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

[Headbanger]

And finally, do you think burying your head in the sand is going to make the problem go away?.

I doubt he will ever get it, His 35 years in the industry has been in a business model that no longer fits the customer base, or at least a sizable chuck of the customer base.

The rise of the internet has created a far more informed customer and a far more efficient way to purchase goods, and it up to local bussiness to adapt if they want to compete for those dollars, and there is plenty of evidence this is happening with the launch of local internet based retailers with huge database of stock, quick turn arounds, and slick ways of purchasing.

It will be interesting to see if the manufacturers are willing to let their entire local based infrastructure fail or perhaps sacrifice all the middle men and supply directly to the retailer at a cost equilvent to the international retailers.

Either way, Things will continue to change.

[Virago]

...If we assume the full prime cost of a mechanic to be $100000 per year ( I realize that they don't get paid that, but there are many other costs in the prime cost and it's a conveniently round number, not too inaccurate); and assume a 50% charge out rate ( in my experience anything greater relies on creative time sheet entries); and a 50% burden; then that means a true charge out rate of $200 an hourroughly...

I think you're out on your calculations there, Ixion. There's roughly 2000 work hours in a year - 50% productivity would equate to 1000 hours, or $100 an hour. But the market won't accept even that.

You're right - the lower the charge-out rate, the more the mechanics will be pressured over productivity, resulting in creative time-sheets and padded-out jobs. Result, stressed staff and pissed-off clients.

[Headbanger]

Yup. Therein lies the biggest internet buying factor - GST.

Those buying small items for personal use on the internet are seldom slapped with GST at the border. Those same items bought in your local bike shop attract 12.5% GST (soon to be increased to 15% by your precious National government).

Those demanding the same price in the shops as they can get from huge overseas warehouses, are generally too dumb to understand such inequities.

Market forces? Yeah, right...

Speaking of too dumb.

You just outlined the very market forces I was referring to, then denied them.

Besides, its the large discrepancy in prices on many items that have prompted people to shop overseas, Not the blind insistence that prices be matched. Unlike yourself I'd say customers are getting too smart, not too dumb. And only a fool would dismiss it in the manner you have done.

[Headbanger]

You will also find that a few business are running their workshop as a separate entity from their retail outlet (and the retail outlet has to pay for any work done by the workshop on retail items ie:bikes) and that the workshop has to sustain itself.

And its not costing $200 an hour.

[Virago]

Speaking of too dumb.

You just outlined the very market forces I was referring to, then denied them.

Besides, its the large discrepancy in prices on many items that have prompted people to shop overseas, Not the blind insistence that prices be matched. Unlike yourself I'd say customers are getting too smart, not too dumb. And only a fool would dismiss it in the manner you have done.

I stand corrected - dumb may be the wrong expression - short-sighted is more accurate.

The bike shops are not responsible for the GST inequities, yet are somehow expected to compete?

You continue with your smart shopping and your market forces. But at the end of the day, the bike shops won't be there when you need them.

[firefighter]

Maybe you should start another thread dude. And somehow (do'nt ask me how!) make it clear you don't want any crap/arguments in it. Or perhaps the mods could swoop in and move all the crap into P.D and leave behind what was asked for?........

This place is filled with what a bike shop owner wants: CUSTOMERS!

We have all visited the places that get it soo fucking wrong. So wrong in fact that we will never go back!

Many of us (me included) have started threads re useless cunts not doing what we want.

Let's here tell the shop owners, and the ones who are planning to open one, what we, their customers, really expect!

What do you expect, want, prefer?
What do you hate?
What makes a good... no, a PERFECT shop?

And try to be serious here. After all, I recon that if someone on here is running a shop/planning to run one, he would love to know...

[Ixion]

I think you're out on your calculations there, Ixion. There's roughly 2000 work hours in a year - 50% productivity would equate to 1000 hours, or $100 an hour. But the market won't accept even that.

You're right - the lower the charge-out rate, the more the mechanics will be pressured over productivity, resulting in creative time-sheets and padded-out jobs. Result, stressed staff and pissed-off clients.

Nope. No mistake. You are overlooking the specified 50% burden . 1000 hours at $100 will only cover the prime cost. That is the $100000 to paythe mechanics wages, holidays, stat says, sick days, FBT, tool allowance, employers ACC, Kiwisaver training costs , overalls, laundrey, protective clothing, first aid, recruitment costs etc. I did mention that there were other costs.

BUT it does nothing to cover the costs of rent, insurance, light and power, repairs and maintenence , depreciation, advertising, clerical, consumables and all the other overheads. That is the burden charge, a 50% figure ( or another $100000) is a typical cost in this industry .

In short it costs a shit load more to run a business than people think.

Edit . However on reflection I think the 50% / 50% is probably overstated for the tyical bike shop - those were actual figures from when I did that sort of stuff for a job, but it was in a more complex and technical industry.

Perhaps 70% and 30% burden would be closer for a smallish bike shop.say,$150 per hour.

[Conquiztador]

There was no intention to hijack the thread as such, so Ill say my piece and be done with it.......

BUT DONT LISTEN TO ME, IVE ONLY HAD 35 YEARS IN THE TRADE IN BOTH WHOLESALE AND RETAIL, I KNOW NOTHING......

There are ways and means but its threatening the traditional wholesale and retail etiquette......

Perhaps Im old fashioned and one of the realities of being like that is having a concern for the long term health of the country. No apologies for that.....

Robert. You have missed the point of this tread totally. I had a small business in servie and sales for 10 years. I know all the ins and outs, the agency stuff, how you think you have it and then someone else suddenly sells the same cheaper bla bla. This thread was not about how hard it is to make a dollar as a honest bike shop owner (as I am sure you are).

The question here was: WHAT DOES THE CUSTOMER WANT?
Why not "listen" to the customers, see if there is something you can pick up here (Personally I wonder if many had thought about the point that was made about treating young new customers really well so they stay with you?).

Your 35 years in the trade is most probably a hinderance as things have changed. Heaps. And will keep on doing so.

I tell you a story: Bizerba was the biggest weighing scale manufacturer in the world. All their scales were mechanical. Then the Japanese started making electronic ones. Bizerba refused to change. All for gallant reasons: They would have had to close factories, make all their mechanical technicians redundant, suppliers who made a living on supplying them with dampeners, oils, springs etc would have had to close. So they kept on making their brilliant, but by now old fashioned, scales. And they lost all their market. From having been the biggest supplier in the world they went to close to bankrupcy. In the end they had to start making electronic scales and take the drastic mesures they did not want to. Today they are again one of the biggest.

Same happened with the Swizz watch makers when digital watches came out.

What you are currently fighting is the same. You can do nothing about the change. Either learn to adapt or die.

So again, take this thread as it is meant: as a list of ideas from customers re what they want. Nothing else. This is not a place for you to try and tell anyone why this or that can not be done. In Brainstorming nothing is wrong or impossible.

Peace!

[Motu]

In short it costs a shit load to run a business than people think.

And you can add in theft,vanalism,grafitti and bad debts.It costs so much to run a business it's a wonder any of them survive.

[Headbanger]

I stand corrected - dumb may be the wrong expression - short-sighted is more accurate.

The bike shops are not responsible for the GST inequities, yet are somehow expected to compete?

You continue with your smart shopping and your market forces. But at the end of the day, the bike shops won't be there when you need them.

The very existence of threads and discussion like this would indicate you and the industry have it the wrong way around. The short-sightedness of the industry means the customers they need won't be there...

And mechanics will always be around, and if they have to charge a rate to survive then that's life.They should already be doing so. In fact we routinly take all sorts of gear to mechanic shops rather then dealers and costs are generally the same if not lower.

As for GST, The limit is $400, at which level the cost if importing a single item all the way from the other side of the world should outweigh it by a large margin, But in the real world even in the event GST was applied then no doubt there would still be large cost savings for the consumer or they wouldn't bother to source from overseas.

[Motu]

WHAT DOES THE CUSTOMER WANT?

The bottom line? As much as they can get as cheap as possible.They will put up with very bad service to get a very good deal.

[Conquiztador]

The bottom line? As much as they can get as cheap as possible.They will put up with very bad service to get a very good deal.

I disagree. The cost is very seldom the main factor. Yes, if there is two similar businesses selling same thingy then I will go to the one that is cheaper. But if you read the replies that have ansered the question you will find that being treated well tends to be something that comes back again and again. Sure, being ripped off by a friendly and smiling sales guy is not gonna work. So the price will be a factor. And as also stated, today with the web we all have an idea (well most of us...) what the bit really should cost.

[Headbanger]

The bottom line? As much as they can get as cheap as possible.

Value for money.
Appreciation for being their with my dollars.

I've had better friendlier service spending $5 at Mcdonalds then I have had trying my hardest to spend thousands at some bike shops.

[Katman]

How about some things in return?

How about.......when you order something from a business who is decent enough to not expect payment until the item arrives, you make a point of returning to pick up and pay for it instead of just never bothering, or getting it elsewhere the same day but not bothering to let the other mug know.

How about.......when your bike is finished you make a point of collecting and paying for it, instead of leaving it three weeks because you had another bike to ride around on anyway.

How about........when you ask to pay a job off, you don't expect $20 a week (or a really big bag of weed) to cut it.

How about......when a payment plan is agreed on, you stick to it.

How about.......when something goes wrong with your bike after it has been in the workshop (that may be absolutely nothing to do with the work done), you come in and discuss it rationally instead of storming in with a rocket up your arse.

How about......when you're lent a tool, you bring it back.

How about......you accept that it's my neck on the block if I issue you with a WOF when your bike has any defects, no matter how many other places haven't worried about them in the past.

How about......you understand it's not our fault that the part is going to take three weeks to come from Japan (or six months from Italy )

How about......if I can remember your name, you remember mine.

How about......you realise that the stock that a shop carries has cost that shop a lot of money and should be handled with the utmost care until you choose to hand over your money for an item - then you can handle it in whatever manner you choose.

How about......if you're given a loan bike, you treat it with respect instead of using it to practice your wheelies (or taking it on a round-the-island road trip).

How about......when you bring your kids into the shop you stop them from clambering all over the bikes with their chocolate ice-cream covered fingers.

[CookMySock]

Robert. [...] Why not "listen" to the customers, see if there is something you can pick up here..

Because he feels too angry and victimised by those same people to see that he can change it, and maybe really scared of some looming change in the industry.

It's 60% about him and 40% about all the people that have done hurtful things to him in business all his career. I am in not too much different a situation, where it's easy to point the finger at all the people who made things hard and much harder to fix where I am at and then proceed. Along with it comes the feeling of "being doomed" which doesn't help the situation at all.

I think it's healthy to not work in one industry too long. One gets too embedded in the stress, and sometimes its better to just hand it over to someone fresh and not so burned.

I think your thread is well intended, but often the rational look at "why?" needs to also take into account how people are feeling, which quite a lot of the time is "not too flash", and maybe this will give some insight to how people perceive they are "mistreated."

For myself, I make a point of walking into any room and asking myself "how are these people feeling and why?" Everyone has their own life, and the lack of a smile on their parts mans' face is just an indicator of the struggles he has in his life, just like you do.

People aren't machines. The have feelings and families and troubles, just like you do, and some of those troubles can be a really big.

Basically you have to decide if you want a motorbike shop nearby or not. Then it's pretty clear what you have to do.


Steve