Top 5 Immediate Goals for your Business
We need to look at the top 5 immediate goals for your business during this pandemic. Lots of learning has taken place, and many perceptions have been changed. From the prospect of being shut down to becoming essential to realizing incredible sell-through, we as an industry are seeing trends. The biggest is that people are buying entry to mid-level new bikes and repairing older ones at a furious clip. After a few conversations with front line retailers, and some suppliers, here are five things gleaned from what I have heard:
1. Take the inventory you can if your suppliers are short. It is very crucial right now to have bikes on the backorder. If you need bikes now, you have to be willing to take what’s leftover; perhaps in off colors and models, you would have never considered before. Shops are reporting sales being very straightforward, with very little analysis paralysis happening.
2. Shop around to find repair parts for older bikes that allow you to make significant margins. If you usually stocked a slightly more premium tire line, look into more basic brands and models to leverage your margin potential. I am not saying you should be overpricing items, but some things should be viewed as opportunities.
3. Get your repair backlog under control, if possible. This situation probably means you need to find another mechanic if you can. Some retailers are reportedly having a tough time with staffing, as some employees are sitting on the sidelines. Many of these dusty just-off-the-wall-in-the-garage bikes do not require an ace mechanic if they need new tires and a more comfortable seat. We used to call “pump & polish” repairs affectionately are not highly involved repairs, and a person with some necessary mechanical skills could help you get those types of repairs turned around.
4. Reconsider how you sell accessories. Good retailers used to use the bike as the beginning of the sale and would add dollars and margin with better margin accessories. Depending on how the retailer operates, this has become much harder if running under a curbside locked-door scenario. If this is how your business is working, you may want to consider bundling an accessory package or something along those lines to maximize your margins and adequately take care of your customers with the most needed accessories.
5. Next-level bikes are becoming entry-level. Entry-level price points seem to be climbing a bit as bikes sell-through, and shops buy whatever they can get their hands on. It is also reportedly much more comfortable to sell as the selection is limited. Who knows what the ceiling is, but the retailers I spoke to are finding that what were $500 sales can pretty quickly be moved up a price point if that’s all that is available, so don’t neglect to give those next level bikes a shot if there is inventory.
One thing seems inevitable for the near term, and that is that inventory levels are going to be slim, mainly if you are used to just ordering as you go. You need to do some essential forecasting now and get bikes on backorder along with trying to secure the labor you need to operate as efficiently as possible. Things are beginning to loosen up a little bit in certain areas, and we are all beginning to realize that we have to keep moving ahead – the virus is, unfortunately, going to be with us for some time. Do your absolute best to keep mitigating risk while also continuing to operate as efficiently as possible and being ever mindful of the additional hurdles severe inventory shortages may have on your business. Keep asking employees to return who may be sitting on the sidelines, and if they are unable to answer, then consider seeking out replacements. Please also be aware of the stresses and burdens you continue to carry and be mindful of those issues and try to alleviate as many as you can. Be well, and keep charging forward!
Words by David DeKeyser
David DeKeyser and his wife Rebecca Cleveland owned and operated The Bike Hub in De Pere, Wisconsin, for nearly 18 years. In 2018, they sold the business and real estate to another retailer based in a nearby community. David now writes the Positive Spin series on Bicycle Retailer and Industry News and he writes articles for the NBDA’s blog, Outspokin’. David also provides business consulting through the NBDA’s P2 Consult Program.
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