The chance of a lifetime: You are asked to start a bike shop. How should it be done?

[PeeJay]

I don't mind the shop owner making a good profit, .

BS
This is the nub of the problem.
Most people cant stand the thought of someone "making money" off them.
Most people look at that profit as how much they are being overcharged
NZ has turned into a country of cheapskates. The warehouse has set the bar.
We import cheap s/h cars no one else wants
We import cheap s/h bikes no one else wants
We import cheap goods which have wrecked any local manufacturing we have had.
We export trees and then let someone else turn them into cheap timber and buy them back
We sell anything thats not nailed down
And thats why we get on the internet and buy from some anonymous entity.
All we care about is "how much does it cost"

A shop can do what it likes, open 24/7 highly educated staff everywhere stock levels to Africa but if the prices arent cheap customers will go elsewhere.
You wont care if the salesman is a dumbass if the price is right.
Thats why the warehouse is succesful

[sidecar bob]

That reminds me of a bloke that was having a whinge on here a while back that he discovered that the dealer was MAKING $1500 profit on the B King he was about to buy ( only because he snuck a look at the dealers computer) If the dealer was making $1500 profit on it he would need a mark up of at least $3500 minimum on it.
Note, mark up & profit are not the same thing.
Sure, if you buy a busted bike on trademe & tidy it up at home in your spare time it may be, but not in a business situation.

[Scorp]

Well, I haven't been at this long enough to comment as authoritatively as some people, but I have got a view on the internet vs dealer issue and dealer margins. I don't expect my local dealer to beat the internet on price, and frankly I'm happy to may more for their advice. Why? for the added value you don't get when buying online.

Just yesterday I bought a Shoei Raid II helmet and a pair of Gaerne G-Duke boots off my local dealer. Unlike the internet, the guy at the bike shop helped me with proper sizing, let me try the products on, experience wearing them and walk around a bit and chatted away openly and honestly with me about the purchase decision I was making.

I'm also aware of the fact that I'm building a relationship with people who I know will give me good advice in the future. There's no way I'll squander that by getting their advice then shopping for a better deal online. You get what you pay for. And I was happy to pay for the advice, service, and products I got.

If I had just gone on the internet now and found the same gear for $100 less, I would not have felt stupid, or ripped off. I'd still feel happier paying more for the personal service. However, I have just gone online and checked, and the best Online Store prices I can find for these products totals NZ$805 without postage and packaging. And as it turns out, that's $50 more than the deal I got my local bike shop! So I'm very happy.

I have also just bought some leathers online from 1Tonne. I did this because their gear had the product features I wanted at the right price. However, I would have been happier buying them from a shop where I could hold the gear, feel it and try it on. (May still happen if I'm not happy with 1Tonne's gear when it arrives!)

So for me, personally, all I really expect from a dealer is added value in the form of quality advice, service and personal trust. If I get that, I'm happy to pay for it. And will continue doing so.

Anyone who thinks they can get that advice (for free) then buy off the internet is just taking the piss out of their dealer, and one day will probably get the piss taken back.

[bogan]

A shop can do what it likes, open 24/7 highly educated staff everywhere stock levels to Africa but if the prices arent cheap customers will go elsewhere.
You wont care if the salesman is a dumbass if the price is right.
Thats why the warehouse is succesful

So don't you think bike shops should offer more competitive pricing? I'm still very curious as to how much the parts sales subsidize the rest of the shop, as it seems like a bad idea to have any subsidization at all.

Anyone who thinks they can get that advice (for free) then buy off the internet is just taking the piss out of their dealer, and one day will probably get the piss taken back.

I agree with that, don't go to a dealers and try on their stuff to get it somewhere else, don't ask parts advice then get it cheaper somewhere else. But you can also get advice off the internet, it's not always good kb is a good example. And for parts I know exactly what I want, and can easily find the part numbers for them (genuine honda usually) which I give to the dealer anyway, so I wouldn't get any added value from a dealer for the 50% extra I may have to pay.

[Katman]

I'm still very curious as to how much the parts sales subsidize the rest of the shop,

Motorcycle businesses live or die on the strength of their workshop.

Profit from bike sales or parts will not cut it.

[bogan]

Motorcycle businesses live or die on the strength of their workshop.

Profit from bike sales or parts will not cut it.

So is there no subsidization occurring at all then?

[Katman]

So is there no subsidization occurring at all then?

RRP is not set by the business at the coalface.

If shops sell above the RRP they stand to suffer the wrath of customers who are searching for the cheapest deal.

If they sell below the RRP they risk instigating a pricing war that will see the industry collapse in upon itself.

[bogan]

RRP is not set by the business at the coalface.

If shops sell above the RRP they stand to suffer to wrath of customers who are searching for the cheapest deal.

If they sell below the RRP they risk instigating a pricing war that will see the industry collapse in upon itself.

Not really answering my question though. And you forgot one:

If the industry does nothing, people will continue to buy parts from overseas.

[Katman]

people will continue to buy parts from overseas.

Good luck to them when that purchase turns to shit.

[bogan]

Good luck to them when that purchase turns to shit.

and good luck to you once people realize that many sites have good returns policy in such cases.

So conquiztador, not a lot of new ideas coming out anymore, how you gonna open your shop?

[Katman]

So conquiztador, not a lot of new ideas coming out anymore, how you gonna open your shop?

With a crowbar?

[Conquiztador]

Good luck to them when that purchase turns to shit.

That's the spirit. "We have done it like this for 50 years. Nobody is gonna come and tell us what we should do. And certainly not the customers!" (Remids me of a old pommy logic that killed all they did...)

Just because you, at this moment, can't se the answer does not mean that there is not one. I will now digress (diversify?) from my initial purpose of this thread, but I recon it is needed...To me it sounds like all NZ bike shops are facing the same problem: "Private overseas purchases are killing us". So what are you, the industry, doing about it? I tell you what it looks like: You are burying your heads in the sand. Your pigheaded attitude will only have one outcome: You be part of the history. To blame the customers, the government, GST, the Easter Bunny is easy. But will not fix the problem!

Just one from top of my head: If all bikeshops in the country are facing the same issues, why not solve it together? Set up a central importer that only the registered shops can get bits/supplies from. Run this importer as extension of the shops. A setup that all will contribute to (in whatever parts that is decided) and make it a setup that only needs to cover costs, not make any profit. Why rely on a privately owned importer that fucks you around? You guys have the power, use it!

Now I will sit back and get the normal shit why it can not be done, why I am stoopid, and why I could never even find my way outta a paperbag.... But instead of shooting me down, try to look at the other angle: how could we achieve this?

To the shop owners: The writing is on the wall. If you do nothing you are dead. So what are you gonna do about it?

[Conquiztador]

With a crowbar?

:slap:Standup comedian material! Long as you are a vegetarian you be able to live on the rotten tomatoes rest of your life.

[Tony.OK]

Alot of shop's have no say in what they charge, or should I say price they advertise, that is set by the wholesalers in alot of cases. I know Honda dealers are not allowed to advertise at what ever price they want, its Bluewing that sets the price.

eg....shop has to buy bike from wholesaler/importer for xx amount, then 2 months later the wholesaler decides to have special pricing, all the shop's now have to lower their prices (reduce their margin) giving them even less to play with........when there's only $1500-$2000 in say a $20k+ bike thats buggar all to play with when the outlay has been made already. And then they are expected to give top dollar for a trade in..........its pretty tight.

I feel a bit sorry for the shops really, its the wholesalers that dictate alot of what goes on in NZ but the shop ends up taking all the flack.

Case in point..........some OEM front pads for my Blade, retail is near $380 for 2 pairs for the front, my local knocks it down to only a 10% markup............still costs $260 for 2 pair. I can get them from US for $100NZ delivered for 2 pairs, thats retail too, thats a decent chunk of difference that goes to Bluewing. And thats for just a set of pads, common amongst many models, I don't mind paying a premium for the service I get from my shop, but their hands are tied in some cases when things are just too dear to start with before they even get it to the shop.

[Katman]

That's the spirit. "We have done it like this for 50 years. Nobody is gonna come and tell us what we should do. And certainly not the customers!" (Remids me of a old pommy logic that killed all they did...)

Ok retard. If you're told that New Zealand businesses cannot compete solely on price with the WWW, what are you going to do about it?

Happily condemn every New Zealand motorcycle business?

Start your own business that would last six months (if you're lucky)?

Continue to buy overseas until you get sick of being shafted without the means to gain any recourse through the Consumers Guarantee Act?