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99 Bikes now employs a staggering 430 team members across 45 stores and head office positions. We recently spoke to three 99 Bikes team members to find out more, starting with 99 Bikes’ co-founder, Matt Turner.
Contrary to some misinformed external perceptions, 99 Bikes not only prefers to employ people on a full time permanent basis, but they’ve built both career path structures and payment packages that strongly reinforce this culture. Matt began by explaining the career path on offer within each store.
“We have two starting positions, Sales Consultant and Mechanic,” he said.
“They’re all permanent part time or permanent full time roles. 99 Bikes don’t have casuals or contractors, with some minor exceptions. We navigate the quieter months through a combination of staff taking their annual leave during winter, some natural attrition and sharing staff between quieter and busier stores. Some uni students work through the summer, but they’re still on a permanent part time award.
“As a Sales Consultant or Mechanic you can earn four different levels of commission on top of your base wage,” Matt continued. “You start at ‘No Jersey’, then can move up through White Jersey, Green Jersey and Yellow Jersey.”
99 Bikes set three criteria for moving up through the jerseys.
- Knowledge base, which is proved by passing tests.
- Achieving financial results
“There are monthly tests and analysis of financial results,” Matt explained. “In an exceptional case, someone could get to the Yellow Jersey level in one year, but it will more typically it will take three years.
“Their base wage is the retail award wage. The commission level on top starts at 5% for No Jersey, then 10% for White Jersey, 15% for Green Jersey and 20% for Yellow Jersey.
“This is based upon the gross profit that the employee brings in. There is a threshold of about $5,000 per month that they need to exceed to start earning that commission, but the average gross profit is about $10,500 per month, so most employees exceed the threshold, most of the time.
“The mechanic’s commission is calculated slightly differently, so that both sales staff and mechanical staff are on a level playing field.
“The next levels up are Workshop Leader and Assistant Team Leader (2IC).
“The Workshop Leader is in charge of the workshop profit and loss. They get an increased award rate and a 10% profit share of the workshop profit.
“The 2IC is second in charge of the whole shop. They get a 1% profit share of the total shop and employees at these levels need to be full time.
Empowering Team Leaders
“The next level up is Team Leader and Store Owner,” Matt continued. “Our business revolves around this position so this person is given as much discretion to make decisions as possible. We also know how important they are to the performance of the store, so we reward them well.
“At this level staff are on a salary rather than hourly award rate. They all receive 10% or 11% profit share of the whole store that they’re in charge of.
“They’re still expected to sell and lead by example, which is really important, so they still receive sales commission as well.
“There are two additional profit share levels above this. Five of the 45 Team Leaders have reached the Franchise Team Leader level. They can earn up to an additional 8% profit share which they gradually work towards over a 10 to15 year plan.
“The term ‘Franchise’ does not mean they’re a franchise owner who has bought the store, but rather the professional sport context of the term, where someone is described as ‘franchise player’ because they’re a key player that the team is built around.
“Finally, 24 of the 45 Team Leaders are part of the Business Ownership Scheme which is a model that has been copied directly from Flight Centre.
“To participate the Team Leader invests some of their own money to ‘buy’ 10% to 20% of the business. This is not a form of ownership that can be sold on the open market. It’s more like a term deposit in a bank where the value of the investment does not go up or down, but the investment earns income. Unlike a bank term deposit which pays interest, the return on investment under the Business Ownership Scheme is a bigger profit share.
“The team leader only needs to put in 5% of their own cash and can borrow up to 95% of the investment from 99 Bikes.
“It ends up being a very low risk, generous way for them to do well if the business does well,” said Matt. “It’s certainly a lower risk investment than owning your own bike shop.”
Speaking of bike shops, five former bike shop owners in Queensland alone have since joined 99 Bikes.
“All five of them have performed extremely well in sales roles, but have chosen not to take on leadership roles,” Matt reported. “We try to be flexible with people who have such great experience and sales ability.”
One of those five former shop owners is the well known former Olympic cyclist Blair Stockwell, who owned Lifecycle, just north of the Brisbane CBD, for 27 years from 1988 to 2015.
Blair is now working at the Burleigh store, on the Gold Coast. He’s been with 99 Bikes for over three years, since finishing working for the new owner of Lifecycle in 2016.
“I wanted to work with 99 Bikes because I could see it was the future of retail. I knew how tough it was for ordinary stores,” Blair explained.
“I’m a sales consultant. I’ve got a lot of experience, but I didn’t want to go into a leadership role. I’m happy not to have the pressure after so many years running a business.
“I just like to work hard, sell well, then go home and not have any more to worry about! Having a bike shop was heaps of fun. In the earlier years you could get by not being so organised, but now you have to be a real businessperson to have a solid shop.
“Now I don’t have to worry about the back end of the business. They’re so well organised. The systems take a bit of getting used to, but you can see why they work. We have really good stock levels. They’re really strict on clearing out old stock and I love working with all the young guys. Even though I’m way older, they give me respect.
Like all 99 Bikes sales consultants, Blair receives commission on top of his wage, in proportion to his sales.
“The commission system works in our Burleigh store,” he said. “Even though it can involve some competition between staff, we’ve got a good team and you know your boundaries. It’s a good way of rewarding staff and giving them more incentive to work hard.
“We’re a successful store and growing well, so it’s good to see my commission at the end of the month. It’s nice to be acknowledged.
“It can be really busy working here, especially on weekends. It’s a top notch store in terms of quality of leadership,” Blair concluded.
At the opposite end of the experience spectrum from Blair Stockwell is Charlie Barratt who has been at the Artarmon store in NSW for just 14 months. Charlie is young and completely new to the bicycle industry, but making up for lost time fast.
“I came from a building background, but I had rather large interest in bikes,” Charlie said in explaining his reason for joining 99 Bikes.
“I started as a Sales Consultant. I moved up to the Assistant Team Leader position after two months and then two months after that I took over as Team Leader.
“It was a steep learning curve but I had high calibre people training me which definitely helped. First the previous Team Leader who was a former NSW Area Leader. Then the NSW Recruitment Office briefly took over as Team Leader.”
It’s certainly remarkable that someone so new to the bike industry was managing a busy retail business that is ramping up to 10 team members.
Charlie credits this rapid rise to 99 Bikes’ structure and incentive system.
“I love it,” he enthused. “I’m a relatively competitive person so I thrive when the earning potential is pretty much uncapped.
“I’m in the Business Ownership scheme already. If you’ve got money invested in the shop then you’re going to care more about the results, so it works well for me.
“There’s a set criteria to achieve before you can become a Franchise Team Leader. I’m on track to achieve the criteria by the end of this financial year. Then I need to be selected by the operations leaders.”
As you might expect, Charlie’s meteoric rise has also come through putting in some hard effort.
“My working hours vary,” he said. “I work anywhere between the regular 38 hours and 45 to 50 hours. There are definitely weeks when I’ve done 60 or 70 hours, but normally it would be closer to 45 hours.
“99 Bikes have 10 philosophies that guide our business. One is egalitarianism. There is no job that’s below anyone. We just get it done. For example, at head office they do an office clean every Friday and Matt is usually the person that takes the rubbish out.”
Two Key Qualities
When asked to summarise what qualities 99 Bikes are looking for in new recruits, Matt Turner had no hesitation.
“We’re looking for commitment – people who want a long term career,” he said.
“We’re also looking for a proven history of achievement. Even if that’s not in a bike related field.
“There are a lot of other factors including being a friendly, people person, but those are the most important two.
“Bike industry experience is definitely a positive, as long as it doesn’t come with any ‘bike snob’ tendencies! We want to be the world’s most approachable bike shop. We really focus on that. Whether it’s the customer’s first bike, right through to consistent riders, we want to communicate at their level and not talk down at them.”
With so many stores and team positions, 99 Bikes offers a new alternative for people looking to work in our wonderful bike industry but still enjoy career path structures and incentives that are on par with those in the corporate world.
(Break out Box)
Reward for Effort
Here is the average Team Leader’s package, rounded to nearest whole dollar, before income tax. Because the package heavily rewards good performance, total earnings of Team Leaders across the 45 stores vary widely from just under $90,000 to over $150,000.
Base Wage $55,145
Profit Share $19,665
Business Ownership Scheme $10,665
Total Earnings $104,552