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LBS reasonable markup
I'm all in favor of supporting local bike shops (LBS) but what do
people consider a fair markup? Last year I needed some Look-type bike cleats. I went to a bike shop, and, while they didn't have any in stock, the owner just happened to be on the phone to the supplier and he added it to their order. When they came in, the store wanted $27 for them--that seemed expensive but not knowing better and since they were ordered explicitly for me, I bought them. Later I saw that Performance was selling Look cleats (not clones) for half that price. Last month, I needed another pair and I went to a different bike shop. Again they didn't have them in stock, but they looked it up in the catalog. The catalog price was $13 and they said they could sell it to me for $21. This time I declined. So what to people consider a reasonable markup? My first example I feel is clearly too high. The second one seems to high but by how much? Keith |
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LBS reasonable markup
Keith Vetter wrote:
I'm all in favor of supporting local bike shops (LBS) but what do people consider a fair markup? Last year I needed some Look-type bike cleats. I went to a bike shop, and, while they didn't have any in stock, the owner just happened to be on the phone to the supplier and he added it to their order. When they came in, the store wanted $27 for them--that seemed expensive but not knowing better and since they were ordered explicitly for me, I bought them. Later I saw that Performance was selling Look cleats (not clones) for half that price. Last month, I needed another pair and I went to a different bike shop. Again they didn't have them in stock, but they looked it up in the catalog. The catalog price was $13 and they said they could sell it to me for $21. This time I declined. So what to people consider a reasonable markup? My first example I feel is clearly too high. The second one seems to high but by how much? Keith A sucessful shop owner once told me "if no one complains about the price then you're not charging enough". As a customer you don't want to hear that (I was a little stunned when I heard it), but the guy ran a great shop. |
#3
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LBS reasonable markup
Retail more or less doubles the price, which they need to succeed by the
way. You walk in and expect them to stock what you need, but a lot of stuff nobody walks in for. On the other hand most retail businesses fail, so they have to guess right what there's a need and a market for. I abandoned LBSs not for the price so much as that they stopped carrying a decent inventory. -- Ron Hardin On the internet, nobody knows you're a jerk. |
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LBS reasonable markup
Keith Vetter wrote:
Last year I needed some Look-type bike cleats. I went to a bike shop, and, while they didn't have any in stock, the owner just happened to be on the phone to the supplier and he added it to their order. When they came in, the store wanted $27 for them--that seemed expensive but not knowing better and since they were ordered explicitly for me, I bought them. Wow! I almost choked when a local shop wanted $16 for them a couple of years ago. Then I found out all the shops charged that. But $27 is highway robbery for two pieces of plastic. Find a good online source and buy several pair. Last month, I needed another pair and I went to a different bike shop. Again they didn't have them in stock, but they looked it up in the catalog. The catalog price was $13 and they said they could sell it to me for $21. Yikes! First, why is it that these shops don't carry such a common item? And how do they justify such a huge markup? Art Harris |
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LBS reasonable markup
Harris wrote:
Keith Vetter wrote: Last year I needed some Look-type bike cleats. I went to a bike shop, and, while they didn't have any in stock, the owner just happened to be on the phone to the supplier and he added it to their order. When they came in, the store wanted $27 for them--that seemed expensive but not knowing better and since they were ordered explicitly for me, I bought them. Wow! I almost choked when a local shop wanted $16 for them a couple of years ago. Then I found out all the shops charged that. But $27 is highway robbery for two pieces of plastic. Find a good online source and buy several pair. Last month, I needed another pair and I went to a different bike shop. Again they didn't have them in stock, but they looked it up in the catalog. The catalog price was $13 and they said they could sell it to me for $21. Yikes! First, why is it that these shops don't carry such a common item? And how do they justify such a huge markup? I have a couple of extra pair somewhere that came with shoes. Maybe I should put them on eBay, with a healthy reserve! Matt O. |
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LBS reasonable markup
Keith Vetter wrote:
Last month, I needed another pair and I went to a different bike shop. Again they didn't have them in stock, but they looked it up in the catalog. The catalog price was $13 and they said they could sell it to me for $21. This time I declined. I don't know what catalog they looked in, but that sounds like a pretty high wholesale price for Taiwanese Look cleats. Even gen-u-wine Looks don't cost that much. Still, for small parts, a keystone margin (50%) is pretty common in retail. Todd Kuzma Heron Bicycles Tullio's Big Dog Cyclery LaSalle, Il 815-223-1776 http://www.heronbicycles.com http://www.tullios.com |
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LBS reasonable markup
Harris wrote:
Yikes! First, why is it that these shops don't carry such a common item? And how do they justify such a huge markup? We stock them, but they really aren't a very common item. Remember that roadies represent a very small part of the overall bicycle market. Bike shops make their money selling $350 comfort bikes. The volume is all in the family market, not the enthusiast market. We are not a big shop, but we do a fair amount of road stuff because we own Heron. We sell 3-4 pairs of Look replacement cleats a year. Also, if the shop is charging $21 for an item that they buy for $13, that is not a huge mark-up. Actually, that's a fairly small mark-up for that type of item. Todd Kuzma Heron Bicycles Tullio's Big Dog Cyclery LaSalle, Il 815-223-1776 http://www.heronbicycles.com http://www.tullios.com |
#8
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LBS reasonable markup
On Fri, 11 Jun 2004 17:44:41 GMT, Ron Hardin
wrote: Retail more or less doubles the price, which they need to succeed by the way. You walk in and expect them to stock what you need, but a lot of stuff nobody walks in for. In this case, the OP did not expect them to stock what he needed, or even if he did, they failed to do so. At that point, what's the difference if the bike shop orders it or he orders it from Performance? -- Rick Onanian |
#9
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LBS reasonable markup
My first example
I feel is clearly too high. The second one seems to high but by how much? A guy on ebay was selling them 10/pair shipped from England. For things like this buy a couple sets to last a year at nashbar etc. Cheaper than being ripped by a shop. Markups vary from industry to industry- autos are 5 to 10% markup while clothing can have a 100% markup(yes the Gap still makes money when you buy a shirt on sale for 9.99) |
#10
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LBS reasonable markup
kantspel wrote:
A sucessful shop owner once told me "if no one complains about the price then you're not charging enough". As a customer you don't want to hear that (I was a little stunned when I heard it), but the guy ran a great shop. That's a great way to look at it! And if enough customers don't like it, they will seek alternatives. The shop will then lower prices, find ways to cut costs, or go out of business. That's the system! I'm new to this group, but recently kicked off a flame-a-thon in alt.mountain-bike for posting letter to an LBS where I complained about a mickey mouse charge and crappy customer service. You'd think I'd insulted the Pope while visiting Rome! Ironically, I support both sides on this one. Shops should charge as much as they think they can get away with, and customers shouldn't let 'em get away with it! That's why competition -- in bike parts, airlines, or breakfast cereal -- is good. If forces innovation and gives buyers options. Tom |
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