What does it take to open a bike shop in your city?
Well, next in line is another business idea with a seasonal product that sells very well, but many are frightened by the fact that the product is relevant for only five months a year. It’s about the bike shop business. In connection with the rise in fuel prices and the actualisation of ideas for environmentally friendly transport, the bicycle is becoming one of the leaders in this niche. In addition, cycling is very beneficial for health and many people buy them to keep their bodies in good shape. Let’s take a look at how you can start selling bicycles and where to go to grow your business.
Bicycle retailing does offer a variety of options. Everything will depend on the initial capital and the willingness of the entrepreneur himself to work with seasonal goods.
There are two main business formats for selling bicycles:
– trade in the market. It is a rental of a certain retail space in the market during the seasonal time.
– opening a full-fledged bike shop, for example, somewhere in a shopping center or a separate building.
We advise you to start with the first option. Why? Here are some of the main reasons for this:
Minimum investment for renting premises. Since the premises itself will need to be looked for large enough from 50sq.m., Then the rent will not be small. That is why market trading is more profitable for a beginner.
You don’t need to invest huge amounts of money in promoting your bike shop. Clients will come due to the popularity of the market in which you operate.
Flexibility in seasonal work. We worked out the season and returned sales for the next season. In the case of a store, you will need to look for another way out, or invest in winter goods – skis, sledges, etc., and at the same time spend money on advertising all this, or also cover up trade, but only with payment of rent during downtime.
It is all these factors that restrain entrepreneurs from opening a bicycle store, and stimulate them to work in more different conditions. But at the same time, in big cities, on the bike shop there are large players who have already adapted to this seasonality and they manage to conduct business more thoughtfully, and most importantly, profitably. Perhaps it is worth learning from them and adopting some of the techniques for “survival” in the off-season.
It does not matter which trade format you choose for your bicycle business, you will need to purchase some of the equipment:
– trading tables for the sale of spare parts and components.
– racks and fixtures for displaying bicycles in a bike shop window or market place. In case of market trading, it will also be necessary to rent a warehouse for storing bicycles during the season, or buy vehicles for transporting them. Since the product is oversized, this is also a rather big expense item.
Assortment and suppliers
In fact, the business idea for selling bicycles is not limited only to this product and you must definitely include various additional product groups in order to minimize the risks of the money invested.
This list can be much wider, in fact, each category has its own subcategories of goods.
The assortment is very impressive, but at the same time, a lot of parts, consumables and components, allows everyone to make good money on this, since the margin level for all this is quite high.
Service-center & bike shop
A separate area is the bicycle repair business. If you have the opportunity to do this or hire people and organize a business in this area, then you will be able to provide your customers with the highest level of service, offering them to buy not only bicycles, parts and components, but also to service their “iron horses” … This will increase your credibility as a seller and at the same time can be an additional source of income.
The main thing here is to find smart workers who are ready to work and motivate them with monetary rewards in the form of bonuses.
Marketing moves in a bike business is a whole range of promotional activities. For example, to promote a sales outlet, you can:
- distribute flyers with discounts and pleasant bonuses in the form of gifts.
- hang some banners in the area where you work.
- to advertise in the media, on the Internet, on social networks. That will cover the maximum level of the target audience.
- order a bright sign, business cards.
Advertising costs will be high at first and can be reduced over time.
There is also an option to open an online bike store and connect contextual advertising or order search engine optimization, but the competition in this segment is very high.
How much money do you need to start for bike shop?
To put together a good bike shop business plan you will need to make all the cost estimates for starting a retail outlet. Of course, everything will depend on the format of trade and the pricing policy of the store, but the investments will be rather big.
- Rent of premises, or a retail outlet on the market
- Taxes – $ 150
- Seller salary – $ 200
- Bicycle Repairman Salary – $ 250
- Initial purchase of goods – $ 20,000 – $ 30,000
- Purchase of equipment – $ 2000 – $ 2500
- Advertising – $ 500 (+ online advertising).
How much can you earn from bike shop?
Earnings in the bicycle trade business will directly depend on the level of competition, pricing policy, customer service, availability of goods in stock, and more. It is also difficult to estimate due to the fact that the bike shop is very seasonal and the earnings received during the season must be broken down into a whole year to get the average value per month.
The average markup on bicycles is 10% – 30%.
Margin for spare parts and components – 50% – 70%.
On accessories – up to 120%.
Also, if you decide to start repairing, you need to take into account the income from the work of the service center. For its operation, you can not rent a huge room, but even work in your own garage.
Conclusions. The bike shop business is a very challenging niche that requires a lot of investment and is very seasonal. It will be difficult for beginners to start from this very direction, but with a great desire and interest in this topic, you can try.
Do you want to supplement the information provided? We are waiting for comments.