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Now that I work at a bike store I know the real prices(36 posts)

Now that I work at a bike store I know the real pricesishmael
Sep 20, 2002 5:49 AM
Almost everything sold is "keystoned", I'd never heard the expression before but it's in other businesses also. It just means doubled, so a customer generally pays double what the store pays on 90percent of whats sold. Nice complete bikes and other high-end stuff is the other 10percent, often it only gets marked up 50percent because it's so expensive to begin with.
re: Now that I work at a bike store I know the real pricesrbb
Sep 20, 2002 6:06 AM
I worked in a shop for @6years and still am very close friends with the owner/staff. I believe that the usual markup is @30-35%.
Take care

So do you get paid?Spoke Wrench
Sep 20, 2002 6:09 AM
Where do you think the money to pay you comes from? The more convenient the location, the higher the rent. Skylights or electric lights? What about the jerseys that get soiled or just old and the computers that get stolen and the wierd parts that somebody special orders but doesn't pick up and the last years closeout bike that somebody gets for a real good deal? All of that stuff has to be paid for at the full wholesale price whether or not it ever gets sold.

I'm betting that your boss is not a wealthy man.
Sep 20, 2002 6:47 AM
did Mr Ishmael imply anything do the contrary?

Personally, I found his post enlightening. I never knew.
welcome to the clubDark Sonix
Sep 20, 2002 6:11 AM
i worked in a shop a couple of years back. be sure take advantage of pro-deals (direct orders by shop employess to a company the shop does business with, usually at wholesale prices) and other discounts while they last. some clothing and components companies offer shop employess 10-15% under wholesale! get while the gettin' is good.
welcome to the clubjtkirk15
Sep 20, 2002 6:16 AM
Why the funny print funny boy?
funny printSteve_0
Sep 20, 2002 6:58 AM
If you start you post with a lower case "i", you get the funnyprint.

Dont know why, but it broke me of a bad habit.
funny printjtkirk15
Sep 20, 2002 8:02 AM
Strange. Thanks for the tip.
At retail material cost is only perhaps 35% of the actual costMB1
Sep 20, 2002 6:12 AM
of running the business.

It is called overhead. Rent, utilities, salaries, shrinkage (aka-theft) cost of borrowing the money to keep the business going daily and on and on and on.

Good retail businesses often mark up double or triple keystone and still have problems operating at a profit.
it's amazing any of them make itDougSloan
Sep 20, 2002 6:31 AM
These guys are not making lots of money. Don't forget liability insurance, workers' comp insurance, health insurance (maybe), employment taxes, business franchise taxes, income taxes, social security taxes, business licenses, security, bookkeeping, legal fees, benefits (if any), all those tools; I don't know how they do it.

Sep 20, 2002 6:52 AM
I worked in a shop, chain store actually, so they didn't have alot of the problems that a independent owner would have, and I've known 2 managers of small, ind. shops. One said his goal was always to cover operating costs with repairs and mark-up on goods to be his profits. So I would think repairs make a sign. portion of a shops income.

For anyone who is short on cash, but has a heavy cycling jones, there is no more wise investment you can make than getting a part-time job in a shop.
leave your firm and put on some overallsishmael
Sep 20, 2002 7:02 AM
Dont expect to make too much cash. I think the majority of people on this board are making a lot more than a mechanic. I also think that the majority of this board has enough trouble oiling their chain. Not that I know too much myself but from what I've seen most people feel safer leaving everything to a shop, both fitting and repairs. It's a dangerous mentality
most of them don'tgtx
Sep 20, 2002 6:59 AM
and I've noticed that, on the West Coast anyway, the shops that survive are the shops where the owners OWN the building they're in. Of the six shops I worked at in the 80-90s, only one is still in business--and they own the building.
I was gonna say...MXL02
Sep 20, 2002 7:33 AM
I know lots of bike store guys...none are rich, most are just kind of getting by. Most do it cause they love it. Internet sales are making it more difficult everyday. It's funny because some things are heavily discounted while other things are
i very
retail. Case in point - one of my lbs's sell sella italia saddles for $100 when every internet site is selling them for $70-$80...yet they have Speedplay x-2s for $149. Go figure. I try to support them for some of items but sometimes it's just easier and more economical to order over the net.
I'm not saying anyone is taking advantageishmael
Sep 20, 2002 6:49 AM
but according to what I've learned 90percent of the merchandise is at double the wholesale cost. For all special orders I permit someone to look through our book without prices and I hold onto another book with the prices at the cost for the store. Whatever they want I double the cost I see in my book for the item. Maybe some stores are cheaper. I doubt my boss could be concidered wealthy by some standards, but by my standard, anyone with 14 bikes and a child, wife and house is doing damn well. Better than me.
It was pretty much the same...Wayne
Sep 20, 2002 6:56 AM
at the store I worked in. Doubling the price was standard on components, clothing, etc. Not until you got up to exp. wheels and bikes did the mark-up % start to decline, and basically the more expensive the item the less the mark-up %. So is it a cool shop, will you be able to get stuff at cost and EP stuff? Once you get hooked into that line of purchasing it becomes very hard to pay retail ever again!
It was pretty much the same...ishmael
Sep 20, 2002 7:09 AM
I wont be buying anything in the future except speedplay cleats, tires, and maybe a nice high output light for winter night riding(it might be my new thing,less traffic and I like the cold). I'm already in huge debt to everyone and I'm even in debt to the bike store after my first day(rode to work and forgot to pack sneakers and my cc is maxed out so boss loaned me 100 to buy shoes). But the boss and others are realy nice so everything is alright. Hopefully they will take me, I'm being assesed at the moment and it seems I'm competeing with two others, but it's looking good.
So, ishmael, what the hell was the reasoning......gogene
Sep 20, 2002 7:49 AM
....for your original post regarding the LBS markups? It seems completely contrary to your reasons for wanting to be accepted at that store. The boss loans you money, treats you well and you crap on him like this?!?!?! You don't deserve the job! When you work for a company like you described, you owe your loyalty to that company! The owner has his ass and money on the line in that store and you have nothing. He pays the rent, signs your check, pays the electricity, buys the shop tools, pays Federal, state, county and city taxes, and more. You want the job and he has to stay in business. Don't snivel about bicycle shop markups until you see the real world of retail. How about shoes? 400% markup! Furniture, 400% and more! So what? There is markup on everything you buy! That is one of the things that makes our world go 'round. It's called Capitalism. Frankly with the attitude, and in my opinion disloyalty, you have displayed here, I hope you don't get the job. You don't deserve it.
So where did he 'crap' on the owner?Steve_0
Sep 20, 2002 8:10 AM
I saw nothing negative in his original post.
I saw no disloyalty to his company.
I saw no sniveling.

All I saw was someone passing along interesting information; You imply yourself markup is common knowledge; so why get on his case?
Say what?RickC5
Sep 20, 2002 8:22 AM
I agree with Steve_O. What's up with the rant?
I agree with the rant..TJeanloz
Sep 20, 2002 1:31 PM
Markups and margin are considered by retail managers to be the most top-secret information around. Telling anybody your margins is a definite no-no. When I worked at the shop, I never told what the markup was on things to anybody; but I did post them here when I left my job, and I'll give a little more detail about how things are priced:

1. Dura-Ace and Record: 1.5x wholsale (50% markup)
2. Ultegra and Chorus: 1.65x
3. 105 and Daytona: 1.75x
4. Tiagra and Veloce: 1.95
5. Components below that: 2x

Other 'components' are priced roughly according to the above schedule; so an Easton EC90 (ie top-of-the-line handlebar) would be at Dura-Ace level, while an ITM Pro260 would fall around 105 and Daytona.

All 'soft' goods: clothing, miscellaneous accessories, were at least keystoned (2x). Tubes are where the real money is at- if you buy them in volume, a road tube should cost no more than $0.80, and we generally charged ~$3.50 for them. And they took up no space on the floor- a retailers dream product.
I'm not saying anyone is taking advantagerbb
Sep 20, 2002 6:57 AM
So, that would the good 'ole Quality Bicycle parts book! I love going to the shop and perusing all the possibilities!!!

check this for some perspective...hirevR
Sep 20, 2002 8:38 AM
trek 5900 w/full DA wholesale-2100/retail-41-4900 (depending where).

rudy lenses wholesale-21/retail-39-60 (depending where).

ishmael sspeaks truth.
so tell me this, bike shop guys ...tarwheel
Sep 20, 2002 8:51 AM
My bike shop has been giving me the cold shoulder ever since I bought a new bike last year by mail order. I have bought 3 bikes from them in the past and spent lots of money on repairs, maintenance, parts, etc. If they only make 10% on new bikes, why should they be bothered if I buy a new bike elsewhere -- particularly when I still use them for service? I've since started using another bike shop because I didn't appreciate the attitude. I didn't buy my new bike from them because all they sell any more are aluminum frame bikes and I wanted steel. The only way I could have bought what I wanted from them was to special order a frame and group, for probably $500 more than I ended up spending.
There's a LBS here with a sign posted on the door:scottfree
Sep 20, 2002 9:14 AM
"We only repair or service bikes we sell."

Now, I SUPPOSE they keep their wrenches busy and make money with that policy, but I have to wonder. Damndest thing I ever saw.
That's got to be the most stupid business practice...Wayne
Sep 20, 2002 10:06 AM
going on in the U.S.
Talk about cutting your nose off to spite your face!
I assume that reference is to department store bikes.Spoke Wrench
Sep 20, 2002 12:44 PM
Repairing department store bikes is tough business. Anything you do to one takes longer than the same job on a quality bike. The customer's tend to be real sensitive about price because they only paid $80.00 for the whole bike. Some parts, like brakes, won't stay adjusted so that sometimes generates ill will with the customer.
The deal is .....african
Sep 20, 2002 9:16 AM
The market has changed with the internet. I go to a LBS and ask for gel, reply "er we don't have that anymore as everyone seems to get it mail order". VAARK sink or swim dude. This store is dead all the time, yet I go to an internet based bike store and the guy can't talk to me he is so busy and his staff of 4 are running around freaking busy.
Making a small fortuneStraightblock
Sep 20, 2002 9:43 AM
Step 1-Start with a large fortune

Step 2-Open a bike shop
Making a small fortuneJon Billheimer
Sep 20, 2002 9:59 AM
The markups in bike shops are no different than retail anywhere else. And yes, making a living in "small retail" is a really tough go. However, I have noticed really unprofessional attitudes, combined with unprofessional salesmanship and poor service, in some if not a lot of bike shops. On the other hand there are some really excellent shops around too, such as the one I'm lucky enough to deal with on a regular basis. My LBS guys know their products inside out, bust their ass to provide top notch service, and on top of that are just plain, regular good folks. So it's like anything else, caveat emptor.
Making a small fortunelookin for help
Sep 20, 2002 10:13 AM
For most of us the LBS is pretty critical. I can do some work on my bike but when it boils down to some jobs I'd rather leave it to the guy who has done several. I bought my MTN bike through a local LBS. We established a pretty good relationship. He worked with me 'till I picked out what was best for me. Next time around I was looking for a frame he actually went out of his way to pick up something he thought would work for me. It ended up being a better deal than anything I had come across on the internet and so I took it and he probably made a little on it. Now I have to build a whole new bike. Some of the parts I am sure I will get from him some online but he will end up getting some revenue out of it. I say support them the best you can. If they are good they will understand that at times there are better deals other places. As a result... I walked in the other day needing a wheel trued.. he did it on the spot no charge. took him a couple minutes while we talked about expanding the local trail systems. LBS's are great place to hang out and meet folks... i would be upset if hewere gone!
You're a lucky man, Mr. LookinRickC5
Sep 20, 2002 10:30 AM
I would LOVE to have such an LBS anywhere near me. I have to drive over 45 minutes to get to the only LBS in the area that I have any respect for. Unfortunately, I get there so seldom that I can't establish relationships with the staff. However, I always buy something when I do stop in.
Sounds like Caster's, in Warwick RI. This shop...RhodyRider
Sep 20, 2002 12:08 PM full of great guys, helpful, experienced, never pushy or attitudinal, etc. Want to bring in a frame & components bought on the net for a build-up? No problem, you'll get fast, courteous, professional service. At competitive rates. I highly recommend this shop to anyone in the area.
i've been to caster's a couple timesrufus
Sep 20, 2002 4:34 PM
when i've been in providence, i make it a point to visit caster's. was there one time in early spring when they had one of those "supersales" going, place was mobbed, big tent out front with probably a hundred bikes under it, people taking test rides, quite the sight for a bike shop. more shops should be like that.
Online vs. Retailfbg111
Sep 20, 2002 11:13 AM
Imho, I consider the retail markup to be the cost of convenience and instant gratification. If I need a can of Simple Green, or another CO2 cartridge, or bar tape, and it's not something I can wait a week for, then I buy it retail. I buy online when I can wait, and cost+shipping is significantly less than the retail cost, or if none of the lbs's have what I want. This goes for everything, not just biking stuff.
what happened to "support your LBS"??????stik__boy
Sep 20, 2002 4:10 PM
funny how everyone is so into supporting local businesses until that includes actually forking out some extra cash vs. an internet price. these guys dont buy 100,000 worth of bikes from brand x per year, so how could they compete price wise with someone that does? a couple posts mentioned over-head, employees, what about shop owners..... do you think they live at the stores???? (some may...) this goes for all local businesses..... if you like them there, you better buy there......