znomit

That's an N+1 problem.

eduskator

If only they could have bikes in stock to start with...

12 months waiting period for my new gravel bike (reserved Oct 21 - delivery sept-oct 22) here. Found one last weekend 300kms away, bought it right away. Need to do the drive now. Crazy crazy!

sloppy12

well with more and more consumer direct one has to assume the LBS will figure out how to schedule service appointments and have parts for repairs.

seypat

There may come a point where anything not bought in the bike branded store, or a bike brand approved store will void the warranty if installed on the bike. I hope not, but that's where it's headed. Whatever hot item people want such as a set of the OP's wheels, could become a thing of the past unless purchased through one of these stores. Uuggggh!

phrantic09

Believe it or not, the only place around here that really does that is the Trek owned shop. They’re really good in that regard, unfortunately my strong preference is to support a different shop, but they’re not so great unfortunately.

Psimet2001 

Yes I was alluding to the Specialized announcement. I know enough dealers I got a heads up a couple days ago regarding the meeting and it didn't take a genius to figure out what it was going to be about. I haven't' read the articles about it yet but all products consumer direct and margins to dealers still selling will be cut.

Specialized is not alone in this but from the OE's standpoint the current system of independents in untenable. They can no longer control the buying experience for the customer. The dealer being independent means they can drop the ball or flat out talk shiz about Specialized to the customer. Piles of warranty issues or broken things because the helper the independent hired 2 weeks ago didn't understand how the stupid integrated system was supposed to go together so they broke it and they expect Specialized to cover it...then the same guy will tell the customer it broke because it's crap.

OK...but sometimes it's because it's crap.

Up to this point Trek has been making their moves in a semi-private kind of way. This move is Specialized's first overt shot. They will be either buying or building their own shops. They slept on doing it and Trek bought a lot of their key stores up already.

For you guys this should be "great" news. It means you have a more concierge buying experience that most of you want.

Prices will not come down and in fact will continue to increase. There's an effect to this that I want to cover in the podcast but in essence the industry is made p of people who are there because of passion and are grossly underpaid because of it. This has set up the world where these companies can still keep pushing because they have always had an unending supply of some of the worlds best engineers and marketing people who take pay cuts to work in the business with their passion. Those paycuts though are creating the scenario where it's pretty common knowledge that almost everyon in any of these companies can't even afford to buy the product they design and make above the mid level of the product line.

Those passionate workers that the companies are built on will start to move away from the industry. They make up the OE's and the lifeblood of the IBDs. There will be an exodus of these people. Form a company standpoint - who cares, amiright? Apple stores aren't filled with the hobbiest programmers that supported that business through the 80's and they do fine. ...but you lose the passion in the product. While you can argue your bikes and parts haven't been made by anyone who cares or even rides a bike for a long time the maintenance, service, repair, and the experiences and knowledge has been coming from those passionate in the industry.

End of the day - who cares. Industry will be fine. it just won't be what you know of now and it's going to be more like other industries where it's near impossible to ever find anyone who actually knows what they're doing. There will be plenty of mindless drones who will be able to quote you the canned Specialized/Trek/Giant/Cannondale/Cervelo scripted speech regarding your problem though.

"Did you try airing up the tires?"

So: I am not happy about where it's heading but I can't tell if that's based in logic or a sort of scared nostalgia. I do honestly feel for anyone who owns a traditional shop and is under the age of 55. They really need to start exit planning. That makes me sad. Granted the industry has given everyone over 20 years to prepare for this. As a rider I am not happy that what I enjoy doing, buying up frames and parts and building what I want when I want, will be increasingly more difficult (this level of control is coming to the component end as well). Customers will just adapt as it will be more inline with other buying experiences. Just an end of an era. Celebrate your new corporate overlords.

msu2001la

There is a relatively new corporate Specialized store in my neighborhood and it's total garbage. It's basically a showroom for new bikes, with sales bros who will be visibly disappointed if you tell them you're just looking to pick up basic things (likely because they don't have them and have to explain this to new walk-in customers multiple times a day). I'm not even sure if they do bike service there for anything beyond newly sold Specialized bikes.

This is not the future of bike shops that I want.

smashndash

Is this near morgan hill? What is it called?

msu2001la

It's in Chicago. It's called "Specialized". It's very nice, in a posh area with high end retail and fancy restaurants. They have a lounge area and cool video wall display showing clips of bike racing and MTB guys hitting huge jumps, etc. They've got S-works stuff all lit up on stands. It's one of those shops where you feel like you need to ask permission before you touch anything.

They've got a cookie jar next to the register with gels that cost $10/ea.

I'm sure I have neighbors that think it's awesome. I felt an instant wave of disappointment the moment I walked in.

smashndash

oof. I feel that. I'll walk in next time I'm in chicago.

SoSmellyAir

Judging from where Cannondale is going post Pon acquisition, the first scripted questions would be: (1) Is the battery charged? (2) Have you tried disconnecting and reconnecting the battery?

And the drones will ask these questions even if you tell them you have a non-Di2 SuperSix or CAAD.

Psimet2001 

I have a team member who is a mechanic there. She is awesome. That's all I will say.

There is another store scheduled to come into Chicago as well. That's what makes me laugh at the memes and comments from shops that say, "well I'm not going to handle their warranty work" - that's right. You aren't because they are buying and building brick and mortar just like Trek.

the sci guy 

so what you're saying is that if i hit 700 million in powerball, i shouldn't open a small independent shop with smaller niche brands?

Psimet2001 

If you end up with that much money then you should run away from cycling at all costs. Someone will eventually talk you into being a title sponsor of a team and you'll be broke in a handful of years.

Psimet2001 

Recorded the podcast yesterday. It's up now. Was lucky enough to have long time industry veteran Tim Jackson (Spokesmen Podcast, Masi Guy, etc) join us. A good one to listen to if the industry stuff interests you. https://roadisdead.libsyn.com/worst-...f-the-industry

himespau 

That's the shop I'd been going to for a while. They could do basic stuff that I theoretically could do but didn't have the tools for. Stuff that had me stumped, stumped them too. Finally found a different shop that could do some oddball stuff (strangely it was a Spesh shop) after a lot of searching (looking for someone who could had a tool for cutting/facing a fork crown race that was a hair to big on an old threaded fork - none of the shops in down had the tool, but one shop had a mechanic who used to be a machinist and still had all his gear at his basement at home) after the first shop broke a couple of things and suggested fixes that didn't make practical sense.

znomit

The best way to make a small fortune from a cycling shop has always been to start off with a large fortune. It just used to take longer.

the sci guy 

lol it’s sad that apparently bike shops have almost always been money pits. Hard to pay employees and property rent when you’re only making $2 margins on accessories and fix flats for $10.

Psimet2001 

Yeah I remember running threads out here like 15 years ago where I would talk about how I had looked into the economics of bike shops for a long time and the consensus was it was a horrible idea. I still did it anyway. So did everyone else. The industry exists because of the over educated and highly motivated passionate people who work in it despite the lack of financial viability.

As the industry keeps pushing the prices up the ones who are in it because of their passion will just start to leave as most were staying because they could "make enough" and they always got deals that made them stick around. That is gone and now they can't afford to buy what their passion wants. That will force the industry to go through the same process other industries are right now where good workers are demanding a more appropriate wage. This too will continue to push the prices higher.

This isn't an industry killer but it will absolutely change the makeup and face of the industry.

Back to the point - Shops used to make 30-40% gross margin on bicycles and 50-60% gross margin on accessories. Even then the net operating margin for shops was in that 3-5% range annually. These margins have been slashed in the last 10 years or so. Many bike margins are more in that 30% and lower range and now those margins are cut in half if the consumer buys direct but the shop is still a dealer so they receive it and do final assembly. Considering a decent local shop that worked hard is probably in the neighborhood of $1M in annual sales that nets to $30k a year. If they buy a work van and start doing mobile repair that will eat all of their profit for a few years....for scale.

It's untenable now and most shops were drowning under a pile of debt and a string of bad years before the pandemic hit. The pandemic demand made a lot of them re-energized (thinking there's actually a large or growing market that is sustainable), and allowed them to kill off their debt. The still crushing inventory and supply chain shortages aside - the economics of bikes will close a lot of shops anyway. The Consumer direct moves, shortages, and age of owners combined with debt elimination will cause a large number of shops to simply close their doors in the next year or two.

I am honestly estimating in the 30-40% range and I fear that's a conservative number.

Look around your town. If you are in a larger area and there's 10 shops in your city - 3-4 of them will be closed within the next 2 seasons. Odds are you can guess which ones.

deacon mark

There are 3 Bike shops in my area of about 130,000 folks. I have not been in 2 of them in years and have no real reason to go to them. One of them I do go to but it also is a running store and I know the guy who runs the running shoe part. They actually ask me to be a mechanic in the store but frankly in my retirement 3 full days of working a week at that was not something I wanted and it would have not paid much at all. I am not sure the bubble has not already burst and even gone into a tailspin. I have no idea of they can make a living with the 3 shops but clearly the employees working in them cannot. I have no idea what it all means except to me as a cyclist and consumer.

I do all my own work. I would need to order anything I need regarding bikes from places other than these 3 shops. I probably would not mind doing more business with them but I simply cannot they don't have anything I am interested in or need. Right now I am considering an upgrade to make my Wilier an 11 speed. The wheels are already able to handle 11 speeds and I just need the groupset. There is nothing in this equation that even remotely has me thinking of getting anything local. They don't carry it and I am a has been in the cycling community. I still have rim brakes, and have no intention of going Di2 no need my 6800 shifts perfect after 33,000 miles.

The strange thing to me is I am a cyclist and a serious one at that for sure. However I have nothing in common with what is happening in the industry and feel like really I am a lone ranger. Certainly that is by choice but for the cycling industry to point and marketing at me would be a waste of time completely. I see that for sure they probably hate riders like me I take care of my bike and keep it running myself. When things go wrong it is completely me who has to figure it out someway. I just hope that parts and good parts are available for what I ride. Now if they would start offering a place where I can order a frame of the material I want and then buy the parts and groupsets I need without any interference that would be great. If I were to get a new bike now hands down I am going Lynskey. I just order what I want and they send the bike. They are well made and well thought of but yet not some independent manufacturer with HUGE BOUTIQUE signs that spell high prices. Nothing wrong with that but just more than I will go for a "better" name.

SoSmellyAir

The cycling industry -- like most others -- caters to the broader market. The needs you describe above (which I have bolded) are "boutique" (in the true sense of the word, or niche) and therefore costly, but AFAIK are still available. What you seem to be against are "conglomerates" like Trek and Specialized, which I can understand. They have much more market power than you do, and buy up all the groupsets.

Psimet2001 

Agreed. There is a small market for boutique service/sales but it's not a great space to be in. I have watched a few closely. Some do OK. The coolest setup I ever saw is Saville Road - https://savileroad.com/

I just checked them again and they seem to be doing more of a traditional model now and apparently also sell Specialized. HAHAHA - wonder how long that will last.

Boutique offerings are absolutely going to be a niche but even then that's dropping. First off you have to charge a lot to be in that space because the volume is really, really low. You have to cater to the enthusiast who is also like a PCad - "I have people for that" - who don't have any interest in doing their own work. You have to avoid the "brain drain" of people showrooming them just for their knowledge (something even I fight).

I firmly feel there will be boutique shops, service only, and extremely large Independents (ones that carry in house every smaller brand they can secure giving customer a reason to drive to them as a destination experience to try out a lot of different bikes) and then factory owned or controlled dealers.

Back to the demand bubble - it has definitely popped. Shops that have been backed up for 3-5 weeks even in the winter are now all over the place advertising to get people to come in now for service with discounts and quick turnarounds. That's a sign. It aligns with the demand numbers being down last quarter back to pre-pandemic levels.

genejockey 

This sounds like what the Swiss have been doing to independent watchmakers for years now. Instead of selling parts to all comers, they started instituting requirements before they would sell to you. First, they demand a bunch of additional training and certifications. Then they require the use of ONLY the specific lubricants from one particular company, which are ungodly expensive AND have relatively short lifespans before they 'expire'. Then they require specific, and quite expensive instruments. They're trying to drive all the repairs to their dealers, who then send the pieces back to the factory or to service centers.

(I'm not a watchmaker. Just a hobbyist, but I participate in forums where watchmakers discuss how hard it is to be an independent these days)

SoSmellyAir

Re: boutique shops which predominantly handle service, would the mobile mechanic model be more cost effective than having an actual physical shop, especially in affluent areas where rents are more expensive?

I have been shopping Canyon and it recommends a specific mobile mechanic service for those who cannot assemble their own.

Troul 

having a LBS operate out of a major B&M supermarket or sporting goods store might lower some costs. Kind of like how walmart has subway & how Kmart had little caesars. Sublease some building space in a local shopping mall could be a cheap way to do it too. Having a standalone building selling bicycles & service is way too expensive, & would it really change how the general bicycle consumer views it if a Trek or specialized retailer was next to a footlocker or bath & body works?