How’s Business? – December 2024
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With Christmas just around the corner for this month’s follow up question we asked, “What are your predictions for the upcoming Christmas and summer season. What will sell well and what will not?”
Gabe Sullens of Urban Pedaler located in the southeast bayside suburbs of Melbourne said:
The past 45 days has been the most positive, consistent stretch of decent business that we’ve had since covid.
We would have a really good start to a month for two or three days and think, “Okay, there’s some life back in the economy!” Then we would get two weeks of crickets.
We’ve had little bright spots. Our community based activities, our gravel rides and our no drop road rides and the people that are in our shop community, definitely are regulars and keep the shop working well. But all that new business that you depend upon kind of drops off with the interest rates and the economic conditions.
We’re starting to see more than one or two good days in a row. Having a string of good weeks is something that we’ve not been used to for a while. I’m looking forward to a nice consistent summer.
PSI is our main supplier. Cannondale is our main brand. Kona is our second. We’re trying out a new company that has launched in Australia, TVS, which is Swiss e-mobility.
What’s nice is they’re a subsidiary and they’ve hired some really good staff, focused on growing their dealer network and servicing their bikes properly.
One of the bikes had some production issues and they took on that feedback really well. They were like, “What do you need us to send? Send us the invoice and we’ll pay for it.” That type of activity around a new company is really encouraging. Of course I want to support companies that are run like that, not like the fly by night e-bike companies that are just about volume and really aren’t thinking about growing their brands.
They do Cilo and Ebco. They’ve got some really interesting bikes, like they’ve got a dual suspension step through touring bike. I could see a couple in their sixties getting a pair of those and going off and doing adventures, not necessarily crazy mountain biking.
Predictions for Christmas and Summer?
I think the performance road category. I’m seeing a lot of enthusiasm with the younger generation. I would say late 20’s to mid 30’s. Especially guys. There’s some women in there as well.
Whether it’s the Netflix Tour de France series that’s getting everybody jazzed up, or what it is, but I just see these guys coming in that are possibly pre-starting a family, but they’re really jazzed about road biking. And they’re all one-upping each other. “I want a better bike than he’s got!” “I want to get faster!” “What’s lighter?”
It feels like it’s cool to get into road biking now for that younger generation. Some of those guys are in their first 10 years of their careers. They’ve got a little bit of money. They’re not thinking about retirement. It’s one bright spot that I’ve noticed in the past year and a half. That it’s now cooler for the younger guys, it’s not just the 45 to 65 year old MAMILS that are doing it.
Mid to premium level road bikes and the accessories that go with it. Right now, white helmets, white shoes and white socks is all the rage. They’re into their style. Beach Road is where everyone struts their stuff but it’s the café’s where the real action’s happening! (laughs)
Some of that high end product like the LAB71 from Cannondale – some of the older guys, who could afford it, were doing it. Now all of a sudden, the younger guys caught onto this really cool, neat paint jobs, cool kit and flashy stuff. All of a sudden, it’s a way for them to express themselves. That’s a bright spot that I’m enjoying.
Gravel bikes are maybe not as hot as they were two or three years ago. But there’s a consistent flow of people of people that are discovering gravel bikes and realising all the adventures that can be had on those and how versatile those bikes are.
E-bikes – I’m still waiting for that whole e-bike thing to take off. It’s putter, putter, putter. We sell a couple of e-mountain bikes, a couple of e-cargo bikes, a couple of e-recreational, a couple of e-commuter bikes. But I just don’t see any real full trend of everybody getting into e-bikes like they would be in Europe or New Zealand or other places.
For us, what’s really interesting and I don’t think a lot of other bike shops have this, is that our workshop and our bike fitting are always within a couple of hundred dollars of each other.
Our workshop, we’ve got a really good workshop manager right now and we’re probably doing better in the workshop margin and dollar wise than we ever have. The bike fitting has consistently grown over the years.
When I moved into this new store four years ago we concentrated on setting up a really nice bike fit studio. And Paul has been with us that entire time. We are now fully booked out a week to two weeks in advance. We’re doing six to seven full comprehensive bike fits per week plus follow up appointments and things like that.
Ironman and other triathletes – quite a few of those bike fits. So bike fits and workshop are now vying for top spot as far as the non-bike sales part of the profitability for the shop.
Jesse Bulkeley from Tune BikeWorks in Dickson, an inner northern suburb of Canberra, ACT said:
Business is probably the most up and down that I’ve ever seen it. Not knowing what comes one day to the next. My shop is just a one man band, repairs, service and P&A sales, but no bike sales.
I had a very funny period being busier in June / July than what I was in September / October which I found quite bizarre. (because Canberra has very cold winters and ideal riding weather in spring)
We’re ticking along steadily enough but demand is less. My desire to work is less too, so I’m not too worried about that.
Canberra at the moment, everyone is holding onto their wallets and their pennies a little bit closer to them than they have done in the past. Sometimes when you quote someone in a repair, in the past they would go at it wholeheartedly, but in more recent times they might run a back tyre a bit longer than they normally would have, or bits and bobs that they would have normally replaced without a second question. So I’m probably losing out a little bit on some of those easier upsells.
In terms of the actual shopping centre that I’m in, it’s really taken a bit of a dive to the point that I’m considering moving out. Chinatown is close by here. Dickson’s gone through a few waves of things closing down – like we’ve lost every single bank in the shopping centre here which has drained the foot traffic unbelievably – especially since the Commonwealth Bank has closed.
I’m directly across the road from a tobacconist that brings a very dodgy crowd now unfortunately. It lowers the tone of the friendly shopping square that it once was.
I’ve been here seven years now and from when I opened it’s gone backwards in terms of foot traffic and vibe. So I’m considering moving to somewhere a little more gentrified.
I go very general practice in here. We’re right on a couple of main bike path arteries – lots of commuters and so on, so I do like to focus on that world. That would be my core customer. We’re not pretentious like we’d only do road and mountain. It’s whatever walks through the door really.
I’d split it 25% Road, 25% Mountain, and the rest low to mid end commuter and hybrid bikes.
We’ve got about 80 square metres in the shop and I sell almost everything you can think of as far as parts and accessories go. All your pumps, grips, helmets, pedals, seats – I keep $50,000 to $60,000 worth of stock in here.
That P&A world has been slow. I stand at my workstand all day and if you want to break down that 80 square metres of the shop, I’m producing 85% of the income out of four square metres and the rest of the shop is dragging the chain a bit. Hence why I’m looking at maybe a smaller tenancy.
Predictions for Christmas and Summer?
I’m a little bit sheltered from the whole world of everything that goes on in the bike industry, because as much as I can do with one set of hands in here, I hit a ceiling pretty quickly in terms of busyness and output.
But it could be a bit of slow one, just in terms of watching all the online ads pop up from most of the bike shops and most factory backed or brand backed shops ditching stock out at 30% to 50% off.
No-one’s really wanted to admit it yet, but it looks like being a tough one.
Darren Wilson-Roberts from Hey Bike located in the southwestern suburbs of Adelaide, SA said:
Business is going well. A lot of people are out riding with this nicer weather, so a lot of people are coming in wanting servicing and bits and pieces.
We have a few bikes for sale but we’re more focused on servicing now. We’ve got a couple of ladies cruisers and a couple of rigid mountain bikes. We’re very much a repair business.
We have a big focus on servicing high end road bikes – lots of electronic gearing, carbon frames and 12 speed Dura-Ace, Ultegra – all the good stuff. Being close to the hills, there’s also a bit of mountain bike. But we service any bike and we get all sorts coming in including children’s bikes and commuters.
There’s a big focus on P&A as well. We’ve got a whole wall of merch. That seems to go pretty well. Lights are popular, tyres – rubber’s always selling well, saddles. We do a bit of BMX as well, so a bit of stuff for the younger folk.
Predictions for Christmas and Summer?
It’s been interesting over the past couple of years. Christmas has really dropped off. Hopefully that will return this year. But being not such a retail store, it will probably not affect us so much. But hopefully that retail come back a bit. I think there’s been a bit of glut. Still experiencing a bit of a hangover from the pandemic.
The Adelaide cycling scene is always thriving. We’re heading up to the next Tour Down Under. Being here on Anzac Hwy (which links the city to the popular beachfront rides starting from Glenelg) we get so many road bikes coming past all day long. We’re next to the KOM Café (King of the Mountain) which has a big cycling focus as well. It’s a Colombian café, they’re really nice people. They’re in the same little block of shops where we are.
They’ve been there a year longer than us – seven years.
Blair Taylor of Spoken Cycles in Cambridge a large town in the north Island of New Zealand said:
It’s been good. We’ve definitely felt a pickup in the past month or so with some events that have just happened or coming up. A combination of road and MTB.
We had the Whaka 100 last month. We had a few customers do that. Our club racing has started again locally. We get 100-odd riders turn up to that every Tuesday night. The Round Lake Taupo Cycle Challenge is on again next week. It’s not what it used to be but it’s still a big event.
We sell Specialized, BMC and a little bit of Cervélo. We’re a performance shop. There were four shops in town and currently there are only two.
We’ve got our online store as well which is quite busy. We sell nationwide. We sell the odd complete bike online, but that’s not really online. They might see us online first, then talk to us about what we’ve got in stock.
Our best online products are consumables – tyres, nutrition, helmets, clothing.
Predictions for Christmas and Summer?
We don’t do a lot on the lower end kids’ bike stuff. The road is a bit stronger for us. We’re just hoping road continues to be strong. We’ve seen some good growth in the past year or so on that. Hopefully that continues on an upward trend.
Dianne Bennet, of Giant Toowoomba in the centre of this southeast Queensland regional city said:
I think it’s pretty good, really, at the moment. We’re not quite up to the Christmas stage at this point of time. In our area there’s been a lot of interest in road bikes. That seems to be the main thing recently.
And in Queensland they had a government rebate on e-bikes. That was a very popular time too. So we sort of went from e-bikes and then into road bikes again. It’s been pretty good, really…
I think the road bikes are a change. There does seem to be a noticeable interest in those again. Everything comes back to the area in which you live. There’s quite a bit of interest in triathlon here at the moment. That seems to be inspiring a lot of people.
We sort of went through the gravel stage. There was a lot of interest in gravel. But now, for whatever reason, people seem to be wanting to come back to road riding, racing again, that sort of thing.
Cycling is still very popular in our area. There are still four bike stores in town. The Brisbane Valley Rail Trail is not too far away. It’s still really popular.
We’ve got Jubilee Park – we’ve got a really well developed mountain bike trail area. (located only two km from the centre of Toowoomba where there has recently been an announcement of $6.6 million in Federal and State funding for upgrades and expansion.)
Predictions for Christmas and Summer?
I think there’s definitely a lot of interest in low to mid-range mountain bikes. It’s the time of year where people tend to have holidays, so we get quite a few sales with mountain bikes say up to the $1,500 price point. That’s consistent every year.
Obviously children’s bikes – we’re getting more interest in that as we get closer to Christmas. People are still doing things like laybying to secure bikes.
Then there’s also a lot people who like to buy themselves a nice present for Christmas and I think that’s what inspires that road bike situation again. They’re looking for that electronic gearing. They like the idea of tubeless tyres, disc brakes – it’s just becoming more popular I would say in the $5,000 to $9,000 price point.
Bikes with electronic gears whether it’s Shimano 105 moving up to Ultegra – that’s sort of the level of entry. In Giant they also do their Propel road race bike, which can be used in triathlon as well and people like the design of that bike. And Giant always has good price points. They manufacture the frames themselves. We’re 100% Giant.
P&A is good. We sell across the board with P&A brands. We sell a lot of Fox and also a lot of lighting. There’s a lot of new lighting products come out that has remotes, you can put in radar that you can control. A lot of companies are bringing out new products in P&A, so that’s good.
Then servicing and repairs is only average at the moment. We’ve had heaps of rain. It will get busier when we get closer to Christmas. The kids will start school holidays, families will want to go away and everyone will want their bike serviced in the leadup to Christmas.
John Michell of Ashfield Cycles located in the inner western suburbs of Sydney said:
Well… it’s okay. It’s not like the old days of the Christmas rush. People aren’t laybying like they used to. They leave it until the last minute. I think they’re being a bit careful with their money at the moment. Covid changed everything really.
People have already got bikes and they’re not buying stuff. The roadies aren’t buying as much and mountain biking is not really happening for me.
Maybe my area is changing. We’re doing a lot more commuter bikes.
This month is up a little on last month, but earlier this year, like March, April, May was just woeful. It wasn’t winter. People just had no confidence in buying anything.
Our workshop is going alright. It ticks on. It went a bit quiet but there’s always enough to keep us going. But bikes in general are definitely down and my turnover is down a little bit.
We’re doing lots of repairs and we’re not knocking them back. We take them in. We don’t say “I’ll book it in. Come back in a week.” We try to get them done within a few days.
It’s also better in one way because I don’t have as many staff now so it’s not costing me as much in wages. I’m probably lucky in one way too, because I’ve heard in the past couple of months of a few shops closing down, I think because of the rent and things like that.
I’m lucky because I bought the shop premises years ago. I’ve still got to pay myself an income but it’s not as critical because I don’t have to find that rent every week or every month to keep the doors open.
Other costs are going up, electricity, wages, super and all the stuff that goes with it.
I’ve cut back on my stock as well, but that’s the other problem – a lot of the wholesalers – there’s no kids bikes, they’re very short. I know Specialized, Giant and Avanti they’ve got hardly any bikes for Christmas – mainly kids’ bikes, a bit of everything.
But my road bikes are just sitting there at the moment. I’ve cut back a bit and the occasional one will go out the door, but they’re very slow for me at the moment.
Flatbar road bikes are going very well. But even e-bikes, they’ve dropped off. I think there’s too many on the market and the better ones… people are thinking, “Well I can get one for half the price of a bike shop e-bike.” Then they’ll buy it online and realise that they’ve got a dud!
Accessories are selling well. Lots of helmets… I’m surprised how many helmets you sell. You think, “Everyone’s got a helmet.” But they keep buying them! Tyres go well even though people buy tyres online I still sell lots of tyres and lubes and things like that. Locks and all that sort of stuff.
I probably sound a bit negative, but I’m not over it. I’m not trying to wind down and retire. I still like being here. My wife says, “When are you going to do something about getting rid of the shop?” but then I’ll be stuck at home get bored like a lot of old people.
If I keep a couple of good staff and just come in two or three days per week, that would be perfect. You’ve just got to keep opening doors, keep it looking fresh, keep plenty of stock, keep it looking full and keep competitive on price. I don’t do a lot of advertising anymore – word of mouth is good.
Predictions for Christmas and Summer?
I think it’s going to be a very flat Christmas. In the old days we’d be flat out leading up, September, October, November. But now, the middle of the year has got better because through winter people are still riding bikes.
I think a lot of bikes are going to turn up (from wholesalers) at the end of January. But the Christmas period will be over. Some might still get a bike for a belated Christmas present, but they might get something else for their kids for Christmas instead of a bike.
But in saying that, I’m still selling the occasional S-Works road bike for twenty grand and you think, “Geez, that was a good sale!” But it’s not every week. It’s just occasionally a good customer will order one and they might have to wait three to six months for them to get in.
I do discount a little bit if they’re a longstanding customer I’ve had for years and a good customer, so I’ll help them out a little bit. And the margins, a lot of the wholesalers have cut the margins, so you’re not making as much on them anyway.
I’ve I had them sitting on the floor, I’d be losing money on them after three or six months really.
It’s nice to have them. I like looking at them and having them in the shop but I’m just not keen on having that high end stuff here anymore.
Some of the wholesalers discount them before they’re even on the floor. I think they just got burnt during covid buying too many bikes so they had to clear them.
I’ve still got one S-Works road bike on the floor at $20,000, but the flatbar road bikes at $1,000 to $2,000, they’re ticking over. A lot of people used to buy a mountain bike instead of a flatbar road bike. But it’s not practical around here having a full suspension or front suspension bike with fat tyres.
There’s so many brands now! When I first opened the shop over 40 years ago there were only three or four top brands.