[trentnix]

Former bike dealer here (I've written about it briefly for anyone who might by be interested: http://www.sciencerocketry.com/blog/great-work-and-new-begin...). You are correct that dealers have been unable to capitalize on the boom to realize big profits. There's plenty of service business but the labor part isn't really profitable (in my experience). The ability to sell parts with service can be profitable, but the distributors and manufacturers don't have any parts to sell.

One positive is that those dealers drowning in older, unsold stock have been able to turn a lot of that into cash. That's allowed a few of them to restore some financial health to their business and get out from under some of their debt to vendors and other creditors.

But even so, the bike business is so commoditized and the supply chain is so lose that bike shops (and manufacturers as well) have a pretty low ceiling of profitability. Even in the midst of a boom, the economics of the bike business restrict it to a lifestyle business at best. For some shops, this (likely temporary) boom probably presents the best window of opportunity to close their doors.

[usrusr]

Bike shops absolutely need to turn themselves into workshops, in other words increase hourly rates until repairs become a worthwhile business on their own. Even if only because internet.

The idea "I could do some bike work on my own, so bike work can't be expensive" has to die, simple as that. People can pop open a beer at home just fine, nobody expects bars to sell beer at a similar price.

If shops insist on offering workshop services at a loss for bikes bought at the establishment, they are free to offer huge rebates as a hardware sales argument.

[midnightclubbed]

There is a value add from going to a bar. I'm paying for the social experience.

A local bike shop repair has two benefits over doing it myself - experience and convenience.

Unfortunately for bike shops the people who are most in need of their experience are those who are newer to riding (or dusting off a 20 year old unridden bike). When the workshop labour charge is approaching the perceived worth of a bike the customer is not going to want to use those services (more likely to dump the bike and buy a new one from a sporting goods store or Walmart).

People who ride regularly are more likely to have bikes where the cost of a repair is a small fraction of the bike's worth (personal or actual) but they are also more likely to have the tools and experience to do the work themselves.

I go back into mtb riding 2 years ago and upgraded to a mid-range full suspension bike at the end of 2019. While I was familiar with basic bike maintenance I didn't know what I was doing with some of the newer bike tech. When my bike needed a service in the summer I tried to use my local bike store - they needed my bike for a month in order to get the work done (backed up due to Covid demand).

Rather than miss all those rides I bought the tools and figured how to do the jobs myself. Now I have the tools I can do those jobs again for almost no outlay (and wrenching is therapeutic).

[MrFantastic]

I do a lot of my own bike repairs. When I take it to the local shop, they can fix it better than I can. When it's slow my local shop will show me how to do some tips on some of the different repairs. I replaced all the cables and shifters on my bike and I had a hard time getting the derailleur adjustments correct.

I had to replace some spokes, that would have taken me a while to do on my own and some specialized equipment I won't need again for a decade.

[matsemann]

Lol yeah, I tried building my own wheel, and getting it true was such an art that I ended up writing my thesis about bicycle spokes...

[ogre_codes]

> The idea "I could do some bike work on my own, so bike work can't be expensive" has to die, simple as that. People can pop open a beer at home just fine, nobody expects bars to sell beer at a similar price.

In the town I used to live in, Performance bought out the only decent bike shop in town so I got into the habit of buying online because I could wrench better than the Performance mechanics. When I moved up to Oregon there are 5 good bike shops here in town and they all charge reasonable rates so I use them whenever possible.

I do still buy online and install parts myself, not to save a buck, but because it's more convenient than taking my bike into the shop and leaving it there for a few days.

[klyrs]

> The idea "I could do some bike work on my own, so bike work can't be expensive" has to die, simple as that.

If the shop charges more than I value my time, than I won't go to the shop except to buy parts and tools to fix my bike with. Not sure why you think DIY needs to die. This is a supply/demand problem and ease of repair will depress prices.

Where the workshop model might work is the fabrication of parts. The supply chain has tanked; I'd be willing to pay double on that chainring I busted and nobody can stock.

[trentnix]

Some in the bike industry have been asking for that very thing for years. The most common answer is, "you first".

[usrusr]

I really don't get what they would be missing though: "foreign" (e.g. internet) brands would usually be rejected before that price hike anyways (unless workshop capacity is desperately idle) and preferred customers (qualified by bike purchase) could still be offered arbitrary service discounts. Is it really just the old bait and switch of offering to service a clunker for the price of a hamburger and then suddenly realizing that the bike is impossible to salvage if the customer happens to be not utterly wrong size for that unloved bike that has been clogging inventory for three years?

[trentnix]

No bait and switch, and my experiences aren't from the boom period so take my commentary with a grain of salt. What I can tell you is that there is an immense amount of pressure from competitors and from customers to keep service prices low. So the prospect of raising service prices is challenging when your customers are spoiled with cheap labor.

Also, servicing a lower-end bike ends up meaning the service is a large percentage of the original cost. So the prospect of paying, say, $150 for a tune-up, cables, and a new chain on a $400 bike feels excessive. But if you do it for any cheaper than that, you are either compromising the quality of your work or compromising your ability to turn a profit.

[usrusr]

Sure, a "boutique bike service station" certainly wouldn't attract your typical Wal-Mart bike owner. But those bikes won't be served by the bike shop that runs the workshop at a loss for his loyal bike buyers either.

That part of the market is usually served, quite well actually for both sides, by a shop that is one third preowned bikes, one third budget parts and one third highschool job repairs (sometimes they also rent out the preowned). Lifesavers for my theft-immune three speed (they'll happily take on daring salvage operations nobidy else would even attempt), but I surely no place were I'd leave one of my Campag steeds even for just a tire inflation.

[Mauricebranagh]

You know On Licenses ( Pubs/Bars) pay massive amounts of tax compared to Off Licences (Supermarkets / Bodgegas)

[cycomanic]

I see that you're from the US, I know that in many places in Europe and Australia, the workshop has become the most profitable part of the shops. In fact in Australia I know of several workshop only bike "shops", essentially with the raise of online sales lots of people just need their bikes fixed.

I find it interesting though that you say the bike business is commoditized. In particular there are several bike manufacturers who have transitioned into live-style brands (the big one being specialized). Their prices have gone through the roof, while their manufacturing is all outsourced to cheapest bidders in China. It's now common for top of the line race bikes to cost >$10,000 while the frames for the bikes cost them ~$300 shipped to the US (and the total bike might be on the order of $1000-$2000 max). Mind you nothing of that ends up with the dealers.

[MrBuddyCasino]

> Mind you nothing of that ends up with the dealers.

Not true, the very expensive bikes definitely have better margins.

[cycomanic]

Ok interesting, this might be different in different countries again.

What I heard from friends of mine is that the margins are not really any better on high-end bikes. Because you sell significantly less of those it used to be that it was much easier to make decent money on low end bikes (i.e. everyday bikes used for riding around town). I think things changed a bit with the popularity of e-bikes now (they are generally more expensive but also much more in demand, don't know about the margins exactly).

[MrBuddyCasino]

Looks like you had a sizeable well-run business, too bad it still didn't work out. At least you tried! I always wonder about those tiny inner-city bike shops and how it is possible to make a living.

[trentnix]

We had our day! Business was okay, just not going to go far beyond a lifestyle business. A lifestyle business that takes away your weekends and part of every evening is a grind, so it was just time to move along.

I very much learned the importance of business models and product-market fit, though!