How’s Business – June 2023
Welcome to our monthly chat with bicycle dealers across Australia and New Zealand.
With winter officially started after a very cold May in most parts of Australia and NZ, our follow-up question this month was, “How are your sales of lights, winter apparel and any other winter seasonal product going?”
We made our calls on Monday 5th June, which was the Kings Birthday public holiday for both WA and NZ, so there are no shops from either location in today’s round up.
Steve Beams from Swan Hill Bikes & Trikes, on the Murray River in north-western Victoria said:
Reasonably good. The workshop is still busy. I’m back to being on my own in the shop for the time being. As a one-man show, it’s keeping me busy. Sales have certainly slowed but they’re still ticking along.
We are the only bike shop in Swan Hill since the two sports stores have moved away from bicycle sales, so we’re fortunate there.
The population in Swan Hill is 10,000, but with a district population of 22,000.
We mainly sell mountain bikes from $1,200 down and then kids bikes and the odd road bike, but we just cater for that as needed.
Our main brands are Giant and Trek and we do a bit of Scott as well. Our mainstay for e-bikes has been TEBCO and we do a little bit of the bottom end of the Giant mid-drive e-bikes, like Roams and Roads. It’s certainly expanding.
There’s been a proposal at council for probably about six years now for a cycling trail to go from Swan Hill to Lake Boga, which is approximately 16km. I think they know where they’re going to put it, but it’s just the funding and they still haven’t got their heads around cycle tourism.
Winter product sales?
We always struggle. I don’t do any of the wholesalers’ light programs. We don’t have a commuter market – as silly as that sounds when it’s only two to three kilometres from anywhere in town to our CBD. But as a country town, we still don’t have a commuter market.
We sell lights but there’s not a jump over the winter months.
Tim Palmer of Rideshop in central Canberra, ACT said:
It’s definitely slowed down a bit with the cooler weather but that’s pretty normal. I reckon it’s gone very close back to normal trading cycles after Covid.
Summer was fairly normal. There are a lot more enquiries for commuter bikes. We’re selling more commuter bikes. I think the squeeze on interest rates and people looking at saving a quid … and parking expenses in the city in Canberra have gone through the roof. It’s $16 or $17 per day.
People are coming in looking for a bike – they can save $70 or $80 per week just in parking and chuck in on top of that petrol and the other costs of running a car and a lot of people are starting to ride to work.
Long term that’s good for the cycling game because if you look at most people who are into road cycling or mountain biking, it all starts with commuting. You see it time and again – the husband or the wife will start riding to work and then a couple of months later the other partner’s in the shop looking for a bike to ride with them on the weekend, and the kids are on bikes. Commuting kicks off a lot of cycling and future cyclists.
Transport is definitely a growth area and gravel bikes as well, with people looking ito get off the roads. The gravel bike is like the ultimate bike. You can be riding along the road one minute, then turn into the bush and go where you want. So that’s good.
The (wholesale) warehouses are choc-a-block full of stock at the moment. We try not to hold a lot of stock on hand anyway but we don’t need to be the warehouse anymore. We can order a bike and it will be here in two to three days. We try to encourage people to look at websites, ranges, colours and fit them up to the right size.
Being an independent shop, we can’t afford to be holding great swathes of stock. You go into some of the Trek factory shops and man, they’re sitting on … you couldn’t run a business like that. Unless you can turn it over every two months, you’d go out of business real quick.
I was actually going to talk to a few of the independent shops in town about maybe getting a loyalty program going for independent bike shops. 99 Bikes have a club loyalty card, that I know they get a lot of repeat business out of.
We can’t compete with the big factory shops on their range sitting on the floor, so if we could get an independent bike dealer discount thing going or offer time, like bicycle fits or stuff like that … The factory style of shop is growing at a massive rate and they’ve got multi-million-dollar companies behind them – it’s very hard to compete against that.
As a customer, the perception of walking into a shop and seeing a whole range of bikes – and expensive bikes, you just can’t afford to do that.
That’s the hard part, to look like you’re still in business and doing business, without going broke doing it.
But it’s all pretty good – we’re still here, we’re still operating.
Say if you have $10k in your pocket and you say, “I’m going to go out and buy a real nice road bike.”
Where would you go and what would you buy? There are no real dud manufacturers anymore. They’re all producing bloody good quality items. They’re all sponsoring pro road and MTB teams, so that R&D is coming back down through the system.
Winter product sales?
We’re selling a lot of gloves, light winter jackets. Anything up to $100 – $120, people will come in, try it on, if it fits, “Yeah, that’s good”, and buy it.
Anything over that, they just start looking on the internet, so I purposely try not to carry any expensive winter cycling clothing anymore. We used to carry heaps. I used to get a heap of winter jackets off DeGrandi which were $200 to $300. Now with the power of the internet and these big cycle clothing companies … very hard to compete with.
Pushys stuck their neck out a couple of years ago and said, “Right, we’re going to control cycling clothing”. And they stocked hundreds of thousands of dollars’ worth of clothing. Sure enough, three months later it’s all still sitting there, now 30% off.
Now they’ve cut their cycle clothing right back to a bare minimum. It’s very hard to compete with clothing.
We keep the incidental stuff: gloves, headbands, all that stuff that makes it more comfortable to ride. You’ve just got to adapt.
And again, with the internet, people won’t buy something unless they’ve read five reviews about it. There’s no self confidence in their own belief that something is any good. They’ve read 10 reports saying something is good then someone will pop up and say, “Oh, I didn’t like this”, and they won’t buy it!
“Mate, do you like the look of the gloves?”
“Yeah.”
“Do you like the way they feel?”
“Yeah.”
“Are they warm enough?”
“Yeah… but this bloke said they’re no good!”
Anyway … (laughs) it is getting a bit harder that way.
Darren Derrico of Giant Devonport on the north coast of Tasmania said:
It’s ticking over. I think we’re much the same as most others. Availability of bikes is a bit better.
We’re not breaking any records, that’s for sure, but we’re going okay
In the past few months, people who have got a few bucks … the higher end stuff is still going okay. It’s the bread-and-butter stuff that has quietened off a bit in the past few months, I reckon. A lot of people are probably living on the edge a bit at the moment.
We’re doing a little more road than we have been in the past couple of years. I think a lot of our customers that were riding on road bikes, then jumped on mountain bikes and not riding their road bikes so much … But we’re starting to sell a few more road bikes to those guys who are replacing their old road bikes from a few years ago now.
What we sell most of is the (Giant) Trance model MTB bikes in the dual suspension range. We’re lucky because we’ve got lots of local trails. It makes a big difference.
(Darren is planning to move from their long-time current location, which is on the outer edge of the business district, to a new purpose-built shop in the centre of Devonport.)
The development application is with the council at the moment. It will take two to three months, so in a couple of months we should be starting to dig dirt.
The current shop is fairly big but it’s like a rabbit warren. This will be more of a square that we can lay out better. I think the new showroom area will be about 700 square metres, so it’s a fairly big area. We’ll still be a Giant, GS store.
We should be in the new store by about May next year. It has taken longer than we thought but it always does, I guess.
It’s called Living City. It’s a piece of land that we’ve acquired that wasn’t just up for grabs to the highest bidder. It was going to somebody who wanted to tie in with the theme, the Living City – not just a bike shop, but there will be hire bikes and then there will be accommodation above it as well. Holiday accommodation at this stage – about eight apartments.
We haven’t been doing a lot of hire bikes at the moment. Just before Covid, we got rid of our hire fleet to replace them and then with Covid we weren’t able to replace them. Since then, we haven’t worried about it too much, but we’ll start doing it again shortly. We’ll get our bike rental management software up and running again in the next couple of months, so we’re ready to go.
There’s bike paths here now and a big new motel, so we’ll cater for people who just want to ride from here to Latrobe or Ulverstone, with some basic e-bikes and we’ll also do some mountain bikes again.
Winter product sales?
Not too bad. Our clothing has been a bit higgledy-piggledy. We haven’t done any indent orders. We’ve just been trying to work through what we’ve got.
But we’ve been selling a bit of it – we’re going okay.
Nathan Morris from Bicycle Centre Mitcham, tucked below the hills in southeastern Adelaide said:
There’s been a bit of downturn since the start of the year, with interest rates going up, but we’ve still been busier than pre-Covid times.
Obviously, we had a couple of busy years over the Covid period but now things are about 20% up on pre-Covid.
We’re still selling through a lot of e-bikes. There’s still pretty major stock problems (shortages) in certain categories and that’s probably going to be an issue for the next 12 months or so.
With the brands that we do, like road bikes, gravel bikes and certain e-bikes as well, there’s still some pretty huge delays.
We dabble in some other brands but our major categories are through the Advance Traders brands. Merida has some issues with road bikes, or we just don’t get allocated stock, maybe.
There’s certain price points in mountain bikes and hybrids where there’s no stock and hasn’t been for six or seven months.
There’s an oversupply in some models but still some where there’s no stock.
Winter product sales?
Not too bad. Lights are good. Clothing has been okay but I think that’s just a steady decline over the past five or six years. We don’t order a lot of it, so we’re not left with a heap of stock.
But we tick through jackets and vests – no huge numbers. I would assume that most customers are buying online. We do a lot of mountain bike clothing, so that’s still quite strong for us … mountain bike jerseys and jackets coming into winter now as well.
Mountain bike clothing is not too bad but casual and more recreational and road clothing we don’t do a lot of anymore.
Michael Graham from Local Cycle Co. in Wollongong, NSW said:
It’s quite steady at the moment. We had a fairly good start to the year: a lot of e-bike sales, servicing and that sort of stuff going on.
We sell Specialized. We have a small offering of Forbidden bikes and we sell Pivot and Yeti. Our focus is definitely high-end mountain bike.
We’re still selling quite a few of the high-end mountain bikes but we’re seeing the trend shifting towards high-end e-mountain bikes at the moment. Given our geographical location and the big hills around the Wollongong area, it’s definitely a good place for e-bikes.
Winter product sales?
We’re selling a fair few lights for both commuters and trail lighting for MTB. Winter apparel has definitely picked up. Winter has kicked off here, it’s getting a bit colder, so that should see a shift to more winter sales.
Dianne Bennett from Giant Toowoomba, in regional south-east Queensland said:
Well, I guess it’s not quite what it was during Covid. We haven’t spoken for 3½ years. That was an incredibly busy time. Having said that, while things have settled down, sales are still good, that’s for sure.
People are looking for better quality items and the workshop side of things has been very good. It has increased as a result of the purchases people did make during Covid. There was always a lot of concern that people wouldn’t use their bikes once we got past Covid, but fortunately that hasn’t been reflected, as yet.
There’s three of us in total working here. All of us are mechanics and all of us do sales. We can all work in together, which is pretty awesome.
Brian (former owner and now employee) has sold Giant since it first became available in Australia. He’s continued to always appreciate and promote that brand. Then as we’ve all come along, you get to understand why somebody has appreciated the brand, so that’s been helpful to the rest of us.
Winter product sales?
This year we decided to try something different and have a sale on those winter clothing items – not so much for lighting. I don’t feel anymore that lighting is that seasonal. I think people want it for their own safety. I feel that’s now a continuous sale throughout the year.
But this year in terms of winter clothing, we decided to look at things differently, because it’s hard to know how much to stock. So to gauge what interest is out there … (they put it on sale right from the start of the season).
And it’s been good. It’s worked, that’s for sure. But I it’s how people want to choose to run their business as to what they want to do.
It also covered any clearance items we had. We just came up with what was a reasonable amount and offered a sale straight up, just to encourage people to keep cycling through winter, because it gets pretty cold up here. (Although Toowoomba is in Queensland, it’s at altitude, so is much colder than nearby locations on the coast.)
I think it’s better to be encouraging rather than to sit back and do nothing and then assess the situation at the end of the season when you might think, “That wasn’t so successful”.
We put all clothing on sale across the board and it definitely has been well received. Then we’re not carrying items through to the next season. If I go to a different type of retail store, I like to see the latest products – that they look fresh.