tag:blogger.com,1999:blog-13887692.post4384364534830800345..comments2024-03-13T02:16:08.135-04:00Comments on Cozy Beehive: The Story of Bike NashbarRon Georgehttp://www.blogger.com/profile/18394865788996482667noreply@blogger.comBlogger33125tag:blogger.com,1999:blog-13887692.post-43722496881703812482014-06-15T14:02:34.317-04:002014-06-15T14:02:34.317-04:00Had a friend who bought a brand new road bike (nor...Had a friend who bought a brand new road bike (north of $1000) at Performance and the maintenance club plan, or whatever it's called. Before the bike left the store, I watched the "mechanic" flip it over and rest the shiny new hoods on a rough concrete floor to adjust the gears. I was aghast and advised my buddy to walk out. <br /><br />The bike had to be looked over by the head mechanic, so we left it there. He picked it up a few days later, and on the first ride, the seat slipped down. Stop, raise, tighten, resume ride. Then going down a descent on city streets, the handlebars fell, all the way down. I told my friend he should return the bike AND the maintenance club plan, and report the head mechanic. No bike shop should have had that bike go out the front door. So what did he do? Bought 2 more bikes there, and seeks the advice of the head "mechanic." Pennywise and pound foolish, if you ask me. Robert Settehttps://www.blogger.com/profile/06579317555861490019noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-91553546557048241952013-06-15T08:34:50.540-04:002013-06-15T08:34:50.540-04:00Nice article. Been wondering about Nashbar for a ...Nice article. Been wondering about Nashbar for a long time. They just entered the 27.5 Mountain bike market. I am tempted to buy it but their just I am just not sure if I trust buying a bike online.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-79408251916696995102012-09-08T14:43:04.698-04:002012-09-08T14:43:04.698-04:00I sent Garry a note. Their webstore is broken (ag...I sent Garry a note. Their webstore is broken (again) and no one is at Nashbar on the weekend. Sometimes I wonder how some companies stay in business.Arne Boberghttps://www.blogger.com/profile/00838651351437610235noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-40423572888010638402012-09-08T14:26:58.580-04:002012-09-08T14:26:58.580-04:00Recently, a woman at Bike Nashbar denied they were...Recently, a woman at Bike Nashbar denied they were ever named Bike Warehouse. I recall clearly the day they changed their name (it was as plain as the mail-order catalog I got from), and discussing it with my cousin, who thought the new name sounded dumb. Arne Boberghttps://www.blogger.com/profile/00838651351437610235noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-9547611401356839802012-09-08T14:22:30.141-04:002012-09-08T14:22:30.141-04:00Nashbar's shopping cart is broken - again. An...Nashbar's shopping cart is broken - again. And they are closed on Saturdays. Nashbar should maybe just do mail order. I look forward to going to my LBS today. Arne Boberghttps://www.blogger.com/profile/00838651351437610235noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-88950118583791365512012-06-02T10:01:13.404-04:002012-06-02T10:01:13.404-04:00I'm old. I used to get the Bike Warehouse cat...I'm old. I used to get the Bike Warehouse catalogs back in the 70's. Then suddenly they started arriving with the logo Bike Nashbar on them. So.... yeah. The dude clearly bought out Bike Warehouse.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-56671805771153361062009-12-24T14:55:23.856-05:002009-12-24T14:55:23.856-05:00As to the comment about them SPAMing cutomers... I...As to the comment about them SPAMing cutomers... I have PROOF. I use boutique email addresses for every vendor I deal with. It is NASHBAR@mydomain.net that comes back from MULTIPLE sources other than NASHBAR!!! On in particular is Outsider Mag. That bugs the hell out of me when my address is SOLD !!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-21473632095021508232009-12-24T14:54:51.389-05:002009-12-24T14:54:51.389-05:00As to the comment about them SPAMing cutomers... I...As to the comment about them SPAMing cutomers... I have PROOF. I use boutique email addresses for every vendor I deal with. It is NASHBAR@mydomain.net that comes back from MULTIPLE sources other than NASHBAR!!! On in particular is Outsider Mag. That bugs the hell out of me when my address is SOLD !!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-35226208259620127582009-07-28T14:21:03.679-04:002009-07-28T14:21:03.679-04:00They spam their customers and -- adding insult to ...They spam their customers and -- adding insult to injury -- compromise customers' personal data.<br /><br />Founder of Nashbar - Garry Snook: gsnook@performanceinc.com <br /><br />Other addresses:<br /><br />custserv@nashbar.com,<br />productsupport@nashbar.com,<br />webmaster@nashbar.com,<br />technical@nashbar.com,<br />affiliates@nashbar.comAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-7635171358861548562009-01-08T14:23:00.000-05:002009-01-08T14:23:00.000-05:00The margins in the bike business are rather tight....The margins in the bike business are rather tight.<BR/>Walmart works on a 28% net margin.<BR/>We have to remember that the bike it self takes at least 40-45 mins to assemble,adjust and test before selling.<BR/>The floor space it takes is appx 6sq ft. this is expensive. an hour to sell to the customer and a $300.00<BR/>has lost the shop $20 more or less.<BR/><BR/>The business is not exactly as described as to the terms.<BR/>there is not returning of merchandise and some times products arrive very late in the season.<BR/>This is critical in the north.<BR/>Also lately mfgs have started to<BR/>bring out the following year models before the end of the current year.<BR/>This instantaneously discounts the current inventory. They don't give a discount on the remaining inventory to help hold margins.<BR/><BR/>Hopefully you find a shop with concerned trained and helpful personnel that are true professionals. Treat them as they would like to be treated.<BR/><BR/>As to the lower pricing from performance and Nashbar ect.<BR/>Many of the parts are purchased at <BR/>a cost that is for a mfg entity.<BR/>They buy as a mfg would.<BR/>Ford buys spark plugs at a cost much lower that Advanced Auto parts. Now open a store with over purchases ect and your acquisition cost is very low.This shifting of product happens because there is a blurred line between the retail and mfg side of the business.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-84516678911218967332008-08-22T09:00:00.000-04:002008-08-22T09:00:00.000-04:00they have good prices but.... shipping sucks, sp...they have good prices but.... shipping sucks, specially for service out side the 48 continental states, the slowest service ever, plus charges dont go together with the service, in other words too expensive for a slow service to areas served by the usps ofering priority mail service,something is wrong in their shipping department.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-70553903594383988892008-04-24T11:52:00.000-04:002008-04-24T11:52:00.000-04:00If I remember correctly, Supergo came out of Bikec...If I remember correctly, Supergo came out of Bikecology (sp?), a store located on Wilshire Blvd in Santa Monica in the eighties. I used to go there with my dad, and remember when the name changed. I remember drooling over the Cannondale mountain bikes with the roller brakes :)dolanhttps://www.blogger.com/profile/06876154317272720789noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-12412785171368837672008-04-08T01:04:00.000-04:002008-04-08T01:04:00.000-04:00Thanks for the very informative post and discussio...Thanks for the very informative post and discussion. I work in e-commerce, and I am involved in a retail/on-line business in a field unrelated to bicycling. <BR/><BR/>Although I know nothing about the inside workings of the bicycle industry, I suspect that retail will always be retail, and that it is more or less like the industry I am in. <BR/><BR/>Nato remarked, as a bike mechanic, that margins on bicycles, especially the high end ones, are much lower than for clothing and accessories. While true, this is probably misleading. <BR/><BR/>A bike shop wouldn't be bike shop if it didn't have bikes, right? If the industry works anything like other fields, here is what really happens. <BR/><BR/>1. First of all, the manufacturers give a lot of <B>trade credit</B> on the bikes. Those are expensive bikes, but the bike shop owner doesn't pay the invoice immediately. It's quite possible that he can finance his entire inventory on trade credit.<BR/><BR/>2. What does the bike shop advertise when it advertises. Bicycles, of course! Who pays for those advertisements? Probably the manufacturers, through what is called <B>co-op advertising</B>. They may well pay to have a professional advertisement produced, with their own bikes featured, of course. They may be paying much of the cost of placement too, perhaps even to the point where the bike shop makes a profit on its own advertising. <BR/><BR/>3. Is the invoice price really the price that the bike shop pays. Probably not. There are usually a lot of <B>incentive payments</B> in retail. For example, the shop owner may receive an incentive at the end of the season for selling a quota. There are a lot of ways this could work, of course. All retail works this way. <BR/><BR/>4. Large retailers, especially chains, may be paid to display products, allow demonstrations, etc. <BR/><BR/>5. The person who manages all of these promotions, incentives, etc. is the <B>manufacturer's rep</B>. The rep is an independent businessman who probably serves a territory, and gets a percentage of sales, as well as a lot of incentive payments, in exchange for managing the entire process for the manufacturer. If there is a agreement with the shop owner, the Rep manages it, sees that its terms are fulfilled. The Rep helps the shop owner a great deal. He may in effect be taking inventory for the shop, automatically generating the orders for new inventory. <BR/><BR/>6. I don't know what the story is in bicycles, but I expect that shop owners have agreements that allow them to <B>return unsold inventory</B>. If not, they may have agreements that give them big discounts on what doesn't sell by some date, since this is a very seasonal business. <BR/><BR/>7. Furthermore, the manufacturer's rep has a lot of other services he or she provides, like <B>free sales training for employees</B>.<BR/><BR/>Nato, my apologies if I am not fully informed about your field, but I am guessing that it works a lot like mine. Retail is retail. <BR/><BR/>Howard MetzenbergHowardhttps://www.blogger.com/profile/17796348883359360685noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-64792035057902779822008-03-12T17:38:00.000-04:002008-03-12T17:38:00.000-04:00On markups:People are more price sensitive the mor...On markups:<BR/><BR/>People are more price sensitive the more they pay for something, cause they do more research on the subject, and therefore feel they should get the best deal (often meaning lowest price not best overall lifetime value). On the other hand on the little stuff, there is less sensitivity since convienence trumps price. The difference in paying $3 vs $4 for a tube is neglible, even though it is a 33% premium, but adding that same premium to a $2000 bicycle means you're paying an additional $660. that price differential will make you go online to buy that bike and assemble it yourself.<BR/><BR/>To Nato, I bet your girlfriend's restaurant has a $15 appitizer that costs them $3-5 to make, but is a great seller.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-60430587503016562772008-03-07T17:28:00.000-05:002008-03-07T17:28:00.000-05:00Nato, A case in point is the similarity of the bik...Nato, <BR/><BR/>A case in point is the similarity of the bike shop to other businesses. And you highlighted this. Its the small things that can make margins. Interestingly, when I did my college internship in a well to do compressor company, the aftermarket department selling small parts and services made a huge contribution to the total earnings compared to the other sides of the business. They put a lot of emphasis on doing well in this area, hence came the need to motivate employees, getting as much business as possible, moving stuff out the door etc...<BR/><BR/>Even if its the box of small screws, customers keep coming back for them. The potential is great. <BR/><BR/>I hope people reading this understand how a bike shop makes money. Thanks again.Ron Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-78979117432835901412008-03-06T22:19:00.000-05:002008-03-06T22:19:00.000-05:00Oh, another couple things:Bike racers are the most...Oh, another couple things:<BR/>Bike racers are the most finicky, fickle, pain-in-the-ass customers there are. They want the best deal and have little shop loyalty. I say that both as a mechanic and a racer. They buy very high end bikes that the shop makes a very small margin on.<BR/><BR/>The old couple who comes in every month for 5 years to buy tubes for their comfort bikes give more money to the shop than the bike racers do.<BR/><BR/>You're right about tying up money in capital. A bike is a big investment for the shop, and a huge financial risk. <BR/><BR/>With razor thin margins, the bike you're getting costs almost as much as they paid. A decent bike shop will have maybe 5 or so $2-3k bikes, bigger shops many more. <BR/><BR/>Think about that next time you're in your favorite bike shop. Do a mental addition of all the msrp's you see on the bikes on the floor, and you get a good idea how much money is tied up in inventory that moves slowly.<BR/><BR/>You can put $100 into some tubes, and sell them all quickly and make a good margin. We go through dozens of boxes of tubes every summer. After you sell one box, that pays for the next two. <BR/><BR/>Multiply that, and you can afford to pay your mechanics and salespeople to deal with the whims of the "high-end" customers. <BR/><BR/>College students getting $300 mtbs and retired couples getting $300 comfort bikes are the best customers, from a fiscal point of view.Nateohttps://www.blogger.com/profile/14428471228818070571noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-47409723490269279712008-03-06T22:06:00.000-05:002008-03-06T22:06:00.000-05:00Bike shops don't make any money on bikes at all. A...Bike shops don't make any money on bikes at all. At best they break even. It's all the other stuff, like lights, and tubes, and tires, and fenders and clothes and shoes that keeps the business going. <BR/><BR/>My girlfriend is a chef at an Italian restaurant. They have $30 steaks that actually cost them $35. The reason they can sell those at a loss is because it gets people to buy a nice bottle of wine with dinner, some appetizers, and the like, all of which have very good margins. That's where they make money.<BR/><BR/>Selling bikes is just a way for shops to sell accessories for the bikes.Nateohttps://www.blogger.com/profile/14428471228818070571noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-57027641447450182902008-03-05T10:04:00.000-05:002008-03-05T10:04:00.000-05:00did anyone get in on the $90 campy centaur square ...did anyone get in on the $90 campy centaur square taper cranks at nashbar recently? or the $50 hubs and brakes? i did.<BR/><BR/>what's to complain about?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13887692.post-31054036387821443542008-03-04T22:35:00.000-05:002008-03-04T22:35:00.000-05:00Sprocket :Wow, that was ruthless. Performance so r...Sprocket :<BR/><BR/>Wow, that was ruthless. Performance so reminds me of the Standard Oil Company in its early days.Ron Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-72025698936517135092008-03-04T22:26:00.000-05:002008-03-04T22:26:00.000-05:00As I recall, Supergo began as a chain of shops on ...As I recall, Supergo began as a chain of shops on the West Coast and expanded into mail order. I have a feeling that Performance wanted to build a national brand and since Supergo's product line was priced similarly to Performance, unlike Nashbar, they dropped the smaller brand rather than run two catalogues. I see that Performance has a lot of stores in CA as well now. Another explanation is from Dan Empfield at Slowtwitch.com, who wrote in 2002:<BR/><BR/>Finally, there is the Supergo deal itself. Years ago Performance weaned itself off selling parts inexpensively, and with its acquisition of Bike Nashbar two years ago it probably owned over half of the bicycle mail order market. But then that pesky Supergo got itself onto the radar and was taking bigger and bigger chunks out of Performance/Nashbar's market share. This was double-trouble for the large conglomerate, as it not only meant lost market share, but an embarrassing admittal that Supergo could outbuy and undersell its larger competitor while offering similar customer service. The antidote was to buy Supergo, and while Performance says it won't make changes, I'll wager than the days of huge savings on Look pedals and Shimano derailleurs are numbered.Sprocketboyhttps://www.blogger.com/profile/00002657522696618715noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-74567591234910274762008-03-04T21:52:00.000-05:002008-03-04T21:52:00.000-05:00Sprocket :Supergo was bought out by Performance, s...Sprocket :<BR/><BR/>Supergo was bought out by Performance, sure. A big question in the minds of some is why Performance ditched the name Supergo and stuck with Performance. Wouldn't the former have attracted more business?Ron Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-54803040469959391502008-03-04T21:46:00.000-05:002008-03-04T21:46:00.000-05:00Nato :I appreciate the time you put into this comm...Nato :<BR/><BR/>I appreciate the time you put into this comment. That was a good lesson..<BR/><BR/>Why do some companies have MAP's while others do not, say Campy? And its interesting to learn the markup differences in big ticket vs smaller items. Its almost like they don't want to take a risk with bigger products so they can move them out the door, while they think people would always want smaller items so they'll buy them anyway, hence they won't mind the unseen "markup".. Am I thinking about this the right way? :)<BR/><BR/>I'm sure bike shops have a lot of costs themselves, including rent, electricity,labor what not. Its a risky venture I'm sure, unless someone with a passion gets it going. They get people into bicycling and bike racing as well. No bike shops probably means lesser or no racing teams!<BR/><BR/>Getting into the bike shop business is very well <A HREF="http://sprinterdellacasa.blogspot.com/2007/12/life-so-you-want-to-go-into-bike-biz.html" REL="nofollow">captured in this article</A> which I really liked!<BR/><BR/>The BSNY comment was awesome. Thanks!Ron Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-62644570746178155132008-03-04T20:21:00.000-05:002008-03-04T20:21:00.000-05:00I'm not in any way disclosing pricing in bike shop...I'm not in any way disclosing pricing in bike shops, since that's sort of a secret, but sort of not. I would never disclose wholesale pricing. <BR/><BR/>I have a friend that works at a mountaineering/kayaking/general outdoors store.<BR/><BR/>Generally speaking, a lot of stores that sell retail stuff like shorts, or climbing gear, or camp stoves, will generally charge a 100% markup, and that's called "keystoning." <BR/><BR/>Basically, you sell it for twice what it costs. Now, that sounds like a lot, but generally speaking, a mountaineering store, or a running store will have a lot of money in overhead, wages, utilities, rent, etc. So about 30%-40% of that markup goes to pay expenses. <BR/><BR/>If you see stuff for sale at a store, like 20%+ off, they're probably losing money when you factor in all their costs.<BR/><BR/>Now, for bigger ticket items, markup is a lot lower. Like a kayak is probably only marked up 30% over cost. <BR/><BR/>Something small, like those fabric deals that hold your sunglasses on, probably cost $1 and sells for $8. <BR/><BR/>Now, you may say, "50% markup, that's outrageous!" In reality, Nashbarf is making the same exact margin on the stuff they sell. The difference is, Nashbarf buys something like 500 LX rear derailers direct from Shimano, so they get a very, very good deal.<BR/><BR/>And LBS has to get their stuff from a distributor. That distributor buys 2000 LX rear derailers from Shimano, gets an even better deal, and then charges a markup to cover costs of shipping out one or two at a time.<BR/><BR/>Some companies have MAPs, or minimum advertised prices. Campagnolo doesn't. If you go to say, Colorado Cyclist's website, they sell Record shifters for a price which is actually pretty close to the cost an LBS would pay from their distributors. <BR/><BR/>Colorado Cyclist buys 200 full Record gruppos from Campy and gets a crazy good deal, then divies them out and sells the individual parts for a greatly discounted amount.<BR/><BR/>A brand like Louis Garneau, however, has a very tightly controlled MAP. Their MAP and their MSRP are almost identical. Meaning, even if Nashbarf buys a million, they can't undersell the LBSs. <BR/><BR/>I don't actually know how I feel about that, but a lot of people like or dislike MAPs.<BR/><BR/>I think Bikesnobnyc sums the whole deal up succinctly:<BR/><BR/>Defenders of the local bicycle shop say that online shopping can in no way rival the experience of entering a bike shop, being ignored by a staff of professionals, and paying a premium to cover their salaries. Advocates of mail-order say that buying online frees them from the constraints of being able to handle products and actually knowing what they're getting before it arrives six days later in a mangled box missing half its hardware.Nateohttps://www.blogger.com/profile/14428471228818070571noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-6706909147336372008-03-04T14:47:00.000-05:002008-03-04T14:47:00.000-05:00Zach,I'm glad its working for you. As long as you ...Zach,<BR/><BR/>I'm glad its working for you. As long as you become a better cyclist, I guess it doesn't matter how much you spend or where you spend itRon Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-44909764697527288682008-03-03T19:30:00.000-05:002008-03-03T19:30:00.000-05:00DUDE! Don't give out the Nashbar secret! haha I ...DUDE! Don't give out the Nashbar secret! haha I order some stuff from there sometimes and now that more people know about it I have competition to get cheaper stuff than in stores! ugh, I hate you!<BR/><BR/>only joking, yeah it's a good store in my opinion, I've bought my leg warmers, glove lining, and several other stuff the last 5 or 6 months I knew about it. I forget how I found it but I am surely glad I found it. Anyways, keep the good posts coming, I enjoy reading them!Zachhttps://www.blogger.com/profile/03369172064101957130noreply@blogger.com