How’s Business? – March 2024
Welcome to our monthly chat with bike shop owners across Australia and New Zealand.
Firstly we’d like to thank Bikecorp, Australian distributor of Knog, for sponsoring our How’s Business column for the previous six months! This booking has run its course, so if you’re a wholesaler reading this that would like to sponsor our most popular, highly read column, then please contact Ed Price at ed@thelatzreport.com.au for more information.
We’ve been hearing reports of some bike shops closing and because no-one knows their local area better than a bike shop owner, for this month’s follow up question we asked, “Do you know of any shops near you that have closed during the current financial year?”
Rob Sullivan from Rock & Road Cycles in Wangaratta in north-east Victoria said:
It’s pretty strong. The workshop’s very busy and the bike sales have slowed, but still there.
It’s still kicking along pretty well.
Bike supply is patchy. I wouldn’t say that it’s good across the board. Suppliers have got a lot of something but not much or nothing in some other things. It’s pretty frustrating sometimes, because they had so much overstocks last year and so many sales going on that they’ve now depleted their stocks to a point where they don’t have much.
“When covid was around and we were all saying, “Oh well, there will be a reset and we’ll learn this stuff.” …we didn’t learn anything!”
It was all very good having all those specials last year, the consumers certainly had a good run, but now it’s to the point where we don’t have a lot of things available.
Shimano is generally pretty frustrating, which I’m sure you hear all the time.
We had a really good run with Advance Traders with some of their Merida’s because they were doing ridiculous prices on some things. We had really good sell-through with their e-bikes and with Trek to a certain extent as well. And now they don’t have anything now or for the foreseeable future in some of those recreational categories such as a step-through e-bike.
It’s terrible! When covid was around and we were all saying, “Oh well, there will be a reset and we’ll learn this stuff.” …we didn’t learn anything! (laughs)
Within e-bikes, low step-through commuters and dual suspension MTB are our two best categories. Pre-covid we’d only have three or four e-bikes on the floor in total. Now we keep at least 20 on the floor.
It took us years, but we’ve finally convinced the local men that it’s ok to ride a step-through and that it’s not just a ladies’ bike. They realise they need to future-proof themselves for when they become too old to swing their leg over a traditional framed bike.
E-bikes are strong. Road is very quiet. It’s so dead it’s not funny, which is a pity because I like selling road bikes. The gravel scene is kicking along pretty well.
Mountain bikes are still strong. There’s no mountain bike trails in the immediate area. But we’ve got Beechworth half an hour away, Bright an hour away, then up into Falls Creek and also Mt Buller.
Any shops closed near you?
No, not around here. It’s been pretty strong around here really. I don’t know what Albury is like – I think it’s pretty strong still. I know that here in Wangaratta has been really good. There are two shops in Wangaratta.
I think the guy in Beechworth, who had a small shop for a couple of years, is moving into a bigger shop.
Kerry Hopkins from ABC Bikes at the Crossroads in outer south-west Sydney NSW said:
Yeah, it’s ok. We’re doing what we’ve got to do. It’s back to what pre-covid used to be for this time of year… the kids have gone back to school. People have got to pay their credit cards from Christmas – things have gone back to normal.
But we’re still selling bikes. People are still coming in to get their bikes fixed. We’re doing all the things that we’ve got to do.
We changed our business model from what we had in 2019. We used to have two shops. Now we have one shop, but we have a greater a web presence and that web presence has replaced our second shop.
In terms of overall, we’re probably a little a bit ahead of where we were in 2019 – but now with only one physical shop, not two. It’s a bit easier for me to manage and I don’t have to drive 100 km per day any more like I used to.
Supply is a bit fragmented. We’ve still got some suppliers with way too much stock and crazy specials and then a customer will walk in and ask for a particular bike and we’re not going to see them in stock until later this year. It’s better than it was during covid, but still all over the place.
Anything in that dual suspension performance market is pretty difficult for us at the moment. We’ve got a decent selection, but nobody is looking at them.
Then we have people coming in every week looking for performance road bikes that don’t exist – we can’t get them. But outside of that, we’re still selling lots of kids bikes and recreational mountain bikes.
Any shops closed near you?
We had motorcycle shop Trooper Lu, open up with bicycles during covid and they’ve just closed their bike section down and sold off all their stuff. That’s local to us – but we’re not sure how much impact they had on us. We haven’t put on another three mechanics to take whatever they were doing…
No-one else in our local area has closed recently. There was a Specialized dealer in another motorbike shop, but they closed that, I would say, at least three years ago. Where the bike shop was, they put in Stihl chainsaws and equipment.
Clayton Wells from Cluster Cycles in Port Lincoln, SA which is 650 km west of Adelaide by road said:
It actually hasn’t been too bad. Sales are down overall, but it’s a bit up and down.
Towards the end of the week it always seems to pick up a little bit, but since Christmas it has been a bit quiet.
I know when it’s getting quiet because I’ve had one of the reps ring me to see if he can come over from Adelaide. I haven’t seen anybody for a while. You know when they start ringing regional shops that they’re quiet in Adelaide as well.
It’s actually Pat Jonker (former pro road cyclist and Tour Down Under winner) that’s coming over. He always brings his bike, we always go for a ride and he just loves the national park here because it’s bitumen all the way now.
We organise a few people to come out and go for a ride with him and then he does an order the next day. He does a road trip and visits other shops on the way.
Any shops closed near you?
I think the regional guys are going ok. There’s me here, Wes in Whyalla, Rich in Melrose. I don’t know if the guy in Port Augusta is still going. There used to be an older guy there… Flinders Cycles. He used to do bikes and home brews! I think he did ammo as well if I remember rightly. That’s what you’ve got to do I suppose.
There’s now a guy in Moonta doing bike stuff. He started just doing hire bikes but now he’s doing everything.
Regionally in South Australia you’ve got some sports stores doing Merida, Avanti and something else. They’re selling bikes here through one of the sports stores and I think that’s happening in Port Pirie as well. But they don’t service them or anything like that.
It’s a bit of a hard one for me, because they buy them there, but then expect me to service them. You don’t want to upset people, but I want to look after my own customers first.
A lot of people buy online. I’ve had a run of people buying e-bikes online and expecting me to sort out their problems. Batteries don’t charge or brakes – they seem to be the biggest problem at the moment. They put no-name hydraulic brakes on them that don’t work! You can’t bleed them and they’re just a… …and to get warranty… I tell them, “You just need to send the bike back!”
That’s a problem because say 99 Bikes would do bikes 40% off and then they were freighting them free! But for people to send them back from Port Lincoln to Adelaide it’s sometimes a $300 exercise.
Karl ‘Stretch’ Murray from Rouleur Cycles in the southern suburbs of Auckland, New Zealand said:
It’s picked up a little bit. December was 50% down. I’m referring more to covid times, a median over the past three to four years.
The beginning of January was still pretty much a holiday so there wasn’t a lot of business going on. Then as people started coming back to work, we started seeing a bit of interest. It wasn’t until the last couple of days of January that we started seeing some decent sales kick in.
Then the beginning of February you could tell that people were back into their usual summer swing, so it was almost like a six to eight month delay from the sort of summer we knew before covid.
Before covid we’d have our normal seasons. Winter was normally quiet and summer was busy.
We’ll just see how it goes. I think there’s still a long way to go.
We’re probably stronger in road and gravel than much else. We don’t do a lot of mountain bikes, which is what a lot of other people tend to do. I guess you could call us more of a specialist store.
We’re the only ones with Cervélo S5 stock because we’re the only ones who put in forward orders a long time ago and also the only ones that didn’t cancel orders. The wholesalers tend to look after you a little bit better when you’re one of the ones who hasn’t actually pulled the rug out from underneath them.
So I’ve been lucky enough to have a good relationship with Pon in Australia and their local distributors PRV. I guess they like me because I don’t cancel orders and I buy a lot.
We haven’t put them on discount like everyone else. We’re quite happy to discount some of the older model Cannondale’s and other stuff, but we’ve been hanging pretty tough with the Cervélo’s because we think its’s the hot brand of the year. They had an unprecedented season last year winning three Grand Tours, so I don’t think we should have to discount a brand that has gone to the length they’ve gone to and won as much as they’ve won.
Any shops closed near you?
There’s a few distributors and retailers that are closing down. There’s been a few 99 Bikes stores that have shut down and a couple of smaller stores have either shut down or relocated or gone down from two to one stores.
There’s a distributor called Pheonix Cycle Distribution. I think they just shut down in recent weeks. They did it a few small brands like Haro, Swiss Stop and things like that.
I think its only the ones who have been around for a long time who have bigger products that tend to survive these tough times.
Anthony Moneleone, from Melbourne Powered in the inner western suburb of Ascott Vale, Vic said:
Business is quite good at the moment. I can’t complain.
We do a lot of regular commuter bikes, but we also have our niche with custom electric bikes. We’re quite busy in that department. We’re booked out until about May in the workshop, just trying to service our regular customers and also do our custom electric bikes.
We’ve recently also started doing custom electric wheelbarrows. We’re branching out to pretty much anything that can hold an electric motor that has a purpose.
We don’t do anything non-electric, unless it might be a special request. Our bread and butter is commuter. To be honest we have struggled with mountain e-bikes. I think it’s because our demographic is predominantly commuter style, so that’s where our focus has been.
It’s been really good to see the growth in the business. We’re not doing too much of taking a customer’s bike and making it electric. It’s more our own stuff. We have some frames which work well for conversion bikes when you add a motor and battery to it. That stuff is popular and it’s unique to us.
The wheelbarrow stuff is pretty cool. Cargo bikes – we do Omnium which is a good cargo bike brand.
We’ve started importing our own accessories. We do Arkel, which is a pannier bag range. At the moment, we’re not going to wholesale them. Just because of margins, making it all work, and B2B – we don’t have that set up yet.
We’ve had a few stores reach out and asked us to sell to them.
Any shops closed near you?
I believe through the grapevine that Bicycle Superstore in Highpoint has just closed (we called them to verify and they were scheduled to close on Saturday 24th February) and also Reid Cycles who were just up from us closed about six to 12 months ago.
Craig Saunders from River City Cycles in the southern Brisbane suburb of Yeronga, Qld said:
It has been pretty busy since we re-opened after Christmas.
Last Christmas we sold a few more kids bikes. I think we might have only sold half a dozen kids bikes for Christmas 2022 but it certainly changed for 2023. We had really good sales in kids bikes again. I think a lot kids during covid got bikes, but now they’re all getting a bit older, so it’s the next wave of getting them again.
Predominantly we’re more road and commuting in the shop now. A few bikes have arrived from my wholesalers. We’ve had a lot of preorders for quite some time, that are starting to come through. I’m trying to sell the pre-ordered bikes before they actually arrive.
A big container of Cervélo must have arrived in January and they’ve shipped a few bike to us. A few of those have been pre-sold to my customers. Cannondale have been going pretty strong.
The workshop’s just ok at the moment. There’s a lot of new bike builds. The expectations of customers are still quite high – and I try to turn around bikes fairly quickly. But you’re relying on suppliers to get parts to me.
Everything’s going ok at the moment, which is nice. We’re not breaking any records, but it’s just ok.
We had a year of roadworks right outside our front door (due to a huge upgrade of the railway station directly across the road including a large pedestrian overpass construction).
There were three major things that I lost: my driveway in front of the shop, the entrance road to the shop was closed at one end and they took my sign away for a year as well.
Those three things did impact the shop. For the first month a lot of my customers would ring up and ask, “Craig, are you still open?” So that first month was quite difficult with people not coming because they thought we were shut, but after that it was sort of ok.
I think if I was a new business, I wouldn’t have survived, but we’ve got a good customer base.
It’s good out there now (the work is fully completed). It’s clean and tidy. It looks good but it does have a few scallywags that hang around the train station…
Now my sign’s back, my street’s open and my driveway’s back. But the bridge has blocked a lot of the view of my shop when you’re heading outbound from the city, and that’s not the best. There’s a huge concrete bridge. There’s enough concrete in that bridge that if a 747 hit the bridge, it’s not going to move!
Any shops closed near you?
There’s a few shops that aren’t with us anymore around this area and that’s probably kept us pretty busy as well. We’ve been here in the shop since 1995 so we’re a pretty well established business.
One is shutting on the 24th of this month – RT Cycles. That’s a bit of a shame because you don’t want to see any shop close down.
They’re a Cervélo dealer. I know the mechanic there pretty well. They’ve been sending a few of their Cervélo customers to me, so that’s been really nice to have that from them.
Bike Bug was a big one that was just down the corner from us. That might not have been last year, it could have been the year before.
I’m not really in control of what goes on outside these four walls and I concentrate on what’s going on in here.