On Tuesday, April 13, 2021 at 10:00:05 AM UTC-7, Mark J. wrote:
On 4/12/2021 12:58 PM, sms wrote:
On 4/12/2021 11:22 AM, Mark J. wrote:

snip

My understanding 40 years ago was that selling *bikes* was not really
a profitable undertaking for *bike shops*, that the profit really came
from parts, accessories, and service. The markup just wasn't that
high on *bikes*. This may have changed in the intervening years.

The margin on new bikes, sold at MSRP, is 25-35%, for Trek. Trek cut the
margins to shops for online sales.

There are considerable costs to the shop for assembly. Parts and
accessories typically have "Keystone" margins or better, Keystone is
100% markup over wholesale.

In an area with high costs for leasing space, and high wages, you have
to sell a lot of high-value bicycles and a lot of parts and accessories
to be able to make it. You're not going to survive selling mainly
$300-500 entry level bikes at 25-35% margins. On a $3000 bike, even at
only 25% margin, you're doing pretty well, but those aren't the majority
of sales.
Yeah, the figures I remember from "back in the day" was that 70% of the
MSRP was the wholesale price to the dealer.

I think that all of the retail bicycle dealers with a very few exceptions are barely keeping the doors open. We have one exception around here that has been in business for a long time. He has been selling a LOT of medium price Specialized bikes and off-brand kids first bikes. He seems to have found the formula.