How’s Business? – June 2024

Welcome to How’s Business, brought to you by our sponsor Dirt Works Australia, where right now, you can get Sunringle wheelsets for HALF PRICE.

We’re getting into winter weather in most of Australia now, which is usually the toughest time for our industry.

For this month’s follow up question we asked, “Do you sell cycling shoes in your store and if so, how are your shoe sales going compared to previous years?”

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Brian Anderson who recently bought The Bike Shed in Wanganui, a regional city in the North Island of New Zealand said:

I was a contractor with earthmoving gear. I’ve got five children and my oldest was racing cross country mountain bike. The previous Bike Shed owner sponsored him. That got us into the shop a lot and I got to know him. We had fairly casual conversations initially and they went from one thing to the next. He was looking at stepping back and I was looking for a new challenge.

It’s a steep learning curve for me, but I’m really enjoying it. I’ve kept on Doug, the previous owner. He’s now an employee. He’s been in the business for 30 plus years and he created this shop 22 years ago.

It’s going well. My first month of April we ended up with a good average. May has been a little quieter, but I’m still confident. I’m enjoying the industry and the people in it.

I’ve been doing big changes in the store. Increasing a bit of stock, but not too much. I’m predicting that things will quieten off a little bit during the winter. But I’m really enjoying it. It’s been cool!

We’re a fairly small shop – we’ve got three staff, including myself. One of our main customer bases is the semi-retired to retired person looking for a step-through e-bike to ride around the river pathway and maybe a little bit out of town. That’s been quite strong.

Then we have a couple of mountain bike parks in town or close to town, so we get the dual suspension entry level mountain bike and e-dual suspension mountain bike.

Specialized is our core brand. We deal with Black (a NZ brand) in e-bikes. Then a fairly even spread with Merida, Norco and Marin, all through the same supplier. We use these more for our entry level bikes – kids riding to school, commuters, riding around town. Anything in the higher price point is dominated by Specialized.

Cycling shoes?

We do and they have never been a strong point for us. We do a couple of flats, a couple of mountain bike and gravel. Little or no road cycling shoes. Overall, the shoe market is small for us.

Shimano flat cycling shoes also make awesome school shoes. We all get around the workshop in mountain bike shoes.

Marek Jankowski from Two Wheel Industries located in the main street of Newcastle, NSW said:

For us it’s been pretty good for repairs. We’re booked out through to the end of June for servicing. (This was five weeks in advance, at the time of speaking to Marek).

The mountain bike side of things and e-bikes have stagnated. But custom road bikes are still quite strong.

In road predominantly, we do Cervélo, Focus, Cannondale, Orbea, Bianchi, Colnago and some Chapter2 and Enve.

We do quite a few custom builds with Chapter2 and Enve. We’ve also been doing quite a bit with Cervélo, where we just build around a frame set. They’ll typically retail for anywhere between $12,000 and $18,000.

We get customers from as far north as Port Macquarie or even Coffs Harbour and from as far south as Sydney.

On the 8th April 2024 we had our 20th anniversary.

Cycling Shoes?

We have consistent sales, but in regards to price point and type of shoe, they’re sporadic. We sell everything from a high end shoe one day to an entry level shoe the next.

We might sell a pair per day. We do predominantly two brands, Shimano and Northwave. We’ll carry size 41 to 47 in the men’s and 36 to 41 in women’s. We’d carry five to seven models in each brand.

It’s a lot of stock. Shimano and Northwave do regularly change models, but it’s not a blanket change across the brand’s whole range and we get time to sell out the old model that’s being replaced. We don’t get stuck with a lot of old stock.

‘Showrooming’ does happen. Sometimes you get to filter those people by what questions you ask. Our most common question is, “Are you looking to buy something today?” If they’re only showrooming, then they feel uncomfortable answering that question. Then we can say, “I’ll show you the models we carry and when you’re ready you can pop in and try some sizes on.”

That’s one technique that we use so we don’t waste an hour with someone who then walks out and gets a pair for $20 cheaper somewhere online.

Robert Stoker from Salter Cycles located in Altona Meadows in the western suburbs of Melbourne, Victoria said:

Business is diverse. Business is all about trying to diversify to get sales across the line. Also to maximise the potential out of the workshop. Our workshop is booked out a week in advance.

You really have to maximise what comes to you and do your best in tough times. By diverse, I mean that one day you’ll be selling certain things, say pumps and tubes, then the next day you’re selling through the workshop, the next day you might sell a couple of bikes… but there’s no real stability in any of it.

We’re selling a different range of bikes now. We’re selling more recreational bikes than before. We’re also selling more e-bikes.

Predominantly we’re selling recreation / commuting / hybrid e-bikes. Our main brands in e-bike are Giant and Amped Brothers.

Overall we’re definitely up on pre-covid sales. Business is difficult and it’s going to be a difficult next few months, but the outlook for bikes is growth. It’s still going to grow. With the price of everything going up, people need to find ways to save money, and cycling is a good way of doing that.

I say to people it’s not covid (bike industry boom times), but it’s not the end of the world either.

Cycling Shoes?

Shoe sales are definitely still around. We generally kick through. We’ve really tightened our range that we carry in store. We’re relying more on wholesalers to have stock.

We have agreement with our wholesalers that we can get them quickly in store in the right size for customer and if they don’t fit, we can send them back to the wholesaler.

Wayde Brown from My Ride Rockingham, an outer southern coastal suburb of Perth, WA said:

Overall, pretty good. We’re pretty much on exact level pegging with last year. From most reports that we’re getting around town, we think we’re in a somewhat unique position where we’re equal or a little bit up on last year. But that’s just the word of reps. We don’t actually know. We’re happy overall.

The high end side of things, we’ve definitely experienced a little bit of a slowing. We’re not trying to compete in that ultra cutthroat, low margin, high end market at the moment.

We’ve really doubled down on the workshop which has gone crazy and the margins that we’re making on it are really solid. That’s helping to compensate for the lack of high end bike turnover.

Recreational e-bikes have been solid. That sub $3,000 mark has been turning over really nicely. The high end e-bike market, again, not much going on there.

Recreational bikes have slowed a little bit compared to last year but they’re still turning over nicely.

We’re in a slightly unique position because purchased the store about three years ago when it was starting from a low base. We had quite a rapid build up to where it is now. I think we might still be riding that upward curve, just because the business was performing poorly when we took it over.

We have a really solid customer base. We’ve had fifty-odd positive Google Reviews in the past two years and not a single bad one. People who need bike stuff seem to come here rather than looking at the other two bike shops in this area.

Cycling shoes?

We’re pretty level with previous years. We don’t dabble in the high end shoe market. We stock a solid range of entry level road, entry level mountain and then a range of flats.

We found the high end shoe market… we’ve got to chop the price to match online and we don’t make anything on it.

We stick to say sub-$250 level shoes and it works for our store and most of the clientele we get in here.

For us, flats are the smallest category. Road and mountain are pretty even 50/50 split. We get real good sales of entry level mountain bike shoes, and we get good sales of $150 to $200 road shoes.

We just do Scott and Giro brand shoes. They have more than enough range for what we need.

Oliver Wacek from Trinity Cycleworks in Cairns, far north Queensland said:

We’re still having rain. It’s been going for six months now, ever since the cyclone last year.
We are fortunate with all the events up here. We have Crankworx this week. Last week we had the Masters World Championships. Then we have the Ironman, so we’ve got one event after the other rolling through.

So we’re doing ok. It would be a lie to say we’re doing as well as during the pandemic. It has gone backwards a little bit, but we’re still doing better than standard sales prior to the pandemic.

I’m doing the Pon.Bike brands. Focus mountain bikes, electric bikes. Then of course we do Cervélo, we do their triathlon bikes, which we’re pretty strong with because of the Ironman. We also do their S5 and the R series. Then we do Kalkhoff for city bikes, touring and commuter bikes. With Bianchi we do road racing bikes, some e-bikes and gravel bikes.

Repairs at the moment are very busy because of the rainy weather. Also everyone needs to get their bikes together for the big events. After Crankworx we’ve got bookings en masse for Ironman.

Cycling shoes?

We have done Bont shoes for a long time but we’re phasing them out and going back to Shimano. That’s because Shimano have a bigger variety of models available. Also, the fit seems to be an issue with the Bont shoes because of the way they make the carbon fibre sole, coming up on the outside of the foot.

Yes, they say it’s heat mouldable. But people don’t want to muck around with a microwave, putting their shoes in. They just want to ride in the shoes, feel comfortable and go. So I’m back with Shimano shoes for road and mountain bike. If someone still wants the Bont shoes of course, I will still do them, but for my major display it will be Shimano shoes.

Trying my shoes and buying online may have happened in the past, but I have to say that of late my customers are honourable enough, when we get to the shoe fitting, if they fit, they take them. Rather than saying, “Hang on, I have to think about it.”

Danny O’Shea from South Coast Cycles in the outer suburbs of Adelaide, SA said:

Business is quieter than normal. The weather in Adelaide has been sunny but no-one has been out and about spending money.

I’m doing more repairs than I normally would be, but there’s no foot traffic coming through the door, unless they absolutely need something. People know what they want and come in to get it, but not many browsers.

I would guess it’s down to the uncertainty of the market. Prices are going up and people are not spending money on luxuries.

We don’t really have a commuter market here. People don’t ride bikes to and from work. So they’ll just save money for their cars for petrol and stuff like that, or use it elsewhere.

I’m probably selling more kids bikes – 12, 16 and 20 inch. Entry level BMX bikes, I’m selling a decent amount of those. And entry level mountain bikes. But hybrids and commuters, they’ve have died right off and have been like that for a while.

The workshop has been pretty consistent. It hasn’t really dropped at all. I’m still consistently getting three of four bike services and repairs in per day.

Overall I’d probably say the past few months have probably been down on pre-covid years, but the year in general has been about the same.

Cycling shoes?

I’ve got a few clip in shoes in stock, but I don’t sell many at all. Maybe a pair every three months. I used to sell flats, but not any more.
I stock mountain bike and commuter clip ins (SPD’s). Usually I sell them for spin classes more than commuter riding.