replied with one short sentence, "The IRS has decided in your favor."
Knowing what I do now, I would have continued to withhold taxes and do the proper paperwork for these people anyway, considering them as employees instead of contractors. In fact, in later businesses, that's exactly what I have done, and all has worked out perfectly.
The other case is a bit off-topic, but it illustrates a typical real-life situation. I sold a bookstore in California. One of the forms I had to fill out was from the State Board of Equalization. That's what they call their sales tax agency. The form was to list assets such as cash registers, light fixtures, and sales counters of the store I was selling. I don't remember exactly why, but I was supposed to pay sales tax on the assets, not the buyer. I think that's how it's done in California. In any case, I didn't mention $300 worth of lumber, from which I had built shelves. Somehow, the tax people discovered the lumber, and made me pay approximately $28 in sales tax.
If you have already set up an account with your bank or a typical credit card service company it may be too late, at least for now. When you open a branch store, or when your contract expires, you may find the following information useful:
Setting up to accept credit cards used to be complicated and expensive. In a recent retail businesses, I had to sign a three-year contract at $35 per month to get a credit card machine. Now, PayPal.com, an online money transaction company, makes it super-easy, and free! Sign up for a free PayPal account if you don't already have one. Then look for "On Your Mobile Device" or something similar, since they change the layout of the website from time to time. When you click through, you are taken to a page that explains how you can accept all common credit cards on any standard smartphone. PayPal even mails you a free attachment for swiping the cards. When you take a card payment, the money goes instantly to your PayPal account. From there, you can transfer it to your checking account, spend the money on eBay, have a check mailed, whatever you want. PayPal takes only a small percentage from each transaction, the same or less than any of the old-fashioned credit card companies used to charge.
The only downside is if you're running a busy retail store, dedicating one or more smartphones to take credit cards may not be the most sensible solution. Plus, you have to keep track of your smartphones. Salespeople could misplace them or customers could steal them. (I once had a customer 'shoplift' a cordless phone used in one of my stores. I'm not sure what good it would be without the base. Perhaps it was a child who stole it.) You may prefer credit card scanners that are wired and sit on a desktop. There's a good chance PayPal will provide this option in the near future.
By the way, the thirty days starts from the time someone has complained and the city issues a letter. Sometimes, you can violate the sign law for years. I'm not saying you should, of course. . .
Depending on where your shop is, and the sign laws in effect, you are probably able to lock up a line of bikes in front of your store every day. If you are fortunate, the bikes can be seen from passing traffic. Nothing says "Bikes For Sale" more than, well, actual bikes for sale, all lined up.
The only downside is that you need to roll the bikes out every morning, and roll them back in at night. If your store is small, then a big plus is that you can display more bikes than would normally fit in your store. Rainy days can be problematic. Some stores just put the bikes out in the rain. Others squirrel the bikes away in nooks and crannies within their store on inclement days.
If you can place your bikes on a raised platform, even if it is only a few inches higher than the ground, it may make the bikes more visible to passing motorists.
Can you put bikes on the roof?
Some stores make a bike into a sign. They simply mount an old bike at the top of the building. Whether this qualifies as an actual sign in various communities varies.
Then there's bike sculpture. You can take some wheels, some frames and je ne sais quoi, weld them together any artistic way you like, and you've got yet another attraction that will bring people's eyes to your actual signs, to your store, thereby raising awareness.
For almost all computer printers, you can look up the ink cartridges you need on eBay, and you'll be surprised at the amount of money you can save. Cartridges that are $30 at the local office supply store can be had for $3 or $4, postage included. I don't know how these companies can make any money at such low prices, but it has been going on for years.
The trick is after you enter the model number of the cartridge you need in the search field at the top of any eBay page, click the "Buy It Now" tab, then in the Sort menu, select "Price + Shipping: Lowest First."
The quality of these cartridges is just fine. I have a Brother MFC-255CW printer that has spit out more than 20,000 pages, with more than 1,000 in full-page color, and it still works like new, even though I have used nothing but cheap eBay ink since the printer was purchased several years ago.
It's not always like that, but more salespeople do it that way than we'd all like.
I'd like to propose that on busy days, you juggle customers whenever possible. While one customer is holding a jersey that she might buy, you can answer a question from the person behind her. When a customer brings in a repair, you can hand the ticket to him to fill out (asking him to print clearly), or turn the computer around so the customer can fill in contact information himself. Meanwhile, you bring out the two derailleurs another customer wanted to compare. While this is all happening, you can answer a question about tires from someone else. This is customer juggling. What happens is that everyone gets attention every minute or two. True, each customer may require a bit longer to get through their transaction from start to finish, but they end up spending no additional time in the store. The big difference is they all get to participate, to feel like they got a lot of personal attention, rather than the bulk of the time waiting for the customers before them.
You do want to be careful to avoid the impression that you are not focused on a customer's needs, or that you are easily interrupted, or that you are too willing to interrupt. It's juggling. On the other hand, if you've got someone who is asking a million questions, even though they are valid, it is OK to say, "I'm so busy today. Do you mind if I get back to you in a couple of minutes?" In some cases, you can explain to the customers exactly what you are doing: "I'm juggling everyone so no one feels neglected."
The customers will understand and love you for it.
If you show a number of accessories to some new bike customers, and they decline them all, have no worries. They'll be back later on to buy some of the items you suggested.
That incident caused me to really think about my test ride policy. I considered everything from not allowing test rides at all, to making no change in policy. In the end, I considered test rides important, but didn't offer test rides to people who didn't seem trustworthy, and just held driver's licenses from those who did. No more bikes were stolen in that way. I did lose three more bikes during my first five years in the business. That's a reasonable proportion compared to the number of bikes I dealt with. Two just disappeared off the sales floor one day. I think someone just walked out with them when there was no salesperson in the front room.
In another case, I learned about extending store credit. A fellow bought a new bike. I tried to sell him a lock, but he wasn't interested. A few days later, he came to buy another bike. His first had been stolen. Still, he wouldn't buy a lock. A month later, this happened again. In retrospect, I should have realized this guy had a screw loose. Anyway, over the course of a year, he bought a total of five bikes. When it came time for the sixth bike, he told me he was short of cash, and could I just give him the bike today, and he'd bring the money on Thursday. Since he was such a good customer. . . I never saw him again.
Looking at all this from another prospective, how much would it cost to totally trust most customers?
I recently walked into a bicycle store, and saw a bike with a NuVinci hub. It is a fascinating new continuously variable transmission. The shifter doesn't have any clicks or positions. There are no 'gears.' Instead, the shifter has an infinite number of positions, so you just turn it from low to high, and always have a gear ratio that's just right.
Without knowing who I am - I could have been anyone from a saint-to-be to a thief, the proprietor saw me looking at the bike and suggested I take it for a test ride. No driver's license required, nothing. Just take it and go. Now you probably can't do that in some parts of Chicago, and you wouldn't do it with a group of three or four teenage boys, but this was in a fairly small town, where most of the residents are honorable and I was well, older than a teenager. So what was his percentage of risk? What's the potential profit in comparison, when customers feel his absolute trust?
I feel that with bicycles, test rides are important. Once the customer has ridden three bikes, s/he will have an opinion, and will know which one is right. I encouraged test rides - for those buyers who I thought were responsible and legitimate. From those customers, I would hold their car keys or driver's license until they returned. Some stores do not allow test rides, preferring to keep all the bikes absolutely new until sold. Some stores have designated test ride bikes, so most of their bikes remain pristine. I understand the various points of view, so I leave that judgement up to you. By the way, if you do allow test rides, it is absolutely essential that all your bikes are properly tuned so the customers will be impressed, and safe.
Between test rides, make sure the derailleurs are set to a low gear, so the bike will seem effortless when starting out.
They loved this, and often purchased a certain brake, hub, or derailleur because it was lighter than the others. Many of these are people who came in not expecting to buy anything. Many others played with the scale while they were waiting for service. Keeping customers who have to wait happy is very good for repeat business, and they'll talk positively about your store. Many others who played with the scale ended up with purchases of things having nothing to do with weighing components, such as a new bike or cycling jersey. (Often, just for fun, they weighed the jersey.)
I made a drilled-out plastic seat, a drilled chainring, and some other lightened components, so people could see the differnce in weight. This resulted in the sale of additional customized components, even though most of these lightened things had an insignificant difference in weight.
Guess what? There is another way. I call it "display boards," although there is probably another term. This is what I did in all three of my bike shops, and it worked great.
I bought 2 x 4 feet pegboard panels from the lumberyard, and put 1" x 2" framing behind them. The frames were slightly smaller than 2 x 4 feet, so that the frames didn't come all the way to the edges. Then, I bought inexpensive colored burlap and upholstered it to the boards, just using ordinary tacks. Finally, I put eye-hooks in the tops of the board frames, and hooked them onto screws driven into studs in the wall.
Then it was time to display merchandise. I'd use picture framing wire to tie things onto the boards. Sure, a shoplifter could come equipped with pliers to steal things, and sure fidgety children could mess around with the samples fastened to the walls, but these things seldom if ever were a problem.
You can choose any color combination and any kind of cloth you like. In the picture below, from my first bike shop, you'll see I used black and brown boards. One nifty advantage is that we only had to use one price sticker for each kind of thing in stock. And, it could be a big, easy-to-see, nice-looking sticker. If I wanted to change a price, I just changed the sticker on the board, not every one on each item in stock.
The downside is that for every item sold, a salesperson had to go into the inventory room, and get the thing off the shelves and bring it to the counter. We offset this minor inconvenience by putting the most commonly asked for items on a shelf just behind the sales counter. Also, if someone wanted the last one in stock, we'd have to clip it off the board, leaving an ugly open spot where it had been displayed. Oh, and another downside: Although it was easy to take the boards off the walls and put them back up, it did take a little bit of time to wire new samples onto the boards.
A big plus is that it was quite elegant! A bike shop outfitted this way is a cut above the others in the way it looks and feels inside. The customers seemed to enjoy shopping from the walls. It eliminated shelves in the showroom, leaving more room for bikes and dedicated displays. I do believe customers were more inclined to buy things if they could see and touch the actual items, rather than picking among boxes and packages on shelves. The main reason may be that by using the boards, we were able to categorize things. For instance, in the picture below, you'll see several boards. The one in the top right corner is all front derailleurs. It allows the customers to compare easily.
Of course there are options besides reel-to-reel. For instance, you can run a nice channel on Pandora.com. This is Internet-based radio where you can pick a song or artist, and then the website plays related music all day long. Pandora is free as long as you don't mind advertisements every now and then between songs. Or, you can pay small a subscription fee for reduced advertising. Even if the ads are running on Pandora, or you just have regular radio in the background of your store, the customers don't seem to mind. They still enjoy the effects of interesting music coming along now and then, and the masking of background noises.
Something interesting happens fairly consistently if you have a radio station that starts playing commercials from another bike shop. Your customers laugh. No worries, I never had a customer run out of my store after hearing an ad from a competitor.
I have been in stores where the music is too loud. That can work great for about ten percent of your customers. The other ninety percent will learn to shop elsewhere.
I have found that you can create a channel called "Celtic" on Pandora that everyone seems to like.
scenes from the repair area
One of the more impressive tools was a large dial indicator on a magnetic base that I attached to a wheel truing stand.
With this, we could align wheels to within 0.004" (four thousandths of an inch), whereas without, the best one can see is around a 0.020 (twenty thousandths) variation. But that wasn't the point. This little tool will cause your customers to think that your mechanics are highly-trained, super-competent technicians. You can pick these up for a lower than average price at Harbor Freight outlets.
If you look closely at the lower left corner of the first workshop photo above, you can see the dial indicator on a truing stand.
The customer was always right. I would never argue with someone about a problem. (Probably because I was too timid.) It was instant refund, always. The percent or two of gross sales this may have cost was well offset by the reputation this built.
This is the way most department stores do it, and it has become expected from the general public. Most people do not take unfair advantage of the policy. The modern customer would be shocked to take an item along with its receipt to a store for a refund and not be able to get that refund.
I would make special deals, accommodate special needs, and talk to individuals as if they mattered - because they did. When someone brought in a bicycle for repair, I'd take a couple of minutes to look it over carefully. I might find a loose headset, or an untrue wheel. I'd recommend additions that made sense, but would not push them into buying more than they wanted. For instance, a customer might bring in a bike for a tune up, which was $29.95 back in those days. I'd notice that the back tire was quite worn, and sell a tire and installation. So now, instead of a $30 sale, I had a $50 sale, and a happier customer, because I noticed a problem with the tire that could have caused trouble for him later on.
One day a young, bearded fellow came in with an old cruiser. He was wearing torn, slightly stained jeans, and a ragged T-shirt. I assumed he was living in his car or something very low-income like that. He asked how much it would be to fix the bike. I looked it over, and it had fatigued spokes in the rear wheel that were breaking at the hub, problems in the bottom bracket, plus the tires were quite worn. I told him that the repairs would be costly, so he shouldn't bother. He told me, "The groundskeeper likes it, so go ahead and fix it." I didn't recognize him, but I'm guessing he was a rock star or some sort of very successful, and perhaps eccentric, individual.
We learned to watch the customers' physiology. You already know about physiology. It is instinctual. It's a survival skill. We know when people are nervous, angry, happy, gregarious or shy. But in this modern world of ours, we often overlook this skill. If you start noticing your customers, really observing them, you can tell who wants to talk, and who doesn't. You can tell whether when you start to draw someone out of their shell it is working or not, and whether you should continue being 'friendly,' or whether a customer really does want to be left alone to quietly shop and consider. And, you can see the mood change, and if you aren't too busy with other customers at the time, you can then give attention, when the customer is ready.
We learned how to close a sale. We learned to start writing the price on a sales ticket. We learned to ask double-bind questions. These are questions in which the customer is expected to make a selection between two choices, either of which is a commitment. For instance, "Would you like me to show you some accessories with this, or do you want me to write it up as-is?" Or, "Do you want to pay the full amount now, or just leave a deposit?" Here's one that always brings a smile when a customer is considering a bike. "So, do you just want me to write up one of these, or two?" Now, the double-bind doesn't always work, but if done subtly, after you have become 'friends' with the customer, and if late enough in the process, it doesn't scare anyone off.
Sometimes you can joke around a bit, and it breaks a kind of ice. One of my favorites is when the customer asked the price of perhaps a $329 bike, I'd say, "With tax, that'll be $1307."
Another one, said loudly when someone hands you $10 or $20 cash for a small item, more for the amusement of the other customers in the room, "That'll be $4.97 out of $500."
Or, "Here's your change, four thousand dollars."
The worst case when you press too hard is that the customer backs away. You can ask things like, "What would it take to make this a done-deal for you?" This may bring a response you can't comply with, such as "Give it to me for $100 less." You can come back with, "Well, I can't do that, but would you buy it if I can throw in a lock?" (Assuming your store policy is to wheel and deal a bit.)
Sometimes, a brilliant response when you've pressed a customer a bit much is, "Well, I can see I've been pressing a bit much. Please feel free to take as long as you need, and just signal me when you're ready."
Once you see they are ready, do the paperwork right away, and do not continue to 'sell' the bike. I have seen salespeople do this so often, I think it is a flaw in human nature. The customer says, "OK." The salesperson then says something like, "Oh, I know you'll really enjoy taking this on the trails in the park. . ." And the salesperson goes on and on. But the bike is already sold. Sure enough, after a minute or two, the salesperson puts a foot in the mouth, or the customer suddenly gets corcerned. For instance, the salesperson might say, "Well, riding in the rain isn't so great, but you can wear rain gear." Now, the customer suddenly imagines himself riding in freezing rain, and isn't so sure he wants a bike!
The one big exception to closing the sale as soon as the customer agrees is that you want to see whether you can suggest some accessories. You are doing the commuter a big favor by recommending a good lock, and you are doing everyone a favor recommending a helmet, the mountain biker might want to upgrade tires, and the racer may want to pick up shoes at this time. As I have mentioned elsewhere, sometimes the profit from accessory sales can exceed the profit from the bike sale itself.
Most will end up keeping their bikes. The few that were refunded, can be sold as 'slightly used' at a small discount, and you still came out ahead. In fact, the 'slightly used' bikes are very appealing to some customers, and even with a tiny discount, they are easy to sell.
You might think ninety days is excessive, especially on clothing or on used equipment. However, I once talked with a shareware author who offered a thirty-day warranty. When asked why she didn't do the usual thirty days she said, "People who have thirty days feel pressed to make sure they return it on time. With a ninety-day warranty, that pressure is gone, and by the time 90 days rolls around, the interest in returning the item is long past and forgotten."
Good point, don't you think?
This little procedure I'm about to tell you about takes just a few minutes, and can change your situation with a customer, employee, landlord, or just about anyone, sometimes in spectacular ways. It is not necessary to do this thing exactly 'right.' If you mix up a step or have something out of position, it is likely to work well anyway.
This chapter is written as if you are using the technique for yourself, but you can just as easily guide someone else through this procedure.
1. If your most vivid memories of this undesirable person involve sitting, arrange three empty chairs approximately as shown. If it was a standing situation, chairs are not needed.
2. Sit in chair A. Try to imagine your 'undesirable' person sitting in chair B. With the parts of you that know how to do it, move yourself into your co-worker in chair B, and see the world through the other person's eyes, hear the world through that person's ears, and so on. For the next few minutes, you are the other person.
3. As that other person, you are looking at yourself in chair A. What do you see? What do you hear? What do you feel about the person in chair A? What do you think about that person in chair A?
4. Whenever you are ready, get up, and do something to break your state. Spell a word backward, walk in a circle, just anything to free your mind for a moment. <> 5. Sit in chair C and become an independent observer. You are not yourself or the other person. As the observer, what do you see, hear, think, feel about the interaction between yourself in chair A, and the person in B?
5a. Imagine/sense that your chair is very far removed from chairs A and B, and see if anything changes. How about if your chair becomes very close?
6. Break your state. Sit again in chair A, be yourself, and notice if anything has changed in your thoughts about the other person.
7. As necessary, feel free to repeat the steps of this procedure.
In the meantime, the best system is want lists. You, and everyone who works in the store should have little notepads available. As soon as anything appears to be in too low a quantity, it needs to be written onto the list. So, if a mechanic uses the only seven-speed trigger shifter, she writes it onto the list, and a replacement is put back in inventory. If the sales person notices that there are only six Kryptonite locks left, they go on a list. You place small orders from the want lists every couple days. Maybe every day at first until you have enough wealth in the store to support a larger, more redundant inventory.
You, or the person who manages your inventory, gathers all the want lists, crossing things out that are not practical or of which plenty are still in stock. This way, the mechanics and salespeople don't have to be inventory experts. All they have to do is write down anything they think the shop should order.
If an order arrives but something on the order was out of stock, it is written back onto a want list.
When you believe you're ready to transition, keep in mind that you have to list your entire inventory on the computer, and this can take quite a long time. If your store remains open during the time you computerize, you'll want to be sure your system for inputting information is organized, so that by the time it's done, it is not all out of whack.
No doubt you've heard, "Garbage in = garbage out." This couldn't be more true than in inventory management. If someone accidentally indicates that you have 100 26 x 1.75 inner tubes, but in fact there are 10, then you'll run entirely out of those inner tubes at some point. Depending on how your inventory is stored, something misspelled can be misplaced forever. A computer-managed inventory requires manually counting (or estimating) everything and comparing it to the computer records at least once per year.
On one end of the spectrum is West Coast Cycle, which is a general bicycle parts and accessories wholesaler in Carson, California. From them, you can buy Zefal pumps, spokes, headlights, brake pads, handlebar stems, whatever you need. They also supply the CyclePro line of bicycles. Anyone who has a bike shop can buy from West Coast Cycle.
Then there are specialized companies, such as "Specialized." (Yes, that's their actual name.) They sell only certain parts or bikes that carry their brand name. Companies like Specialized, Raleigh, KHS, Schwinn and others have what they call protected dealerships. If another bike shop within a certain distance of your store, typically five miles, is carrying the brand already, you can't carry it.
Schwinn used to be on the far end of the spectrum. In the past, you had to be an exclusive Schwinn dealer. You couldn't sell Peugeots along with your Schwinns. You had to have company-approved display equipment. Even the cash register had to be Schwinn-approved. There may still be some companies around with such severe restrictions, but they are few and far between.
In my first bike shop, for my first parts and accessories purchase, I had a total of $200. I wanted to have a few of the popular size inner tubes, a few patch kits, one headlight, one taillight, one bar lock, and so on. I had to show the widest possible range of inventory. I always thought dealers had to buy things in dozen-lots or even hundred-lots. It turns out many wholesalers will sell as few items as you want. From some, you can literally buy a single axle nut. The prices for such small quantities are only a fraction higher than in large quantities. For instance, you can buy a single patch kit for 50 cents. If you buy a hundred of them, they are 40 cents. I was also surprised by the size of the markup. I figured on a $20 saddle, I'd make perhaps $4 or $5. But no, the saddle that sells in the store for $20 costs only $10 or $12. Sometimes, the wholesalers will put that saddle on sale for $8.
You'll want to have accounts with several wholesalers. You will find that one has a certain popular tire for $3 less than the others. So you buy those tires from that supplier. Another will be the only one who carries seatposts (OK, "seat pillars" if you're obsessive in bicycle terminology.) in all the diameters you may need, and yet another has all the little Shimano parts that the others don't carry.
You'd be surprised at how helpful the wholesale reps, and the salespeople in the wholesaler's office can be, if you'll ask them. Oh, they probably don't know much about bike repair, but they can tell you that 26 x 1-3/8 tires don't sell very often (so you shouldn't stock very many), and 26 x 1.75 tires are the most common. You might already know this, but no doubt there are places where you can use their guidance. You can do things like tell them to send you $400 worth of the most common handlebar stems, letting them work out the details, so you don't end up with the weird stuff, and you can fulfill most requests when someone needs a handlebar stem.
With careful management, your store can satisfy 90 percent of your customers' requests. More important, more than 90 percent of the repairs will be completed in a single session. It is expensive to start a repair, wait for a part to arrive, then resume. Furthermore, the customers don't like having to wait a few days for parts.
Interestingly, with a fairly small, well-managed inventory, you can fulfill ninety percent of requests. If your inventory is ten times larger, you can still fulfill only perhaps 92 percent of requests.
I knew of a camera store owner who carried a single Hasselblad, a $3,000 camera. When it sold, he ordered five more. It turns out that was a bad move. Hasselblads sell on average only once or twice a year in a small camera store. That purchase tied up $15,000 that could have been spent on inventory that turns faster. For instance, if you think of a patch kit. You can order fifty at a time, you know they'll sell out in a month. So, you could say that you can "turn" patch kits twelve times a year. If your markup is 100% on a patch kit, then $1 invested turns into $12. Or, if you could buy $1,000 worth of things that turn twelve times a year, your $1,000 investment would grow to $12,000 in a year, a $11,000 profit. Not bad, eh? On the other hand, you can buy a $4,000 mountain bike with a 20% markup (retail price $5,000). It might sell in a year. So, your $4,000 turns into $5,000, for a profit of $1,000. Not as good.
In time, you'll find out which wholesalers are best for most of your inventory. Then, every couple of months, you can crack open a catalog or website you don't usually deal with, and order a bunch of things your store doesn't normally carry. You'll be surprised by a few of the items. For instance, you may discover that a certain kind of mountain bike fenders are very popular. You'll also end up with a lot of odds and ends to fill out your inventory. But, how nice it is when someone comes in for a Shimano axle, or a pad for a Mafac brake, and you have it in stock!
Once your shop has a large inventory and plenty of money, you can make even more money by ordering as many sale items from wholesalers as possible. Almost all wholesale suppliers will have weekly, monthly, or holiday 'specials,' as well as other reasons to discount some items. Many of the discounted things will be oddball inventory that you can't sell, but much of it will also be spot-on. You're looking for sales on the ordinary everyday things that people want all the time, such as brake cables, inner tubes, helmets, and locks. You can constantly shop the sales, stocking up on large lots of anything good that's on sale. So, if you normally pay $8.00 for 26 x 1.75 tires, and you can get a hundred of them on sale for $5 each, your profit is an additional $300.
Be careful of sales of discontinued items unless you know exactly what you're doing. There's a reason most of the stuff was discontinued.
My bicycle shop started smaller than what I recommend to others. I started in the autumn in a city that gets significant snowfall. I had six used bikes. After paying the rent and deposit, I had $120 left, which quickly went to utility deposits, paint and wood for signs, and so on. It wasn't even a real bike shop. Because I had so little, I started it as a general fix-it shop, specializing in bikes. In time it evolved into the premier 'pro' shop in the city. But the first few months were tricky. From the beginning I planned to make it a bicycle shop, not a fix-it shop. By the end of November, I had $200 more than necessary to pay the rent and utilities. I placed my first wholesale order of parts and accessories. I sold most of the original $200 order, and got more. By Spring, I was ready to order my first new bicycles. I was so excited!
One of the wholesalers carried a full line of bikes, while most of the others carried only mid- to high-end bikes, so I placed my order with that company. I almost knew what I was doing, having purchased four mid-level adult bikes in varying frame sizes, a low-end bike, which can purchased in department stores for less than I paid wholesale, and one child's bike, also in competition with department store bikes. Guess what? The four mid-level bikes sold fairly soon. It took months to dump the child's bike, and the low-end adult bike gathered dust in my store for more than a year, while I sold and reordered bikes all around it. In that first year, sales amounted to 125 new bikes.
If I knew then what I know now, I would have ordered nothing but mid-level and semi-high-end bikes right from the start. I would never try to compete with department store bikes. In time, I sold very high-end bikes, but like Hasselblads, they sell slowly, and so are not a good investment for a shop just starting out.
I also learned about frame sizes. The most common sizes sell regularly. As you reach toward the limits of very large and very small bikes, they sell less and less often. I'd recommend filling your store with 80 percent normal-sized bikes, and only 20 percent, or even fewer, particularly short and tall ones.
I don't want you to think that a bike shop is all about selling new bicycles. In fact, I could have been just about as successful if I didn't sell any new bikes at all. The bulk of the income came from repairs, accessories, and parts, in that order.
When you sell a spoke, it may cost you five cents, and you might sell it for 25 cents. A great markup, but a small profit due to the handling time involved. When you sell a $20 saddle, you make $10, for only a couple minutes work. When you sell repair labor, the markup is around 200 percent. In other words, your labor cost on a typical repair may be $20, but you sell it for $60.
New bikes are horses of a different color. A typical new bike costs the store $350, plus $25 for shipping (if you buy a large enough quantity of bikes at once). Then you have to pay a mechanic to assemble and adjust it, unless your business is small enough that you do that yourself. Then, you have to take quite a bit of time in selling it. So, you might have $50 labor tied up in it. And, all you can get when you sell it is $495, so you make $70 for all that investment. Then, you may have to pay for more labor to make adjustments or warranty repairs after the sale. The manufacturer or wholesaler will cover parts, but labor is out of your pocket. So maybe you end up with $50.
Oh, a bicycle store can be profitable by blasting out hundreds of new bikes. Many have done it that way. But if you are starting out with a small store, you may want to focus on repairs, parts, accessories, and used bikes.
New bike sales become profitable when you sell accessories to the new owner. And when, during the following years, the customer brings it in for repairs. Guess what? Used bikes support this even better. The used bike customer will not only bring the bike in for service, but is at least as likely as the new bike customer to upgrade parts and buy accessories. Then, the used bike customer may buy a new one in the future, so you get to have your cake and eat it too. Finally, the used bike buyers are so appreciative that you carry used bikes, they will advocate your shop to all their friends.
Another upside to weird bikes, if you have the money to buy them and the space to display them, is that something unexpected may become popular. I made a frame with the mid sections of the main tubes polished-steel under clear paint. The intersections were painted black, fading toward the clear middles. It was just an experiment, but was a weird-looking frame. Guess what? Everyone wanted one!
One downside to weird bikes worth considering: You are responsible to keep them running. If your customers need a replacement part, you are expected to be able to get that part. So, ideally, buy only oddball bikes for which parts are available, and from manufacturers who you expect to stay in business.
This is all true for parts and accessories as well. In my early days, I purchased a display kit of individual freewheel sprockets, made by Suntour. This was every size from 14 to 34 teeth, which was the full range of their line at the time. The sprockets were gold colored, and looked great on my wall. It made my shop look as if I carried everything, even a full range of gold sprockets. I almost never sold any of those sprockets, yet I believe that kit was very profitable indeed.
When super-weird contraptions came on the market, I always tried to order at least one or two. For instance, in addition to some inventory mentioned elsewhere in this book, at various times I carried a plastic-enclosed green fluorescent generator-powered light tube, rainbow colored pants clips, star-shaped inner tube patches, 20-inch 'slick' tires, a trials bike with a 24" front sew-up wheel, genuine wicker baskets, a very wide range of high-end tires, although often only two or four of each, plastic headsets, red derailleur pulleys with sealed bearings, Phil Wood hubs, Lambert (later called Viscount) bikes, which were the first bikes with all sealed bearings, double-action frame pumps in which whether you push or pull the pump, it compresses air. . . well, you get the idea.
This stuff wasn't always as high-quality or as well thought-out as I would have liked, but it was more about attracting customers into the store, than actually selling weird green lights and such.
I loved the weird stuff, and I'll bet you do too. For instance, one day a wholesale rep gave me a prototype all-plastic freewheel that his company was considering carrying. This was in the days when freewheels screwed onto hubs. Every part of this was plastic except for six little gravity and centrifugally loaded steel pawls that engaged the plastic ratchet surface. I was excited, and asked the rep whether I could put it on a bike right away and test it. He was enthusiastic to see the result also, so I put it on a bike and took it for a little test ride. I do mean little. I went approximately six feet (two meters) before the pawls chewed through the plastic ratchet.
Your level of success with the weird inventory strongly depends on your location. If you are in a big city with many competing shops, then the weird stuff is a great competitive edge to bring a larger clientele. If you are in a small rural community, then your customers will prefer you to carry all the general bikes and parts so they can get what they need. This may squeeze out your weird inventory due to space and monetary limitations. Besides, in the small community where you are the only bike shop, the weird inventory doesn't attract a larger clientele, because you already have 100% of the clientele.
Markups are typically as high as one hundred percent, and few items sell for less than $30 or $40.
How many inner tubes do you have to sell to take home a hundred dollars? Right, probably around 80 to 100 tubes. How many jerseys? Right again! Three or four.
If you have never sold clothing in your bicycle store, then like everything else, I advocate starting small. Pick up only perhaps six jerseys in the most common sizes, display them nicely, and see what happens.
In many communities, cycling clothing sells amazingly well. In others, you can hardly give it away. It all depends on the community's attitude to serious cycling. If there are many racers, dedicated tourists and recreational riders who wear proper cycling clothing, it will sell. If not, it won't, unless the reason is that no one supplied clothing locally until now.
In time, you will learn:
The most common sizes sell way more often than particularly large or small items.
However, once you've got a full stock of the most common sizes, then the few extra large and extra small items will sell very well.
Certain colors and patterns absolutely won't sell.
In jerseys, yellow is a particularly popular color. This is because of an old tradition in which yellow has been the color awarded to the winner of a stage in a stage race. Also, yellow is very visible in traffic.
Advertisements on jerseys and shorts such as Bic, Shimano, and Campagnolo sell well. Jerseys for companies no one has heard of, or not typically associated with bicycling, are going to be far less popular.
People complain about shoes. No matter how perfectly you fit a rider to his shoes, he'll come back and say they are uncomfortable. To head that off, tell them up front that no one is happy with their shoes at first. Tell the customers this well before they make their actual purchase. Then, they'll be expecting some discomfort, and will quietly wear their shoes until they become comfortable.
Same with shorts.
Keep your clothing items out of the sun coming through your display windows. Clothing fades quickly.
You'll find that buying, selling, or consigning used clothing can be particularly profitable.
You can store a lot of back stock in a small area compared to bicycles, wheels and frames.
Salespeople should be trained in the rudiments of fitting helmets and shoes. They should know a bit about clothing materials so they can advise about things like stretch and washing.
You'll sell more clothing if you have a fitting room, complete with a full-length mirror.
Clothing is more prone to refunds and exchanges than most bicycling merchandise. You'll want to decide on a refund and/or exchange policy early on, and let your customers know the policy before they put money on the counter.
You, too, may eventually find 75 percent of your showroom space dedicated to clothing.
But you already have a bike shop. It turns out that a messenger service might fit in as a nice adjunct to your business. Because you have someone in the store during business hours to answer the phone, you already have dispatchers. It would not take much to train your sales people in dispatching. All they need to do is follow six steps:
1. Answer the phone when it rings, and discuss price if the customer doesn't already know the details.
2. Ask about the dimensions of the package and the destination to make sure the messenger can handle it. Let the customer know the package must be ready to go.
3. Record the information about where to pick up. Record any special details, such as "knock on the back door."
4. Process a credit card number.
5. Tell the customer approximately when to expect the messenger.
6. Phone whichever messenger is best able to service that customer.
You'll discover that there is no shortage of people in your community who would like to work for you as messengers. I suggest you pay them on a piecework basis. Hourly pay is troublesome for a variety of reasons. One of the biggest is that the people who will work for the wage that message delivery pays are not always trustworthy. They will be unsupervised, so they could easily take extra long to get things delivered, and come up with excuses as to why they didn't complete the jobs sooner.
You will want to be sure that you are properly insured. Some of the items the messengers will carry may be quite valuable. Furthermore, there is a large chance one of your messengers could get hurt on the job. Check with your insurance agent. I'm not an insurance expert, but chances are, you'll need a specialty rider to your general liability policy, or may even need to sign on with a specialty carrier. Possibly workers' comp insurance is sufficient, but again, I'm no expert.
Like any such business, for maximum success, start small, and build up. You can hire a single messenger at first, and in the beginning when there is little work, you can have your messenger post flyers around town and hand out cards.
If the cards offer something specific, such as ten percent off a delivery, they'll be more effective. Make sure the special offer has an expiration date, since you may not want to honor what was advertised in cards that were issued years before.
Because you have a bike shop, you can jump start your delivery business by having the sales people talk to all the customers, and putting up signs in your store, or adding mentions of your messenger business to your ads and website.
If you live in a large city, there may already be messenger services. But there's always room for more. Especially if you offer something unique. For instance, you might deliver lunches between 11am and 3pm. Or you might specialize in transporting medical records - whatever you find a need for in your city. If you're in a small town, even as small as 5,000 residents, you can set up a general messenger service and prosper nicely.
In my first bike shop, I dealt with almost entirely new parts, accessories and bikes. I had no idea how profitable the secondhand, or what you might call a "recycling" business can be.
Let's start with a look at complete bikes. In general, children's and low-end adult bikes don't sell for a sufficient profit to be worth your while. A twenty-year-old mountain bike that you can buy for $25 or $30, put a part or two and a bit of work into it, then price it at $150, is the easiest thing to sell. Relatively high-end bikes when you can find good enough deals are extremely profitable. You can pay $100 or $150 for a high-end bike at a garage sale, and sell it for $600.
If you have someone to run your store on Fridays, Saturdays and Sundays, you can go to all the garage sales, looking for used and broken bikes. If you live in an urban area, you might want to spend some time during the preceding evenings making a route so you can hit as many sales as possible. At most garage sales, people expect to haggle a bit over price. Let's say you find a 25-year-old Specialized Rockhopper being offered for $50. It may have a flat tire and a stiff brake cable. You can offer $25, and you may be turned down, You can counter with $35, and more often than not, such an offer will be accepted. It is important to be in a mindset where you can turn down overpriced bikes, or ones that are in such bad shape that you can't make a good profit. Turn down all the department store bikes and children's bikes unless you can get them for $10 or $15 each - which actually can happen fairly often. Remember, you can sell these for only around $50 or $60 at the most. You might want to turn them down even if they are free, if they clog up your ability to sell better bikes for a larger profit.
If you have a full-size pickup truck, you can put as many as twenty bikes in it. It is easy to exceed that number on a good weekend in a large town or city. One possibility is to take the bikes back to your shop, then continue visiting more garage sales. Another option is to have the people from whom you buy bikes mark them sold, then pick them up in the evening. Most of the bikes will be there when you get back, but things can happen. The most common failure is that the people sold the bike to someone else. They may have forgotten they sold it to you, or someone may have offered more, so they just figured they'd give you your money back. This is unethical, but many people don't quite know that. They may leave your bike out for the rest of the afternoon, once they have finished with their garage sale. It doesn't take much for a neighborhood kid to steal your bike before you can pick it up. What I used to do was to leave the bikes at places I thought were safe, but immediately pick up the ones that were especially valuable or felt vulnerable. I tried to balance filling my truck with going to as many garage sales as I could manage.
If you are serious about getting lots of used bikes at garage sales but you don't have a pickup truck, you might consider renting a truck on Sunday evening to round up all the bikes you have purchased. Depending on the number of sales in your community, you can even profitably rent a truck and use it to shop at all the garage sales. Small rental trucks generally cost $20 to $30 per day, plus 49 cents per mile, plus a bit of fuel. This doesn't add up to much considering you can get $2,000 worth of bikes in a single weekend during the summer season in many large cities.
What if people at the garage sales recognize you from your store? You might think that's bad news in some way, but really it is great. You can even hand out business cards when you're at garage sales. Whether or not you buy a bike at a sale, you can let everyone there, including other customers of the sale, know that you're always buying bikes at your store. You don't even have to mention that you sell things at your store. People who have met you at a garage sale will come by - it's actually very good free publicity.
The only problem you may want to head off is that if you bike a bike in good condition for a very low price at a garage sale (or buy one over the counter for a low price for that matter), then mark it way up and sell it in your store, you could develop a reputation for 'ripping people off.'
One way to avoid that is pay a reasonably high price on every bike you buy that's in good condition and that you intend to resell. Obviously, the parts bikes won't matter, since the person who sold it won't see it in your store. And one in bad shape, naturally you'll charge more once it's fixed up. But I think you can imagine that if Fred sells you a Rockhopper for $25, you fix a flat tire, and put it in your store for $200. Fred isn't going be too happy seeing that. On the other hand, if you decide to pay Fred $100, that's very nice and avoids the problem, but not good business. So here's what to do:
Tell the seller of a bike that it is actually worth more. You might say something like, "That Rockhopper is worth $100 as it sits if you get the right buyer, and I could clean it up and sell it for $200, but I'm not that interested in it, because I have several similar bikes already. However, if you'd be willing to sell it for $25, I'll be happy to buy it. So you've been completely truthful, and didn't have to hide anything. Sometimes that will wreck the sale, but there are other bikes out there that you can buy for a reasonable price.
If you can score the older bikes, maybe something like a Peugeot PX-10 from 1970, you can disassemble them, and sell the parts for a rather remarkable sum. More about eBay.
As you develop your selling business, you'll discover that you no longer need to get all your bikes at garage sales. People will start calling your store to find out whether you'll buy their old bikes. You can enhance that by telling everyone who comes in that you're always willing to buy broken or inexpensive adult bikes. Especially offer to take trade-ins. Offering to take a trade-in can solidify a deal with a customer who had been sitting on the fence.
You'll want to be careful about stolen bicycles. They don't generally show up at garage sales because thieves don't operate that way. They wouldn't want the exposure. Still, you'll want to be careful about anything in too good a condition at too good a price being sold by people between 12 and 25 years old unless their families are at the sale with them. Thieves will try to sell bikes to you in your store. I used to require proof of ownership, either an original receipt, or a photo showing the seller with the bike. The photo had to be old enough to show the seller with a different haircut, or a different season, or family members in the picture. I had to turn down bikes for which the sellers could not show proof, even though some of the bikes that were probably legitimate were very tempting.
In many communities, the police have worked out some sort of system to register used bikes. If you start dealing with used bikes regularly, they'll want you to let them know about every used bike you purchase. You'll want to participate, even though it is a bit of paperwork, to protect the community at large from bike theft. The police won't charge you any money, but they'll want you to provide the serial number, description and source of every bike you handle. They usually ask you to hold every bike for 72 hours so they can have a chance to follow up if something turns out to be stolen. The downside is that if a bike is stolen, you'll have to give it up, and won't be reimbursed for what you paid. The upside is that the owner from which it was stolen gets it back.
Imagine a twelve-year-old boy who saved all summer to buy his BMX bike, has it for two weeks, leaves it unlocked in a friend's yard, as twelve-year-olds will do, and discovers it has been stolen. The poor thing will cry his eyes out. If you can help prevent that sort of scenario, you can be proud to do so. Wouldn't it be a great gesture to clean and tune a bike that's going to be reunited with it's owner? I never got the chance. I registered hundreds of bikes with my local authorities, and no bike was ever reported as stolen. Part of the reason is that the majority of bikes I purchased were broken, not shiny, valuable bikes. I think another reason is that most homeowners fail to record the serial numbers of their bikes, laptop computers, cameras and such gear.
Furthermore, there are times when you can outsource the selling of something that may be off-topic for a bicycle store. For instance, back in the days of chemical photography, I once took a broken 35mm camera as a partial trade on a new bike. I actually figured the camera had no value, but it was just an excuse to discount the bike by $10 so the customer would buy it. On a whim, I took the lens off the camera, a standard 50mm original equipment lens, and consigned it at a camera store, figuring maybe people break their lenses from time to time. Sure enough, someone bought the lens for $75, and I got $50 from that little experiment. There's no way I could have sold a lens in my bike shop, plus it would not have looked very professional to have a lens for sale among all my bike parts.
Consignment stores exist in most communities. They look like ordinary stores so you may not have known of their existence. They don't own their inventory. Instead, they depend on customers bringing them things to sell. In addition to dedicated consignment stores, many specialty stores, like the camera store that sold my lens, will take occasional consignments.
When you bring some items into a consignment store, they check them out, and accept some or all of what you brought. They put a code tag on each piece identifying you as the owner. When an item sells, you get all but 33% (typically) of the amount. In many consignment stores, you don't get to set the price. They set the price using their experience with with the market. In other stores, you dictate a price for each item.
The very nice thing about consignment stores is they bear all the expense of having a store, and they do all the work. Someone has to be there from ten to five every day, and that person isn't you.
Some consignment stores may entertain offers. When a customer says, "I'll give you $20 for this $25 item," they may phone you and see if you'll accept the sale for $20. If so, you'll get $13.33.
Some pay for all the items of yours that have sold monthly, some pay for what has sold whenever you show up, others pay on Tuesdays.
Some specialize, and many only accept clothing or books, for instance. Others are general and will accept anything they think they can sell.
They love professionals. If you start bringing more and more bikes to a store, they learn who you are, and a professional friendship develops. More and more, they trust you, and you trust them. You learn what sells and what doesn't, so in time, nearly everything you bring them is highly profitable for them, and for you.
There is no need to do all your business with one consignment store. You can sell at as many as you can reach. You may discover that Shop X is the best place for selling cycling clothing, and Shop Y, you get a better price for used cruisers, and at Shop Z, they can sell inexpensive children's bikes quickly.
Although this book is about bike shop strategy, a person could easily earn a living selling secondhand bikes and parts entirely through consignment stores. This eliminates all the hassle (if you think if it as such) of owning a store, being open during regular hours, possibly hiring employees, having insurance, and so on leaving you to focus just on producing more bikes for sale.
This conversation got me to thinking how much I'd like to start a similar service, and do things better. But, I'm a writer. So instead, I'll tell you how to start a consignment operation in your store.
Like any big business, it is safer and less stressful to start small. How small could you start? How about with a single bike?
The only downside, is like any special case, you have to fill in all your salespeople on what's expected, even for just this one experimental bike.
With no money invested in signs, advertising or employees, you've got a start on a business in which you can gain experience and grow.
A consignment business can naturally grow faster than an ordinary retail store because the people who bring bikes to consign will most likely also buy some of the bikes, or at least parts and accessories you have. And, they'll tell their friends, who could be buyers as well as consignors.
Consignments are much like a retail inventory, but with one huge advantage: You don't have to spend money in order to have a large inventory, which is usually a big cost.
Whereas the shop I visited charges a whopping 65 percent consignment fee, and that seems to work for them, I think you can charge less, and will be more successful. I'd recommend something between thirty and fifty percent.
The biggest downside to the consignment business compared to regular retail is that you have to keep careful track of all the inventory. At any given moment it might be important to know who owns a specific bike. When it comes time to pay your consignors, you want it to be a simple process.
The consignment store I visited uses their computers for all that, probably with expensive custom software. That's not necessary, especially at first. You'll probably want to use a computer, but you can get by with an ordinary spreadsheet program, such as Microsoft Office or Open Office, a free download created by volunteers that many say is just as good as Microsoft Office. If you don't know anything about spreadsheets, you can hire a bookkeeper or computer person to show you the basics in an hour. It is really quite simple if you already know how to click a mouse and write email. All you need is two charts. A list of consignors with their contact information, and a list of inventory. Each consignor gets a number. Each item carries the consignor's number. In the inventory sheet, you have a description for each piece, a price, the date it came in, and most importantly, the consignor's number.
For each bike, accessory, piece of clothing or whatever, you need a nearly bulletproof tag of some sort. You'd be in a bit of trouble if the tag becomes separated from an item, because then you won't know who the consignor is. You might spend a few bucks and get two or three types of tags. You might have ones that can pin securely onto cycling clothing, and another kind that comes with a loop and can be tied handlebars.
When a new consignor comes to your store, you start by putting them on the consignors' sheet with their unique number.
You'll probably also want to have them sign a form for your records that informs them of how your consignment system works, and puts all the responsibility for theft, loss, damage and mix-ups on them. If an earthquake breaks your store in the middle of the night, you wouldn't want to have to pay all your consignors for all their bikes. Once they sign the form, give them a copy for their records.
When a consignor brings items, for each one you accept, you immediately add a price tag with the consignor's number, and the price. You might also give the consignor a receipt.
At the beginning, you can do the whole thing on paper, but it won't be long before the size of your business demands a computer. With that, you can get as sophisticated as you want. For instance, in time, you can invest in software that with a single click of a button, prints checks for all your consignors every month.
At the clothing consignment store I recently visited their computer even told them which clothes to accept, and which not, as well as what price to set on each item of clothing. Then, they could tell the consignors, "the computer says. . ." whenever a consignor is dissatisfied with a price or what the store is willing to take for consignment.
You get to decide your policies. You can take everything consignors bring in, although you probably don't really want to clog up your store with undesirable stuff. What you carry will dictate what kind of clientele you attract. For instance, if your consignment store is all upscale, with few bikes under $500, you'll get all upscale customers. It won't take long for the people who must shop in the lower prices to figure out your store is not worth going to - for them. You'll make more per sale, but may have fewer sales. Or maybe not, because the upscale people may all shop at your place.
If you go too upscale, you'll only attract customers who can easily afford to buy new bikes, and so you may have almost no customers at all. On the other side, if you go low-end, you spend a lot of time handling a lot of transactions for smaller profits per sale.
You can also decide who sets the prices. If you decide, consignors may grumble or argue. If you let them decide, you may grumble or argue. Price charts are difficult in this business, but not impossible. You could say all childrens bikes are $35. All single-speed cruisers $100, All five-speed cruisers $125, and so on. But some are not worth that much, and many name high-end bikes are worth far more.
You can decide whether consignors can be paid whenever they drop in, or just on Tuesdays, or you can mail checks once per month.
When your business is small and you're running it yourself, everything is easy. To start bringing in employees complicates things because unless a person knows bicycle values well, and unless they understand how you like to do things, the training period may be long and awkward. The store with a computer that sets prices is a big asset once you have employees.
You get to decide whether your prices are flexible when customers ask for deals. I've run stores where that was my policy. In time, I was inundated with people who wanted to wheel and deal, which took much of my valuable time. Sometimes, I'd give a guy a good price, and the customer right behind him would say, "What about me, can I get such a good discount also?" Consignors will only be happy with wheeling and dealing if they know up front that that's store policy. If they know in advance that they may get fifteen percent less than the stated amount, they'll generally accept that. You might find the chapter on discounts interesting.
If your prices are set in concrete, your items may spend a lot of time on the shelf, which tends to bother consignors. Rather than wheeling and dealing, you can have a sort of reverse auction. Let's say you start with a general mountain bike at $200. After a week, you lower it to $190. Then after another week, $180, and so on. Perhaps it will sell at $140. This is the most profitable way to get as much as the market will bear for each item, but it requires that you set up a system that allows for such flexibility. For instance, you don't want to go through everything in the store, marking new prices on tags every week.
In my third bike shop, a partnership which sold new bikes only, no used bikes, we got talked into an arrangement with a contractor who fixed up secondhand cruisers as a hobby. He had a nice way of doing overspray two-tone paint jobs that made his bikes look great. For some reason, he only consigned one-speed bikes. I think he liked the simplicty and reliability of coaster brakes. The deal was that we provided him space to display six bikes and charged him 33% of the sale price. The arrangement worked out great. The salespeople were paid a 10% commission, so from every bike he brought, we made 23 percent. Yet, we did nothing because he came by two or three times a week, and filled the spaces where bikes had been sold. He kept them dusted and cleaned, and took care of any warranty work that came up. For us, it was easy money. It was just right for this bike shop, because none of the three partners wanted to actually work in the store, and we were in a town with few qualified bicycle personnel.
The least expensive electric bikes, starting around $500, may be a bit of a disappointment to their owners. They are slow, have a limited range, stall out on steep hills, and the batteries poop out after a year or so.
The other end of the spectrum is rather amazing. Some of the high-end electric bikes, sometimes selling for in excess of $10,000 can go fifty miles per hour (even though the legal limit for bikes being sold in most states is 20 mph), twenty miles or more on a charge, and the batteries will last for years.
The mechanical side of most electric bikes is based entirely on bicycle technology. In fact, many electric bikes are just ordinary mountain or fat-tire commuter bikes outfitted with a motor, controller and battery.
Buying and selling electric bikes is easy. Like many of the things discussed in this book, you'll want to start small with perhaps one or two machines, and see whether they sell, before you blow your entire inheritance. If they do, get more, and you may find that your bike shop evolves into an 'electric bike shop,' if that's what you want.
I'd suggest staying away from the $500 models. You'd be in competition with department stores, and be selling bikes that may not satisfy the customers.
You'll want to have at least one mechanic with basic electrical knowledge, since an outlet that sells these things ought to be able to fix them. Besides that, you'll probably attract a number of customers who want electric bike modifications or want to discuss the possibility of converting their existing bikes to electric. Actually, you'll want to talk them out of that, since a conversion typically costs as much as new electric bike, yet is not as reliable or functional.
Be careful if you buy and sell or consign used electric bikes. The batteries must be in good condition to satisfy the customers, yet are very expensive to replace. The main reason people get rid of their electric bikes is that they 'just don't have the power they used to have,' which means the battery is going bad.
What if this happened on a daily basis and was about bicycle merchandise, not clothing? In this chapter I'm going to suggest integrating a secondhand bicycle parts and accessories exchange within your existing bicycle business, and if I do my job right, you'll discover exactly how this can be very profitable.
Imagine a regular location, a shelf or small room within your bicycle store, where this free exchange of secondhand components went on every weekend, or even every day. Do you see where the profit is in this? Since you'd be the one who organizes and maintains it, it is only fair that you get first pick on everything that comes in, some of which you could sell in your store, or better, sell on eBay. So, the general idea is that you provide some shelves or tables in which people can bring their unwanted tire pumps, pedals, headlights, derailleurs and so on. If space is a consideration, you might limit it to things smaller than wheels. People can also pick through the things others have brought, and simply take what they want, with no payment to you. No monetary exchange at all.
This will not work as well if you also sell secondhand parts and accessories within your store. Most bike shops don't deal in secondhand merchandise other than complete bikes anyway, so it won't be in direct conflict.
You can sell secondhand stuff out of your store, and augment your for-sale inventory with things that are brought to the exchange, but this is hard to explain to the customers.
So, if you limit your sales of the things you glean from the exchange to online sales, this will work out fine. You may have to give up your sales of secondhand components, but as you'll soon discover, that's a small price to pay in 'exchange' for what you get.
This may have an impact on your sales of new parts and accessories, but the impact will be positive, not negative. Oh, sure, sometimes, someone who was going to buy a new Suntour derailleur will find one in the exchange, so you lose that sale. But much more often, they'll come to the exchange hoping to find the right derailleur. It won't be there, so they'll end up buying a new one from you.
OK, here comes the huge part: Are you ready? Having a free exchange will bring so much word of mouth publicity to your bicycle store, that you will instantly become the one and only place everyone will come to, and bring their friends to, when they need service, parts, accessories and new bikes.
Your success with this will be directly proportional to the square footage you assign to the exchange, and the energy you put into maintaining it. Furthermore, it as a wonderful community service in so many ways. It is recycling at its best. It really help people on the low end of the economic scale that cannot afford to pay money for new parts and accessories. And, it does more to promote bicycling in general. Even non-bicyclists will talk about your exchange.
If you let everyone know right up front that you're gleaning some stuff to sell online, they'll all be OK with it. I can assure you of that, because I set up a business that grew nearly overnight into a large, ongoing free general exchange in Marin County, California, and that's what actually happened.
More specifically, I rented a 2,500 square-foot store, primed it with stuff I bought for next to nothing at garage sales, and opened to the public. In my exchange, I allowed people to bring anything of reasonable size (no refrigerators or mattresses, please!) There were many books, garden tools, car parts, sports equipment, you name it. But I could have specialized in appliances, car parts and accessories, clothing, computer gear, or pretty much any type of thing. A couple of years later, I set up a quite successful specialty exchange, dealing just with books, CDs and DVDs.
Never once did anyone complain that I had first pick. Quite the contrary, I received complements all day long for the nature of the business.
Another thing that might surprise you is that I received much more stuff than I gave away. There was so much stuff coming into my exchanges that much had to be discarded.
When people decide to clean out the attic, basement or garage, they tend to bring multiple boxes full of stuff. There were hundreds of wealthy people who brought things to the exchange just so other less wealthy people could get them. All these donors knew full-well that I was supporting the business by picking the cream off the top.
I'm sure you can imagine what I did with the one percent or so that I picked. Right, I sold them on Amazon and eBay.
I only ran my exchanges as experiments for four months each.
During my first four months, in the general exchange, a volunteer ran some math and worked out that I gave away $44,000 per month worth of stuff. This was just wonderful for all the people who came from the poorer areas east of Marin and were able to get good things for their children and themselves. Even though the store was in a rather fancy suburban neighborhood, and many of the 'shoppers' came in junky cars and looked kind of scary to the locals, I was often told how much it was a great community service by the well-off locals.
I have been more of an experimenter than a do-the-same-profitable-thing-year-after-year person - probably to my detriment, but my exchanges could have been huge successes. Instead of moving on to the next experiment, I suppose they could have branched out, and I'd be very successful in the exchange business. But, being an experimenter and a writer, I'll leave starting the next exchange up to you.
Imagine the potential. you'll get repair parts, lights, reflectors and such into the hands of children and adults who couldn't otherwise afford them. If someone has had their bike stolen or broken, you can provide them with the parts to build another.
Of course much of the stuff that comes in will be in sad shape. You'll get dirty old wheels that are quite bent. You'll get worn out tires. You'll get parts that are 30 years old. But not all of it will be junk!
When it's free, you'd be surprised how delighted someone can be with a rear luggage carrier missing one leg. When it's free, people will figure out a way to fix a wheel with two broken spokes. Or if they can't fix it, they'll have fun trying. You may not be too happy about selling the good things that come in, even though that could be quite profitable. But if a Shimano seven-speed planetary hub comes in that you can sell on eBay for $100, that money will go a long way to support the exchange, wouldn't it? That way, you can get a even more serviceable goods into a lot more hands.
Perhaps the bulk of the money will be from selling pieces of broken things. As far as I went with pieces is that I experimented with two student-model flutes. I took them apart and listed the pieces on eBay. They each brought just over $100, after all expenses, selling most of the bits and pieces for $10 each. I once took in a guitar that was cracked on all sides, and missing a couple of tuners. It was not a production model. It appeared handmade, having no brand name and no model marking, but it had excellent inlay around the sound hole. I put it as-is on eBay, expecting maybe I'd get lucky, with a winning bid of around $20. It sold for $203.
Looking specifically at bike parts, hubs can surprise you. A regular old Sturmey-Archer hub will bring $40 on eBay. A plain old handlebar stem is worth $10. The pedals off the cheapest mountain bike sold at Walmart can be worth $12 or $15. The older stuff gets really exciting. Go ahead, look up Simplex and Huret stuff on eBay and see if I'm right.
The reason I created two exchanges was that I wasn't quite happy with the first one.
My first version started out quite large, and I had a rag-tag assortment of about 20 volunteers. Not being a great manager, I quickly lost a degree of control over these people. Some came in drunk, some complained about everything in sight, some treated the clientele crudely. So, if you're going to do this, you'll either want quality employees rather than volunteers, or you'll want to screen your volunteers better, or you'll want to have a more alpha personality. Or, perhaps the best solution, is to keep it as a small and manageable part of your bike shop that you can easily maintain yourself or with the help of some of your salespeople.
Much of this chapter is about larger, stand-alone exchanges, because the concept excites your author, but I think you'll find all this info useful for a small exchange within your bicycle store. Or, who knows, perhaps you'll want to grow an exchange as an entire business on its own someday.
With my second exchange. I wanted something smaller and more manageable. It was 1,000 square feet, about a third the size of a typical 7-11 store, in a town of just under 20,000 residents. Initially I did everything myself, no volunteers. I decided to specialize in books, CDs and DVD movies, because I figured I'd have a quieter, more focused clientele. I was exactly right. The second exchange was just as profitable, yet much less hectic, and therefore more fun for me.
Speaking of profit, I spent about $10,000 setting up the second exchange. I could have done it with less, but in my case, I didn't need to. By the end of the second month, I was making $5,000 per month profit. At the end of the four-month experiment, I sold it quickly for $32,000. (If I had wanted to, I could have held on for a year, and sold it for much more!)
A bit of a problem with the first, general exchange was waste. Since I was taking everything, not just books and disks, I had to rent larger and larger dumpsters to accommodate the things that weren't worth even giving away. At the end of the fourth month, I was paying $250 per month for dumpster rental.
To avoid discouraging people from bringing things, I decided never to decline any reasonable donations. I stand by this, and believe it's better to spend a bit on garbage pickup than losing donations from people who start to figure you may not accept what they bring. Interestingly, things they assume you don't want may be wonderful donations. I received a sousaphone that's bell was crushed all out of shape. It was awful in appearance, but still played, so I gave it away. Or, getting back to bike parts, you really want people to bring their dead wheels. All you need to do is clip the hubs out, which sell quite well on eBay.
If an item needs repair, you may be surprised how many volunteers are available to fix it. They may prefer to fix it in the exchange - if you have the space in your repair area. This is so they can become part of the social scene. Of course this is only if you want a social scene. Or, they may want to take things home to repair them. But what if the volunteers are unreliable? What if someone brings a wheel home to true, and never brings it back? If you were going to give it away anyway, no loss!
I had a sign on the front window of my general exchange that told people not to leave donations after hours. But they did. Many mornings I'd find enough bags of worn-out clothing, broken lawnmowers, sofas without cushions, and so on to fill a pick-up truck. These were the things that people just wanted to dispose of, didn't want to pay landfill fees, and would be too embarrassed to try donating to the store during the day. This wouldn't be so much of a problem with a specialized exchange. In fact, the nighttime donations might surprise you. Someone once left two banker's boxes full of old records. I called my friend Ken, who paid $100 per box for the collection. He took about six albums per box, and donated the rest back to the exchange.
In my media exchange, I learned to solicit nighttime donations. I had a drop box with a slot outside. Hundreds of books per months came in through that slot. I used a slot rather than an open container, because I didn't want other people coming by and rummaging through the books before I had a chance to pick through them. I also put a free shelf outside, so visitors could get books, and occasionally music CDs, any time of the day or night. This would probably work well for bike stuff also.
Taking the concept one step further, you might be able to design an exchange that doesn't need your presence at all. One way is to staff it with volunteers. Another is to have drop boxes around town, much like some clothing companies do, in which you ask people to drop of things they're not using. On the drop boxes, you'd have signs indicating what you're doing - donating most of the stuff to children overseas - or locally, for that matter. If you have the interest, you might be able to solicit donations to actually build up good, reliable bikes for children, or to create free use bikes that people could simply ride around town as needed.
I believe you should also state that you're making a profit in the process. If you're up front, not only will no one complain, but many will just love what you're doing. If you try to hide it, people will undoubtedly get the wrong idea. Unfortunately, some of those companies that put out clothing donation boxes a few years ago developed a bad reputation for not actually fulfilling the promise of making good use of the donated clothing.
A little aside here: As I understand it, a fellow in Boston advertised on Craigslist that he would pick up unwanted books. He didn't mention what he was going to do with them. He didn't promise anything. Yet, many people gave him thousands of books, which he sold on Amazon.com. Same thing with bikes. I'm guessing that no matter how small your community is, there are hundreds or thousands of unused, unwanted bikes in garages, basements and barns. The owners would just love giving them to you, just to clean up their spaces, if nothing else.
Taking it even a step further, I can imagine that you might have a charitable arm. But that's up to you. It is quite possible that a year or two after you start an exchange it becomes so profitable that you would have money left over with which to do good work.
To round out the picture, it would also be possible to have specialty exchanges that are simply shelves in public locations. The idea is people can drop off bike parts and accessories they don't care about any more, and pick up ones they like - all for free, of course. Your job, besides keeping the shelves organized and clean, is to go through the stuff that comes in, gleaning what will sell online. Quick oil change places, laundromats, and restaurants would all love to have such a shelf.
You can tighten up the efficiency of free exchange shelves a bit by having a box with a big one-way opening on the shelves. Like a lobster trap. Signs tell people to drop donated things into the opening, and take whatever they want from the shelves. The point is you don't want people carrying away the obscure and possibly valuable items. You want to be able to sort everything that has been donated before it gets away.
Don't forget to have contact info so if someone has a truckful of stuff, they know how to contact you for a free pickup. This happens more often than you would expect. Many people have made a hobby or small business at one time or another of fixing up used bikes, and have accumulated a surprising amount of material.
Getting back to the idea of a full-size exchange, when you pick a location, it is important to have good parking. This can be even more important than for an ordinary retail store because many people are going to be bringing large loads of stuff. If they have to carry it a hundred yards (100 meters), they'll be less inclined to bring stuff next time. Fortunately, the parking was very close to my first exchange. Even still, I provided hand carts for people to get things from their cars into the exchange. You don't want anything to come between people and their desire to bring things to your exchange.
And yet, parking was a problem. My store became rather popular within a very short time. (Advertising and publicity is absolutely not necessary in a business that exists to give things away.) The problem was the parking lot became congested. And that, ultimately, was the downfall of my experiment. When traffic started clogging the little strip mall I was occupying, the neighboring businesses started to complain. The property manager suggested I leave. Oh, I could have worked things out, but since I was ready to move on, I just pulled the plug.
So, you can learn from my experiments. One thing I'd recommend if you want to start your own exchange is to start very, very small. You don't need to rent a separate store. Just start something your existing bicycle store.
I'm not the first one who set up a store to give things away. The precedent was set in 1968 at the Digger Store in the Haight-Ashbury neighborhood of San Francisco. The Diggers were a loosely assembled group of entertainers (one of whom was Peter Coyote) who started making free soup, beans, and bread for the hippies that came to the Haight during the Summer of Love. In time, they rented a storefront where they accepted donations of clothing and general merchandise, and gave everything away. I did a bit of research and never found out how they paid the rent. My guess is that they came up with the first month's rent, then just coasted until they were evicted. That store, too was a short-lived experiment. Digger Archives
If you don't entirely believe me, and are concerned about the exchange cutting into your parts and accessories sales, or if you don't like that some of these things will come in all ratty, greasy, or whatever, you might consider a more focused exchange. For instance, accessories only. Or hubs, derailleurs, shifters and brakes only. If your store doesn't sell cycling clothing, then a bicycling clothing exchange would work great.
By accepting only things smaller than wheels, you keep your wheel business intact. As you know, ready-built wheels is a big part of most shops' parts profit. On the other hand, by having wheels in your exchange, you'll probably end up selling more new wheels than before, since people will come hoping for a free wheel, only to discover the one they need is not currently available. So, they'll have to buy a new one.
Another option is to do a semi-related or unrelated exchange. What comes to my mind is bicycling books. Just books. Believe it or not, hundreds of books will accumulate, and your public will love you just as much. Since you probably sell very few books in your store, there's no competition. You can almost entirely ignore the exchange, letting it work its publicity magic for you. Or you can extract additional profit by not only selling some books on eBay, but also other book venues such as Amazon, Alibris, and ABE Books. Interestingly, some books, such as the two-volume Schwinn Repair Manual, are worth a rather remarkable amount of money.
That's not always the case. Sometimes, the police auctions are way too popular, and you'd be wasting your time to try to buy bikes there. For instance, at some auctions, you need to pay as soon as you win each bike, so you miss the opportunity to bid on the next several bikes that go across the block while you're waiting in line at the cashier. In that case, bringing a friend to help is a good idea. Some of the best auctions happen in inclement weather. In late fall, the police will have their last auction of the year. These will be many good bikes that accumulated during the end of the summer. There's less interest as soon as the weather cools, and if it rains, or snows, there won't be many bidders. You win. Mostly. But there is an unexpected catch.
When you buy a bike at a police auction, guess what? It's still a stolen bike! Normally, this means nothing, and having gone through the process, and paid money, it is morally and nominally yours. But if the original owner discovers his bike in your store, you are still obligated to give it back.
The first thing you want to do is to make sure your general liability insurance covers rentals. Surprisingly, most policies do. You'll want to check with your insurance agent, and get a rider or switch to another carrier if not. Many of your customers will be in town having fun, which might mean drinking, drugs, and whatever. These people won't be the most responsible bike riders, some may get into trouble, so you'll want to be properly insured.
The funny thing about rentals is that in a good couple of weeks, your bikes can pay for themselves, and you still have the bikes to keep renting, or to sell as used.
You'll want a good bullet-proof contract. Every customer has to sign one, or have it signed by someone of legal age. Even though the contracts might be perfect, spelling out that the customers are responsible for damage or loss of the bikes, life is messy. A few bikes will be stolen. A few people will smash up rear wheels, and so forth. You may not always be able to collect for loss or damages. In many cases, you won't want to. The customer had hoped to have a good time. Something went wrong. They already feel terrible about damaging your bike. To make them pay on top of that might be a bit too much. But guess what? The percentage of these failures is very low in comparison to the profit.
However, there is a way to insure that you'll come out OK most of the time. Most customers will pay with a credit card. You can check with your credit card company to make sure you are in legal compliance, and if so, you can charge for the rental plus a deposit, then refund the deposit upon successful return of the bike. For customers with cash, hold a cash deposit.
Interestingly, the deposits can be nearly the full replacement cost of the bikes.
Have a standardized procedure that your salespeople implement when bikes are returned to inspect the bikes for damage or missing accessories.
You'll want to have a full range of sizes, and as large an inventory as you can manage. This is because many of your rentals will be group rentals from large families, church groups, or conventioneers.
If you are lucky enough that your bike shop is in a flat community, you may want to provide only single-speed bikes. Or single-speed bikes for one price, and multi-speed bikes for a higher price. Just about everyone knows how to operate derailleur-equipped bikes these days. Or, they just leave them in a high gear, clunk around, and have a good time anyway.
You may find that renting electric bikes is very popular.
If you have a particularly successful day in which every bike of a certain size is rented, and if you have a new bike in stock, it might be profitable to turn that one into a rental. After all, you can sell it for almost the full price if it looks almost like new. Or, it may become a part of your rental fleet.
Ideally, you can put signs on all your rental bikes for two reasons: One is to let everyone who sees your bikes out on the streets know that they can rent bikes from you. The other is to deter theft. If your signs are attached to the bike in a way that they'd be hard to remove, thieves may prefer to take other bikes instead. You might consider putting spots of paint on the rims, under the seat and so on, so parts can be identified as having come from your rental fleet.
On the other hand, you don't want to make your signs impossible to remove. This way, you can sell bikes out of your fleet. One way to do it is to paint the frame tubing itself with a unique color. Then, to avoid confusion when you sell one of your rental bikes, paint over that with a different color. Better yet, engrave the frame tubing, rims, etc with a specific and consistent mark. When you sell something, cover or expand those marks in some way that identifies the items as "sold." If you can put fleet numbers on your bikes, and there is a dispute later on, you can quickly check your records, and determine if a bike is still in your fleet or whether it has been sold. This helps when a stolen bike is recovered.
Make your tires and tubes as puncture-resistant as possible. Have a policy about flat tires and make sure every rental customer knows the details. If your fleet is large enough that you can offer road service, that's a good option. If it is a small fleet, it would not be profitable to have someone drop what they are doing to give road service. Instead, you might tell the customers that there is a possibility of a puncture or mechanical failure, and that they are responsible to bring the bike back, but that you'll fix it or give them another bike.
Provide each bike with a helmet, lock, lights, and a way to carry luggage. You might even provide a map of the community. Make sure your shop's phone number is on each bike.
Before any customer leaves with a bike, make sure they hear a short but comprehensive briefing on bicycle safety including hydration and sun protection.
Taking this one step further, you can offer tours, in which you, or the leader you hire, takes people on a five or ten mile ride of all the best gardens in town, the parks, famous homes, nature places, or whatever your community offers. The rental bike is included in the price of the tour. You might or not provide meals, or even overnight accommodations for longer tours.
Do you have a multiple-mile long but safe hill in your area? There is business to be had in trucking your customers and their bikes to the top of the hill, and letting everyone ride down.
If you're not into repair work, encourage your mechanics to experiment. You might even encourage your salespeople to experiment, if you have room in your shop. If they are real klutzes, and some salespeople are, and if they are trying something like operating a drill or welding, you might want to make sure a mechanic supervises. By letting the salespeople get a feel for repair work, they'll be better salespeople as they learn what interchanges with what, just why a headset overhaul takes so long, they'll gain a better understanding of the metals and plastics from which bikes are made, and so on.
If you'd enjoy repairs, but have little experience, then as you develop your sales business, you may find opportunities to do simple repairs. In time, the repairs you are capable of performing will become more complex until finally you are qualified to do repair work professionally.
That's how it worked for me. I started with simple things for my neighborhood friends. I tried experiments with my own bikes and with bikes I eventually put up for sale, until finally I was building custom frames, making customized tall unicycles, specialty human powered machines, and bicycle trailers. You should have seen my first paint jobs. Horrible! But eventually I learned how to professionally paint a bike and perhaps you will too.
The one thing to always remember is to know your limitations - for two reasons. One, you don't want to promise something you can't deliver. I still remember the time I took apart a shifter to replace a cable while the customer waited, back in 1976. It was one of the first-ever index shifters. I didn't realize there was a little spring in the thing, and it jumped out on the floor. I spent fifteen sweaty minutes looking for that dang-blasted thing! The more important reason is safety. You want to make absolutely, completely sure you never compromise a bicycle's safety. There are things you might want to learn about before offering professional repair, such as over-dishing a rear wheel, so that it suddenly collapses on a high-speed turn. There are many good books and websites that teach bicycle repair. You might enjoy BikeWebSite.com.
You might want to keep a magnet around. When you drop something made of steel, as most little springs, washers, and nuts and bolts are, you can wave the magnet just above the floor, and sure enough, your lost part will stick to it.
Along the same lines, a flashlight is useful. Even if your shop is well-lit, having additional light as you scan the floor helps considerably.
When a repair customer brings in a bike, the typical bicycle sales clerk listens to what the customer wants, and writes it down on a repair ticket. In a typical case, the customer has heard the term "tune-up," and that sounds about right. So the customer tells the clerk "Tune-up" and the clerk writes, "Tune-up." The customer might also mention a puncture, so the clerk writes something like "flat rear." The salesperson then tells the customer an estimated price, takes their name and contact info, and tells them they can pick up the bike on Tuesday. What a shame! Compare that to this procedure:
1. After a friendly greeting the clerk asks the customer what's up. The customer says "tune-up" and "flat tire."
2. The clerk holds the bike by the handlebar and while the front brake is applied, rocks the bike back and forth, noticing whether the headset is loose. The clerk lifts up the front wheel, and notices whether the handlebar flops to one side, or not (indicating an overly tight headset). The clerk checks the tightness and condition of the handlebar stem. The clerk notices whether the handlebar covering or grips are in good condition.
3. The clerk again lifts the front wheel and gives it a spin, noting whether it is true and the condition of the bearings. The clerk lifts the back wheel, examining it for trueness, bearing condition, and noticing whether there are any broken spokes. With some bikes, it is worthwhile to pinch bunches of spokes near the hub to discover a spoke broken at the hub. In some cases, with a loose wheel, the clerk tries pulling the dropouts outward to discover a broken axle.
4. When the wheels are spinning slowly, the clerk looks at the tires, noticing the condition of the tread, the sidewalls, and any seating problems. (More than once, I've seen a sales clerk rush to let air out to prevent a blowout right then and there in the store upon discovering bad seating, or a tear in a tire's sidewall.)
5. As problems are discovered, the clerk simply mentions them to the customer. For instance, "I see the back tire is quite worn." The clerk should also say why these findings are of concern - if they are. Like this, "When the tire is this worn, there's a pretty good chance you could have a flat, which would be a problem if you're a ways from home."
6. The clerk squeezes the brakes, and examines the ends of the cables in the brake levers, looking for any possible brake problems.
7. The clerk visually examines the shifters, shift cables, derailleurs and chain for problems.
8. The clerk examines the chainwheel, cranks and pedals for problems, including bearing adjustment (if not sealed bearings).
9. The clerk looks at the fork and frame, looking for collision damage (fork bent back), and in case a separation at an intersection is developing,
10. The clerk inspects the seat and post.
11. The clerk examines the condition of any accessories. (Kickstands are quite often messed up.)
12. The clerk then tells the customer whether or not a tune-up is recommended. Normally, by now, a tune-up is definitely recommended! But, sometimes, the clerk has the good fortune of telling the customer that one or two simple and less expensive adjustments are all that's needed. Also by now, a fairly extensive list of other services the bike could use has cropped up. The clerk puts together an estimate, and ninety percent of the time, a customer that has come for a simple tune-up and a puncture, ends up OKing two new tires, a replacement brake cable, new pedals. . . you get the idea. It is now a much more profitable repair.
And the customer is excited. This customer knows that the bike is going to be entirely fixed. It will be fun and safe to ride again!
Now, imagine the other, more common scenario. If the customer had not been informed of the worn out tire and frayed cable, after paying for a tune-up and flat repair, this customer would go out on a ride and have a flat or worse, a brake failure. How will that bode for this customer's future with your shop?
Or, if you're lucky, the mechanic catches the unwritten requirements of this bike, has to stop and prepare a new estimate, have a salesperson call the customer, and get an OK for the additional work. This puts the customer in an uncomfortable spot. Perhaps this person left the shop thinking the entire repair was going to be $50. Now, it turns out to be $80. The customer is going to feel kind of cheated. Plus, your mechanic has had to spend much more time on this bike, what with preparing a new estimate, putting the bike back in storage, then getting it out again when the customer OKs the additional work.
There's even a worse scenario. The mechanic has started the tune-up. But the customer doesn't want to pay $80. What's the mechanic going to do? Complete the tune up without replacing the tire and the frayed cable? Not complete the tune-up and not get paid at all? Or, maybe replace the cable and the tire for free. As you can see, none of these options are nearly as good as having performed a good assessment in the first place.
Your sales people can learn this twelve-step procedure in a day. It helps if you give to them in print right on their clipboards or on a wall chart. It takes at most an extra five minutes per bike. If your sales people are paid on a commission basis, they'll love it. The mechanics will love it either way.
OK, I'll admit there's a chance the customer may have OK'd $50 worth of work, but will not accept an $80 estimate. You may loose this customer. But compared to the other options, that's a good thing, right?
You may not have to loose this customer. Your astute clerk might be able to say that there's nothing that absolute requires a tune-up. Instead, perhaps the mechanic can just replace the cable and tire, and give the bike a quick once-over - more of a safety tune-up than a complete tune up, and the clerk may still be able to do what will satisfy the customer for $50 or $60.
Don't forget that at the end of a repair assessment is a good opportunity to sell accessories unless the repair price seems to be at the end of the customer's range of acceptance.
When a bike comes in for repair, after doing a careful assessment, the sales clerk needs to prepare an estimate. Charging on an hourly basis, how will this person know how long it will take? Right, most salespeople are not experienced enough to do that. But if the salesperson knows that it is a $9.95 flat repair plus a $28 bottom bracket overhaul, then it is easy to write $38.
It is also easier to describe the work on the repair ticket. The various 'jobs' each have a name and a price.
But there are some operations that fall out of the flat rate system. For instance, someone may want a 28-hole hub spoked into a 36-spoke rim. This can be done by a good mechanic, but it takes quite a bit longer. Or, what if a bike comes in with a badly bent one-piece crank, it is going to have to be bent back or cut off before the bottom bracket can be disassembled. So, the ultimate solution is to have flat rate plus a hourly rate, also known as "shop rate."
Did you notice something here? How is the salesperson to know that a badly bent crank is going to take longer? Unless this person has been a mechanic, s/he isn't going to recognize the problem. For that reason, flat rate charges are a bit inflated.
On the other hand, there are overlaps. If the bike is getting a tune-up, there's no need to charge the full price to also replace a derailleur cable, since both the tune-up and the cable replacement include adjusting the derailleur. With slightly inflated flat rate prices, you can discount overlapping operations with room to spare.
If your shop rate is $60 per hour, and it takes a mechanic 1/2-hour to do a typical bottom bracket overhaul, you don't set the price for bottom bracket overhaul at $30. Nope. It's $45. So now, if the sales person doesn't catch the problem, there's still time to get it done within the allotted price.
Finally, on a complex repair, I like to recommend you give an estimate that's ten or twenty percent higher than the parts and labor add up to. This way, if the mechanic discovers something unexpected, it can just be taken care of without stopping work to call the customer. Or worse, exceeding the estimate.
I used to have a solid rule in my shops: We would never exceed the estimate unless we had the customer's permission for extra work. This really helped our reputation as the best shop in town. In fact, for many of our customers, we were the only shop in town they trusted for repair work. By simply charging some customers more than they expected, the other shops had killed much of their own repair business.
Here's where I confess something: Occasionally, like maybe once in 200 repairs, something would happen so a repair became much bigger than expected, and the customer did not want to pay more. For example, we thought we were going to true a wheel, but it was hopeless, needing to have the rim or the whole wheel replaced. I would never hand the bike back to the customer uncompleted. We just absorbed the extra cost, because I wanted each and every customer to be absolutely delighted.
I'm not bragging here, but telling you this, so you can do it too: If you treat each repair customer as well as I have described in this chapter, you will get almost all the repair work in your community, even if there are dozens of other bike shops. And, as you know, repair, and the associated parts sales, are the biggest piece of the profit pie in most bike shops. That's what happened in my shops. My first bike shop was established in a city of only 350,000, yet during the season, I kept four commission-only mechanics busy full-time, each one generating a big profit.
The first consideration is scheduling bikes to be completed as soon as possible, taking into account how many repairs your mechanics can handle per day. You want to push the limit, but at the same time making sure you never get a bike done late.
In my first shop, I'd say "Tuesday at 3pm," and by gosh, the bike was going to be done on time. After I learned to hire mechanics on a commission basis, there were usually a couple of guys who loved working late on busy days so they could make extra money. Plus, I had one or two less-competent mechanics who I had on an on-call basis. One guy was very competent, but had a drinking problem. So I didn't have him work as a full-timer. I'd call him, find out whether he was OK, and if so, I'd have him fill in when we were particularly busy. In that first shop, the biggest bottleneck was space. We had storage for 140 repairs in the basement, but only five workstations that were fully equipped. In truth, one of those stations were pretty rudimentary. Mechanics in that station had to occasionally borrow tools from the other guys, or walk around equipment that was partly in the way.
In my later bike shops, I told all the customers, "Probably Tuesday at 3pm. Please call first, unless you want to take a chance it that won't be done on time." Then, I did everything I could to get the bikes done on time anyway.
When we were done more than an hour ahead of schedule, we'd phone the customers and let them know. They loved this. When we knew we were running late (which was almost never), we'd call the customers and tell them as soon as we knew. I always had the mechanics add something to a late bike. The usual gift was a free headlight.
Sometimes, if we weren't swamped, I'd have a mechanic do simple repairs such as cable replacements or punctures, while the customer waited. The customers loved this, and it saved us the time to put the bike in storage, get it out to repair it, put it back, then get it out again to hand to the customer. Sometimes, if we were nearly swamped, I'd have a salesperson call me out of the office and I'd do these while-you-wait repairs myself.
You almost can't run a bike shop without rags of some sort. A few shops will use paper towels. You may find that the paper towels are too light-duty - tearing apart as you try to use them. Some will use those disposable woven paper cloth-like products you can buy in the grocery stores. They are like a cross between paper towels and actual rags. They'd fall apart if you try to clean them, but they're tough enough for most bike shop operations. The cost gets kind of high if you use a lot of them.
You can get actual rags from sources like thrift stores. Some won't be appropriate, being made of unusable materials such as rayon. You may find yourself spending time cutting them into useable sizes and shapes. Since the colors vary, they don't seem very professional. I don't know how important it is to impress customers with the rags you use, but the overall look and feel of your place may be slightly adversely affected by assorted rags.
Rags that are supplied by rental companies are actually more like small towels. I've always preferred red rags, because they are more professional looking than blue or brown ones. Having your shop look as professional as possible helps in getting more repair customers. In most population centers, there are several companies that supply rags. In order to get the color you want, you have to contact the right company.
The usual arrangement is that you contact a company who delivers a couple hundred rags. You've gotta call them "shop towels" or else the people who supply them are offended. Every week, they pick up your dirty rags ('shop towels') and deliver washed replacements. If you exceed your contract limit - for instance one hundred rags per week, they charge you a bit extra.
There is a downside which is that you are using industrial rags, um, "shop towels," that have been used by other businesses. Some may be print shops, car repair shops, you name it. Sometimes the supposedly clean rags are covered in ink, have dried paint, or unidentified substances. That can be kind of icky. But worse, you've gotta wonder about the chemicals they use to clean rags. Since they can be so dirty, and since the rags don't have to come out looking good, like clothing, the companies are free to use super-powerful chemicals. But is touching these rags safe for the mechanics?
These days, many mechanics prefer to use disposable rubber gloves, to save ten minutes of washing up at the end of a shift. The gloves will prevent getting rag chemicals on one's skin, but what about breathing the fumes?
Some mechanics prefer aprons, some prefer uniforms. The same services that provide 'shop towels' typically provide five changes of shirt and pants. The mechanics can make as much of a mess out of these as they want. Normally, the mechanics use one change per day, but sometimes they'll be careful to keep one change in backup, in case they mess up two sets in one day. Those who prefer uniforms like the idea that they don't have to wreck their own clothing. Some also like the idea that they don't have to regard fashion in the slightest. Every day, they're going to wear tan and brown, and that's it!
With uniforms, you can order them with each mechanic's name embroidered on a breast pocket, or not. I left that up to my mechanics.
The last time I ordered uniforms, three colors were available: blue, green, and brown. The brown set is actually a tan shirt with brown pants. To my taste, blue and green look too common, and not as professional as the brown set. The green might look like 'park service,' while the blue ones might seem too much like 'police' or like 'vending machine refillers,' to some people. I suppose orange would be a bad idea. The cost is around $20 per week per person.
You can ask about other products from the shop towel companies. Some carry rugs, floor mats, even shop aprons and even soap dispensers.
So, don't use gasoline!
One step up is to use kerosene, often called "paraffin" in the UK. Kerosene is also flammable, but somewhat safer because it does not vaporize in air as easily as gasoline. Because it does not vaporize in air as easily, it is probably also less harmful to breath. Some bike shops keep a gallon or two on hand and pour a little into a flat pan when they want to clean parts. If you reuse your kerosene, a small amount can last a long time.
Yet another step up is to buy a parts cleaning machine, also known as a "parts washer." available wherever automotive tools are sold. This uses kerosene or a dedicated solvent that you can also buy at auto supply shops. This thing, typically just a bit smaller than a home clothes washing machine, has a pump and a flexible spout that recirculates the solvent. It has a large tub with a false bottom through which the solvent pours, so you can clean a part under the spout, without having to totally immerse it in solvent.
The problem with buying your own parts cleaning machine is that you have to clean it and replace the solvent from time to time. I once made the mistake of buying one. I thought it was just great until the first cleaning. After scooping all the solvent out, I had a half-inch of muck covering the bottom, which was not a pleasant cleaning job.
The next step up is to rent a parts cleaning machine. The biggest vendor in the US is Safety-Kleen. For a reasonable rent, they'll supply the machine, and then on a regular basis, usually once per month, they clean it and replace the solvent for you. The Safety-Kleen machines sit on top of barrels. The service person lifts the machine off the barrel, seals the barrel with a lid, and brings you a new barrel of solvent. The usual solvent is only slightly flammable. The machine has a lid held upright with a fusible link that melts, slamming the lid closed if something catches fire in the machine. No one knows for sure how harmful the fumes are to breathe.
Safety-Kleen now offers what they call an "Aqueous Parts Washer." This is just like there regular one, but instead of using a petroleum-based solvent, it is water-based. It is billed as being non-flammable, non-toxic, biodegradable, and just as effective as the oil version. Although I haven't tried this system personally, I strongly recommend that you look into it. Sure, there will be a monthly service charge, but it beats spending additional time cleaning parts in a less efficient way, and then having to spend time cleaning your parts cleaning machine. It also beats ruining your life with something that may be harmful to breathe in the long run.
Pictured below is the standard parts cleaning brush. You can pick these brushes up from any auto parts supplier, or your parts machine supplier. You'll find having one of these is very efficient no matter what kind of parts washing system you use. Having an assortment of other brushes will increase your efficiency further. You don't generally clean the brushes themselves. You just leave them laying in your parts cleaning machine, ready for the next use.
There is a model of brush with a hollow handle and a hose that connects to your parts cleaning machine nozzle. If have found these 'flow-through' brushes to be a big improvement over using a standard brush while trying to hold parts under the nozzle.
Safety-Kleen machines come in two sizes. If you get the big one, you can set entire wheels inside, where it is easy to clean the spokes and hubs, especially if you have one of these flow-through brushes.
No matter what system you use, gloves are recommended, because who knows what might otherwise soak through your skin?
You might look into ultrasonic cleaners. They are pricey, but they do all the work for you, reducing the scrubbing to a bare minimum. Most are small, designed for jewelry, so you may need to make sure to get one big enough for large bike parts such as chainwheels.
Using a blower nozzle with your air compressor, you can do a rudimentary cleaning quickly. It works especially well to wet the offending areas with soapy water or solvent a few minutes before attacking with compressed air. Make sure to wear goggles, because particles can come off at random angles with velocities in excess of 100 miles per hour. The problem with this technique if you do it indoors is that after a while, your entire workshop gets coated with grease. I have seen shops used this way, and it's not pretty. Even the ceiling has a permanent coating of dark grossness. So, better to do it outdoors, if you must do it at all.
People who have access to air blower nozzles tend to play with them. Resist the temptation to do anything involving your body. It is possible to blow a bubble of air under your skin - or into various other places, where it can cause trouble, such as an embolism resulting in stroke (permanent paralysis) or even death.
So, I learned to put regulators on the air lines for my pneumatic stands and keep the pressure down to 60 PSI. (I had two double stands and a single stand eventually).
You'd think I would have learned the full lesson by then, but I didn't. Several times I, and my mechanics, would grab a bike by the seat tube, downtube or headtube, leaving mangled decals or slightly scratched paint.
Those old Park stands were fun - we loved the pneumatic hiss when we'd step on the foot pedals to grab and release bikes. And, it was convenient to simply hold a bike in position, step on the pedal, and have it grabbed securely, without having to adjust any sort of clamp. But they were dangerous as hell. A mechanic could have got fingers or a hand trapped in one of those claws. It was just luck that it never happened. It is probably a good thing they don't make them any more.
However, one day, I was installing a toe-clip and dropped my little 8mm wrench right on the foot pedal, which instantly released the bike. In a rapid reflex, I grabbed the bike to catch it, but I grabbed it by the chainwheel, which left a neat row of punctures spaced exactly 1/2-inch apart across the palm of my hand. After that, I welded sheet metal protectors over the pedals.
Anyway, the lesson I finally learned, after literally thousands of bikes, is that it is worthwhile to make a inviolable rule: Never grab a bike by the frame tubing. Once I learned this, I insisted that the mechanics grab all bikes by the seatpost. Even if they had to raise the seat first. And, then, it took a while to remember to mark the original positions of the seats, and put them back down before returning the bikes to the customers. Although, I have to say it is amusing to watch a customer ride away who didn't realize the seat is three inches higher than it was.
Even when grabbing all bikes by the seatposts, we learned to put rags in the jaws, not only to protect the seatposts, but to keep the rubber in the jaws in good shape.
In some cases, for a quick little repair, with rags completely surrounding the jaws, it is OK to just hang the bike by the underside of the seat over the top of a workstand jaw.
Another way to hold bikes for repair that is almost never done this days is with cables, ropes or chains suspended from the ceiling.
I heard that there was a fellow, originally from Puerto Rico, in New York City, who was supposed to be the fastest bike mechanic in the world. How people figured that out, I do not know, but that's what they said about him. He specialized in assembling and adjusting new bikes. He could do some phenomenal number of them, like twenty in a day. Anyway, he did not use a repair stand. He used chains.
Chains have several advantages. You don't have to turn the bike around, or try to squeeze in around the workstand to work on the left side. In fact, there's no workstand in your way at all, so the left side of the bike is as accessible as the right. You can hook a bike on chains in a couple of seconds, faster than using a workstand, if you raise the seatpost and all that, or if you have a workstand that has to have a knob turned before the bike can be secured. Chains will work for everything including recumbents, tandems, electric bikes, you name it. They cost almost nothing. They require almost no maintenance. The chains can be hooked together or raised to the ceiling, giving you complete open floor space if needed.
For best results, secure the top of the chains about eight or nine feet (three meters) apart on the ceiling. This way, when a bike is hooked up, the chains don't go straight down, but are at an angle, so the bike won't swing forward and back.
Use some sort of open hook at the bottom end of each chain. I used ordinary plastic-coated hooks that people use to store bikes in their garage. I cut off the woodscrew threading, and welded them to the chains. Cover the hook with padding. Make some sort of arrangement so it is easy to adjust the height of the chains.
Then, all you do is hook one chain to the handlebar stem, and the other to the underside of the saddle.
At first, you may be frustrated by the tendency of the bike to swing from side to side as you work on it. But in a few days, you get entirely used to this, and it becomes your friend. It is kind of fun to have the bike swinging a bit. It is sort of like being on a comfy sailboat in a calm sea.
Welding equipment isn't just for making frames. It can be used to make a huge variety of human powered machines. It can be used to repair tools, and make custom jigs, light stands, holders, and display equipment. It can be extremely useful in day-to-day repairs, such as cutting through a badly bent one-piece crank so that it can be removed, or heating a stuck bolt so it can be unscrewed. And, welding equipment can be used to perform custom operations for customers with special needs.
If a shop has no welding equipment at all, an oxy-acetylene gas welding set is recommended. With that, and requiring nothing else, you can cut metal, heat, bend and melt metal, weld steel and brass, braze steel (attach with a hot brass glue - like soldering but stronger), do silver brazing, and even weld aluminum.
After that, if the proprietor finds the shop is doing many welding tasks then the addition of a small MIG (Metal Inert Gas) or TIG (Tungsten Inert Gas) welding set is a good option. These are electric arc welding systems with which you can quickly weld steel and aluminum, even if you are inexpert.
Small home electric welders that run off ordinary house current are available. Avoid these. They do not generally have enough power to do serious bike work, and will only frustrate you.
Small gas welding sets are also available. If they have tanks about the size of a BernzOmatic tank (around a liter or quart in size), you may be disappointed how quickly the gas is used up, and how much it costs. The torches associated with these tiny sets will often put out insufficient heat.
To rent full-size tanks is fairly inexpensive, perhaps a couple hundred dollars a year, and you'll be amazed how long the gas lasts. In a typical high-volume bike shop, the tanks need to be refilled only once or twice a year. When you buy a welding set, try to get a torch with small tips and a short cutting attachment. After all, you're not going to be fixing bulldozers or building bridges.
If no one in the shop is experienced with welding, a community education class is recommended. You can also find basic through somewhat advanced instruction (written by yours truly) at BikeWebSite.com.
It is the people who don't take precautions who are hurt with welding, or any such pursuit. Always wear proper goggles, gloves, and non-flammable clothing. Do not work near sawdust, flammable liquids or piles of metal filings. Make sure you are well-instructed before you undertake welding operations. With oxy-acetylene welding, you'll find the visible flame is only a few inches long, but the heat more than a foot away from the torch tip can ignite paint, rags, papers, whatever is laying around.
Somehow I discovered a better way. One day, I made an offer to one of my mechanics. For a week, we would add up his labor charges. At the end of the week, if 1/3 of the amount of labor charged to the customers exceeded his hourly wage, he would get paid that amount instead. I don't remember the exact numbers, but his hourly wage was something like $200 for that week. But, he had done $900 worth of repairs, which magically, was quite a bit more than he would typically turn out in a week. (He usually generated about $500 worth of repair labor.) So I paid him $300!
The other mechanics liked this quite a bit, and as you can imagine, they begged me to do the same for them. So I did. All except for one fellow who ranted and raved that being paid piecework was "un-American" and all sorts of other bad things. So I fired him.
Guess what happened next? We never missed the guy I fired. The remaining three mechanics easily did the work of four. They each took home more money. Because of a clause I added, their work was of higher quality than ever before. The clause was this: If a repair failed due to workmanship, that mechanic would do it again for free. And, if the customer was present, the mechanic might have to do it while the customer sat on a stool and watched - if the customer was so inclined.
I figured that what was good for the goose was good for the gander, so shortly thereafter, I put all the sales people on commission. They got five percent of new bike sales, and ten percent of all other sales. The ten percent commission included parts, accessories, labor, and used bikes. They, too, made more money, and sales increased. I had to be careful to monitor them at first. They did tend to oversell. In time, being paid more than bicycle personnel anywhere else in town, they took pride in their work, in their customer relations, and felt no need to oversell.
Especially when the next phase hit. It didn't take long for all the experienced bicycle professionals in town to apply for a job at my shop. Instead of the going wage of $8 to $10 per hour (at the time, late 1970s) they could get $15 to $18 hour, if only they could work for me. Now, I had my pick of the very best! As my business grew, I could pick and choose the most experienced sales and repair people, some with a clientele that would follow them to the ends of the earth.
In the end, even though I paid my people twice as much, I made more profit from their work.
You need to do some paperwork to handle withholding taxes. Or not. There are companies that do all the heavy lifting for you, such as ADP (www.adp.com). For around $50 per employee per pay period, they'll take care of all your employees' paperwork needs. They'll keep you informed of what and where to pay, and send you the occasional paper that needs a signature. And that's all there is to having employees!
When you have someone with previous bike shop experience that you might hire, you'll probably want to conduct an interview. Ideally, everyone who has to work with this person will be present. This way, if there are going to be sparks between a partner or existing employee and the new person, you can know about that before you hire the person. You'll want to be careful to avoid asking discriminatory questions and you can't base hiring decisions on sex, religion, skin color and so on. That's illegal, and immoral.
There are two things you're trying to discover during the interview: Whether the person has sufficient technical knowledge, and whether the applicant's personality is right for the job. You don't want someone with a grouchy monosyllabic attitude in your sales department. You don't want a mechanic who doesn't know which end of a screwdriver to hold. So, you ask technical questions, and have a conversation in which you're trying to discover something about the true nature of the individual.
I once hired a salesperson who said the word "pray" at least six times during the interview. That should have been a clue. I had to let him go because he started trying to convert customers. It was more important to him to talk about religion than to sell bikes. It was more important to me that he sell bikes. We did discuss it, but he refused to change. You can't discriminate based on someone's religion, but you are not required to let an over-zealous person poison your business. So, you can't refuse to hire someone, or fire someone because he's Catholic and you're Protestant, or whatever, but if the individual is not properly performing the duty for which he was hired, that's another story.
Check their references. I can't emphasize this enough. Remember that they'll give you their best references. They aren't going to volunteer names of people who fired them or have a grudge. When you call their former employers, remember that most will give you glowing reports. You want to dig past that if possible. Most people do enjoy talking, and employers are no exception. If you can have a friendly conversation with the former employers, you may find interesting surprises. More than once I found that a person who said they quit a job were let go due to performance issues. In one case, I spoke with a former employer who initially gave a wonderful report. After ten minutes on the phone, I discovered that the person came in drunk after lunch more than once. The person was let go when in a messed-up state, he made wild, improper sexual advances to a customer.
I gave an inaccurate reference once. I had to let a salesman go because $20 was missing from the cash register a couple of times after his shifts. Because I couldn't prove that he took the money, I let him go for another legitimate reason. I had one more salesperson than I really needed, so he is the one I fired. Except, I didn't really fire him. I found him a position at a big sporting goods shop. I told the manager the truth about this guy, which that he was a good worker and good at sales. But I didn't bother to mention the part about the missing cash. One day a couple of weeks after they hired him, he took a perfectly good pair of new running shoes from a shelf and put them in the dumpster out back. Another employee saw that and so that evening, the manager took up a hiding place near the dumpster, and sure enough he witnessed our man reach in, grab the sneakers and put them in his backpack.
Before you hire anyone, make sure they understand that it is initially a trial. That they may get to work for a day or a week or two, and then be let go if they aren't a good match for your shop. I once went through twenty people who tried out for a job as a mechanic. Each had previous bike shop experience. None were really, truly gifted as mechanics - and that was what I wanted. This was before I started paying on commission. After that, I had a whole list of remarkably qualified applicants.
Finally, before you hire a new person, make sure they understand all the important details up front. They should know exactly what is expected of them, what hours they are going to work, whether they can come in late occasionally, whether they need to dress a certain way, and the exact way they'll be paid. You'll find it helpful to write up a list of requirements in advance, and when a person is hired, have that person read and sign a copy of the list for your records.
In an entirely different business, I moved a man from software testing, in which he was doing a poor job, to creating and maintaining our website, in which he was brilliant.
If you do need to let someone go, try to give them some warning, and a chance to correct their behavior. If it still doesn't work out, then tell them the exact reason you're letting them go. The reason cannot be discriminatory. It is illegal to fire someone based on their age, sex, color, religion, etc.
With practice, and empathy, you can strike a balance between being the boss, and being one of the workforce. In a toxic workplace, there is a 'us against them' attitude. On the other hand, if you are one of the guys, friends with your employees, all sorts of magic happens. Your employees will work late without being asked when the shop is busy. They'll go out of their way to treat your customers right. They'll bring in their own tools to help support the shop. In our shop, we had developed a tradition of all riding our bikes to a pizza place on Friday evenings. In time, owners and employees from some of the other bike shops in town joined us on our Friday pizza outings. A great time was had by all, except the waitresses.
On the other hand, I may have gone a bit far with the 'just one of the guys' attitude. Somehow, it's not entirely believable, since I did own the shop after all. There must have been some envy, so I tried to counteract it by being an especially 'nice' guy. In retrospect, I think it is best to maintain a bit of an 'alpha' personality, so you get things done the way you want them done, while at the same time, being empathetic, supportive, and friendly.
Did I say, "buy" advertising? I meant "get free publicity." Just about any form of advertising that a small bike shop can afford will be entirely ineffective. Yellow pages ads are the worst. You end up paying a lot of money per month to the phone company, or a phonebook publisher, and get little effect. People don't use phone books any more. They use the Internet.
So, when it comes to paid advertising, almost nothing works for a small business. Good free publicity, on the other hand, can change things overnight.
You may be thinking I'm talking about sending press releases to the local newspapers, radio, and TV stations announcing that you have a new business or have added something to your business. That can have a small effect. Much greater is to do something newsworthy, meaning, something positively eccentric.
Customers of an old bookstore in San Francisco used to complain from time to time because is was sort of dark in there, especially in the deeper shelves toward the back of the store. That gave the owner an idea. He held a one-time special sale. All books were half-off. But, the sale ran from midnight to one in the morning. And, he turned all the lights out. At the door, all the customers were handed flashlights. That not only made the news, but it is still talked about today, twenty years later. After reading the story, thousands of new customers visited the store, mostly because they were curious about how dark it really was, that people were complaining.
At another bookstore, some college students created an art project. Their idea was to rearrange all the books, not by subject and title, but by color. Shopping there during that time may have been tedious, but all sorts of people came by to see it, and no doubt many of them came away with books they would never have noticed normally. (After two weeks, the same college students put all the books back in subject and alphabetical order.)
So, what kind of positive eccentricity can you think of for your bike business?
Your author had a one-acre yard behind his second store that could be seen from the street. In time, old junk bikes started collecting there. They were for parts. As a last resort, if a new item wasn't in stock, if a customer just couldn't afford a new derailleur, or if we wanted to grab some material to build something, there was that pile of junk bikes. As you probably know, bike frames tend to accumulate. In time you sell the wheels, the shifters, the pedals, but the frames tend to be the last things to go. Soon, my pile of stripped frames had grown quite large. I was thinking I ought to build a fence around the pile, so I built it out of these old frames. It kind of looked like a sculpture. People driving by saw the fence, and immediately knew we had a bike shop there, even if they didn't see the sign. So, the crazy fence was acting like free publicity. People used to start telling their friends, ". . . you know, the place with the bicycle fence."
That fence played a bigger role that was unexpected. Upon noticing the fence as they drove by, people inevitably also noticed that there was a pile of old bikes behind the fence. They started stopping into the store and asking whether we wanted more old bikes. They were giving them away. The answer was 'yes' - that we'll recycle the bikes to the best of our ability. After a while, we had a quarter-acre covered five feet deep in old used bikes. Now, we never had to buy low-end and mid-range used bikes. We had plenty. All we needed to do was fix them up and sell them. Very profitable. And of course as people saw more and more used bikes accumulating around the store, more people came in looking for used bikes. Many bought used bikes, and many others bought new bikes from my store. And, we had a sideline - we had a parts junkyard, the one I mentioned earlier. Many customers loved this. Imagine, someone would donate a bike for our pile. We'd sell a derailleur for $8, a rear wheel for $20, a fork for $15, a saddle for $10, and by gosh, it was very profitable indeed! The junkyard business could have supported the bike store by itself. And never once, did I advertise the availability of used parts.
As I mentioned, having at least a basic website is important for most businesses. Fortunately, a one-page site is sufficient for most, and easy to create. You can do positive eccentricity on a website as well. We'll talk a lot more about websites in the next chapter.
A guy who's business was repairing Apple computers uploaded a little video to YouTube and linked to his website, that showed him dropping a PC and a Mac computer off a six-story building. Both crashed to the sidewalk. The Windows computer was smashed to bits, but with the aid of trick photography, the Mac had only a couple of scratches. That was a fun video. I don't think anyone has done a 'drop video' of bicycles yet.
In one of my bike shops, I had an area of wall above a double-wide door that I covered in broken bicycle parts. This included a horribly bent wheel with spokes sticking out every which way, a Zefal pump that had been run over by a car, some mangled derailleurs, and things of that nature. Many people talked about that wall. It was part of what made the bike shop what it was.
One day Sam, a fellow in a wheelchair, and his hired helper came in to buy some more material from our junkyard, These guys had been in several times before. Sam had cerebral palsy or something like that, so his body was really quite twisted. He could stand up for brief periods of time, but his stance was odd and he was wobbly. Sam's hobby was building human-powered machines. The helper would do the actual construction work, while Sam did the inventing. His helper saw the badly bent wheel on the wall, pointed to it and said, "Sam, that wheel is as wobbly as you are!" Sam laughed. We all laughed.
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So what kind of bicycling information could you put on the back of your business cards? (Hint: A gearing chart is too common, and not interesting enough.)
Sometimes coupons can be interesting enough. You can give out cards that carry a coupon on the back for a dollar off on helmets, or 10% off tires, etc. They ought to show an expiration date, so you don't have to deal with discounts years after you've moved on to something else.
For a short while, I experimented with what I called micro-books. These were the size of business cards, but had a dozen pages. They contained a wealth of fun bicycle trivia. The front and back of the little books had my shop name, address, phone number and a map. I gave up the idea because it took too long to organize the pages and staple them together. Customers used to pull the books out of their pockets years after I gave them away, just show me they had kept them all that time.
These days, it is a simple matter to print business cards on your own computer printer. You might look into using photo paper. It is almost as thick as card stock, but the glossy surface looks like a million bucks. Especially if you incorporate a nice graphic or photo. Avoid the tendency put too many words on your cards.
Putting flyers on all the local bulletin boards can surprise you. You'll get more business with no cost. Bulletin boards at laundromats work well, because patrons have to spend idle time waiting for the wash. You might think that laundromats attract low-end clientele - those who can't afford their own appliances. This is true, but they also attract a higher-end clientele. These would be customers who have to wash blankets bigger than their home washer can handle, or people who are waiting for their home machine to be repaired, or - I hate to say it - people who will wash rags in a public machine because they don't want to mess up their own machine. For better or worse, all these may be bicycle customers.
Bulletin boards at natural food stores work especially well. I'm not quite sure why. Bulletin boards at diners, quick-change oil places, and elsewhere can work well, too. The best kind of flyer is one that makes only a few quick points, because too much text is hard to read. The best flyers have little pull-off tabs at the bottom with your shop's contact info, especially your phone number. You might want to have full-page and half-page flyers, since many bulletin boards are too full to accommodate full pages. When space is very limited, you can put several business cards fanned out under a thumb tack, indicating to people it is OK to take a card. For this use, the cards ought to have large text that's easy to read at a distance. There's a color called "Solar Yellow," that's very bright and sometimes used for cards and flyers. It is a bit loud for sure, but in a jumble of white flyers, it gets noticed.
You may find a big drawing of a bicycle is helpful. It will draw people in from thirty feet (10 meters) away if they're interested in bikes at all.
Sometimes people will tear off a tab on each of the flyers they put up. This is to make the general public think there's interest in what they flyer advertises. Chances are, for your bike shop, that won't be necessary. Flyers work particularly well if you include a special offer. Like $10 off a tune-up when someone brings in a pull-off tab. Or a free safety inspection. Or 10% off accessories.
Going a step further, you might replace your flyers from time to time. One might advertise half-price headlights until the end of September. The October flyer might offer a "Fall Tune-up Special," and November might be 10% percent off all cycling clothing. Each flyer should look different than the previous ones, so people recognize that something new is being offered.
You might think flyers on local bulletin boards are not professional enough to represent your shop. More likely, they will attract many new customers, and once people see your shop itself, they will have no doubt about your professionalism.
Computers give us the capability of designing very professional-looking three-fold brochures and other such items. Interestingly, for a typical bike shop, they work no better than obviously home-made flyers. On a deeper level, however, they give people the feeling that your shop is more professional than the others.
You may be worried about the cost of printer ink. Here's a tip.
That book said, "Always show your prices." When selling items, especially high-priced ones, many proprietors are afraid to show their prices. They feel the public will think the prices are too high, so it is best to keep the prices secret, or at least not discussed, until after you have convinced people they can't live without the product. Well, guess what? That mostly didn't work in 1804, and it doesn't work today.
As soon as someone sees something being advertised without a price, they automatically assume it is too high, and their attention goes elsewhere.
On the other hand, if you display a price, people immediately start rationalizing, and they manage to make it fit in their budget if there's any possible way.
So, let's say you have a $4,000 mountain bike in your store. Should you put the price on a tag hanging off the handlebar, or make people ask about the price?
Right, on the handlebar. In less than a second, a prospective buyer will go from "Geez, that's awfully high," to "Well, maybe if I skip lunch for the next two months. . ." and they'll come up with a way to afford it.
What about pricing tails? You know, the ".99" or ".95" at the end of a price? You'd think everyone in the world is smart enough to know that a set of bar ends for $9.95 is pretty much the same as $10. Yet, it has been proven time and again that to a real-live human being, $9.95 seems way less than $10.
I've noticed that on the Internet, items selling for $3.92 seem reasonable compared to $3.95.
As to high-ticket items, rounding off to the nearest dollar (or euro) makes the most sense, otherwise using the "slightly less than concept," like so: $1799.00.
So, this is one way to do business, and it answers to a problem most proprietors have: What do you do with friends and acquaintances when they buy things in your store? If you give everyone discounts, then your friends get the same discounts also. They can't very well expect a deeper discount, because they know that would be crazy. Too much of a discount. They'd worry that you're not making any money. It also answers to a variation of the problem: If your friend gets a discount when you're in your store and greeting customers, how do you handle it when you're not at the sales counter? Do you instruct your employees to give certain individuals discounts? Do your friends only get discounts when you're in the store? Do the friends have to ask the sales clerk to bring you up from the office? But if everyone gets discounts, this all goes away. This is not particularly important in a big city, and if you have few friends. But if you have your store in the small town where you grew up, it can be a big problem.
Giving discounts to everyone also kills one more big problem: How do you handle people who ask for discounts?
The city manager's son used to come into one of my stores, and loudly announce that he was the city manager's son, and so he should get a discount. Even though I told him that this was crass, not to mention unfair to others, he continued to do it several times. I never met the city manager. I wondered whether he was a spoiled brat also.
How many customers have you had who ask something like, "I'll buy those tires if you can give me $2 off?" or "I'll buy that bike if you throw in the sales tax?" If everyone gets the same discount, problem gone!
Before I learned this trick, I would sometimes offer a discount when asked by a customer. On a couple of occasions, I was asked by the next customer in line for a similar discount, and the next customer and the next.
We're not done here yet. There is another huge advantage with discounts for everyone. I alluded to this a bit earlier. It is very good free publicity. This is unusual, and people will talk about it. I mean, where else do they pay less than they expected? Not at the gas station. Not at the grocery store.
So how, exactly, do you implement this?
You can start by setting all your prices about ten percent higher than you normally would. Or not. You may find that by having slightly lower final prices makes you the most competitive bicycle store in town.
You can put signs up that everyone always gets ten percent off. But that takes the fun, the seeming spontaneity out of it. Let it be something that people discover.
One way to implement this is to calculate exactly ten percent off everything. I'm throwing around "ten percent" as if it is the only option, but of course it is not. A better way might be to be approximate, maybe even let your generosity ebb and flow a bit. A customer may buy $197 worth of stuff, and end up paying $185. Another may pay $4.95, and you give her a quarter back out of a five dollar bill. That's the most fun, don't you think? It also keeps the customers from figuring out and talking about a formula. It also makes each customer feel you gave her a special deal. Ten percent might be a bit high on new bicycles, although it works just fine for used bikes, parts, accessories and labor. You might discount whole bikes more in the neighborhood of five percent. Generally, the higher the price, the lower the discount percentage needs to be in order to be impressive.
Giving back a seemingly random amount also lets you hide deeper discounts you might actually want to give to friends. When a friend is at the cash register, you might decide to give back twenty percent.
Another option is 'throw in' the sales tax. If you want to do this, check with your local sales tax agency first, since the way it is worded can put you in hot water. In some places, you cannot legally say "No sales tax," but you can say "We pay the sales tax." That may be academic, since paying the sales tax doesn't have quite the same surprise factor as just giving some random amount of money back.
It is pretty much essential that you write receipts to reflect the amount of money you actually charged. This way, if someone wants a refund, and they have a receipt showing $267, you won't have to give back $267, but instead only the actual amount you charged, which may have been $250. Also, you need to do this in a way that you're salespeople can't just skim some off every sale for themselves instead of giving the full discount to the customer.
The Swiss Army knives did very well, especially right before Christmas. In time, I had hundreds in stock, and carried every model the company produced. In my last couple of winters in my first bike shop, I started teaching bicycle repair, wheelbuilding, and then framebuilding. These classes covered my winter expenses nicely. The framebuilding went especially well because the students not only bought the lessons, they bought the materials, and eventually most of them furnished their new frames with components purchased from my store.
Let's talk a bit more about the cross-country ski rentals. I started with twenty pair. Figuring the big ski shops in town were too competitive, I didn't try to sell them. I planned to rent them, hoping to get fifteen pairs out every winter weekend. I did manage to get ten or twelve pairs out most weekends, but to my surprise, people wanted to know whether they could buy the rental skis, poles, bindings and boots, figuring they'd get a better deal on used rental ski sets than on new ones. I charged almost as much as new ski sets would cost and people bought them. So, it turned out I was in the ski sales business. In time, I added and sold more ski inventory, sometimes just letting people think they were used, even though no one had actually rented them. This was in the era when most serious cross-country skiers used waxable skis. The various hardnesses of wax were made in different colors, which made the wax kits attractive-looking gifts. I sold quite a few of those kits.
Bicycle stores will do other things to survive the winter. Many sell camping gear. That's not a winter inventory per se, but tends to sell more year-round than bikes.
Neils, a very intelligent fellow had a friend a few years ago who was a printer. The printer had a rush order one evening that was to be completed by morning. Unfortunately, he was too drunk to do it. He gave the print shop keys to Neils, Not knowing the first thing about offset presses, ink, or anything like that, Neils looked around, put two and two together and by morning, he had the order ready to deliver. Within days after that success, he bought the business from his drunken friend.
Neils was fluent in English plus four Eastern European languages. In fact, his sons, ages five and six at the time, could speak three languages, and the six-year-old was reasonably proficient in writing in English, and Romanian or some such language.
Neils got what few orders there were in our city for printing in these other languages, but business wasn't great. To supplement, he started selling camping gear out of his store. Still, he struggled in business. Not many people wanted to buy camping gear from a print shop, and not many printing customers trusted a camping goods store to do their jobs right. Besides, Neils' inventory was out of balance. For instance, he had replacement mantles for lanterns that he didn't stock.
Neils was intelligent, but not nice. He started refusing all refunds. One time, as I was visiting in the back of his store, someone returned a raft they had rented. Neils went into the back room and stuck a screwdriver in the side of the raft. He then went back out and showed the hole to the customer. He said he couldn't return their deposit, since they had somehow punctured it. He came back into the back room with a big smirk on his face, which I was rather sickened to see, and quit visiting him. Shortly after, as I rode my bike past his shop one morning, I noticed it was totally empty. No more Neils.
I know of one owner who'd run his small store during the warm season, then go down to Florida and work as an employee of a large bicycle store in the winter. Some bike shop owners just take it easy, or go on vacation all winter. This is quite possible once your bike shop becomes more successful. The first couple of years in my first shop, I worked through the winter. If I hadn't done that, I would have burned through about $10,000 in savings to make it through until spring. That's not necessarily a bad option, if free time is more important than money, and if you can afford to do it without putting your business in jeopardy. Instead, I had a trusted manager for my final years in the first bike shop. I let him run things in the winter, while I went South or West and rode my bike around in warmer climates.
I watched in horror as an eleven-year-old boy came rushing down a hill on an out-of-control bicycle. He barreled through an intersection at about 30 miles per hour. Fortunately, there were no cars there just then, or his life would have ended instantly. But, he wasn't even nearly out of danger yet. He hit a curb on the far side of the intersection, and with a bang of escaping air, his front wheel was instantly destroyed. At that point, the boy and the bike became separated. He airborne flight was abruptly halted when he hit a chain-link fence - face first. I won't describe his injuries, other than to say they were serious.
I came back a while later due to a professional curiosity. The broken bike had been forgotten at the accident scene. I tried the brakes. No go. The cables were so rusted that a grown man could not have squeezed the levers sufficiently to slow that bike.
So, it got me to thinking: What if I could have had a chance to fix that bike before the boy rode it? Of course, the accident wouldn't have happened. But what if I could fix other bikes? There are several ways I could perform safety tune-ups and get paid. I could probably fix more than 20 bikes a day. Since something like one out of every eight bikes has a serious but hidden problem, and since 70% of bicycle accidents requiring hospitalization don't involve cars, that means in the course of a season, I might be able to keep up to 450 people out of the hospital. That number may be exaggerated because not all bicycle safety problems necessarily result in a serious accident. But still, if I could keep some people safe, I'd be honored.
Then, I got to thinking about a larger picture: What if I could leverage my knowledge, and show bunches of people how to do the same thing? If I could encourage someone in every community to do something about keeping bikes safe, we could keep a lot of people safe indeed!
My proposal is that you could get paid to do safety tune-ups. The obvious version would be to offer safety tune-ups in your store. These would be while-you-wait when you have time, so customers don't have to drop their bikes off, and then pick them up later or the next day. So, this is best for the off-season. You might offer the safety tune-ups for free. Absolutely free. Then, during the winter, when nothing else is going on, you can recommend a new back tire, lighting, or maybe even new bikes to customers who have come in for safety tune-ups. But, even if you do a tune-up for free and your customer doesn't buy anything, you have gained an advocate for life who will bring all her friends to your store.
If you don't yet have a shop, or maybe even if you do, you could set up a bicycle repair stand and a toolbox near a public bike path or a place where people gather. If you have a shop, then same thing: You can do the tune-ups for free, and then tell everyone that the free tune-ups are sponsored by your store. This will be great free publicity that may even bring the local TV news crew out to see what you're doing.
You'd put up a sign saying that you're doing safety tune-ups on the spot - in just a few minutes while people wait. If you have to pay one of your mechanics to run the safety station, you might prefer to charge money for each bike. Perhaps $8 or $10, or whatever the market will bear. But you could also do it other ways. One way would be to just ask for donations. In a way, it would be like a street performer, passing the hat, or with an open guitar case full of one- and five-dollar bills. To maximize your profit, you might point out that the average person pays $10 per bike. But to be fair to those who have little money - the very people who most need their bikes made safe, you may end up doing a lot of safety tune-ups for free.
You can get sponsorship. Wouldn't it be great publicity for a local business to promote free bicycle safety tune-ups? They'd pay you $200 per day, or $8 per bike or whatever you agree upon, to fix bikes in their name, or in your store's name plus their name, perhaps at their facility. This will bring you new customers from across town who haven't shopped at your store.
This would be a good fit for a corporate or public grant. If you are a grant writer, know a grant writer, or would like to take a crack at grant writing, it would be well worth applying, don't you think?
Of course, you already have a shop, so this is an idea that you can do to augment your business. If you're really enamored of doing something helpful, you could have your employees run the shop while you run the safety tune-up station.
Or, if you have a good mechanic who isn't getting enough hours at your store, or someone you'd like to hire but can't, you might tell them about the safety tune-up idea. It doesn't so much matter who does the tune-ups, or even who makes the money, as long as the people in your community are having their bikes made safe.
You can also perform safety tune-ups in trade for old broken bikes - from those who can provide them. In other words, you're mostly doing safety tune-ups on a free basis, but willing to accept donations of cash or bike items. You could then fix up the bikes, or strip them for parts, and sell them on Craigslist or eBay.
So what is a safety tune-up exactly? You'd make sure all the nuts and bolts are tight, make sure the brakes work properly, and that the wheels are not in danger of collapsing. You'd run the chain through a rag held in your fingertips looking and feeling for defective links. You'd look the bike over for other safety concerns such as a bungee cord wrapped too loosely on a carrier, which could come loose and catch in the spokes. Beyond safety, anything else you might do would be optional. If you have time and interest, you might adjust index shifting so it clicks in properly. You might true a wheel so it doesn't rub on the brakes. You might make sure the tire pressures are correct. And, you might just teach a bit of bicycle safety when appropriate. Wouldn't it be nice to come up with a few metaphorical bits you could drop, especially to the younger riders, so they'd be more inclined to ride more defensively in traffic? While you're at it, don't forget about the adults. Over sixty percent of patients admitted to hospitals for bicycle accidents are adult males.
Some community education schools expect you to work for very little money or for free. You can leverage this by inviting your students to something else for which you charge money or selling an additional product or service. For instance, you could teach in my town, where the school pays only $15 per hour. But during your classes, you tell your students that you are also teaching advanced bicycle repair and wheelbuilding out of your home - for quite a bit more money, of course. In every community, there are people who would love to attend a two-day weekend in which they learn about building and truing wheels. They'd pay well over $200 per person. So, if you get ten students, that's $2,000 for a weekend's enjoyable work.
Teaching is a great way to bring in off-season money, since you're time is so much more available. Interestingly, more people like to attend classes in the winter than in the summer. The community schools have larger enrollment in the winter season.
You don't necessarily have to teach at the school facilities. You can teach out of your bike shop. Unless your store is large, you may not be able to accommodate more than perhaps six students at a time. But, you may not want to, especially at first. Teaching six or fewer people is like riding a bike with training wheels. Once the training wheels come off, you can sign up at a community education school and teach twenty, thirty, even a hundred people at once.
Dale Carnegie, the famous author of "How to Win Friends and Influence People" started this way. He started teaching at his local YMCA with just a handful of students, and ended up teaching to stadiums filled with 20,000 people. I suppose teaching bicycle repair to 20,000 people at a time might be a bit problematic, but for the kind of money that would generate, you'd figure out a way, right?
At first, he approached his local Y to be hired as a teacher. Back in his day, the YMCA was more than a gym with a pool. the Y offered low-cost housing, and hosted lectures and lessons of all sorts. But, his Y didn't think a course about improving social interaction would attract any students, so they turned him down. He then proposed that they pay him by the head - a percentage for each student he taught. The rest is history.
Beyond bicycle repair, one can also teach bicycle racing and touring technique, bicycle safety, and even bicycle politics. One could start a school of bicycle technology.
Your author taught general bike repair, wheelbuilding and framebuilding classes in his bike shop during the winters. Due to space limitations, my maximum enrollment was six students at a time. Most of the framebuilding classes did attract six students in each class. The general repair and wheelbuilding classes didn't always fill up. I didn't do anywhere near the kind of advertising or publicity I could have. In fact all I did was have the salespeople talk it up with some customers, and I put small signs up on the sales counter.
For the general repair course, I had plenty of workstands, tools and space, so I could teach everyone at once. For wheelbuilding and framebuilding, some of the equipment had to be shared. I learned to stagger the students so not everyone wanted the drafting board or the oxy-acetylene set at the same time. What I ended up doing that worked well was to schedule afternoon appointments with the students, so I'd only have one, two, or three at a time, and they were at different stages of development. So, while one was in the design and drawing phase, another would be mitering tubing, another would be in the paint shop, and yet another would be practicing brazing on scrap bits of metal. In framebuilding, managing the heat in silver brazing is critical, so I made sure that I was able to give 100% of my attention during that phase for each student.
Something I hadn't expected, is that almost every graduate of the framebuilding class ended up purchasing all the components to outfit their frames, which amounted to hundreds of dollars in additional sales per student. Several of the framebuilding students also went on to take the wheelbuilding course and build the wheels for their proud new frames. And, all this happened in the off-season!
Whereas most bike shop proprietors can't wait for winter to end, I was having a blast and felt it didn't last long enough!
You might be surprised how much some people are willing to pay for detailing. Oh, you and I might not pay very much, and a large segment of the general population might not. However, there are many people who have plenty of money, but not much time or interest in work for which they are not experienced and for which they do not have adequate equipment - whatever that might be. (I'll leave it to you to figure out efficient bike cleaning equipment.) This segment of the population would be delighted to pay you to clean their bikes.
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If you can build bike frames, the time to do it is in the off-season. People who order custom frames generally expect to wait for months to take delivery, so there's is no need to crowd your summer season with framebuilding activities. The only downside is that if you don't have a paint shop, then you may have to make arrangements to borrow or rent a paint shop, or wait until the weather is sufficient for outdoor painting. Another option is to pay an auto body shop to paint your bike frames.
If you are not yet an experienced framebuilder, what better time to experiment and learn?
My first frame was a bike for my own enjoyment. I rode the heck out of it, and it held up just fine, to my complete surprise! The next went to my roommate at the time, who was a racer. He placed second in some sort of state championship on it. I think it was a time trial. I sold the third frame. The fourth one came out goofy. Somehow, the bottom bracket was at an angle. The customer had his brand new bike all assembled, and when he took it out for a test ride, he discovered that "the pedals seemed to be at a sort of falling-away angle." I gave him a refund. He did not want a replacement frame.
From the fifth frame on, I considered myself a professional framebuilder, and sold perhaps twenty frames before I got tired of the whole process. It is rather exacting and tedious. At the time, the late 1970s, I was charging the going rate for custom frames. Can you believe the few framebuilders throughout the world were only charging on average around $250 for a frame back then? I raised my price to $350 figuring that would slow down the orders. I wouldn't have to make so many, and if an order did come along, I'd be well-paid for it.
Orders doubled! I guess people have no good way to tell the difference between a good custom frame and a great one. They just figure if a frame costs more than all the others, it must be the best, right?
But I was still rather bored with the process. In the meantime, my shop manager had learned framebuilding, and to my delight, he took over the framebuilding operation.
Human Powered Machines
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As I mentioned in the last chapter, building regular hand-built frames is tedious and exacting. On the other hand building special-needs and human-powered machines is more about turning out something that gets the job done, than beautiful cosmetics. And, I found the end result is so much more pleasing. I built bicycle trailers of all descriptions. For instance, an organic bakery stored their flour a mile from the bakery. They had been using a pickup truck to transport 350 lbs (160 kg) of flour every day. They had me build a bicycle trailer dedicated to the purpose. I built especially tall unicycles. I built a circus bike. I built a number of machines for people with an assortment of physical challenges. I built a human-powered flexible shaft grinder. These projects were all tremendous fun and proud accomplishments.
I'm not telling you this to show off. I'm telling you to encourage you to do something similar. You probably won't have to advertise. Once people learn what you can do, they'll seek you out from hundreds of miles around if necessary. It helps if you can display some of your creations in your showroom. It helps if you have an open workshop that can be seen from the sales floor. While I was working on the bakery trailer, I received three more trailer orders just from people seeing it going together.
The one important trick is to over-engineer everything. Since each machine you turn out is one-of-a-kind, you don't have what Ford Motor Company has. Their cars have evolved during the past hundred years. Each design is tested by hundreds of thousands of people. When something doesn't work for their customers, they upgrade it. Your machines have to work properly from the get-go.
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As I mentioned earlier, during my first year in business, I had to take in general fix-it work. I'd put cords on irons, fix blenders, reglue collectible dinnerware and so on. After my first winter, I had a dedicated bicycle shop, and never looked back. But sometimes I missed the general repair business, just because of the variety and the opportunity to be inventive with each unique repair. If you undertake general repair work, there will be times when you can't get replacement parts. You may have to file down motor brushes from a different model, use two resistors instead of one, make a patch from layers of fiberglass and glue - you know what I mean. To me, this was fun.
In this modern age of everything made of plastic and assembled by machines, there are fewer and fewer things for which repair is cost-effective. But there are still plenty. Among these would be high-end tabletop and small appliances, computers, musical instruments, and antiques.
You can start this business in the usual way, with Craigslist postings, flyers on local bulletin boards, business cards, a website, and of course signs within your bike shop. This is a business that can be very nicely driven by word-of-mouth once it gets started. The biggest problem you may have is resuming the bike business in the spring. You may be swamped with general repair work.
Parts for many things are hard to come by. One of the best sources is eBay. There, you can often find the parts you need for anything from smartphones to saxophones.
Before committing to any repair for which parts may be hard to get, make sure your customer knows that you may not be able to get what's needed.
If you have machining skills, or want to learn machining skills, you'll probably want to eventually pick up a welding set, Dremel tool, small lathe and at least a drill press with a cross-slide vice so you can use it for milling operations.
Gluing can be an important skill for a fix-it shop. Make sure you have good ventilation. I wouldn't bet on a long life for someone who breathes toxic glue, cleaner or paint fumes on a regular basis.
You may or may not want to set limits on what you'll fix. If your shop can't accommodate lawn care equipment and small vehicles such as motorcycles, golf carts, and snowmobiles, then that's out. Too bad, because repair of that stuff can be rewarding and lucrative. Gasoline powered equipment has the added problem that it can leak, thereby setting your shop on fire, and so must be stored carefully.
Websites That Work
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Just about any bicycle store will benefit from a website. So you'll want a website. It can be a simple one-page affair. All people want is your contact information. You can do some search engine optimization (SEO) tricks, discussed in the next few paragraphs, to get people to your webpage. If you're in a city with a dozen other similar bicycle stores, they'll all have their own websites, and without search engine optimization, you might be 13th on the list when people google your town name and "bicycles."
In fact, some businesses can be entirely websites. I won't go into much detail about deriving profit directly from the Internet, because this is supposed to be a book about "bike shop strategies." However, it is possible for your bike shop to derive a nice additional income from online activities, such as selling on eBay. In any case, your store will be more successful if you do a few simple Internet things.
There are now several places where you can create your own website by simply cutting and pasting or entering text, dropping in a picture or two, and click an OK button. Blogger.com and Tumblr.com come to mind. However, if you want to take advantage of all the ideas in this book, you might want to learn some basic HTML, or just hire someone to help you with the optimization parts.
Whenever you hire someone to help you with a website, make sure to maintain all access. You don't want the site on some guy's server. You want it on a big national company's server such as Godaddy.com. Because, what if your webmaster goes broke, leaves town, or has an argument with his wife and shuts down his server?
It is very important to get all passwords associated with the site. You don't want to have to hire the same webmaster over and over again for each little change that you could eventually make yourself, or pay someone else to make for you. What if your webmaster disappears and you don't have a password? I can't tell you how many times, I, as a business coach, have had to tell business owners (kindly), "I told you not to trust that webmaster."
The most important thing websites need is visitors. There are three main ways to get visitors.
1. Buy advertising. That mostly doesn't work. Or more specifically, with enough money you can buy visitors, but that would be fewer visitors than you would need just to pay for the advertising. I think it was Pets.com that was famous for that. Right before the big tech crash of 2000, this company had a popular website. It turned out that the company had spent millions of investors' dollars on advertising, and their revenue was far below the expenditures.
There is one form of advertising that can work nicely for bike shops. That's Google AdWords. You can sign up for an AdWords account for free. Once there, you bid on keywords. They should actually be called "key phrases" because most keywords are more than one word. Let's say your keyword is "bicycle shops Cincinnati." You may find that your closest competitor has bid $2.17 per click on that same keyword. You can bid $2.18. Then, your ad will show up at more websites, and closer to the top of the paid side of Google search results than your competitor's. So, your ad is then shown on random websites. Well, not random. Targeted. This means that if someone has a website that has something to do with bicycles in Cincinnati, your ad - and your competitors' ads - will show up on that site. Or if no one has a site about bicycles in Cincinnati, then you'll show up on websites about bicycles, and other sites about Cincinnati, Ohio. When someone clicks your ad to go to your website, Google takes $2.18 from your account. You can adjust maximums, and all sorts of other settings so that if it runs wild, you won't go broke. You can do things like change your keyword to "Bicycles Cincinnati Ohio" (adding "Ohio"), which may not cost anywhere near $2.18 per click. Fewer people enter "Bicycles Cincinnati Ohio" than "Bicycles Cincinnati" when they are looking for a bike shop in Cincinnati, but those who do will see your ad right at the top.
AdWords works particularly well because it is well-targeted. Google's automated software does a good job of making sure your ad shows up on only the most relevant sites, and with only the most relevant search results.
Think about the results: How much does your average customer spend per year? You'll find each regular customer is worth hundreds or maybe thousands of dollars, right? So what's $2.18 compared to that? Not everyone who clicks through to your website will actually turn into a regular customer, but the ads are well-targeted, so a good many will. Especially if your website is well-designed, which we'll talk about in a minute.
2. SEO - Search Engine Optimization. You can do some simple things to make sure your website shows up near the top of search results in Google, Yahoo, Bing, and other search engines. We'll talk mostly about Google, because it is the elephant in the room. My guess is that at least seventy percent of all searches are done through Google, with the remaining thirty percent handled by Bing, Yahoo and a hundred lesser search engines. Then too, if you make a website that works well with Google, it will work pretty much the same with the other search engines.
Google 'ranks' pages based on how closely parts of the page match the keyword people are searching for, and on how many other websites link to a page. The first aspect, matching elements of the page to the keyword is easy. The second is more work and takes longer to achieve, but that's OK, since it is probably less important.
By the way, don't let anyone tell you they have a magic formula to get top ranking. There are hundreds of companies out there willing to take your money for search engine optimization that is all smoke and mirrors. What you are going to read in the next few paragraphs is the heart and soul of search engine optimization. Oh, there are some complicated schemes that might bring a marginal increase in results, but these companies that promise the sky do not deliver. That's guaranteed.
Because your business is a bicycle shop that serves a local clientele, and because the term "bicycle" is so common on the Internet, you'll want to target your website to your local community. What are the chances that someone googling some aspect of bicycling is in your area? It's one in a million. On the other hand, what are the chances that someone who is in your area is googling something about bicycles? That happens all the time.
So, to attract people who are searching for "bicycle shops Cincinnati," for instance, all you need to do is put that phrase in the page title - between the <title> tags, and in the< It can be helpful to have a page filename that also matches the keyword, such as www.somewebsite.com/bicycleshopscincinnati.htm. Google says that as of October 2012, having an exact match page name is no longer significant. However, I have noticed that if you have an exact match domain name, such as www.bicyclescincinnati.com, Google seems to index your page - include it in their search engine listings - within a day or two, rather than within two to three weeks.
So how many people are looking for "bicycle shops Cincinnati?" It would be important to know that, wouldn't it?
As of today, 140 people per month are entering that keyword. How do I know? I used the Google AdWords Keyword Planner. It's free when you sign up at adwords.google.com. Signing up for AdWords is also free. It only costs money if you place a bid on a keyword. You can enter any potential keyword, and it will show you how many people are searching for that. It will also tell you how much AdWords bidders are paying for the keyword and some other interesting information. It will then offer a list of related keywords, in case you find there are already too many websites optimized for your keyword.
Once you are on the AdWords home page, select the "Tools and Analysis" tab, and then "Keyword Planner." Once that's in front of you, select "Search for new keyword and ad group ideas." Enter a keyword in the "Enter Your Product or Service" field, the scroll down and click the "Get Ideas" button.
You'll see an interesting list, but that's not the list you're looking for. Click the "Keyword Ideas" tab. Now you see information for your specific keyword - data about the people who have entered exactly your keyword into Google, and below that, you'll see a long list of suggested keywords based on what you entered.
So, the next step is to see how many people have already optimized websites for your keyword. Good news, well fairly good: Not many people have optimized sites for "Bicycle Shops Cincinnati." When you simply enter that keyword in the Google search engine, several sites come up, some which have the term in their titles, descriptions or <H1> tags, but none seem to be doing it in all four.
As you may know, you can see the source code of any web page by right clicking (or [Ctrl] and click on a Mac) and selecting "View Page Source" in FireFox, or from within a context-sensitive menu on other browsers.
So if your bike shop is in Cincinnati, you could be the top page in Google search results, and most of 140 people a month who are actually looking for bike shops in Cincinnati would click through to your website. Gosh, that could bring you 40 or 50 new customers every month! If you treat those customers well, they'll spend on average perhaps $400 per year in your shop, raising your gross sales by $16,000 per year, compounded each and every month! In real life it may not be as efficient as that, but it will certainly be significant.
If many websites have already used your keyword, there are still some things you can do. You can change the keyword a little bit, checking the Google AdWords Keyword Tool and actual search results, until you get something that has enough people looking, and isn't highly optimized. Maybe "Bicycle Shops Covington" (a small city just a few miles away), or "Bicycle Repair Cincinnati," or "Bicycling Cincinnati."
You can optimize for more than one keyword. Or, you can make a whole bunch of similar web pages each focused on one area, or put several area names in your tags. For instance, "Bicycle Shops Cincinnati, Covington, Florence, Ohio, Kentucky."
Many SEO experts are saying that you want to make sure your website stays natural. If you weave too many keywords into the text of your website, so it no longer sounds like sensible English sentences, your site will be less effective in two ways. First, the search engines will not rank you as high as when all your on-page SEO is reasonable and your backlinks are organic - meaning derived from actual people deciding to link your site from their blogs, websites, and forum posts. And then if your customers can't make sense of your website, or if it seems too spammy, they are less likely to actually visit your store.
Next on the list is backlinks. This thickens the plot a bit. If a thousand websites have added links to your page, Google puts you higher in search results than someone who may actually have better on-page SEO, but fewer backlinks.
This is another place the charlatans go crazy. They tell you they have all sorts of ways to get instant, automatic backlinks, for only $39.95 per month. . .
Don't fall for any of that snake oil. Much of what they do, when they do anything at all, is pure spam, and in the end, may weaken your position with Google. You don't need to pay money for backlinks, and you don't need to do spammy things to get them. Google's automated software has little tolerance for spam, and tends to penalize websites that have been linked with any disreputable practices.
The charlatans also tell you that backlinks are essential. However, with a well-selected keyword you can usually ignore backlinks and still end up with high search results placement and lots of hits. Nevertheless, we'll talk about the best ways to get backlinks in the next chapter.
Since you own a bicycle store, you can go to maps.google.com where you may have noticed that when you zoom in on maps, you see many businesses labeled right on top of their locations. You can have one of these links on the map of your place. It's free. You'll find instructions at google.com/business/placesforbusiness. With this service, you can also have more details about your bike show up in Google search results. These are most excellent backlinks, and so this is a good place to start.
Besides asking webmasters to add a link - many will, without cost, just because you asked, you can trade links, as long as you don't mind adding a reciprocal links list to your site. Better yet, you can post in newsgroups, forums and discussions, especially on social networking sites. You can answer questions, or ask questions. At the end of every single post, you are allowed a tag line in almost all forums. Your tag line can contain a few words about what your site is, plus an actual link to your site.
Not only will these be noticed by Google as backlinks, but some real people will actually click through, bringing up your visitor count organically. The trick to not spamming is simple: Contribute legitimately to the discussions in which you participate. You can answer questions, postulate theories, bring up analogies. If you don't know much about a subject, it is completely OK to ask questions, as long as you are not selling 'expert service' on your site on the very subject of which you're asking questions.
What's wrong with spam? Besides the fact that you're interrupting people, and diluting the value of bonafide discussions, Google and the other search engines have become quite smart about spam.
Once you've built or updated your website, you can let Google know it's there. This is especially important if no other websites link to it yet. Without any backlinks, Google has no way to know you're out there, because Google finds websites by investigating links from other websites, crawling the entire Internet every two weeks or so, link by link. However, you can expedite the process through "Fetch as Google" a simple, free and easy-to-use part of Google Webmaster Tools.
If all goes well, you can have a dozen visitors within 24 hours of building a new website.
If you can provide some useful content or positive eccentricity, then people will tell people who will tell people. Your site can go viral. Take a look at hamsterdance.com. Especially take a look at the "Hamster Classics" and then "Interactive Dance." This one dance page is similar to how the whole site originally looked.
It seems a computer science student made a one-page website as a thesis project. All it did was show lines of cartooney dancing hamsters with some background music. That was in the late 1990s, when it didn't take much of a website to excite people. There was something about the cuteness of hamsterdance.com that caused everyone to email everyone else, and it went viral almost instantly. Millions of visitors came. The creator saw the potential, and quickly added more pages and advertising to the site.
It will take more than dancing hamsters to impress people these days, but if you can do something sufficiently amusing, or informative, you win the game!
Another example is Crayola.com. There, you'll find quite a few interesting and interactive things for children. People come to the site because there's something useful there.
Yet another example is a website where you can buy an antenna for specialized electronics. The site has many charts with just the information that radio designers need, so of course this site is where the radio people go to when it is time to order antennae.
Your author has made several such sites. One of the more interesting sites is www.worlds-worst-website.com. Its sole purpose is to cause people to tell people, who will tell people, and so on. If I recall correctly, I have never done any SEO with the Worlds Worst Website. This site has functionality and eccentricity.
Then of course we have BikeWebSite.com. Built by your author, with only a total of eight hours spent posting in forums, it received over 385,000 visitors before I sold it six months later.
Once you've got a site that gets visitors, you want to direct their time there. It would be a shame to build a large visitor count, then have all your visitors become confused and leave the site without satisfaction. Or more to the point, you want them to do something that satisfies you, also, like come to your bike shop. Think of your web page, or your website, as a funnel. The top is wide. Lots of people spill into your site. The funnel narrows, directing people downward. Or more specifically, it holds their interest. Someone told me the average web page visitor stays one and a half seconds, unless something catches their interest in that narrow window of time. The funnel eventually directs them all through the spout. The spout is the action step. What do you want people to do? Click the "Buy Now" button? Give you a phone call? Come to your store? Design the page to have this effect.
You should have a compelling title, or short bit of text in the upper left corner, since that is where most people look first. The purpose of this top left item is not to sell something, but merely to cause them to feel that your site is worth focusing on. To have them become invested in your site enough to stay on the page and read more, perhaps click through to other pages on your site. Finally, at the bottom of every place they might go within your site, you have your action step - the button to click, the phone number to call, a map showing how to get to your store - whatever you want them to do. During this process, you may also want to convince them that your site is so excellent they should tell all their friends.
One thing you almost never want is links away from your site. In this book, I can tell you about crayola.com, because you already bought the book. I don't need to sell you anything. But if I did, I would not risk losing you to Crayola. Besides, I think I've got your interest by now. Hopefully, I have you well on your way to building up your bicycle business!
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There's a super-effective trick with the social networking sites that can bring you hundreds of new customers, but which is oddly left out of most discussions of social networking. I'll tell you about it after a brief introduction and 'how-to' in case you are new to the whole phenomenon.
For this discussion, we'll just focus on the big three. There'd be little sense in putting much effort into 'lesser' sites when the same effort on one or more of the big three will yield ten times the results.
Amateurs use Twitter to tell you they hate today's homework, Jane wore the wrong running shoes, the boss said something insane, Frank just took a picture of his malamute - you get the idea.
Most communication of this type happens among people who have decided to follow each other. For instance, if you start following Barack Obama, you'll get his tweets about the things that interest him - health care politics, international relations, and so on. When he writes a tweet, only those who have opted to follow him see his messages. In his case, millions of people are following. But unless you are the President of the United States, not that many people will follow you.
Here comes a big trick with Twitter: You can incorporate hashtags into your tweets. A hashtag is a word or phrase that starts with a number sign. Phrases consisting of more than one word are compounded, like this: #BillyRayCyrus. When you put a hashtag in your tweet, anyone who has elected to see all messages about that subject will see your message. Now, rather than the three people who are following you, suddenly thousands may see your message.
If you pick something too common, no one will be following because the number of tweets are simply overwhelming. For instance, if you add a #bicycle hashtag, chances are few people will react because there may be thousands of tweets about bikes every day. On the other hand if you pick something too specialized, there'll be no one who cares. Something like #BicyclingCovingtonKentucky - just isn't going to bring results. But if you use a hashtag that some people are going to be following, such as #Cincinnati, magic can happen.
First, they'll get your message, and perhaps go to your website to learn more about what you're doing. Then, if your tweet is compelling, they may start following you, so you can speak to them even in ways in which you can't incorporate effective hashtags. Finally, they may tell their friends, mentioning you or your website, or at least your tweets, in their own tweets to their friends (called retweeting).
Facebook has a concept called Groups. There are thousands of groups. These are just what you'd think: People with a similar interest 'subscribe' to a group, where the photos, messages, videos, and links are all about the topic of the group. For instance, there are more than 4,000 in a group about juggling. There, you'll find posts about jugglers who have appeared on television, pictures of people juggling three, four, five and more objects, how-to information, and more.
You'll find many general bicycling groups as well as specialized aspects of bicycling, such as classic bike collecting or road racing. You may even find groups about bicycling in your community.
The magic of Facebook groups is that you can subscribe to a group and post messages that will be seen by everyone in the group. Unlike Twitter, you don't have to depend on people searching for hashtag terms, and you don't have to already have made friends with hundreds of people. Just post in an appropriate group, and you can have dozens of targeted visitors to your website within hours.
Just like the rest of the world, you don't want to spam groups. You can't subscribe to a group about orchids, and post about mountain bikes for sale. Well, actually you can, but you'll probably be banned from the group. Besides, it is just plain not nice. Spam weakens a group. Have you ever seen a group that has lost the spam war? It's disappointing. You might want to read about a vegetarian diet, but every post is about weight-loss products. As a group is dying, you see nine out of ten spam posts, and have to sort through them to find a little bit of good stuff.
But you can post on-topic material, and leverage your presence in the group. You might find a group about the Cincinnati Bengals. There, you can say whatever you want about other football teams. The Bengals fans in the group will love you for it. Then, at the bottom of your post, you can have a signature line, complete with a link to your website. In fact, you don't even need a signature line. You can add links to posts - as long as they aren't wildly off-topic. You don't even have to do that. Many people will wonder who you are, check your profile, and the links you have posted there.
It is better to stay nearly on-topic, even with your signature and links, if you can. You can post in running, kayaking, and other outdoor sports groups in which you can participate in a valid way, but it is better to stay closer to home, subject-wise. If you post in a bicycle racing group, you'll get bicycle enthusiasts coming to your bicycling website. Many of them will visit because they are interested in everything 'bicycles.' If you post a bicycling link in a mountaineering website, even if your text is a valid on-topic post about mountaineering, few people will actually click the link.
Let's say you've found the pay dirt. Perhaps you found a group that is specifically about bicycling in your city. You can't just post over and over again that you're selling bikes. What you do instead is offer interesting bicycle trivia, post technical information about riding in your community, state that your first bike was a Schwinn Continental, and so on. You can answer questions that you're qualified to answer. You can ask questions if you're not an expert. You can ask controversial questions which will sometimes keep an active discussion going for weeks. With all this stuff on your wall, you can become something of an authority on the subject. By simply participating in a natural and appropriate way, you'll bring many visitors to your website who end up visiting your bicycle store.
As of 2010, Facebook added a concept called "Like." You can paste "Like" or "Share" buttons onto your web pages. When people click a "Like," a message appears on their Facebook wall with a link to your site. These can be valuable backlinks, especially if someone with a large following clicks your "Like" button. Many other social networking sites have a similar concept, but you'll find that Facebook Like buttons are the most effective by far.
Google+ has hashtags and groups. Their term for groups is "communities." Communities work pretty much the same as Facebook groups, but are not yet as popular. For every Facebook group, a Google+ community will have perhaps a third as many people. The reason to pay attention to Google+ is that it is up-and-coming. Some experts are predicting that Facebook is a fad, that five years from now, it will be a 'thing of the past.' Google+ may suffer the same fate - that all social networking will evolve into something else. But your author's opinion is that in the next few years, Google+ will grow considerably. They certainly have a powerful organization behind them.
In the early days of the Internet, before the WorldWide Web took off, there was another division called Usenet, also known as Usenet newsgroups. Usenet still exists, but most modern Internet users are unaware of it. There are more than 100,000 newsgroups, covering a huge variety of topics. A newsgroup is a list of messages by individuals. You can click titles to read messages, answer messages, and post new messages. It is a lot like email, except every message is addressed to the world at large - anyone who wants to subscribe to the groups. Just like email, messages could have files attached. Most of the time the files were pictures. In the past, you had to download special software, and put up with funky free access, or pay money for a subscription in a 'newsreader' service to gain access. Now, Google has made it much easier. Anyone with a Google account can go to groups.google.com and participate. The messages show up in your web browser - no special software required. There are two major differences: Google doesn't support attached files. With Google, it's just about text messages. And, there are even more groups, in addition to the Usenet groups.
So, if you want to publicize something, you find appropriate groups, post messages, and add a tag line at the bottom of every post. Or, in some groups, you can blatantly advertise. Of course the ones you can advertise in directly don't have much valuable content. They are often called "spam traps," I experimented with some, such as alt.test.test, and alt.announce, misc.forsale, and sure enough, there are a number of people just idling around there who will read pretty much anything interesting, and click through to see what you have.
Let me give you a concrete example of how you can use Google Groups. Actually, you can use this same technique in Facebook groups, on Twitter, and even on YouTube.
I wanted to publicize an idea about bike safety. I found a group called ba.bicycling. After reading a few messages, I figured out that the group is about bicycling in the San Francisco Bay Area, a place I have lived. There is a popular bicycling road that goes out to the rural edge of west Marin County called Sir Francis Drake Boulevard. It is dangerous because it has no shoulders, blind curves, and trees casting mottled sun and shade, making visibility difficult at times, especially since it heads due west into the sunset in the evenings. So I said so. I created a brief post stating that Sir Francis Drake was dangerous, and exactly why. At the bottom was a link to my bicycle safety website. You've gotta remember, I just told a bunch of bicycle lovers that the place they like to ride is dangerous. That was very controversial, just as I thought it might be, and so I was able to keep the discussion alive for a week. On the first day, 400 people came to my website. By the time the discussion died out, 1,000 visitors clicked through. And, these were exceedingly targeted customers - the very bicycle advocates I wanted to come to my site. My site was actually of international interest, but I happened across a Bay Area newsgroup, and remembered the problem on Sir Francis Drake, and so was able to make my little splash.
You may notice that I keep mentioning putting links to your website in your messages. Why not just the address and the phone number of your bike shop? The reason is that almost no one will drop what they are doing and go visit your bike shop. By the time they are out and around town, they will have forgotten all about the mention of your store in something the saw online. But if you link to your site, they may go there, spend enough time to be convinced they have to visit your store, and eventually they'll show up. Furthermore, if they find something interesting or valuable about your site, they'll bookmark your site, come back from time to time, and they may tell their friends and associates. As if that wasn't enough reason, you may find that you can earn money directly from your website. Maybe people don't need to come to your store for some things. You can do a mail order business from your site.
Now, if you try to sell the same things everyone else is selling online, forget it - there's too much competition. But what if you have invented a little something that bicyclists would like, and you are the only source? Right, you can sell it from your site. If your site is interesting enough, perhaps a virtual museum of some aspect of bicycling, perhaps it contains some interesting bicyclist biographies, or an interactive cyclists' forum on a specific topic, you can add Google AdSense, or affiliate links to whatever products you like. You don't even need a bike shop. Just earn a living from you website. But that's way off-topic for this book, isn't it?
But you can certainly augment the profit from your bike shop. In some cases, that can make the difference between success of a retail store and well, not success. For instance, I once had a bookstore in a time when bookstores were flailing due to Amazon, Alibris, ABE and other online booksellers. Kindle and other ebooks were making inroads, and many people do seem to prefer videos and interactive computer activities to reading books. My bookstore started out like most little bookstores, selling books to people who came into the store. I learned to list some of my books on Amazon.com. In less than a year, my store did more business out of the back room selling books on Amazon, than it did out of the store itself.
For you, that may or may not be acceptable. Some people just love retail, and that's all they'd want to do. Others are willing to make money any way it comes to them. Yet others love any opportunity to avoid the public, and would like to make money somehow involving bicycles online, without a bicycle store!
Now, eBay frowns on selling things outside of eBay through an eBay listing. So you can't do that. But you can mention a non-competing website in your listing, and you can direct people to your 'about me' pages on eBay where you can write about and show pictures of your website, or even your store itself. Any eBay buyers who discover you are close to where they live will certainly want to come by.
You may find this chapter interesting. It is all about buying and selling on eBay as it relates to the bicycle business.
For those of you who are reading this on a device that can display web pages, you can click the picture to see the video. Otherwise, you can go to this link to see it on another device: http://www.youtube.com/watch?v=Z19zFlPah-o
The bicyclist is Danny MacAskill. As of today, this video has been viewed more than 34 million times.
If that were your video, you could have YouTube supply advertising within and around the video. Their advertising is linked to Google AdSense, which is no surprise, since Google owns YouTube. AdSense places context-sensitive ads automatically. Ads will be displayed that are related to the subject matter, (probably "bicycle" and "BMX" and "Danny McAskill"), and also to what the viewers have shown an interest in. For instance, Google must be hip to the fact that I have been interested in Dremel and Foredom tools lately, because these are among the ads I see. Or, you could embed your own links into the video. So, if you own a bicycle store in Miami, then you might make an interesting and unique video about bicycling in Miami. People who search for "Miami" or "Bicycling" or "Bicycling in Florida" or something like that will want to take a look at your video. You'll see the visitor count at your website build, and ultimately, welcome hundreds of new visitors to your bike shop.
Interestingly, the quality of a video is not nearly as important as the content, or the subject it addresses. Many successful YouTube videos were shot with cellphones, and not edited very much, if at all. But what all the successful ones have in common is that they do something people want to see. They are informative or eccentric.
If your video is like most, and gets three visitors, one of which is your mother, you may need to do some adjusting, so it's title and description contain keywords that people are actually looking for, or so it is sufficiently interesting or eccentric to go viral. For instance, this video of Steve Moore, known as "The Crazy Drummer," shown below, had very few visitors. It just sat on YouTube for two years being generally ignored. Then the title was changed to "This Drummer Is At The Wrong Gig," and suddenly, 23 million people had to see it.
And there are the other websites. You can post photos or artwork on DeviantArt.com, Pintarest.com, PhotoBucket.com, you can make interactive blogs on Tumblr.com or Blogger.com.
A meme (pronounced 'meem') is a unit of information that carries an idea from person to person almost in the way that genes carry physical traits from generation to generation. Shortened from the Greek mimeme, which means "imitated thing," the term was coined by Richard Dawkins, an evolutionary biologist, in 1976. Modern memes can be a written phrase, an image, an animation or sound clip.
Bumper stickers might be typical memes. Remember the one that had a picture of a golfer and said, "Don't drink and drive. Use a 7-iron?" Hopefully, this meme made driving a little safer. Bumper stickers promoting your bicycle store can be somewhat effective. You'll have customers who are almost like groupies. If you were to give them bumper stickers, they'd proudly put them on their cars, and on the toptubes of their bikes.
It's easier to create memes these days. You can just upload a little something to Tumblr, Twitter, Google+, you name it. And if your meme is successful, everyone will share it with their friends and associates, and soon, your meme will be seen by millions. A typical image meme would have a photo or drawing, and a bit of text. There are no standards - yet. Your meme can be any size, any of the standard Internet formats - .jpg, .bmp, .gif, or .png), and of course it can contain anything you want. All you do is make your meme, including a link to your website, upload it somewhere, set back, and watch the business roll in. At least that's the idea.
As with so much of this Internet-based publicity, it will be more effective to create memes of interest to your community, than to the world of bicycling in general. That's because everyone in your community can come to your bike shop. But to the whole world of bicycling, very few live near enough to your store.
It would be pretty hard to make a text-only meme. The closest I came is this: "If all the toilet paper used in America was on one giant roll, we'd be unrolling it at 7,600 miles per hour, roughly ten times the speed of sound." This could be uploaded to some trivia websites, or into various groups on Facebook, along with a link to whatever you'd want to link.
The problem is that text memes will tend to get separated from their links when people spread them around. So, the answer is embed the text and link in a picture, so it is the picture that gets passed around, not just a line of text. Besides, the picture may enhance the concept of the text.
You can also make video memes, with or without sound. They have the advantage that they more completely involve the viewers. The downsides are that they take a bit more effort to produce, they don't run consistently in all environments, and people have to sit and watch them before they get the entire message. In this information-rich society, you've gotta remember that the attention span is said to be one-and-a-half seconds. If your animated meme doesn't catch people in that amount of time, it isn't going to be effective.
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I wanted to tell you about a couple of Craigslist tricks that can be important to your bicycle shop, especially if you buy and sell secondhand bikes. If you only sell new bikes, you'll find the same ideas work nearly as well. You can also use this information to sell parts and accessories.
First, let's talk about a couple of tricks for selling things on Craigslist.
When you list a bike for sale on Craigslist, it scrolls down the list as other people add the bikes and related items they have for sale. In a busy community such as Chicago or Seattle, your ad can scroll out of sight within a few hours.
So, here's what you do: Every couple of hours, add a different bike. You can put up an ad for a BMX bike at 1pm. Then at 3pm, you can put up an ad for a tandem. Then at 5pm, a mountain bike, and so on. Each one of these ads carries a link to your website, saying something like, "many more bikes available at mywebsite.com." You might even have thumbnails for some your other bikes at the bottom of each ad. This is not spamming, because every ad is for something different.
As you may know, with Craigslist, you are welcome to 'renew' an ad every 48 hours. This means that your ad will reappear at the top of the list. So, after you've built up a sufficient number of ads, you can start renewing them, one at a time, every couple of hours, so you always have something near the top of the list.
The other trick, which I already alluded to above, is that you can have a website that has a larger list of your inventory. Every one of your Craigslist ads can link to your website. It seems to work well to have a vertical table on your website, with thumbnail images of each bike on the left, descriptions to the right, and prices to the far right. I did this for a short while when I was building a business to help some relatives. We kept an inventory of about 18 used bicycles and each was pictured on our website until sold.
I have to admit we didn't stay up to date with posting on Craigslist. I usually only managed between one and three ads per day, and skipped some days altogether. This was because our bottleneck in the used bicycle business was getting bikes, not selling them. Unlike many other product lines, all except high-end bicycles are too big to buy profitably on eBay - due to the shipping cost, and you can't just buy used bikes from wholesalers, so we had to depend on a local market. And there too, I have to admit, we could have done things to purchase more bikes locally, but I had other business interests at the time and the idea was to start something simple that could be maintained after I moved on. Still, we sold twenty bikes per week with an average profit of $75 to $100. So this could work the same way for your business. After doing it for three months, I moved on to other pursuits, but during that time, strictly from Craigslist exposure, our bike inventory website had received over 20,000 unique visitors.
When an item sells, it is appropriate to delete it from Craigslist as soon as you can, but I think it is better to leave the listing on your website for a day or two, marked "Sold," leaving the price visible. When people see that your business is active, an unconscious impulse causes them to want to buy something 'before it's too late.' It also keeps tire-kickers coming back. They want to watch the activity, and eventually when they need an item, or have a friend that does, where do you suppose they'll look?
You can use Craigslist to sell new merchandise also. The public is a bit more finicky about spamming if you do something like list a Marin after a Marin after a Marin on Craigslist. Better to list a saddle, a taillight, a lock, a tire, along with just an occasional bike, and each item links to your website. Even better, the items you list can be on sale. Like, "Today only, Genuine Kryptonite Lock, $32.95, regularly $42.95." You'll still make a little bit of money if you bought your locks well, but once the lock buyers come into your shop, they may buy other things at full markup. Furthermore, if you treat them well, they may become regular, dedicated customers, worth hundreds or even thousands of dollars per year.
The impact of such listings grows with time. Several months later when Fred, who doesn't need a bike, hears that Jenessa wants a bike, he'll remember your bike ads on Craigslist, and direct Jenessa to your linked bikes-for-sale website.
And of course, on your website with your list of items for sale, you can mention that you are also a buyer.
One of the best ways I could have increased our purchasing of bicycles at the time would have been to keep an ad active in the "Items Wanted" section of Craigslist telling people that we buy used and broken bicycles. This would have the added advantage that our 'wanted' posting would also link to our website, so people who see that we want bikes, will also see we have bikes, in case they are upgrading, or looking for a bike for any reason.
Unfortunately, the only category on Craigslist for buying is "Items Wanted." Whereas you could post multiple similar ads such as "Cash paid for bicycles," "I buy name brand bikes," and "I want your quality used bikes," in Items Wanted, this verges on spam, in fact it pretty much is spam, in the "Items Wanted" category. Not only does spamming make a mess out of a good category, and is unethical, and will probably get you a bad name, but Craigslist users will probably get in the habit of flagging and deleting all your ads. You might be able to expand in the items wanted category if you are careful. You could run an ad that you are buying mountain bikes on Monday, an ad that you are buying broken bikes on Tuesday, and an ad that you are buying road bikes on Wednesday, but I think you'll find this is too risky.
If you're offering a service such as teaching bike repair, detailing or repairing bikes, you'll discover the same problem. There is only one category on Craigslist for "Services Offered." Everyone is going to be posting there from rug cleaning services to computer repair. An ad there is seldom seen.
A better way to let people know you're buying things on Craigslist, or offering a service, is to sell things.
I'm going to suggest you dabble a bit in selling items on Craigslist, even if that is not your primary objective. Now, you can put ads in the bicycling section of Craigslist for your bikes or parts and accessories, doing the tricks stated above. But the point is not be to sell the things, although that could be a good income on the side. Your ads are there mostly to let people know that you're buying, or present the links to your website where you sell the lessons and repair services that you offer. If you don't really want to mess around with buying and selling (but who wouldn't?), you can keep your prices too high. The point is that people looking for items to buy on Craigslist are often the same people who want to sell their junk, or want lessons or repairs. This is where they'll be, in Items for Sale, not Items Wanted or Services Offered.
You might be surprised to discover that the for sale ads which happen to carry a message that you're also a buyer or are offering a service are far more effective than the single ad you can legitimately run in the Services Offered or Items Wanted category.
How can you tell? You can go to a website such as Vendio.com that offers free hit counters. You can past a counter into the text of your ad and that way you'll know how many people are looking. You can use a Hidden counter style, if you don't want the general public to see how many hits you're getting. Many items offered by Vendio are free including hit counters. Since Vendio specializes in ecommerce solutions on eBay, Amazon and other such sites, it takes a bit of looking to find the type of counters you can put on general web pages. Vendio calls this category "Web Counters," and the place to create new counters is "Manage Web Counters."
Finally, for building awareness through Craigslist, you'll notice that there are forums at the left side of the home page. Yes, another social networking opportunity. You can participate in those forums. You can teach what you know. You can answer questions. You can ask questions about what you don't know. At the bottom of every posting, you can have a low-key link to your website. Keep in mind that some of the forums are national, so you'll want to notice that before you post a link for local service or large items for sale.
You can also leverage Craigslist as a buyer. People who are moving out of town, don't want to pack and ship things, and who want immediate cash will sell things for much less then they would otherwise be worth online, or if they had all the time in the world to attract the right buyers. They can't get the full value for these things, because the market is limited to the local community. So of course you can come along, swoop these things up, and sell them for a profit. Sweetening the deal, many of these bikes offered on Craigslist are not in ideal condition. The sellers know this, but so do you. So, you might discover a mountain bike that you can sell for $500, once you replace the rear wheel. The seller is happy to get $75 for a bike that was once nice, but now has a broken wheel.
Imagine having a retail store with unlimited space, where you don't have to actually greet customers, it's open 24 hours a day even though you have no salespeople, has almost no overhead costs, and has not hundreds, but millions of customers!
That would be eBay. More than 150,000 people are earning their livings entirely on eBay, and you can be one of them. In fact, if you have a bicycle store, your opportunities to add eBay into your profit mix can be rather amazing. The most common way to use eBay is to sell things that might come through your store that would be difficult to sell to a local clientele. For instance, an old Simplex plastic derailleur is something that will not be asked for very often. Probably never. So if you put on in your inventory, it will gather dust for a very long time. If you'd rather sell it, put it on eBay, where it will be seen by an international clientele, not just the people in your local community. Someone out there collects plastic derailleurs. Maybe there are two or more such collectors, and they'll get it a bidding war for your derailleur, driving the price up much higher than you might expect.
eBay is one of the easiest businesses to set up, and can start bringing you money within just days. It is possible to start an eBay account, list your first-ever item, and have it sell 10 minutes later.
Setting up an eBay account is as easy. You enter your name and contact info, make a couple of choices, and you're all set. You'll also want to set up a PayPal account, which is equally easy, and also free. PayPal is a division of eBay that takes care of collecting money, so you don't have to deal with credit card numbers or anything like that.
I believe a person could watch eBay like a hawk, and pick up things like Campagnolo components, and bullet headlights from bikes from the 1950s. You could turn right around and sell them for more on eBay. There is 14-speed internally geared hub made by a company called Rholoff that sells for $1000.
If you could pick a used one up on eBay for $300, you could sell it for $600 - $700 easily. You can mix and match trading on eBay with your local market. I think another good eBay business could be had by buying the lowest of the low bikes locally - you know, the department store $100 mountain bikes, disassembling them, and selling the pieces on eBay. This wouldn't be as profitable as buying a broken $100 department store mountain bike for $10 due to its condition, throwing away what's broken, then selling the rest on eBay - and through your store.
You can start your eBay business with a single bicycle component. For an example, let's say you have a hub, oh, you probably won't have a Rholoff, but a Sturmey-Archer AW 3-speed hub is a likely candidate.
But is it worth anything? On the top of most eBay pages is a search field. You can type in a description of your hub. Maybe something like "Sturmey-Archer AW" You will see a list of any such hubs currently being sold on eBay.
This list is interesting, but not very helpful. It shows only what's currently being offered. Some items are being sold as fixed price, but you don't know whether they will actually sell. Others are being sold through auction, and you don't know what value they'll rise to when finally sold. So, scroll down the column on the left where you can narrow down the search results. Click "More Refinements," then "Show Only" and finally "Completed Listings." That's more like it. Now, you have a list of all items that closed during the past 30 days.
Items that didn't sell have their prices shown in red. The sellers may have ended the item early, or let the time expire without a sale.
Items that have their prices in green did sell. So you can see how much people have actually paid for your hub. You can click any of the items, see the pictures and read the description so you can better understand competing conditions. For instance, you might find that four of the hubs sold for only $12, while two others sold for $50. Upon reading the descriptions, you see that the four $12 hubs were without axle nuts and indicator chains (the linkage to the shift cable). You might see one that sold for $250. What's up with that? Click through, and you might discover that it was a rare version with an aluminum alloy hub shell. And look at that! You didn't notice it before, but yours also has an aluminum shell!
Now it is time to take some pictures. eBay requires that you supply at least one picture, and allows for up to twelve pictures at no cost. You'll want to take your pictures in such a way that they make your hub as appealing as possible. You might want to set the contrast up just a little tiny bit. Make sure the camera is held still, and the focus is good and sharp. Think about the background. It should be non-distracting, and of a contrasting color.
I have found that including your hand in pictures seems to slightly enhance sales. I don't know if something that's flesh colored automatically attracts people's attention, or if it makes an item seem more real, or perhaps it makes people feel as if it is their hand holding the item.
Keep in mind that the first picture you upload will be used as a little thumbnail. You want your hub to be obviously a Sturmey-Archer three-speed hub at first glance in the thumbnail. Or sometimes, it is better to make it questionable. It is possible to create thumbnails that spark curiosity. People will want click in so they can figure out what they're seeing.
Then you create the listing. First you select the right category. Most of the time, the right category is within the Sporting Goods | Cycling section. Other possibilities include the "Weird Stuff" section under "Everything Else." This would only be if you do have a weird item for sale. People look in that category who don't know they're going to end up buying a bicycle item.
For the item title, describe your item in appealing terms, but don't forget to use the keywords someone who wants this hub will actually be entering.
Click the various options as you create the listing to set it up the way you want. Be honest and straightforward throughout.
These options include:
Condition: New, used, etc.
Description: If it is collectible, state why. If it has special features such as signed by a celebrity, make sure to include that information, even if it is in the pictures.
If there are any flaws, you must mention them. You cannot omit something like a cracked spoke hole. If you try to sell it without mentioning such flaws, you will not be an eBay seller for long. On the other hand, honest mistakes can be made, and as long as you don't do it excessively often, all will be OK.
Size: For some bicycling items, you can select a size. Whether or not you have a field in which to enter a size, put it in the description also. You don't want buyers to forget that they have to take size into consideration. However, there are also many professional buyers. They don't care so much about size, because they're just going to sell it to whomever it fits.
Some items have other important specifications, such as number of spoke holes. For instance, 40-hole Sturmey-Archer hubs were very common, but 40-hole rims are not common. If your Sturmey-Archer hub has 36 holes, it will be far more desirable. On the other hand, if you fail to mention it is a 40-hole hub, your buyer may be disappointed, or may even want a refund.
Auction or Buy-It-Now: An auction listing can run for one, three, seven, or ten days. You get to pick an opening price. For instance, you may decide that there's no way you'd accept less than $30 for your hub. So that's your opening price. As the auction progresses, people will hopefully bid higher and higher. There is no limit. I once started an item at $50, figuring I'd be happy if at least one person would bid and give me $50. It sold a week later at $1,200. If you're lucky, at least two people will want your hub, they'll get into a bidding war, and the winner will pay way more than you think is sane!
You can also set a secret reserve price. You can start your hub at 99 cents, with a $30 reserve. This way, you can see what people are willing to pay. If no one pays $30, you get to keep it, yet you can see what they were willing to bid. Maybe the bidding stopped at $25, for example. Most savvy eBay sellers don't use reserve pricing.
For ordinary non-collectible things, Buy-It-Now, also known as "Fixed Price," is probably a better option. You set a price, and your hub remains available until someone is willing to pay your price. Many people don't like the auction game. They come to eBay to get something, and they want it as soon as possible, and it would drive them crazy to have to wait until an auction closes to find out whether they won or not. Buy-It-Now generally closes a bit higher than auctions on non-collectibles. Buy-It-Now runs thirty days, and can be set to automatically renew every thirty days until the item is sold. It is not uncommon for a merchant to list an item for a fairly high price, and then wait eight months until it sells.
Return Policy: You can decide what happens if an item doesn't work out. Will you accept a return? Will you pay return shipping cost? If so, you may find that ten or fifteen percent of what you sell comes back. On the other hand, the individual buyers are happy to pay much more when they know that they can return things if necessary. With bicycle clothing and buyers who want things for themselves (as opposed to professional buyers and sellers), ending up with the right size is essential. For them, a return policy can be very important.
Shipping: You get to decide whether you'll ship an item for free, or whether the buyer has to pay a shipping charge to you. Many sellers offer free shipping, thinking that will make their items more attractive. Others charge the exact amount the shipping will cost them. I charge a bit more to cover the cost of packing materials (when I don't use the free envelopes and boxes provided by the Post Office), and to cover my time in packing the item and applying postage. I feel that whereas free shipping is an attractive offer, my prices feel lower, because people don't really think very much about the shipping cost when they're considering an item.
You can ship by any carrier you like. You may prefer UPS, FedEx, US Mail (USPS), or another. I like US Mail because most of my items are fairly small and light, so the costs are smaller. Working with the US Postal Service seems a bit easier to me than the other services. Out of thousands of packages shipped, only a a handful have been lost in the mail. More specifically, I've probably shipped 20,000 items to customers in the US, and only around six of them were lost or damaged.
eBay has a fairly new service called Global Shipping. Before that, if you chose to sell to buyers outside the USA, you had to fill out customs paperwork on each item. You also had to pay for shipping insurance, or risk that some items would be lost in the mail. I used exclusively US Mail for my overseas shipments, and I'm going to guess that ten percent of the packages I shipped were lost or very delayed. Dealing with the insurance was tedious, so I generally didn't bother.
With Global Shipping, I send the packages to a central processing location in Kentucky. They take care of the customs forms, and guarantee delivery. If a package is lost or delayed, I don't hear about it. eBay takes care of it with the customer for me. There are only two small difficulties: eBay Global Shipping doesn't service all countries. Occasionally someone will write from Russia or one of those countries asking if I'll ship an item by other means. I always decline. It just isn't worth the trouble for me or the customer. The other problem is that eBay Global Shipping determines the price the customer has to pay. I only charge an amount sufficient to send it to Kentucky, just as if I was shipping to any US customer. But, the shipping price the customer pays is more - enough to cover whatever it is eBay has to do to get the package to them. I don't get to see what they pay, because I'm only seeing eBay from the US site. When I have asked customers about the shipping prices they are charged, they seem to vary greatly. Sometimes reasonable, sometimes remarkably high. One customer told me it was something like $22 for a two-ounce package.
When you list an item, there is a small listing fee. Depending on a few factors it can range from five to thirty cents. You can also add options such as subtitle, or larger pictures, so the listing fee will be over one dollar, but I do not recommend any of these options. They make more money for eBay, but don't generally help your item make more money.
When an item sells, there is also a closing fee. This too, is a variable amount, but it averages around eight percent. Finally, PayPal has a fee of around three percent. I like to ballpark my figuring by saying all the fees add up to twenty percent. It is a bit less, but this factors in mistakes and return expenses. So, if something sells for $100, you actually get about $80 after costs.
You'll find shipping is easy, because eBay includes a free part of their website called Shipping Manager. You put your item in a box or envelope, click Shipping Manager, choose your carrier UPS, Fed Ex, or US Mail, enter the weight of your item, a couple of other choices, and print a shipping label with the address already filled out on an ordinary printer using ordinary paper. Later, you can get a fancy label printer, if you wish. The shipping cost is automatically deducted from your PayPal account. Shipping with eBay Shipping Manager is slightly less expensive than taking this to the Post Office and paying there.
eBay has a feedback system in which a buyer can rate the transaction. They can give you a positive, neutral, or negative vote. In almost all cases, they'll give you a positive one. In order to get a neutral or negative rating, you have to misrepresent your item, ship it quite late, and communicate badly with your customer. If you have made a mistake, such as listing the size incorrectly, but communicate with your buyer and do your best to make things right (offer an exchange or refund), then you won't get negative feedback. Oh, there is the occasional crackpot who is mad at the world and issues negative feedback for no good reason, but that is rare, and eBay has some mechanisms in place to keep that to a minimum.
You can sell things if you have no feedback. Many people will trust a brand new seller with low-value items. If you have something that is selling for a lot of money, lack of feedback can cause some people not to bid. However, most people understand that eBay offers so much buyer protection that even if you turned out to be a horrible seller, they'd be reimbursed by eBay.
As you start selling things on eBay, you will build more and more feedback, and that enhances your profit slightly. If you want to accelerate the feedback process, you can buy a number of inexpensive things on eBay, since feedback is offered on the buying side of transactions also. However, sophisticated buyers can tell the difference between feedback as a buyer, and feedback as a seller. You might rummage around and find a number of inexpensive things to sell on eBay to generate feedback quickly, before you start offering high-end items.
I have discovered that there is a market for many common bicycle parts on eBay. It might even be possible to buy a low-end bike at Walmart, take it apart, and sell all of its pieces for a profit, although I'm sure there are easier ways to make money.
One way is to advertise through your store or on Craigslist that you'll buy broken bicycles. Many can be had for only a few dollars. The sale of a single derailleur or handlebar stem can bring more than the entire cost of the bike. If you can find collectible bikes from the 1970s or earlier, you'll find the parts are quite valuable.
You'll find wheels are problematic on eBay. Unless a wheel is quite valuable, the shipping cost is so high that you're better off selling the hub, and perhaps the rim, spokes, and tire separately. You can send a rim through plain old US Mail by simply attaching a flat piece of cardboard to hold the mailing label. No packaging is required. That is, unless it is a particularly valuable rim. Then you might want to protect it in cardboard. As with any kind of shipping, you want to balance the cost of secure packaging against tho value of the items being shipped. There'd be little sense in putting a $10 rim in a custom-fitted box that costs you two dollars and adds a pound to the weight. The worst case scenario is that you'd have to refund the $10 if the rim is damaged in shipping. On the other hand, a rare wooden sew-up rim ought to be double-boxed, with an inch of padding all around.
You can sell entire bikes on eBay, but there is the added difficulty of packing them for shipping. If you have never done that, you'll be amazed at how much time it takes. Since the cost of shipping bikes is high, you'll be restricted to high-end bikes where the shipping is a smaller fraction of the entire cost.
eBay can also be a source. If you're repairing a bike that requires a rare part your wholesalers do not carry, check eBay. Sometimes, you can find whole bikes that are a good deal, even with the shipping cost. Be careful to check the shipping terms with whole bikes. A large number of people list their bikes for sale with "local Pickup Only." This means that the seller will not assist in getting the bike to you. If you're in Los Angeles, and you buy a bike with "Local Pickup Only" that's also in Los Angeles, no problem. You just go pick it up. If you are in L.A. and buy a Local Pickup Only bike in Boston, you've got a problem.
If you can invent something that bicyclists would want, and no one else sells something similar, you can potentially sell hundreds of them per day on eBay.
The Guy Who Did Everything Wrong
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As you've read elsewhere, my first business coaching client owned a bicycle shop, back in
1979, before the days of the Internet. His business had put him $140,000 in debt. I won't say he really did everything wrong, but he made many of the mistakes that people tend to make in the bicycle business. This is an entirely true story of what was needed to get him back on track. Of course every situation is different, but you may see some things here that you can apply to your own business.
Jason (not his real name) had seven employees. The business could run well with four. If there is an alternative, it is always best to avoid firing people, so after we talked, he called around and found positions for them in other bike shops.
The employees who remained could have felt that they were being given more work without more pay. So, they were switched from hourly pay to commission. The salespeople were given ten percent of gross sales, and the mechanics were given thirty-three percent of the labor charges. This was less of a percentage than they were making before on the hourly basis. In other words, mechanics had been costing fifty to sixty percent of the labor income, and sales people had cost up to twenty percent of gross sales. Still, they ended up with bigger paychecks at the end of each week. In fact, they became the highest paid bicycle personnel in the city. Interestingly, with the higher pay - that they truly earned themselves, they took more pride in their positions, and in their work. There was only a bit of training necessary to make sure they understood the consequences of working too fast, or over-selling customers.
Part of the decision as to who was to be transferred to other bike shops, and which employees stayed, was based on their reaction to the change from hourly to commission. Those who understood and figured they could make more money stayed, and those who only wanted hourly pay left. (If you've ever read Atlas Shrugged or seen the movie, you might see a situation reminiscent of the Twentieth Century Motor Company here.) This change in structure really worked out to suit everyone.
Jason had an inventory that was quite out of balance. So, learning of an upcoming bike swap 60 miles away, they rented a truck and shlepped all the misfit and overstock items and a bunch of borrowed tables to the swap meet, and sold it at or even below cost, bringing in $12,000. We took that $12,000 and purchased inventory that was just right, the kind that turns several times a year. Jason had to learn not to buy everything in lots of a dozen or more just to save a small percentage. On items he sold infrequently, he started purchasing ones and twos from wholesalers that would sell on that basis. Before long, almost everyone who came to the store to buy something got what they wanted. Repairs were no longer put on hold waiting for parts.
All generic advertising was canceled except for the main phone book ad, which was reduced in size. Carefully designed, smaller ads were placed that carried specifics. For instance a tune-up special (with coupon) for $19.95 (the typical price was $29.95 in that era). When a bike came in for a tune up, the sales people learned to look for other things that would pump up the sale. If the customer was agreeable, accessories would be shown, new tires discussed, and so on. The mechanics loved the tune-up special because they became routine and only took about fifteen to twenty minutes each, complete with accessory installations, which, of course, brought additional commissions.
The somewhat toxic atmosphere on the sales floor changed almost overnight. Like many such stores, the sales people acted like the customers were an inconvenience who didn't know anything and really ought to get their education elsewhere. Once the sales people were switched to commission, they somehow became the sweetest people. It didn't take long for the reputation on the street to change so that people dragged their friends and relatives to this bike shop, not any of the others in town.
We found some other product lines that Jason liked so he'd have something to sell in the winter months. These were board games, Swiss army knives, new and used books about bicycling, and bicycle repair classes (six people per class, six weeks, two hours per week, $120 tuition, in 1979 money).
There were plenty of smaller changes also. Jason had to discover that it is OK to guess at a price when a price tag was missing. Before the change, I once saw a sales person approach him while the customer waited to find out the price of a child's bike. Fifteen minutes later Jason came out of the office clutching an invoice and announcing that the bike was $69. The customer had long since left. Now, he just takes a guess. It might be $59, or maybe $79, but he wins the sale, saves his valuable time for more important tasks, and enjoys his business more.
And that was in 1979. The bike shop still exists and it's doing fine.
The day will come when your original store is too small, and this is a very good thing.
However, you'll want to resist the temptation to expand until it is really obvious that moving into a larger store or establishing a branch location is going to be profitable. That's because expansion generally puts a downward bend in your growth curve. For some businesses, this is difficult to survive.
Imagine this scenario: A store owner has done very well in his 900-square-foot (100-square-meter) store. In fact, he rented the house next door as a storage facility, and moved two workstations and mechanics over there.
Now, the store and the house are so crowded that time is wasted moving piles of boxes in order to find things. The proprietor can feel business being lost because there isn't enough storage for customers' repairs, because the can't display every make and model they carry, because there is room for only one sales counter, and so on.
So the owner finds a nice 5,000-square-foot building on the edge of town, and rents it. Now, instead of $1,000 per month rent, he has to come up with $6,000. Instead of $200 per month for heat and electric, he has to pay $800. That's OK, because he has $25,000 in his checking account. Well, he did, until he paid first and last rent. Now he has $13,000.
After carefully strategizing, he has set up the utilities including phone and Internet, and has worked out a way to move all the inventory with four hired helpers and a U-Haul truck in a single day. That day comes.
But he has misestimated the size of the truck, and it takes two days to move everything. That's $4,000 in lost revenue, and a handful of customers that tried out another bike shop, and liked it.
After paying for the truck and the four guys, he has $12,000 left in the bank. From that, he pays $2,000 for his new sign.
Now, they are in the new store, and sales are surprisingly slow. He figured that he'd immediately have more customers, because the old customers would all continue to come, and then he'd have people from the new neighborhood coming in also. But they are slow to respond. So, against all (good) advice, he buys $5,000 worth of radio advertising, leaving $7,000 in the bank.
The radio advertising falls flat, and he starts to figure out that for many of the old customers, the extra five miles is just too far to bother with. They find other bicycle stores nearer their homes. The people in the new, somewhat suburban neighborhood have long been in the habit of commuting into the city for their bicycle needs, and so are slow to respond to the new store.
For the next two months, revenue is literally half of what it was at the old store, and to continue paying the employees, he has to spend $8,000, putting him $1,000 in debt.
Now it's the off season, and nothing changes, except he had to let two people go. Still, the rent is $6,000 per month. He comes out of the off-season $25,000 in debt. He remembers the good times when he put money in the bank every month, and life was easy and good, although somewhat crowded.
Fortunately, this story ends well. As the high season gets into full swing, many of the old customers drift back, and enjoy the spaciousness of the new store. They think there is more inventory to select from, but that's only because the owner stretched his existing inventory to make it look more full. People from the new neighborhood come in and like the friendliness and professionalism of this store - the very same friendliness and professionalism that caused the original store to prosper. Finally, he can expand his inventory further, putting in a full line of cycling clothing. To this proprietor's great surprise, the shorts, jerseys, helmets, shoes sell particularly well, and the customers who are coming in for clothing start buying high-end bikes, hand-built frames and wheels, and bring all their friends and neighbors.
The moral of the story is that a seemingly innocent move almost sank this proprietor. So, you don't want to undertake expansion lightly.
If your idea of expansion is branch stores, it is just like this but worse. When you start a branch store, you need to have enough employees to run both locations. You need at least one person who is fully competent as a manager, because you can't be in both places at once. You need enough inventory for both locations, although you can truck some stuff back and forth. To the great surprise of most people who start their first branch store, business doesn't just roll in to the new location. They seem to think that as soon as the open the branch, they'll have double the gross sales. But no, in reality, the branch's business builds almost as slowly as the original store did. Furthermore, many of the customers have come from the old store, so the old store actually loses some business.
Bottom line, the first branch store is the most risky. It severely destabilizes your existing business. Once you get a branch up and running successfully, however, then your third, fourth, and all subsequent stores get easier.
The Sure-Fire Millionaire
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Every normal person in a democratic developed country can be a millionaire. I'm not saying 'could be a millionaire if their luck runs right.' I'm saying that if you do certain things, it is practically guaranteed. This is especially true of bicycle shop proprietors, but will actually work for their employees as well. Let me explain. . .
You might think the decision to buy a cup of coffee at Starbucks is simple - just do it. But what if I tell you that cup of coffee will cost you $42? Would you still buy it?
If instead of paying $3 for that cup of coffee, you put the money in an investment such as a mutual fund, and leave it there for 20 years, it will, on average, turn into $42. I knew a fellow who understood this so well that he made millions of dollars, yet he worked for nearly minimum wage.
When I met him, Brian was 48 years old. He had retired with several million dollars two years earlier at age 46. When he was 26 years old, he got a job for Sears, driving a van, and repairing washing machines and driers in peoples' homes, which pays just a bit more than minimum wage.
At one home, Brian met a couple who told him that he ought to 'pay himself first.' He asked what they meant, and it sounded like a good idea. So every week, he took 25 percent of his paycheck after taxes, and put it in a savings account. Then whatever was left went to rent, food, and fun. That wasn't very much, but he wasn't making very much in the first place.
Week after week, Brian kept it up, until he had $10,000 in his savings account. He knew he'd have to learn something about investing. Even though he didn't feel like learning about that, he went to the library and started studying up - this was before the Internet. He learned about mutual funds, municipal bonds, money market accounts, and even some things that didn't begin with "m." He moved the money from the savings account into better investments.
Brian was content with his job at Sears, and not really qualified for anything else. He kept 'paying himself first' year after year. In fact, in the first years, his investment fund grew frustratingly slowly. Yet, early on he remained what you might consider painfully careful about spending money. He could certainly have purchased a 35-inch TV, or even a 60-inch TV, but he knew how much that would actually cost. He felt his 21-inch TV was just fine, considering the bigger picture.
He learned to buy only the best car he could buy with cash - no payments. At first, this meant he had to keep his old car a few years longer than he might have.
He couldn't really impress people with material goods. (He did impress people with his common sense.) He couldn't buy fancy clothes. It had to be Wal-Mart, and only when necessary. He mostly bought clothes at the thrift stores. After twenty years, he retired. He can now have pretty much anything he wants. He dresses well. He travels when he wants. Brian has a new Jaguar that cost $88,000, paid with cash, of course. Now, he can really impress people with material goods!
I think you can see that Brian was patient. Patience is a wonderful attribute in business. Just about any business you start, if you are patient, if you are willing to accept the occasional setback, grow it slowly, stay interested, you'll be successful. Maybe even beyond your wildest dreams!
Out of desperation, he wrote a book by himself. It became an international best seller.
Now, eighteen years is extreme. I tell the story only to illustrate patience. For you and I, just a few months can seem like years. But if you can stick it out those months, you'll probably see some level of success. Even if your success is slow, you can stick with it, and eventually you'll have your major success.
Also, note that the story didn't go the way Steve figured. He thought he had to co-write. Turns out, a little adjustment made all the difference. Don't force your story to go the way you figure. Allow for some flexibility. Look around the edges of things. See what you can experiment with. See what you can change. Have fun. You'll do fine. Better than fine! For instance, in my first bicycle store, I totally ignored used bikes. They were 'beneath my dignity.' I wanted my place to be a 'pro' store, and the way I saw it, used bikes didn't fit the paradigm. Somehow, in my second bicycle store, I had loosened my grip a bit, and started dealing in some second hand bikes. Guess what? They brought four times more income than the new bikes. Furthermore, the 'pro' customers were attracted to the second hand bikes, and bought and sold some very high-end used bikes with me.
You probably heard about the three gold miners in California. They staked a claim where they were fairly certain they'd hit a big vein, and dug. And dug. And dug some more, but no gold. Finally, they gave up, selling their mine for nearly nothing. The new owners started digging. They went three feet (one meter), and hit the biggest gold vein yet found in California.