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Ideas for an LBS

1092 Views 17 Replies 10 Participants Last post by  jager7
I have some serious questions over here. I preferably need some of LBS owners to answer me. Thanx!!

The more older members know me well over here .For my posts showing riding scenes in Iran. For some reasons im not showing up as frequently as before. Mainly as my mind isn’t as open and free as before to put it on ridding but also I have converted many of my postings on an Iranian MTB forum.

Never mind you know I have stuck in a certain thing now and just like the days when I had questions on mechanics or parts and these things there was one place which I can rely .

You know I have a plan to open up an LBS over here. As ridding and riders have changed in a really evolutionary way . Life styles have changed and we have more people on the ridding scene whom spend their bucks for their rigs .that much which I got an idea to start an LBS.

But I need to know some things about your LBS ‘s over there .Well after all you have gone all the way im going to go and went through all the obstacles and dilemmas tried many many things on trial and error and………
Some basic questions are sticking on my mind which come prior but ill keep up on this thread further more .

1 : Do your LBS ‘s work on high end parts only ? or they sell normal parts too ?
Are there any bike shops which rely only on high end parts specially on down hill and free ride parts?

2 : A large number of the costumers are those which I ride with ( any LBS owner must make friends with as many people as they can to developing his market ) how do they cope with them on prices and payments ? Do they maintain instalments for the money? I mean paying part of the whole price each at a time

3 : And what about their buys ? From where do they provide their storage ? From official dealers? From commercial importers ? or would they import themselves from S.E. Asia?
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1. we started out only carrying high end expensive bike parts. problem is they are expensive. we moved to another location, and ended up having to stock the cheaper parts because more customers kept coming in that didn't have expensive bikes, you dont make as much, but you do sell it works out in the end. my thing is i'm still doing what i love doing, so who cares which products i sell. go-ride in slc are only high end parts/bikes. it's freakin rad looking around there. i still go up there to just look around even though i have a shop 40 miles away.

2. We don't do a ton of in-house financing. we do do some outside financing places, so that works out. The only thing i finance myself for friends is when they want something that i have to order in so i don't make them pay half down. For most people that i have to order things for i go half down because generally that's what you'll pay for parts.

3. you're gonna have to look into local distributors. we're lucky in the USA because i have i think...4 distributors. qbp is amazing because you can literally get whatever part you need. it looks like they do international stuff. i mean, worse comes to worst you have to pay up the butt for shipping, but in a place like iran, if you're the only one that has the stuff, you can charge higher too...gotta love monopolies!

go ahead and ask any more questions...i'm pretty new at the bike ownership thing. my shop's been open for 2 years now, but it's been really fun. i love it!
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I have worked at some pretty exclusive shops and even they MUST carry low end or common items. A few more common high end items may be kept in stock. Or things that don't generally change much... More specialized stuff is usually ordered. No point in keeping a Boxxer World Cup in stock... somebody may prefer a Team, or they may want a Marzocchi or a Fox. Nobody buys it by the end of the year... new models come out, the one you have has to be discounted. You may have better luck since other people in your country may have more difficulty ordering parts on the internet. It's quite easy to do so in the states, and it will likely be sold for cheaper on the internet too.

If you only carry super expensive tubes, what happens when somebody comes in with a inexpensive bike? That's a customer you will likely not see again. You're looking at far too small and niche of a market. Not everybody that rides a bike is going to have tons of money to spend. And there are very people who get into the sport by building a top of the line custom bike.

We will keep cheaper small parts for service in stock. So maybe common seals, fluids, brake hoses, etc. Tires generally don't change much. We can a few sets of those around. Derailleurs break all the time. Have those on hand. Cassettes don't change much either, sure, why not?

Pay up front. Put it on layaway. Have it financed. Those are the options. Friends still pay. Really good friends might pay cost. Who is going to enforce those "installments?" You? What are you going to do if they don't pay? They already have/rode the product? Now you don't have it, and you can't sell it.

Since you're in Iran... you'll have to do your own legwork to figure things out. You'll have to be set up as a dealer or work something out with a distributor.

Sorry... but it sounds like you may not have the business sense to run a sucessful shop.
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Why don't you go check out the other shops in Iran? Or ask them how they run things?

A simple google search turned up quite a few results...

But having tried to do business with you recently... it seems that you prefer the answers and all the work to be done for you. That sort of attitude won't get you far in the industry.
During the 10+ years I spent at 3 different shops I learned a lot about the cycling and retail business. Still in retail now.

XSL_WILL has all good info and tips. All I need to add is the need for taking care of the low end customers. There are not many places in the world where you can pay the bills selling only high end.

Around here in New York shops can make a fortune off of the lower end customers. Big profits on rubber products along with a quick, smart, efficient mechanic will pay the bills very well.

I'm hung over so I will continue this later. Keep the questions coming
boogenman, that's kind of what I was trying to get at. Thank you for clarifying.

Not everybody rides a expensive brand new bike. If you act like a snob or flat out refuse to cater to/work on lower end bicycles, you will likely not stay in business.

I live in a pretty affluent area, big houses, expensive cars, fake boobs, cheap bikes.

We make far more money doing tubes, tires, and adjustments on old bikes or walmart bikes than we do building custom high end bikes.
near me there's a city that needs a high end shop. these rich snobs just throw money away. the closest shop atleast twice a week a guy walks in and throws down 15k without even asking many questions. it is possible to have a high end shop. i just wish i had 500k to throw around to open another shop
What exactly is he spending 15k on? I find that hard to believe...
Hey Saber. Here are a couple of things for you to think about.

A shop needs to fit the customer base. If that means selling less expensive parts than that is something you will want to do. It is hard to start a business and you will need to attract any potential customer that you can. Believe me, you will not want to pass up a buck. You won't really care if it is coming from high end or low end parts. Also, most people that ride expensive bikes started on inexpensive bikes. That cheap bike could build a relationship that is very good in the long run.

Once established, you can work to attract a specific customer base. It is good to have high end stuff if you want to sell high end stuff. It is expensive to stock but it does attract the kind of customers you would prefer. Having cool stuff can generate a lot of word-of-mouth advertising.

You might also be able to get creative with your business plan. How popular is online shopping in Iran? Is there a benefit to being a local online retailer? Someone mentioned Go-Ride earlier in this thread. The reason they can stock so many cool things in the store is because that inventory supports sales in a much larger market. There have also been more than a few shops that started as mobile shops that provide race/event support and parts.

The best advice I could give you is to put together a proper business plan. Do you have many business development/economic developments organizations over there? Iran seems pretty entrepreneurial so it would make sense that there are places for people to get help getting started.
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You have probably done it, but I'll say it anyway, go and figure out what the other bike shops (if there are any) are doing.

Another thing I'll add from experience, mixing money and friends is not something that should be taken lightly and can go wrong very easily, esp if you start providing "financing", because then you'll have to add "debt collecting" to your list of things to do...

Also where are most people getting their high end parts? Consider if places like Chain reaction ship to your area as they should also be called "competition".

Something that happens here a lot if I want a specialized part, the LBS has to order it in, takes 2-3wks, so why would I do that when I can order it myself from CRC (for example) for less money and have it in less time?
XSL_WiLL said:
What exactly is he spending 15k on? I find that hard to believe...
the shop carries trek...generally matching race road bikes. it's the culture in utah though. the whole, i gotta get the nicest thing on the street mentality
We have a local shop that sells high end road stuff too and they are barely making it. Our other shop that sells high and low parts is doing real well.
The shop I worked at last and also managed was also in a high income, huge home, BMW/lexus area. Most of the people still had older bikes that were $250-$500 new. But every year they would bring them in for a tune-up and rubber every other year. They all had kids too that just destroyed bikes which was very good for business. Flats, wheel trues, cables, new chains, grips, seats ect. The parents had no problem throwing down a $50 to fix the kid's bike to keep him or her busy all summer.

We also did a HUGE business with sub $750 comfort and hybrid bikes for these people. We had accessory packages and discounts so we could sell them tons of keystone items which also made us lots of money.

High end stuff never made us that much money, almost everthing we ordered in was just a few dollars over cost to compete with the internet sites and then we usually did the labor for free or for a minimal charge. We made out cash off the high end customers from getting referals. Guy with $4,000 MTB has a buddy that wants to try mountain biking so he brought him to our shop where we would set him up with a good bike and the whole nine yards. Even giving a discount we made out pretty well when the guy walked out the door after spending $1,000 to get set up for riding. We never screwed anyone and always treated them like we would want to be treated and they always came back to upgrade and spend more money.

Since I left the shop relocated closer to the owners home on the other side of the city in a area of town that is not as affluent. 80% of the customers now drive to the other end of town because we earned every single customer's business.
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nmpearson said:
the shop carries trek...generally matching race road bikes. it's the culture in utah though. the whole, i gotta get the nicest thing on the street mentality
I understand that's the culture in parts of Utah... but dropping 15k twice a week? Damn. Tell him to buy me a CT9 Evo.
I doubt a shop anyhwere is making multiple $15k sales a week :skep:
boogenman said:
I doubt a shop anyhwere is making multiple $15k sales a week :skep:
google signature cycles in NYC or Greenwich, CT, I don't think there's a frame there less than $2.7k and most of their sales are weekend warrior roadies with waaaaay too much disposable income. I know one other shop that stocks 15-20k Meivici frames and were selling 1-2 a month when times were good, and thats stocked on the floor, not the custom jobs the shops are known for.

OP - The business plan is critical, if you think things out before jumping into the business you'll have a time line and a project plan that will have small, attainable milestones that will bring you closer to your goal at every step. It will also allow you to track your progress, spending, and evaluate where you are in terms of what you said you'd do vs. what you're doing.

It's great to have a goal to be a Number 1 business in any industry or country, or the Number 1 rider. You need to know how you're getting there and what you need to bring with you to get there.

You don't ride a new trail without directions to the trailhead/parking lot, and before you leave home you try to figure out how long the ride might be, how much water to bring, is there a map, what's the terrain like, do I have the right tires/bike, etc.

Treat a business plan the same way, do the planning so when you start the business you'll have everything in place to enjoy the ride and not regret it (like forgetting a spare tube or extra water!).
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I am definitely not in the business, but live in a (relatively) high income area (So. San Francisco Bay, California). My friends that are in the business tell me that low-end, comfort, kids' bikes (especially at Christmas), and service are still their bread and butter. I think you need that business to subsidize the high-end stuff. However, there are a few shops that have a fairly high dollar amount of inventory on the floor and still seem to make it.
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