Used Bicycle Market

Hello everyone,

I am new to this group. There seems to be a great deal of knowledgable people in this group. For a
project in the business college, a group and I are writing a business plan. We are thinking about
creating a bicycle shop that has a buy, sell, trade option for customers. Is there a used bicycle
market? This town is very bicycle friendly, and I think this would be a successful business venture,
what do you think?

In article <76314424.0402271538.7ee97e9d@posting.google.com>,
CS112_smb29 <smb29@dana.ucc.nau.edu> wrote:
>
>I am new to this group. There seems to be a great deal of knowledgable people in this group. For
>a project in the business college, a group and I are writing a business plan. We are thinking
>about creating a bicycle shop that has a buy, sell, trade option for customers. Is there a used
>bicycle market?

Used bikes get bought and sold all the time, but not usually in bike shops.

> This town is very bicycle friendly, and I think this would be a successful business venture, what
> do you think?

I think you'd lose money. Of course if you're playing the odds, any bike shop is a losing bet since
most of them fail and margins are poor whether the bikes are new or used.

I know a few successfully shops that started out taking trade-ins, but none of them kept doing it.
It eats a lot of your time and makes sales transactions more complicated, bikes you buy or sell may
be damaged in ways you can't cheaply detect, you may find yourself receiving stolen property, you
may find yourself the subject of rumors about stolen bikes, and you may find it impractical to
delegate bike buying to employees. Some customers won't be customers when they are offended by low
offers for their used bike, even if their ideas about its value are grossly inflated.

If you fail to discover a flaw in a used bike when you receive it, then you eat the repairs before
you can get rid of it (or perhaps it goes into the dumpster). If you sell a used bike with a serious
hidden flaw, then you can either repair/replace it out of your pocket or tell the customer it was
"as is" (better call them an "ex-customer" in that case). Plus you're competing against the
classifieds which is probably a bad idea.

If you haven't already, I suggest you visit http://www.nbda.com/ and maybe contact them to pump for
information.

--Paul

CS112_smb29 wrote:
> Hello everyone,
>
> I am new to this group. There seems to be a great deal of knowledgable people in this group. For a
> project in the business college, a group and I are writing a business plan. We are thinking about
> creating a bicycle shop that has a buy, sell, trade option for customers. Is there a used bicycle
> market? This town is very bicycle friendly, and I think this would be a successful business
> venture, what do you think?

You might want to put in a call to the Pedal Pushing Bicycle Shop in San Diego, CA. It is a 100%
used bike shop. 619.583.2043. Ask for David.

jim

"CS112_smb29" <smb29@dana.ucc.nau.edu> wrote in message
news:76314424.0402271538.7ee97e9d@posting.google.com...
> Hello everyone,
>
> I am new to this group. There seems to be a great deal of knowledgable people in this group. For a
> project in the business college, a group and I are writing a business plan. We are thinking about
> creating a bicycle shop that has a buy, sell, trade option for customers. Is there a used bicycle
> market? This town is very bicycle friendly, and I think this would be a successful business
> venture, what do you think?

Bicycles are the most commonly stolen item in the USA. Therefore a shop dealing in used bicycles is
in a constant threat of being caught with stolen property. That's why most shops are extremely
reserved when accepting any used bike.

Moreover bicycles are, generally speaking, not worth a great deal used. These days if a bike is more
than two years old the components are dated. Very expensive bikes lose value so rapidly that I
recently bought what new would have cost $4K but I paid about $1K for a four year old bike.

So, you could probably make a plan to make a modest living from a bicycle shop as you envision, but
you certainly would make more money by selling only high end bicycles and equipment to the present
day 40+ set.

Consignment might work, if the fee was at least 20% and sellers would accept a progressive markdown
scheme (part of the contract). There would also have to be a penalty if the bike is reclaimed before
it was sold.

Plus a really good service department, and maybe a gimmick to derive decent cash flow - coffee shop
or something.

I think it's doable. Other people's failures are exactly that: theirs. Make sure you don't
copy them.

JimLane wrote:

> You might want to put in a call to the Pedal Pushing Bicycle Shop in San Diego, CA. It is a 100%
> used bike shop. 619.583.2043. Ask for David.

I'm sure someone is doing it!

This might work for high end bikes in a wealthy area -- where there are both plenty of sellers of
pristine, high end bikes, and plenty of buyers for them. You could differentiate yourself from eBay
by offering less risk, plus fitting and service.

It probably wouldn't work otherwise because of the problems already mentioned. Lower end used
product would be twice the work and many times the risk of new stuff, with smaller margins, and a
fraction of the profit. Plus, at the lower end, there's no reason for anyone to buy a used bike,
unless it's a really good one -- brand new bikes are $100 at Wal-Mart these days.

One of our local shops sells used bikes, but I still don't think they're the mainstay of his
business. See www.hokiespokes.com

Matt O.

Matt O'Toole wrote:
> JimLane wrote:
>
>
>>You might want to put in a call to the Pedal Pushing Bicycle Shop in San Diego, CA. It is a 100%
>>used bike shop. 619.583.2043. Ask for David.
>
>
> I'm sure someone is doing it!
>
> This might work for high end bikes in a wealthy area -- where there are both plenty of sellers of
> pristine, high end bikes, and plenty of buyers for them. You could differentiate yourself from
> eBay by offering less risk, plus fitting and service.
>
> It probably wouldn't work otherwise because of the problems already mentioned. Lower end used
> product would be twice the work and many times the risk of new stuff, with smaller margins, and a
> fraction of the profit. Plus, at the lower end, there's no reason for anyone to buy a used bike,
> unless it's a really good one -- brand new bikes are $100 at Wal-Mart these days.
>
> One of our local shops sells used bikes, but I still don't think they're the mainstay of his
> business. See www.hokiespokes.com
>
> Matt O.
>
>

Wrong on all accounts as far as PPBS is concerned. Mostly used low-end bikes (a few goodies here and
there) in a low mid-economic neighborhood.

There are two extremes for making money. One bike at a very, very, very high margin and lotsa bikes
at low margin (call it the WalMart approach).

jim

"CS112_smb29" <smb29@dana.ucc.nau.edu wrote:
>We are thinking about creating a bicycle shop that has a buy, sell, trade option for customers. Is
>there a used bicycle market? This town is very bicycle friendly, and I think this would be a
>successful business venture, what do you think?

I think there is a market for that sort of used bike shop. When we were shopping in the $100 dollar
range for a BMX bike for my G/F's little sister we hit the discount stores first. Complete crap and
not that cheap. Next we hit a few pawn shops. Better bikes, but with some serious flaws that made
them unsafe/unridable without sinking some money into refurbishing brakes/bearings. In spite of
these obvious flaws the completely unknowledgeable sales staff would not negotiate on price. Again,
complete crap and not that cheap. Next we went to our favorite LBS, which got it's start doing the
used bike thing, but segued into a pretty standard LBS with the usual major brand, only with less
snob attitude, a clear vibe that -any- bike that gets ridden is a cool bike, and a willingness to
put odd things together to give the customer something that will work for their unique needs. (They
were amazing at putting together a small MTB with drop bars, bar end shifters and rigid fork for my
G/F who couldn't find a entry level touring bike for her very low stand-over height.) They had a
real bike or two but the deal wasn't that great. Quality merchandise, very limited selection, not
that cheap. Our final attempt was a bike shop in the campus area that strictly dealt in used and
typically funky old one speed cruiser style bikes. The selection wasn't exactly vast, but they had a
well used, but still very usable, mid-range BMX bike with a chrome frame, straight alloy wheels, and
fully functional brakes/bearings within our $100 limit. The kid loves her new bike after over a
year, regularly smokes the other kids on their discount store death traps, and constantly fends off
offers from other kids to buy or trade for her bike. Whenever someone asks about buying a bike for
basic beater transportation or kids I send them there. Another used bike shop has opened on the
other side of town recently so there may even be enough demand to support two such shops in Austin.

smb29@dana.ucc.nau.edu (CS112_smb29) wrote in message news:<76314424.0402271538.7ee97e9d@posting.google.com>...
> Hello everyone,
>
> I am new to this group. There seems to be a great deal of knowledgable people in this group. For a
> project in the business college, a group and I are writing a business plan. We are thinking about
> creating a bicycle shop that has a buy, sell, trade option for customers. Is there a used bicycle
> market? This town is very bicycle friendly, and I think this would be a successful business
> venture, what do you think?

A couple successful shops in this area sell used bikes: Citybikes Co-op and Community Cycling Center
(both in Portland, Oregon). You might want to call them and chat about their business models-
they're definitely not "conventional" businesses.

Jeff