How’s Business? Christmas 2020

Welcome to our monthly survey of bike shops where we start by simply asking, ‘How’s Business?’

As we anticipated, the shop owners we talked to quickly raised the issue of supply shortages. For this month’s follow up question we asked, ‘Given the ongoing shortage of new bikes, have you considered selling second hand bikes?’

In asking this question, we’re not making any judgment about whether this would be a good idea or not. The dealers we interviewed this month were quick to point out the pitfalls.

This month you’ll also find an interview with Nigel Letty founder of Alchemy Cycle Trader, possibly the largest second-hand bicycle shop in Australia, who also highlighted the challenges associated with selling second-hand bikes, both in ‘normal’ times and today.

Lia Weston of Bio-Mechanics Cycles & Repairs in the city centre of Adelaide SA said:

Business is crazy. It has been a crazy year all around anyway. We’re usually pretty consistently booked out year around. It has been no exception this year. It has accelerated quite a bit. We’ve been getting a lot of new customers – people who are finding us.

I think because we’re predominantly a workshop, repair based, we fly under the radar a bit.

A lot of people don’t know we exist. But we’re getting more and more people who are not happy with the service work done by their local bike shop and find us based upon recommendations or word of mouth.

So we’re always busy and it’s been pretty non-stop since September last year. We did just take on additional mechanic to help take the load off, which is awesome. There are now three mechanics, plus me.

That being said, we’re currently booked out until the middle of January, so it’s been pretty nuts!

We always close from Christmas to New Year. The first day of the New Year we’re straight back to work. It would be lovely to take longer, but traditionally with the Tour Down Under we’re usually pretty packed.

This year, even though the TDU is cancelled there will still be so many people out riding or on holidays so we need to be here to make sure we can keep them rolling.

We still sell some bikes, but its never been the focus of our business. We’re stocking Surly, Vivente, Breezer, Bossi titanium bikes and Open, so those custom builds as well so we have a little bit of a spread. Just more niche bikes, that we’re very happy with.

Considered selling second-hand bikes?

It’s not something we’ve looked at, because the workshop keeps us so busy, it’s not something that we’ve had to start considering. That being said, we’ve been fairly lucky with the brands that we carry. Breezer and Surly there have been some shortages. Particularly Surly, we’ve got a waiting list of people who have ordered bikes and are expecting shipments into the middle of next year. But with brands like Surly people are generally happy to wait.

The same with Bossi and those custom builds.

It’s been interesting though with Vivente. Noel from Vivente is obviously a psychic on some level because before the pandemic he ordered quite a few bikes so his stock levels have been really good throughout the year. So that’s one brand that we haven’t had any issues supplying which has been really nice because they’re lovely bikes.

David Cook from Canberra Electric Bikes in the northern Canberra suburb of Franklin, ACT said:

We’ve been really busy with the repair side of things. Obviously bike supply is still a very big issue, but repairs were consistent right through winter so it was good for us in that respect.

We only do ebike repairs on the brands we sell. It’s too hard to get parts for the brands that we don’t sell. It’s just too much of a headache.

Most of my repairs are still conventional bikes, not ebikes.

We still sell conventional bikes at this stage. But I’ve limited myself to kids bikes and mountain bikes under $1,000 now. I don’t do hybrids, flat bars, road bikes or anything like that. Just entry level family bikes, I suppose.

We’ve still got some bikes in stock, but definitely running low.

Considered selling second-hand bikes?

In the ACT to sell second-hand bikes you’ve got to have a second-hand dealers’ licence. It’s classed as a ‘high commodity product’ (ie high theft items vulnerable to traffic in stolen goods) which means you’ve got to keep paper work for the police in terms of serial numbers and it’s almost like a car. So that puts me off doing second-hand bikes.

I do sell some second-hand bikes through my charity work, where someone donates a bike to me, I fix it up, sell it and the proceeds got to whatever charity I’m supporting for the year. But that’s not done through the shop itself, I just do it as a service to the charity.

Phil Stan-Bishop from Impulse Cycles in the south coast regional city of Albany, WA said:

Well… interesting! As you’d probably hear from everybody else. Demand seems to be very high, so we always feel like we’re quite busy. But the availability of bikes is very low, so we spend a lot of time just chasing our tails at the moment.

On the whole, business is brisk. Lots of repairs and workshop stuff.

Impulse Cycles has been here since 2012. I’ve managed it for the past six and owned it for the past four years.

We’ve kept doing what it was always meant to be, which is a family bike shop, with middle of the road stuff predominantly, with a little bit of a dabble in the higher end stuff for customers who can’t get what they want elsewhere.

Considered selling second-hand bikes?

We have. But the trouble is making money off second-hand bikes is pretty difficult at the moment because everyone is paying top dollar for the second-hand bikes – first hand.

If you consider the impact of Facebook, Gumtree and other marketplaces where people can advertise their own bikes for whatever they want and have someone just browse it and buy it at two in the morning, the chance of obtaining a bike worth fixing, then being able to fix it for a reasonable cost and then selling it for a profit, is probably nil!

We’ve offered trade ins on certain bikes with a fairly strict criteria of what we want to deal with. But even that now, with no new bikes to sell we’re not having any second-hand bikes to trade and sell.

At the moment our shop looks fairly full, but it’s not full of what we want at this time of year.

We have maybe four recreational hybrid bikes, which is our biggest market, three ladies’ retro bikes. But we’ve got a whole line up of good quality mid drive electric bikes, Trek and Kalkhoff. Which is great, and we will sell them, but it’s not what we want to have to sell this period.

So while we’ve arranged our shop to look full, stock wise we’re probably only at about a quarter of what we would really plan to be at this time of year.

David Cannings of Bike Trax in Cessnock in the Hunter Valley, three hours north of Sydney NSW said:

Overall, good. It could be better with availability of stock but overall good. I’m actually oversubscribed for kids bikes at the moment. I’ve got a good range of coaster bikes out the back because I doubled up and tripled up my order.

Adult mountain bikes, not a huge amount, but I do have some on the floor and some coming in the next week.

Rob (Rob Benson, former employee) has gone off and started his own shop in Dungog (76 kilometres north east of Cessnock) but we still keep in touch. We’re still doing similar brands so we can swap stock between each other.

Considered selling second-hand bikes?

I think you need a second-hand dealer’s licence if you purchase the bikes. If you’re given the bikes, then it’s a different story.

I don’t know the cost. But I’m usually more confident selling a new bike with a warranty. I think it’s easier than having a problem with a bike that could be an ongoing issue and then you’re stuck with other people’s problems. That’s the way I look at it anyway.

We’ll see how next year goes. The availability of new stock is going to be the issue.

They took the GT and Mongoose brands off me and gave them to the guy down the road, so I was a bit concerned at first, but now I’m back doing Jamis and XDS. We’ve got Richard O’Hara’s Southern Cross, which have basically been the only bikes available in the past three months. He’s got a reasonable stock of those. With Jamis I’ve got some forward orders and XDS in the first quarter of next year.

With a small account I can’t keep loading up all the time. I’m just playing it by ear.

I’ve got more kids bikes than I really wanted but if I didn’t take them they were impressing on me that they wouldn’t have had much more availability next year. So I had to make the decision and pay up, which took up a bit of cashflow, but you have to bite the bullet, I guess.

Rob Sullivan of Rock & Road Cycles in the Victorian regional city of Wangaratta, two hours north of Melbourne, Vic said:

The whole year has been record breaking. I’ve never seen anything like it and we’ll probably never see it again.

We were pretty lucky that we reacted pretty quickly with our Trek bikes rep and put a lot of orders in place in March and stayed on top of that throughout the year.

This has given us pretty good stocks in store throughout the year, because we had such high demand throughout the year. Basically anything we could get, we could sell.

So to have good stocks in store and good stocks coming was really good. The problem we’ve got now is we have all these (future delivery) bikes pre-sold but there’s supply chain or freight issues that are holding it all up.

It’s a bit of a nightmare in that a lot of stuff that was due early November, mid November and early December is probably all going to come in the next two week period now.

It will be an interesting next couple of weeks, that’s for sure. And some things won’t actually get to us in time for Christmas, going by some of the notifications for shipping that we’ve received.

It will be pretty full on for the next couple of weeks. We’ve had a couple of (extra) young guys come on which we haven’t had in the past. So we’ve got six staff in store now. Our plan was to set up a separate warehouse for assembly and storage which would have worked really well if the shipments had come in the timely manner they were supposed to.

But now that we’re probably going to get everything all at once we’ll probably do everything in store now rather than having it offsite. The next week will be the telling thing to see if the logistics and freight people can get stuff out to us or if it’s just going to be all held up.

A lot of kids bikes we won’t be able to supply for Christmas. A lot will be early and mid January, but people on the whole have been very understanding. Just about everybody realises that it’s not a normal year and they have to take things as they come. You get a few cranky ones but generally they’re pretty good.

Considered selling second-hand bikes?

We haven’t because we’ve had pretty good supply of new bikes. But there’s really nothing in the second-hand market anyway. 99% of that goes onto Facebook Marketplace type groups and selling platforms. We don’t get asked if we want to buy anything. We don’t do trade ins. We just stick with the new stuff and keep it simple.

Matt Leasegang of Gear Shop Brisbane in West End, an inner suburb of Brisbane, Qld said:

Business seems consistently busy, but not always in the best sense. I think overall the industry has experienced considerable growth this year. It has been good to see how the market has changed. But it hasn’t been without challenges.

Supply chain logistics is a nightmare. Stock sourcing and stock supply is non-existent. A lot of the manufacturers and distributors are having trouble with supply chain and then you’ve got the major players waiting on parts for complete builds of bikes. So all of the aftermarket sales are being lost to what I would define as the mass manufacturers demanding that the parts suppliers manufacture only for them, which is making the aftermarket parts and accessories a difficult market.

Our shop is only 23 square metres. We’re in the middle of West End (an urban renewal former mixed commercial inner suburb of Brisbane). It’s a tiny store with a very tall ceiling.

Predominantly we do track bikes and fixed gear. We also do high end road builds and servicing. Most of our market is avid cyclists, commuters, but we don’t do anything with ebikes. It’s more of a workshop and parts and accessories focused business, rather than new bike sales.

But we’ve got about 25 frame sets hanging on the walls and 25 plus wheel sets, 10 complete bikes so you can still come here and buy a complete bike off the shelf if you want or we can build something up, but the majority of our business is focussed around workshop and accessories.

We import Engine 11 which is an American frame manufacturer. They do track and fixed gear. We do My Wild Love and Skream, Cinelli… what you’d define as the fixed gear brands.

We’ve also got a Pinarello and a Cipollini here, it’s a real mix. Because it’s such a small store we tend to work with people who will work with us, rather than, ‘You have to stock 30 bikes or you can’t buy our bikes!’

A lot of shops talk about being in competition rather than working as an industry together. It’s an all for one mentality rather than working collectively.

But we’ve got few stores, you know, we’re mates with the owners and when we need to help each other we make the call, ‘Hey, have you got one of these? Do you know if anyone has got this?’

The minute you start helping each other, there’s good vibes between the stores and they’re not afraid to send someone your way because they know they’re not going to lose a customer. They’re going to be gaining that customer’s business for years to come because you gave them the help to get the service they needed rather than just saying, ‘I can’t help. Go away.’

This industry has got to change. It’s so backwards at times!

Considered selling second-hand bikes?

The answer is yes but it’s not without its problems. Second-hand dealer licences are not exactly the most affordable item and without it you’re putting yourself up for liability.

We’ve previously looked at some of the criteria, but it’s rather cost prohibitive.

There’s a lot of people selling second-hand bikes online. They use the words ‘never crashed’, but you never really know the true history. You could inadvertently be selling someone a lemon without knowing it, and that’s your reputation on the line.