If you’re a bicycle dealer who is missing out on bike sales because you can’t get enough stock supplied, perhaps you might consider following the example of this USA based shop, who has pivoted his business to buy, refurbish and resell second hand bicycles.
Jim Moore owns Moore’s Bike Shop in Hattiesburg Mississippi, a city of 45,863 with a greater urban population of 123,812.
Like most bicycle retailers throughout the world, after the pandemic hit, Jim quickly ran out of new bikes to sell. But he then proactively ramped up purchases of second-hand bikes.
He even recently bought billboard space in town and is running newspaper ads.
“We have folks call first, then text me photos, then if the bike meets our strategy, I’ll go and make an in-person offer and pay on the spot,” Moore said.
Moore gets three to four customers a day with bikes to sell, “some too weathered to bring back to life.”
He said refurbished adult bikes usually sell within a day — many are spoken for before refurbishing. He takes a deposit before the bike is ready for pickup, usually in about a day or two. His average retail price for a used bike is US$325 (A$448), with a 64% gross profit margin. For a new bike, it’s $565 (A$779) with a 43% gross profit margin.
“We’re only netting $39 (A$54) more gross profit on a new bike than a used bike,” Moore said. “It takes about as long to refurbish a bike as it does to assemble a new bike but no free check-ups to fulfill on the used bikes and just a six-month warranty. The $325 (A$448) retail price allows us to say yes to so many more customers.”
Another benefit of refurbishing: It’s environmentally friendly.
“The only thing more environmentally friendly than the local bike shop that sells an environmentally friendly method of transportation and recreation and repairs bikes is the shop that also rescues bikes that otherwise would go to the curb on their way to the landfill,” he said.
This extract is from a longer article first published in Bicycle Retailer and Industry News.