Alchemy Expansion Bringing Golden Age for Bike Recycling
Melbourne, Victoria
Second-hand bike sales in Australia will enter a new realm as Melbourne’s Alchemy Cycle Trader prepares to relocate into much larger headquarters.
The new 900m2 premises will enable the Knoxfield business to combine high-end second-hand and new bike sales with a greater focus on classic and collector bikes, including a museum to showcase the industry’s past.
The new ‘Heritage Centre’ will feature classic bikes from the 1950s, ’60s, ’70s and other decades – some for sale and others as a permanent collection – to tell the stories of those models and the broader evolution of bicycles. They will be accompanied by cycling clothing from those eras.
“The majority of people still feel uncomfortable buying a second-hand bike because they don’t have the expertise to know whether what they’re buying is in good condition or the right size.”
Alchemy Cycle Trader founder and director Nigel Letty said the heritage centre will celebrate the history of road, triathlon and mountain bikes, while creating a valuable point of difference for his store.
The extra space in the new building would also enable Alchemy Cycle Trader to introduce additional brands to its new high-end bike sales, with some announcements likely soon.
Overcoming Barriers to Second-Hand Sales
He said growing enthusiasm among people to recycle bikes and a healthy legion of collectors had helped the business grow beyond its current two premises.
“A lot of people like to recycle, so they see buying a second-hand bike as a positive action. However, the majority of people still feel uncomfortable buying a second-hand bike because they don’t have the expertise to know whether what they’re buying is in good condition or the right size, and that it’s fit for purpose for their needs,” Nigel said.
At the same time, many people faced a number of dilemmas with selling bikes.
“I started Alchemy Cycle Trader in 2017 because I saw the problem for the average enthusiast at home, not knowing what their second-hand bike is worth, being able to evaluate its condition and how the bike is going to fit someone who comes to inspect it,” Nigel said.
“Plus, I found the majority of people just don’t want the hassle of advertising their bike and having people turn up at their door and checking out everything else they’ve got.
“There’s always going to be businesses that dabble in second-hand bikes. However, the only business I know of that is doing something similar to us is Pros Closet in the US and they have a slightly different model. They don’t do anything on consignment, they do a pure buy-and-sell model.
“I think the consignment approach is the fairest way for the customer to get what the market decides that bike is worth.”
Armed with his insight, Nigel created a three-year business plan for Alchemy Cycle Trader – incorporating second-hand and new bikes, both electric and non-electric – and was perfectly on track after the first year.
Then mounting demand for his new and second-hand offerings prompted Nigel to establish a second, nearby premises, dedicating one store to second-hand bikes and the other to e-bikes and car racks.
“When people walk in the front door for the first time, their first words are often ‘Wow, I wasn’t expecting this’.”
“We’re now at the point where, for a number of reasons, we will benefit from moving our operations out of our two 340m2 stores and into a single 900m2 premises,” he said.
That included the opportunity to dedicate the whole 450m2 mezzanine to the Heritage Centre that, along with the high-end modern bikes for sale, further enabled Alchemy Cycle Trader to break down preconceptions of second-hand bikes stores.
“People often equate second-hand bike shops with something closer to a junk shop. We can usually pick our new customers because when people walk in the front door for the first time, their first words are often ‘Wow, I wasn’t expecting this’,” Nigel said.
“That feels great and I want to do that again so the new store is a double wow.
“One of the things that made a big difference for us at the start was the fortuitous appointment of a photography enthusiast as a salesman.
“I didn’t know he was a passionate photographer. I would often say to him ‘you’re taking way too long taking those pictures for the website’. But I started getting people walking in the door saying ‘mate, whoever is doing your photography is doing an amazing job’.
“We’ve thought about doing an online reality TV show – our own Australian Pickers.”
“He was getting very creative about the shots for our website and I changed my attribute from ‘you’re taking to long’ to ‘Max, keep doing what you’re doing’.”
Nigel said the photography was capturing the incredible array of beautiful bikes coming into the store.
“The variety is something that’s just awesome to experience. We never know what is going to come in through the doors next, whether it’s a Tommasini, a Colnago Master Olympic, a very late model S-Works Venge, or a TT bike, Yeti or Santa Cruz.
“We’ve thought about doing an online reality TV show – our own Australian Pickers. There would be a lot of people interested in the bikes and their history.”
Alchemy Cycle Trader has built a database of around 6,000 potential buyers, including many passionate previous riders and collectors. It sold a collection of Bianchi bikes – spanning from 1967 to 2004 and including a bike built for Italian Vuelta a España champion Felice Gimondi – for a total of $42,000.
While classic bikes represent only five to 10% of the business’s gross sales, “people love seeing what was around in the past and seeing beautiful technology from earlier eras”.
Nigel said while the Heritage Centre will reinforce the business’s catchcry of ‘every brand, every style, every era’, bringing its operations under one roof would also smooth the path towards the future of mobility.
“It’s exposing more people to the crossover of where the industry is going,” he explained.
“While the second-hand bikes offer people great bang for their buck for high-end conventional bikes, it also gives buyers a better understanding of the value of e-bikes.
“It opens their eyes to the cost of high-end conventional bikes, even when they’re second hand. Then it’s a totally different kettle of fish when they’re exposed to a $3,000 to $20,000 range of new e-bikes. Suddenly they’re totally happy to spend $3,500 – $4,000 for a commuter e-bike.”
Full Cycle for Alchemy
Alchemy Cycle Trader has brought Nigel’s bike industry experience around full circle.
He started in the industry in 1980, when he opened Bicycle Workshop in Ringwood.
“I started with $2,200 and the only way I could stock it was to buy second-hand bikes. I went to all the markets, the trash and treasure markets to find second-hand bikes, fix them up and sell them.
“That was my beginning and it’s part of my DNA. The second-hand market is really what I’m comfortable with.”
He then progressed to manufacturing new, high-performance bikes in 1991 and the Alchemy brand was born.
“The Alchemy title was apt back then because we were turning our own ‘pewter into gold’, taking aluminium tubing and building custom alloy frames that were state of the art,” he said.
“We manufactured Alchemy bikes for 14 years and still get contacted by people who bought those bikes. They proudly bring in the bikes they’ve had for 20 or 30 years.”
The Alchemy brand name lapsed between 2004 and 2017, while Nigel owned and operated the Bicycle Superstore chain.
“We built the Bicycle Superstore business up to 14 stores but ultimately it became something I didn’t have the same passion for. It was high volume, high turnover, big business.
“Our alchemist roots are still there. Now we’re taking second-hand bikes, refurbishing them and making them into pristine bikes you would love to ride in the bunch.”
Now teamed up with his son and co-owner Cameron, Nigel has embarked on a three-month fit-out of the new store and is aiming to have it open for business by the end of January. At the same time, they’re moving to expand their range of new, premium road, triathlon and mountain bikes.