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

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.

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.

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

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.

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

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

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

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)

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