How’s Business? – September 2020

Welcome to our monthly conversation with six bike shops selected from across Australia and New Zealand.

This month our follow up question was, ‘Which products are in shortest supply for you right now and how long do you think it will be until you get adequate supplies?’

As you would expect, dealers were all still short of bicycles, but their predictions of when supply would return to normal varied widely.

Then of course, our Melbourne based participant had more immediate challenges to deal with.

Robert Waters from Northern Bikes in Atherton, which is inland from Cairns in far north Queensland said:

Business has been fraught, you could say, with the supply and demand, which every bike shop is experiencing around the world.

Right now business is a little bit busier than normal for this time of year. But we’ve only had four positive Covid cases that I’m aware of in Atherton for the entire pandemic, so it has not had such an impact as down south.

In the beginning with the initial closures of clubs and pubs and the town was affected and we had three days there when we thought, ‘Oh God, what are we in for?’ But then everything went silly and we had three months of being really busy.

I was coming in early to try to get ahead before we opened the doors and the phone started ringing for repairs. Some days I was also finishing late.

We look after as much in-house servicing work as possible. We do a lot of suspension services in-house so that we don’t have to send them away and have customers waiting for three weeks.

Atherton is a farming community with 12,000 people in the immediate region and an area the size of Tasmania with about 40,000 people living in it.

We’re an elevated area bout 800 metres above sea level, 100 km inland by car from Cairns. So we’re fairly isolated. We’re a farming area. There is some tourist trade but only small numbers.

We’re a family bike shop looking after everybody from balance bikes right through to, well the sky’s the limit on new bikes really. We’re a Giant dealer primarily, but with Malvern Star as well for the families. Malvern Star is a strong brand in this area. People still remember it fondly.

People like to get value for money here. They like to get things repaired rather than replaced. ‘I can’t get parts for that!’ is not what they want to hear.

Stock shortages and re-supply?

Bicycles are the main thing. We’re pretty good for tyres and tubes, Shimano and SRAM parts. Ultimately it’s complete bikes.

Giant’s supply turns up but we’ve already got pre-orders from customers waiting for bikes. It makes it difficult for kids’ birthdays. It could be a three, eight, 12 weeks wait.

I understand that Giant are bringing in more bikes than they have ever done for this time of year. But it’s still not enough. The factories can only do so much and there’s supply problems to the factories as well because the OEM’s can’t produce components fast enough, which slows everything down.

We’re hoping that once we get a Malvern Star shipment in the next couple of weeks, that should put some bikes on the floor and the shop won’t look so bare. I think we’re down to 10 bikes on the floor right now and we’d normally have at least 80 on the floor built.

Right now I’m redecorating the shop. The workshop is still busy, but while the shop is empty we’re taking the opportunity to refurbish and freshen things up. We’ve been in here 10 years and things were starting to look a bit tired, with tyre marks on the walls and things.

We’re just trying to use this time well. At least it’s not as stressful as it was back in April and May.

Damian Jones of Hampton Cycles in the South Eastern Melbourne beachside suburb of Hampton said:

Right at the moment, business is slow because of the Stage Four restrictions. We’re doing as much as we can. The workshop has slowed right up because we’re not allowed to do servicing unless it’s essential. Bike sales the same.

This month we’d be well down on previous months, but it is what it is in Victoria.

To interface with our customers, it’s all done over the phone, or they can call us and we drop the item out the back of our shop and they collect it when we’re not there. It’s all sanitised.

Or we can post the item to them.

At this stage that’s the only way we can sell things for six weeks. It’s hard to sell complete bicycles this way, but if we can, we will. If the person knows exactly what they want we can do that. But it’s mainly P&A that we’re selling.

We’re tidying up the shop, giving it a good spruce up. The guys in the workshop are cleaning all the workshop area. It’s a good time to sort some stuff out, but probably six weeks is a bit long to sort everything out!

Stock shortages and re-supply?

P&A wise, we’re actually really good. Bike wise, like everybody, it’s all the sub $2,000 bikes that we’re quite light on. But we’re not moving many bikes right now so it doesn’t matter. In six weeks’ time it will matter, but by then we’ll have good stock…

I’m very confident. I’ve got some good back orders in place. As long as things don’t get held up, which they’re already showing signs of getting held up from the whole process, but as long as it’s only a week or two weeks maximum, we’ll be ok.

We only sell Specialized bikes.

Overall I can’t complain. It has been very good business wise. There have been stock issues, but hey, normally this time of year we’re very quiet.

It’s just a shame we had to go to Stage Four. Stage Three was not great, but we were comfortable. We’re in a strip shopping area as you know (Hampton Road is a traditional shopping street with specialist shops lining both sides of the road) so it’s just absolutely killed the other shops.

We’re just fortunate that we’re still ok. We’re just ticking over but we’re sort of open for business.

I think if all the other states can learn from what Victoria has done… hey, if we take it for the rest of Australia, that’s the way it is, but I just hope that they learn from our mistakes.

That debacle with the security guards – that’s where it’s all started from. It will all come out. Dan Andrews (Victorian Premier) will get the arse, no question. It’s his fault.

It all started north of the city, but there’s workers who work everywhere… It’s got into aged homes and once it’s in there, poor people. It’s bloody sad. What a way to end your life, suffocating.

New South Wales did it really well. With people flying in they got the military involved and you couldn’t get out of that facility unless you were tested, which is what should have happened (in Melbourne). This is all from that. And once it gets out of control and it’s person to person transmission, well, that’s when you lose control.

I hope NSW really gets onto it. A lot of the NSW cases are people from Victoria who have gone up there.

You look at Queensland they’ve done it so well. They’ve shut the border really quickly. Western Australia have done exceptionally well and even South Australia, really well.

We’re just going to have to get through this.

Ryan O’Connell of Switched On Bikes, located on the waterfront docklands precinct of central Wellington, the capital city of New Zealand said:

Business has changed for us. We had a big focus upon international tourism. So with Covid-19 we changed our focus from international tourism to serving our local market.

We’ve increased the number of bike services that we do. Instead of fixing our rental bikes and the bikes that go out on tour, we’re fixing customers’ bikes for the people of Wellington.

We’ve also introduced a new program called Subscribe to Ride. That focuses on long term ebike leasing, avoiding that big up front cost of buying an ebike. People can just choose how long they want to subscribe for. It might be a couple of months or it might be a year.

We started doing this at the beginning of our Level Four lockdown. It was a very quick pivot. We had all of these rental bikes that we didn’t want to have not doing anything over the time of the lockdown, so we leased them all out for a month and since then we’ve been developing this into a stronger program.

Stock shortages and re-supply?

Shimano spare parts. We are less of a sales store and more of a rental and servicing store. We order a large number of bikes that we plan for way in advance and then we need spare parts to keep everyone’s bike rolling.

Phill Bates of Bates Bikes in Ramsgate, a southern suburb of Sydney NSW said:

Business was great when we had bikes! A bike shop without bikes isn’t a great way of going forward. But repair work has been unbelievable.

There’s a surge in the popularity of cycling, which is pretty important. And it’s not just here, it’s worldwide.

But the lack of bikes is of some concern. No doubt we’ll get back on top of it. We saw this coming, but couldn’t do much about it, could we?

Stock shortages and re-supply?

We’re fortunate with Giant as our mainstay supplier and they’re most probably a little bit further ahead of the game than some of the other companies.

I think we’ll be back on full supply from next month. They’ve introduced their new range, but it has been difficult in many ways with the fact that the main storage of Giant is located in Melbourne, that doesn’t help things either.

But I think it will be back and happening as normal and I’m sure it’s going to be a good Christmas for everyone. It was a bit sad last year, but I think this year will do pretty well across the board.

Last year the months of November, December and January were most probably down on previous years, but it was hard for us to judge because we moved to a new location. But other people that I’ve spoken to didn’t have a great Christmas.

The new location gives us a lot more foot traffic for a lot less rent, which is a pretty significant aspect. It’s been a plus. Slightly smaller shop but pretty convenient with a lot of parking out the back and some good shops around that also attract foot traffic. So from that point of view it’s a lot better.

Paying a lot less in rent certainly makes a huge difference.

Tim Palmer from Rideshop in Lonsdale Street, Braddon, ACT just next to the Canberra city centre, said:

Business is good. We’re ticking over quite well. We’re well up on last year.

January and February were very quiet with all the bushfire smoke. We anticipated a big drop in business with Covid but it got busier and busier.

The next three months up to the end of the financial year were awesome. We couldn’t get enough bikes. We would have done more business if we could’ve got more bikes.

It was like a perfect storm for the warehouses to run out of bikes because that time of year, the stocks are running a bit low anyway. And then we had such a great demand that everything ran out. And of course China is months behind in production. And components coming out of Malaysia, apparently the factories there were shut for two of three months. They’re working 24/7 now to catch up.

Our saving grace was Avanti and Malvern Star, because New Zealand went into total lockdown, so they weren’t selling and they didn’t have the rush on bikes so they diverted a lot of stock to Australia.

Because we’re an Avanti account, it saved our butts, which was good.

We have bikes on the floor, but not as many as we’d like. People were getting to the stage that they’d just buy anything on two wheels. They couldn’t play organised sport, they couldn’t go to the gym… and public transport, just getting them off that.

I think some good habits are going to come out of all this for the bike industry anyway. Long term, it’s shown people another option for getting about.

There’s always been the exercise part of it but transport and utilising a bike, that’s the baseline for most cyclists who then get into road, gravel riding, all sorts of stuff. Because they enjoy their experience and then think, ‘Well I could go for a ride in the bush, or go for a ride with that bunch!’

For the bike in Australia it’s great. We’re selling bikes to people now who never even thought about buying bikes before.

Stock shortages and re-supply?

Recreational bikes $2,000 and under, right down to the starting price of most brands. People’s first good bike that they would buy from a bike shop. We’re getting in dribs and drabs of that category. For example with any Trek’s, they’re coming in small numbers and they’re just going straight back out the door.

All indications are that Trek won’t be full back in the warehouse until October / November, late November, when we can just pick up the phone and order the bike that we want.

Components and accessories were starting to become a bit of an issue last month, like helmets, lights, locks, seats. But we’re just starting to get the stocks back into the warehouses now. Recreational stuff, all that stuff that people buy as part of their first bike purchase.

Brendan Spurr of The Bicycle Centre in Burnie on the north coast of Tasmania said:

Business has been extremely strong. When you start having Christmas turnover weeks in the end of April then May and June during the whole Corona thing, it was crazy!

We started the shop just coming on six years ago. We sell Merida, Norco and BMC plus a few other bits and pieces. We’re fairly heavily into the ebike scene. We do a lot of mountain bikes, a little bit of road and lots of kids bikes.

Stock shortages and re-supply?

Just bikes in general are in short supply. I’ve got a big shipment turning up at the end of the month but I don’t reckon we’ll get full… you know, be able to go to the webshop and pick exactly what we want, probably until after Christmas, the way it’s going.

I could sell 30 dual suspension mountain bikes tomorrow if I could get them.

You put an order in but you only get five or six or seven.

Especially here in Tassie with the mountain bike scene, you can’t keep on top of mountain bike sales. Derby is the focal point, but there’s more and more stuff around our area.

Because people can’t go anywhere (overseas or interstate) whole families are buying dual suspension mountain bikes and ebikes.

It’s just crazy! The amount of ebikes you sell to a family and then duallies to the kids.

The other day one family of four spent $23,000 with me. That’s why I say we’re having Christmas weeks in the middle of May and June. And that wasn’t the only family doing things like that. There was a couple of other families who’ve spent over $15,000 on a family array of bikes.

The kids might be anywhere from 10 to 16 years old. They’re just general tradies type people.