How’s Business? – September 2022
Welcome to our monthly check-in with bicycle retailers across Australia and NZ.
As always, in addition to asking “How’s business?” we asked a follow up question. This month’s question was, “How are you preparing for a new summer season, now the days are starting to get warmer?”
As Wollongong prepares to host the World Road Cycling Championships from this Sunday, Gerard Hilford, manager of Bike Hub Wollongong, said:
Business has been going really strongly but it’s also been really challenging at the same time in regards to stock. We’re still way off what it used to be in terms of supply. We have to hold a lot of stock to have bikes to sell and we can’t just operate as we used to pre-Covid, when we kept a lot less stock, showed people a bike then ordered it in the model up or the size down. That’s in the past.
If you don’t take stock of a distributor straight away, they can offload it straight away to someone who’ll grab it.
We’re going through a phase of getting some continuity back – rather than grabbing everything that’s available – by choosing certainly genres and bikes to carry, then deleting some lines.
It’s a lot different to how we did business in the past but business is still really strong and there’s a lot of excitement about the worlds coming to Wollongong. There’s a lot of people out on the roads.
Our main brands are Merida, Norco and Scott. We do a lot of mountain bikes and a lot of family bikes, including a lot of business with GT and Mongoose.
We keep a big range of brands and keep our options open, which has been really good for us with the supply issues because we’ve had a lot of shortages of particular brands and models throughout the years. We’ve picked up on other brands.
The other thing we’ve really benefitted from, is we do it all. We’ve had really strong sales during Covid with cheap hardtails and kids’ bikes, getting families out and about.
That leads to other things, where they might get a bike and once they’re out and about, then they get a passion for a particular genre and that leads to future sales. They might want an electric mountain bike because they can see how much fun it can be with their friends.
We’ve had certain genres boom, then they slow down and the next genre kicks on.
The poor weather has affected us this winter, particularly mountain bikes, but we’ve picked up in other areas.
There’s quite a bit of interest in road at the moment and there are still lots of kids’ bikes getting sold.
Our location really lends itself to getting out on the bike tracks and having a go at mountain biking. It’s really easy to get out on the bike in Wollongong.
We’re definitely selling a lot more road stuff. People who might have been interested in road riding are a lot more excited with the Worlds coming up. We’re selling a lot more road tyres than we normally do and more road bikes. We’re also selling more gravel bikes than normal.
We’ll start doing some store promotions for the worlds from this Friday. For the week of the worlds, we’ll have demo bikes and distributors’ tents out the front.
We’ve recently invested a bit in redoing the whole the store, so the worlds have been good timing for us.
We just did a whole lot of instore fitouts to increase our P&A sales and they’ve been really strong. We’re stocking more clothing.
It’s hard to pinpoint why our sales have been going so well because there’s a few things happening at the same time; whether it’s what we’re doing or just that there’s been an influx of riders.
The store’s been in great shape for quite some time.
How are you preparing for summer, as the days are getting warmer?
I’ve been here for years and we’ve always prepared a similar way. We get more staff that can put bikes together and we carry more stock in the lead-up to Christmas. That includes carrying more P&A, as people get out more in good weather and during school holidays.
Steven Krajc, the owner of Bicycle Fix in Woodside, on the Amy Gillett , Cycleway in South Australia’s Adelaide Hills, said:
We’re travelling well. Certainly it’s not a pandemic boom any more but because we’re very involved with the mountain bike scene, we tend to survive through the winters a lot better because that’s traditionally our mountain bike growth season. We don’t really have peaks or troughs. We just do pretty steady numbers all year round. Yes, we have a little bit of an influx for Christmas but it’s minimal due to the dollar value of bikes going out the door.
This was previously a bike shop called About Bikes. We bought it about six years ago, rebranded it straight away and introduced new brands like Trek, Rocky Mountain and a few other brands. We’ve changed it quite dramatically, with dramatic positive results. In our first not-quite-full financial year, we had massive growth.
We do cater to the whole family but because we’re all mountain bikers, 12km from South Australia’s best mountain bike park, we tend to sell more mountain bikes than anything.
We do the odd gravel bike and if we can get our hands on entry level roads bikes – some cheap alloy, low-spec road bikes – we’ll keep them on the floor and they’re generally just for footy guys in the off season to burn up and down the Amy Gillett trail which is also on our doorstep.
We’ve got a pretty good portfolio to work with. Trek, Santa Cruz, Pivot are working really well. Rocky Mountain has been going pretty well the past couple of months but Trek is our core business. We do a few BMX brands but we don’t sell a lot of BMX.
Our P&A is also really about mountain bike stuff, like Troy Lee Designs and Fox. Heaps of SRAM and Maxxis.
In the summer we get a bit of business through the Amy Gillett trail but it wouldn’t make or break us as a business. We don’t do any hire bikes. It comes down to a time thing for us. On the weekend, I’d rather a half hour trying to sell $500-$600 of P&A than have three hire bikes go out and maybe put $100 in the till if you’re lucky.
We’ve also got Wood Trails dirt jump park just around the corner. That probably gets us more business, just mums and dads buying gloves or a new helmet.
For this financial year to date, we’re still showing positive growth.
In addition, we run a business called the Fox Run, offering shuttle services at the Fox Creek Bike Park. That’s been going for roughly 12 months. It’s a good little add-on but we haven’t done it as a money winner, it’s just diversifying our retail business to get people through the door. It probably just breaks even as a business but it certainly brings people in.
How are you preparing for summer, as the days are getting warmer?
We always carry good stock in our core items, so mountain bike protection and tyres etc. We’re always well prepared. That’s my role in the business. I’m not often in the shop. Even through the whole pandemic, we were one of the only shops in the State who had boxes and boxes of Maxxis tyres. That was just through good planning and late nights. We’re in a good spot. We have tonnes of group sets ready to do, brakes, chains, cassettes, bottom brackets. we’re loaded and good to go. There are a few items we’re struggling to get, like every shop in the country, but overall we’re in a good place.
Hilton Taylor, the owner of Revolution Bikes in the NZ North Island village of Havelock North, at the gateway to Hawke’s Nest, said:
We’ve had our worst winter ever. We’ve had a really good Covid boom, along with most people. We’ve struggled to get the right stock at the right time and all of a sudden, we’ve ended up with more stock than we need because no one could give you confirmed shipping, so you end up double ordering product from different suppliers. We’re independent, so we’ve got a bunch of suppliers selling similar products. Then they all came at once. Nothing came before Christmas, everything came after Christmas. Nothing came before school started and it all came at once.
Sales haven’t really kept up with expected demand. I knew we were only busy because everyone was shopping at all the stores, because they couldn’t find what they wanted. Every shop thinks they’re busy but you’ve still only got one customer whose been to three stores to find what they wanted. But I still overordered hugely, so now I’ve got lots of stock and cashflow has not kept up with it over winter.
It’s been a really wet winter over here, way wetter than usual. We normally trickle over through winter pretty well and have maybe a bad month, but we’re had four bad months in a row.
I try to be positive. We’re nicely stocked. That goes with accessories as well. We’ve been able to keep one mechanic full time in the workshop. The other guy’s been off building tracks, which is a good skill to have.
We call ourselves an off-road leisure shop, so mostly mountain bikes and off-road pathway bikes – not so much the serious racing stuff. The main racing stuff we do is downhill mountain bikes and we support a lot of guys doing that or enduro.
We’re an Advance Traders stores, so we’ve got Merida, Marins, and we’ve always done Norcos. We also do Mondraker and Pivot is probably our premium brand and has been great. We’ve still got Cube and GT on the floor and we’ve got a smattering of e-bike, specific brands like Moustache and Wisper. We do Byk for kids’ bikes, another Aussie brand, and Haros.
We’re begrudgingly discounting the kids bikes and a lot of hardtails. We’re not discounting stuff we can’t replace, so we’re not discounting e-bikes or full-suspension mountain bikes because we just can’t get another one. We match prices where we have to, but we’re not a big discount shop – that’s a quick way to go broke.
The business has been going for about 25 years under this banner. It’s the original shop for the village, so it’s a 100-year-old business that’s changed names a couple of times and I’ve owned it for 13 years. You have peaks and troughs.
We’re big on gravel and we have a niche bike packing and adventure riding category we look after.
We do some maintenance on road bikes and we sell a couple of road bikes a year. I stopped stocking them essentially. When we had them, they were the wrong size, wrong colour, so we had to order them anyway. We do second hand road bikes because they’re a dime a dozen. There’s always a gym membership bike floating around in someone’s garage, an aspirational purchase. A couple of years later, they bring it in to buy something they’ll actually use.
I’m an off-road guy. One of my former staff set up his own bike store around the corner and he was a hard-core roadie. That was his niche but he’s now a mountain bike shop because there’s no money in road bikes. It’s a New Zealand thing. Most of my suppliers have stopped bringing road bikes in. If you’re not one of the big three, Trek, Giant and Specialized, no one else is really bringing road bikes in.
The real star for us for the past couple of years is Merin. Having an Indonesian factory means they’re closer. They’re back story is great, their product is great pricing, they do creative stuff with speccing – a lot of micro-shift and different brands of tyres – and they have cool paint jobs and graphics.
Norco has just switched its branding a little but we haven’t had supplies to back that up yet.
It’s amazing how many mirrors we sell – and bells. When I bought the shop, there was a whole section for bells, horns and streamers, and I wondered why we’re selling them. But everyone wants a bell and everyone wants a horn.
We do a lot of bags, bike packing bags, and locks.
We do One-Up tools which do well but it does require us to sell them. When we do a nice new build, a Pivot, Norco or Marin, it’s something we push a little with the customer.
We’re doing Fasthouse clothing and some other clothing brands. We’re a bit of a misnomer, a bit of an old-fashioned store.
How are you preparing for summer, as the days are getting warmer?
It used to be a case of dump all your old stuff and get ready for our August shipment of new stuff. Because that’s not happening anymore – the August, September, October shipments never turned up – we’re not dumping old stock. There’s no point getting rid of all my hardtails, to get all the new colours, when we’re not going to get that new fleet in.
We’re still making sure we have all bases covered. We’re still getting each size and a version of each bike on the floor and then we’re tidying the shop and rearranging the displays. Sometimes just moving the store around gives the customer something new to look at.
Marcus Monteith, who bought Townsville store Cycle de Vie with his wife Lindy two and a half years ago, said:
Business is doing really well at the moment, since July, August. This financial year has been better for us than last year. Mid-range and low-end bikes are now quite available and we’re seeing a lot of sales now. I think that’s why things are picking up.
Times are tough for people and they’re not buying the big, high-end bikes anymore. We’ve certainly seen a drop-off in that type of sale. The low-end, the hardtail bikes for kids to ride at the skate park and that sort of thing is available now, where it wasn’t last year.
We’re a Trek dealer and kids love the Marlin. That is the bike for Townsville. It seems to be a bike that every kid wants, so we’re seeing huge sales now that we’ve got the bikes to stock.
We do Pivot but basically we’re a Trek store and sell Trek’s complete range.
We are an everything store. A family bike shop that does mountain bikes, road, commuters, e-bikes, mountain, road … everything.
With all those bikes going out, P&A sales are right up as well. Our P&A is generally Trek but we do a lot of Fox stuff, Oakley, Aftershock.
Mountain biking is our bigger market. Townsville has a lot of road riders but they don’t spend as much money as mountain bikers. Mountain bikers are always in getting new equipment because they break stuff and they want the coolest clothing out on the trails.
All the kids we’ve sold hardtails to are coming back in six to nine months looking for a dually and then they need shoes, then they need a full-face helmet, so that grows your customer base. Later they come back and get a second and third bike.
When we bought the store, we stepped into Covid and no bike stock. We had our own bikes on the floor to make it look like we had bikes here. We changed the store over to quite a lot of P&A. There wasn’t a lot of P&A in this store when we bought it but we realised we had to have it … just because there weren’t bikes to sell. That worked well for us and now bikes are coming back into stock, it’s just getting better and better for us.
Townsville has a very good junior and senior mountain bike club called Rockwheelers. It’s one of the biggest in Queensland. It has huge numbers and we have a great network of trails which is 10 minutes from anywhere in Townsville.
How are you preparing for summer, as the days are getting warmer?
We’re just making sure we’ve got bikes coming through for stock. That will be our big thing to make sure we can service the market up here. Our first few years were a bit hit and miss but now we know what to expect.
The last couple of Christmases we’ve had it hard. It does get very, very hot up here so it’s just having the right gear for the consumer. People don’t go our as much in summer, the racing stops and the club closes down a little bit but generally it’s business as usual for us. Trek does a fantastic job of keeping us stocked.
Geoff Smart is a director of Melbourne-based charity Back2Bikes, which specialises exclusively in second-hand and refurbishing bikes and donates a proportion of them to people who would have difficulty accessing a bicycle. He said:
Sales have been okay but not up to normal. I put it partially down to weather and I know a lot of the bike shops are discounting with excess stock. That kicks down the line to used bikes because people might just buy a new one. That’s only a guess but that’s what we would assume.
Back2Bikes is a charity that refurbishes bikes donated to us and sells them at reasonable prices in order to fund our work giving bikes to people in need, such as asylum seekers and women’s refuges.
We tend to sell the road bikes and some of the flat-bar mountain bikes because they’re not suited to the types of people we donate bikes to. They need bikes for work or to go shopping.
The Covid crisis really affected us. Demand went up but volunteers disappeared and we weren’t allowed to work on bikes for some period. We could only do repairs. It’s all come back quite well. We’ve just had a little bit of a quiet month but we’re not overly concerned because spring is coming and we’ll bounce back.
We had plenty of donations but a lot of our volunteers are older and were unwilling to come in during Covid. That affected the number of bikes we could refurbish. We’ve completely bounced back with volunteer numbers now.
The demand for bikes we give away is at record levels because we’ve become more well known among the charities we partner with.
We were started in 2012. We will probably do something to celebrate our 10th anniversary but we haven’t given it much thought because we’ve had so much on our plate.
Fortunately we don’t have to pay rent because we’re on Port Phillip council premises. They see us as a way to mitigate the problem of lots of bikes being left on the side of streets. They bring them around here.
We’re always looking for good second-hand parts. We receive them from the public and some stores. Melbourne Bicycle Centre just gave us a couple of truck loads a couple of months ago, and Trek Essendon gave us a load of parts. We have pretty good relationships with bikes stores around here.
But there are some parts you have to buy: chains, cassettes, cabling, to make sure the bikes are refurbished properly. Some of the bikes need all of the above and more.
How are you preparing for summer, as the days are getting warmer?
We’ve got a lot of bikes in stock, so hopefully with the spring weather coming hopefully it will reduce the number of bikes we’ve got out there. Our solution to an excess of bikes is to give more away. We certainly won’t run out of recipients but we need to sell two bikes to cover the costs of each one we give away. We can cover it for a month or so but we can’t keep taking hits over a number of months.