About Chris Cocalis

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Episode 13 – Bicycle Retail Radio

Tue, 8/18 9:38AM • 31:38

SUMMARY KEYWORDS

bikes, industry, people, bicycle, business, Titus, retailers, pivot, mountain bike, bike shops, dealers, products, building, suppliers, frames, selling, shop, big, Chris, early

SPEAKERS

Rod Judd, Brandee Lepak, Kent Cranford, Chris Cocalis

Brandee Lepak  00:02

You are listening to Bicycle Retail Radio brought to you by the National Bicycle Dealers Association.

Rod Judd  00:15

Welcome to bicycle retail radio, brought to you by the National Bicycle Dealers Association. I’m rod Judd the membership and development director of people for bikes. And it’s my privilege today to talk with Chris Collis, the CEO of pivot cycles. How are you, Chris? Good, how are you? Good, good. So Chris has been many things to the industry over a career spanning three decades now and is experienced as a Raisa a retail or a frame builder. And a business leader gives him a fairly rare perspective I think we can all learn from today. So with that, I’m going to get started with some questions for you, Chris. All right. Great. So you started as a BMX racer in high school and moved on to some of the earliest mountain bikes Right, how did it all begin for you as a rider and a bike shop employee

Chris Cocalis  01:04

riding BMX when I was nine and also kind of became the shop Grom at that time, so pretty much been involved or at or managing a bike store, really all my life up until the start of Titus in the late 80s, early 90s. But uh, yeah, I raced BMX early 80s until 1987. I will continue to race but I discovered mountain bikes. At that point, I came out to Arizona to go to ASU. And the guys at the shops I started working at were all mountain bikers and got hooked instantly cool, but I started there as a mechanic but had managed like shops and service areas and basically been involved in BMX and started mountain bikes from early on. Right.

Rod Judd  01:51

And so when you started building those early, those early frames, you know, what was different about what you were doing versus what was on the market. In the mountain bike space at that time,

Chris Cocalis  02:02

well, I was really intrigued by some of the early elevated chainstay bikes. So look, Richard Cunningham had Mantis and then he also designed the mashiki alien. And I had a picture of the CG alien hanging up in my dorm room in my first year of college and I met a gentleman who taught me how to brace frames and kind of had a little backyard business called sun Eagle bicycle works. And we were building we built elevated chainstay frames and in 1988 1989 timeframe actually had a test in mountain bike action in 1988, alongside the several different mantises and the Michigan aliens called bikes of the future, and it’s pretty cool to be a part of that. But although cool, I didn’t know anything about welding aluminum, it was steel bike and the idea of elevated chainstays was super cool, but we really couldn’t build a bike that was stiff enough at the time. with tin steel tubes that kind of moved into me playing around with more conventional frames, and then the starting Titus.

Rod Judd  03:09

Right? So talk about those early years, you know, in the 90s, when you did sound Titus, that was really a boom period for mountain biking, right? So the whole category, so talks about the environment at that point.

Chris Cocalis  03:21

It was kind of all over the board at the time, we were kind of transitioning in that the vast majority were still hardtails, and there were some unique hardtail designs, but the full suspension was starting to come about and there were just all kinds of crazy designs going on. It’s actually really how Titus was founded, started building prototype bikes for a guy named John Rader. He was the inventor of the threadless headset. And because he had just invented that, and it was in the first year about 80% of the bikes on showroom floors, he was a pretty big deal. I built those bikes for him. he wound up showing get around to several manufacturers and unit big alone to buy the bikes. I was in my senior year at ASU and I received a purchase order for 175 titanium full-suspension frames from unit Vega. So that was kind of an interesting way to get going and into the bike business and wound of graduating and with some investment from one of my accounting professors at ASU and my friend who was the titanium welder at the time, his boss at his aerospace company, also invested some money and we were off to the races, building unit Vega shock blocks at that time, the production or the brand manager at unit bagel on leaving to go work for AMP Research. And I was able to become friends with him was able to meet Of course lighter at that time, and so we started working on some of our own suspension bike designs using, of course, the original AMP Research ran and then moving on from there. So it was pretty exciting. Adding time because everything was experimental, but there were also huge gains to be made. And if you did it right, you had something truly special. And that unit Vega project also allowed us to really move into a lot of OEM manufacturing. So we did bikes for a lot of different manufacturers from real bikes, suspension bike prototypes for Diamondback did things, custom road frames for them on a lot of things in the early years. That was really exciting.

Rod Judd  05:30

What a fascinating way to graduate. That’s, that’s amazing. Yeah. So fast forward a little to pivot. You know, what, what was the concept behind pivot? Why did you decide to make that transition from Titus and start a new company?

Chris Cocalis  05:41

Well, I think it was 2000. We were seeing changes at Titus in the world of materials, mainly composites. Were starting to come in. And at the time, I made a business decision. We had an offer to merge Titus with composites company and I took that option at the time. I can see They are five years after that when I left Titus. So that was a bad business decision. But looking back at it now, and we’re pivot is today, it worked out just fine. But I wound up leaving selling the rest of my ownership and Titus in 2006 and was not super happy about that. So, you know, I was kind of a man on a mission and was not done designing bikes and building bikes. And it was pretty awesome looking back on and having the had the opportunity to really from bootstrapping with credit cards out of college to being able to start with a fresh slate and do something completely different with pivot. And so business plan ground up of looking back at all the mistakes, or the directions I had taken because of financial concerns of how we would build a bike company from the start a cutting edge bike brand that didn’t have to maybe go cut corners or take certain paths based on financial need at the time. So that’s, we launched pivot in 2000 And seven with two models and really a big plan behind us, which we executed on pretty well considering I think it was about October of 2007 that all the banks collapsed. And it was, it was really interesting time in, in the world and in the bicycle industry on the whole.

Rod Judd  07:17

Yeah, looking at what you’ve built there, you know, in the last decade, and specifically the employee roster, you know, there’s an impressive list of experience there. Talk a little about your colleagues and, and what you consider to be the key elements that have got you to where you are from where you were

Chris Cocalis  07:34

at that I would say, that’s probably the biggest reason behind where we’re at today in the success back in the tightest days, I couldn’t always hire the people I wanted to or oftentimes afford to keep key people that that wanted to grow with us and from the very start with a pivot that was employee retention and finding the best people and building a team and a family that was excited to be here and that we would have a The benefits of via a company that they could grow with and have a career at. And finding the right people is everything, we often take a long time to make hiring decisions so that we can make sure that we get the right people that can help take pivot to the next level, and also fit well within our team. And then everybody’s a really driven group. So we like to have fun here, but at the same time, a lot of our key people are really tight, and they thrive on what we’re doing in the fast-paced environment and wanting pivots to succeed. Mm-hmm.

Rod Judd  08:30

Well, you’re very well respected as a business person, designer, and engineer. But in recent years, I’ve seen you increasingly become involved in supply chain management. Tell us a little about what suppliers need to do to be successful importers these days. And how are those aspects of the business

Chris Cocalis  08:50

changing? Yeah, that part of the business is absolutely crazy. I started building bikes because I love bikes. I never thought I’d be involved in a global audience. sticks business. But that’s really what this has become in a lot of ways. It doesn’t matter how awesome our bikes are, we can supply it and the constant challenge and an area that we focus on as a, as a company, we’ve invested really heavily in this area, setting up our office in Germany, we have both assembly and sales there. And then an office in Taiwan, which really helps with our QC and our logistics around other parts of the world. We basically need to manage the entire process and be as close to our customers as possible. And we’re really one of the only true assembly factories in the US as well. This allows us to be a lot more flexible but also takes a much larger team to manage every nut and bolt that goes into a bike.

Rod Judd  09:41

So do you have any comments? Specifically, on the current tariff issues, we’re seeing?

Chris Cocalis  09:47

Oh, that’s, that’s a huge can of worms. I think that’s been a major disrupter this year, not just for pivot but for the entire sport. Even companies that were not manufactured in China. have really felt the crunch. Because of this. Then this mass exodus, so quickly move production elsewhere. And unfortunately, there are relatively few suppliers outside of China. So that means that everyone’s fighting over a smaller group of resources and it’s just insufficient to handle what the bicycle business needs. I think this will smooth out. But in the short term, it’s really created increased costs and big delays for everyone. Unfortunately, it also makes us manufacturing more difficult. We want to grow manufacturing and assembly in the US but the tariffs hit certain parts so hard that it’s actually more cost-effective to assemble bikes and other countries. If you’re not growing your assembly here, then we’re not going to be able to grow manufacturing to support it in the US as assembly grows and hits higher volumes, then it makes a lot of sense for the supporting businesses to also invest so that they can supply better in the US it might start with something as simple as wheel assembly but then moved to rim extrusions and so on. When it comes to frames we can really begin to move more final machining back and then painting and possibly some frame printing. deduction but it really needs to happen in a step by step process that’s incentivized in a way that makes us manufacturing more competitive. Right now the tariffs are affecting a Chinese economy, but they’re also creating restrictions on the ability to be competitive with us manufacturing. So I, I really hope that this tariff thing doesn’t continue on and that the focus really becomes back to growing manufacturing in America and not so much the trade imbalance or what we’re doing to China’s economy is as a result of this trade war.

Rod Judd  11:32

Excellent. looking really pitching out Chris, do you have any other recommendations that could make the entire industry better?

Chris Cocalis  11:40

Well, it’s something I constantly hound our suppliers on. It’s really related to how we enable the dealers to get the maximum value out of the product on their floors over the last seven or eight years has really been this race to launch products earlier and earlier. In the old days when you know the print magazines, media magazines dominate. We all hold our global trade shows at the end of September, early October when the dealer selling season was essentially over, everyone would come to the shows and show their new stuff. There was excitement on supplier and the dealer end of the spectrum Fox Shimano Tran, everyone would show their new stuff at the fall trade show. So it allows dealers to place orders in that window for delivery into the fall and spring and really allow for a full selling season. Now it’s just all over the board. A lot of component manufacturers use sea otter to launch new products that will really not be available to fall. And if you look at something like you know, you’ve just come into April 2019 product is shipping and now everybody comes to Sea Otter at the second or third week of April and then gets shown 2020 new product when a lot of cases 2019 is still on the water, and half the country might still be under snow. That really creates a big problem combined with the fact that web and social media is so immediate But there’s no delay in that information flowing throughout the world. And it just devalues the product that’s on the showroom floor. I think as an industry and mostly on the major components supplier side, we need to align launches a new product with actual delivery to the market so that timing for the dealer can really fall sometime between October and February. That would give the dealers a full summer season of selling at full price. And I mean we’re not going to move when Summer ends and when it begins and there’s always this race to beat somebody but really we’re just beating up on each other when we do this.

Kent Cranford  13:38

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Rod Judd  14:16

You know, let’s talk about the deal is, you know, in your years of working with retailers who are or were the most impressive retailers that you’ve engaged with, and you know, for those folks, was there a common thread that made them great?

Chris Cocalis  14:30

Well, I’ve got a couple of examples. So this might come as a bit of a surprise, but Alan Goldsmith at super co-taught me a lot about marketing, branding, and consumer purchasing habits early on at Titus in the early days of Titus, we briefly had what was supposed to be an in-store only relationship with them, which they then violated, and please stop selling to them, but still remain friends with Alan afterward and he certainly knew how to be successful in the bicycle business. His mail-order business at the time was incredibly successful. But it was really the way he ran his stores that were most impressive. And today with pivot, I would say that shops like sharing your Boston psychopath and Portland’s golden bikes, and sports garage in Colorado are all incredible examples of dialed in-store demo programs and providing the best levels of customer experience and a cool vibe, and really focusing on high-end brands. And it seems to be a common thread with all of our top dealers is the ability to run an awesome demo program and the place that you want to be in sometimes it’s hard to put your finger on exactly what it is. But when you walk in the store, you just know and it’s a place that you feel welcomed and wants to be at. And then for some larger dealers, it’s even more of a balancing act like elevation in Colorado, Newbury Park bike shop in California. They do an excellent job of balancing that high-end customer service experience while also having the bigger anchor brands in their store. being successful across a much wider range of customer price points and categories, we actually have a pretty substantial list of dealers into it. Right? So these are just a few good examples of people that are just really awesome at providing that customer experience.

Rod Judd  16:14

Excellent. What would you like to see a change in the retail landscape? You know, what would you like to see change for retailers,

Chris Cocalis  16:22

there’s still a lot of retailers that are just in general, highly resistant to change. It’s a really difficult time for retailers if they think that they can just keep doing business the same way and customers will continue to come in their doors. We all know that all retailers and just about every industry have lost a portion of their business to online sales, the best retailers adapt and make their shop a place that customers want to be a part of, but they also need to make sure that customers are being reached in the way that we’ve all become accustomed to shopping. I think it’s super important that dealers treat their website and their social media presence, the way that they initially approached their investment in opening up their store. Pretty much every Customer looks online first, but not necessarily just to shop for the price I like to buy at the store. But I really prefer to make sure the store has the product in stock before I make a trip. Anything that retailers can do to engage the customer on their website and draw them in to be a part of their experience through social channels will I think we’ll drive business to the store, they do not have to sell online but having inventory available to view and update their websites with new images, giving the customers a good reason to look on the site visit the store is really important. The best retailers have really adapted to this. Well.

Rod Judd  17:35

Switching back to talking about pivot a little more to that launched, you know, five new bikes this year, which is impressive. Talk a little bit about the future of the company, you know, what are the categories and the audience’s that you’re most interested in Chris.

Chris Cocalis  17:49

We’re really an engineering and product-driven company first and so it’s always important for me and the rest of us to lead with cutting edge products that Improve the riders experience on the bike doesn’t necessarily fall into a specific category, we don’t really want to limit ourselves in that way. So if we feel we can make a product better, and it’s something that we’re excited about, our customers are excited about, then then we’ll continue to pursue it, we consider our customers that we always want to focus on the genuine rider that really seeks out and appreciates the best products in each category, as well as the attention to detail that we put into our bikes. Right now we’re in the process of building a new facility that we should be moving into around May of next year, which will be about three times the size of our current facility. And it’s really going to allow us to do more hot in the house and give us the room we need to grow everything and as things are getting a bit tight right now in our current home.

Rod Judd  18:46

Excellent. As you mentioned at the beginning, you really began your career in the industry straight out of college. You know, for some of the younger folks looking to build a lifelong career in the industry. Do you have any tips for you? A bunch of stuff that would like to make a transition to the supply side or maybe open their own black company one day.

Chris Cocalis  19:07

That’s a big question. For me, I’ve always just never really been satisfied with what’s out there. And in those early years of BMX, I broke a lot of parts. And in the early years of mountain bikes, it was kind of wide open as well. And a lot of the same issues occurred again, that had been resolved in the BMX world and I had an idea and at some point, whether I can make it myself or have somebody else make it, I just kind of step by step pursued, having the parts that I wanted to ride made. And I see that a lot and people coming up that have that same perseverance and have an idea and obviously a bit the bicycle industry is a bit different now than it was back then. And the way people go about it and the way they launched their brands, but I think the one thing that doesn’t change is having a strong passion and that kind of unwavering belief in what you’re Doing I also think a good business mindset is important as well. I wound up graduating from ASU and accounting degree after three and a half years in engineering and that that business side of things has really served me well.

Rod Judd  20:12

Who human souls Chris, who do you admire in and outside of the black industry?

Chris Cocalis  20:16

Well, in the bicycle industry, I admire a lot of different people. But really, anyone who’s started a grown and grown a business successfully in the bicycle industry, and I’ve been in it long enough. And I grew up in Chicago. So really got to see the height of Schwinn and the failure of Schwinn and really what came out of that and the growth of GT and, again, the decline of CT or how that business changed, but, and kind of the modern era to and from my earlier years, people like Horace Lightner Steve flag at QBP and then you know, looking at people like Mike Sinyard and Bob Margevicius of Specialized that have been in the industry and started something from the beginning, much as I have and then also seeing on the agent supplier and some of the people that I dealt with the first time I’d ever been over to Taiwan have grown incredibly large businesses over the years and it’s always good to sit down with them and listen to what works and what doesn’t work and take their advice outside the industry. I’ve got a couple of close friends that have been involved in the motorcycle industry and the two people that I go to advise for most Yeah, continue to be one of them actually just passed away. Recently, my friend Gary Meyers, he was the fiance Myers Motorsports up in Denver and was also a 1999 mountain bike cross country world champion. He was the first person to ever win a World mountain bike World Championship on a full-suspension bike and XC mountain bike World Championship. He ran the largest Honda dealership in the United States for many years and in my early years really helped direction And what to do and what not to do as the business grew. So it’s super important to have to both have people in your industry and outside the industry that you can lean on and kind of help you see through the things that you think that would that No, nobody maybe has ever been through before. But in business, lots of people have been through it before and there’s always somebody out there that can kind of help you see the forest through the trees, if you’re willing to listen.

Rod Judd  22:27

Absolutely. There’s a lot we can learn from. From non-endemics. Chris, if you weren’t building bikes, what would you be doing today?

Chris Cocalis  22:37

I’d probably be in the motorcycle or car industry I generally like things with wheels.

Rod Judd  22:41

Excellent. Okay, so let’s take a once again a big picture view, and let’s jump to what’s next for the industry. Where do you see the bike movement headed?

Chris Cocalis  22:50

Oh, I think it’s gonna be I mean, big Now, obviously, but I think we’re actually just at the beginning of it. And really what I mean by could be because right We’ve in the US, we’ve designated three classes of E-bikes. But I think what an E-bike is, is going to get segmented even further, you’re starting to see smaller motor systems for road bikes, better commuter specific systems. And we’re just at the cusp of battery technology and the possibilities are quite endless. It’s it really seems a lot like the early days of mountain biking when you look at what the potential is, and that so many people have kind of gone in different directions and is a little different in that there’s an investment to make batteries and an E-bike motor is often driven by the some of the largest companies but also some of the innovation that’s come comes from a lot of the smaller companies and it’s pretty neat to see what’s going on with that where the potential is in the future. But I think it is going to be a big segment of what’s going on in the US and both mountain bike and road and commuter and In a way to just make cycling more enjoyable for a much wider range of users.

Rod Judd  24:05

So you see an important role for the bike industry and you know, urban mobility, urban commuting, sort of a, an expansion of the bike technology into sort of mainstream transport.

Chris Cocalis  24:17

Absolutely. I also think it’s a great opportunity for the bike retailers, not, you know, everyone’s like, oh, add a segment, grow your business, I have a little bit of a different perspective on that. And that as certain things in the bicycle industry become commoditized. And people become more familiar, it’s there are certain things that are just going to be easier and people are going to lose that business to online lowest price, but the entire e-bike opportunity and even a lot of the things we’re doing with electronics and full suspension bike where it’s not necessarily an E-bike, but the technology that we’re putting out there is more complicated requires training service, the ability to explain it to a customer simply and make them feel comfortable about what they’re doing. And although cars are sold online, and motorcycles are occasionally sold on online, you look at those vehicles. And they are handled through dealerships and retailers and because their products that really require that back end service. And so I believe just continuing on the path of having products that make cycling better for customers also is going to come with a technology part of it that also requires more service, more explanation. And the bike shops really have an opportunity to own this and be the best examples of customer service in those areas.

Rod Judd  25:36

Excellent. You know, we’re taking it one step up and talking about the entire industry once again, and I mean, suppliers, manufacturers associations, like people for bikes, media, what can we do to broaden participation with the American public and really make bicycling a better experience for people? Well, what do we need to do?

Chris Cocalis  25:58

You know, Pivot is just a small part of the industry and we’re at a very small segment. But regardless of what the company is or what the shop is what they do in the sport in the industry, I think we can all contribute it to it and do our part. You know, with pivot, we invest pretty heavily in Nika and IMBA. And then I’ve been involved with something campaigns and then help to get e-bikes legal with Bikes Belong here in Arizona. So it’s not always just a donation of money, but as time and participation, and most people, I don’t think to realize what it takes to even maintain the access that we already have today, much less grow that the opportunities that are out there, and from your last question with e-bikes, that always tends to be a hot button with trail access and what that means, and it is, we don’t want to just sell products without a place to use them. And that has happened in the Motorsports industry where there’s a lot of places where there were a dirt bike boom and million In the dirt bikes were sold and then slowly but surely not even that slowly, those places went away. And that market just shrunk considerably. And we have an opportunity to not have that happen through our sport and industry, but it takes shops being involved and companies at any level being involved in local trail adoption and maintenance. Organizations like trips for kids every little bit helps your local racing organization, basically getting more people involved and having them support the sport. You know, I always use Nike as an example. These kids are, they’re the future of not only mountain biking, but they’re also the future people that will be running the country and the heads of businesses and the heads of governments and managing our parks. And if we bring a whole generation of people up that think Cycling is cool, it’s going to build upon itself and so that’s why I think it takes everyone at every level that if you’re in the business in The sport, you should be doing something to support and grow it. And a lot of those things can have positive repercussions across not just the bicycle industry, but just society as a whole. It’s amazing taking a kid that might not have much and getting them involved in a sport like a mountain biking through NICA and supporting them from a point at the beginning of the season where they can’t even finish a lap on a racecourse, to within year to being a competent racer that their entire outlook on themselves, and their future is completely different from what you started with. And if they just gave up the bike at that point, you’ve made a positive impact on their personal self-worth and their future and basically, where we can go as a society. I mean, that gets a little bit big, but I’m pretty excited about those types of programs that grow kids in the sport. And those

Rod Judd  28:51

are some of the most rewarding experiences we can have as professionals in the industry as well. Totally agree with that, Chris. Chris, down to just closing thoughts. Is there anything that you’ve been wanting to get off your chest for the last 30 years, feel free to, to make any comments you’d like

Chris Cocalis  29:09

nothing really off my chest. But, you know, it’s there’s always seems to be a push and pull between the bike brands and the retailers. And I guess every brand handles its retailer base a little bit differently in the way they work with them. But from the very getgo from my start, I’ve always worked in shops and Titus actively, or retailer focused businesses, we support the ID and I truly appreciate when a retailer understands our commitment to them and treats that relationship and in a reciprocal manner. We basically built our entire business around selling through them. Everything we do and discuss internally has that in mind. And our best partners understand this and with them, it feels more like they’re a part of the family than someone we’re just selling to the long term relationships matter. And we really just want us to continue to support the best practices required to make sure that our retailers dream Main healthiest the sport evolves, I kind of laugh internally a little bit when I see everybody, even at industry functions talk about how we all need to sell online, how we need to push Consumer Direct that every business should focus on this. And we need retailers and people like to shop at bike shops. And they like to shop at places like Rei as well. And if we take kind of the best practices that are out there, and basically make stores that people are want to be a part of and enjoy going to, it’s going to be born about the experience and less about the price. There are always people that are going to want to shop on price. And that’s not necessarily the people that the IBD level is going to cater to. It’s going to be enthusiasts and if we do our job with IMBA and NICA and bikes belong and supporting the bicycle industry, we can continue to have a healthy retailer base that really caters to the right level of consumer

Rod Judd  30:59

Excellent Chris Collins, thank you very much for your time today. Please keep doing what you’re doing. And the industry needs you and we fully appreciate your you bringing your expertise and open thoughts to this interview. Thank you very much.

Chris Cocalis  31:14

Thank you.

Brandee Lepak  31:15

This has been bicycle retail radio by the National Bicycle Dealers Association. For more information on membership and our member benefits, please join us @nbda.com

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The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

The post We Need Retailers appeared first on National Bicycle Dealers Association.

On 5/29/2019, the NBDA hosted a webinar presentation: How Tariffs will Affect Bicycle Retailers, from Robert (Bob) Margevicius, Executive Vice President of Specialized. Bob has extensive experience working with trade on a national level and has a seat at the most important table in Washington DC. He not only represents the vendor side but also speaks on behalf of retailers when he advises. He currently serves as a USA Industry Trade Advisor to the Secretary of Commerce (Wilbur Ross) and the USA Trade Ambassador (Robert Lighthizer).

What does all this mean to retailers and, further, to the industry?
The proposed 25 percent tariff on these three categories-bicycles, bicycle components, and bicycle safety accessories-could have catastrophic consequences for the U.S. bicycle market. This industry supports thousands of jobs at companies like Specialized and, of course, the thousands of independent retail bicycle shops you operate that sell, repair, maintain, and service bicycles.

What you will learn:

1. What is a tariff?
2. What is the purpose of a tariff?
3. All the rhetoric about section 232 and 301 tariffs. What do they mean and why?
4. How do the section 232 and 301 tariffs impact the bicycle industry?
5. What are the tariffs that apply to bicycles and bicycle parts?
6. So, section 232 only impact domestic products (Racks, Kickstands, metal products, etc.), and DO NOT impact E-Bikes, bikes, bike parts, bike accessories directly
7. But section 301 tariffs apply directly to bicycles, E-Bikes, parts, and accessories from China. How much is this?
8. What companies and retail channels are impacted by section 301 tariffs?
9. How does this impact me?
10. What can I do to navigate this situation?

Support the show (https://nbda.com/articles/donation-form-pg511.htm#!form/Donate)

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The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

The post How Tariffs will Affect Bicycle Retailers appeared first on National Bicycle Dealers Association.

Tim Krone has been a P2* member for seven years, and Performance, Measurement, Accountability, and Profit are the four key areas that are studied intensely as part of this program. Tim joined P2 when his shop, Pedal, was young and, perhaps, stupid. In this presentation, Tim will discuss his experiences with the program and some of the methods by which the P2* program helped him be at least moderately successful. It’s worth noting that neither the P2 program nor this presentation claims to be a silver bullet that will suddenly make you rich. Instead, both are more interested in the skills and habits that will help you make more money.

*P2: Profitability Project P2: The Gold Standard in Bicycle Retail

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sticky_devices=”small-visibility,medium-visibility,large-visibility” sticky_background_color=”” sticky_height=”” sticky_offset=”” sticky_transition_offset=”0″ scroll_offset=”0″ animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” 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sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

The post Performance, Measurement, Accountability and Profit appeared first on National Bicycle Dealers Association.

When you want to learn how to run a profitable bike shop, you listen to a person who has actually done it. In this episode, Scott Chapin of Marsh & McLennan interviews David DeKeyser, former owner of The Bike Hub in De Pere, Wisconsin, and author of the Positive Spin series on Bicycle Retailer and Industry News magazine. David discusses how he built a successful and profitable bike shop and shares tips on what he thinks other bike shops can do to build their profitability.

About David DeKeyser

My name is David DeKeyser and my wife Rebecca Cleveland and I sold our highly profitable bike shop in DePere Wisconsin on 2/28/19.

We owned the shop and commercial real estate for 18 years and were profitable every year we were open. Prior to owning The Bike Hub I had been with Stadium Bike in Green Bay for 10 years and spent the last 5 years there as the General Manager of three stores. I and the eventual buyer of The Bike Hub tried to purchase that business, but could not come to terms. After being involved in a company with multiple stores and for two years an off-site spring sale I had ideas about running a business aimed at profitability and a great customer service experience. In 18 years we never ran a spring/summer/fall sale etc. we resisted the urge to open another location successfully many times as well. We wanted to have a certain quality of life and engineered that into our decisions on how the business was run.

The unfortunate part about all of the above was my wife and I had always held our desire to live in the Western USA in check to own and operate our business. We knew that eventually, we would relocate, and for various reasons, the timing became right for us to sell. Based on our profits, and prime retail spot it was a fairly seamless transition to sell to my old partner and competitor. We have since relocated to Fruita Colorado.

I have a streak in me that makes me question things and ask ‘what if’ and ‘why’ on a regular basis. I experimented often with things in our business always aimed at being as profitable as possible while delivering a great customer-focused experience. The phrase that did and still does drive me crazy is do you know how to make a million in bicycle retail? Start with two!†I feel many in our industry view retail as a noble cause, but do not feel it is a great way to earn a living. I believe and know first hand that bicycle retail can provide a great living, perhaps better than many retailers realize.

Support the show

David DeKeyser

Thu, 8/20 11:48AM • 41:28

SUMMARY KEYWORDS

business, profitability, buying, people, shop, charge, bike path, bike, years, rates, labor, discount, sale, margins, lease, customers, thought, Wisconsin, point, retailers

SPEAKERS

David DeKeyser, Rod Judd, Scott Chapin

Rod Judd  00:10

You are listening to Bicycle Retail Radio brought to you by the National Bicycle Dealers Association.

Scott Chapin  00:17

Hello, this is Scott Chapin. And we are going to conduct one of the first Bicycle Retail Radio shows. For those of you who don’t know me, I’m run our bike shop insurance program and other insurance programs. I’m worked for Marsh & McLennan, and a proud partner and of the NBDA for many years and I am going to be interviewing David DeKeyser, former owner of the Bike Hub. He and his wife Rebecca Cleveland had owned that for many years and I’ve actually David was a client of mine for quite a while and I always thought it was really interesting in our conversations, discussing sort of the business practices and now that he has more free time, he gets to do things like this. So, David, you want to just talk a little bit about your, your background, how you got into the bicycle industry, and then how you ended up owning your own shop for many years?

David DeKeyser  01:23

Well, I was hoping you weren’t gonna ask me a first question that could take an hour to a day answer.

Scott Chapin  01:29

I’ll give you a little much less than an hour.

David DeKeyser  01:32

Okay, I’ll try to make it as quick as possible that I grew up racing BMX bikes in the early 80s and then transitioned to mountain bikes, and I think it was my freshman year in college at the University of Wisconsin Green Bay. I started working at a bike shop and just kind of fell in love with it. After college, started working full time and within a few years We were trying to friend of mine and I were trying to buy that business. After about 10 years of that, it just, it wasn’t panning out. So my wife and I decided to open up the bike hub in Superior, Wisconsin. And we ran that successfully for 18 years. And we sold it in February of this year.

Scott Chapin  02:23

Fantastic. And I’ve actually read a few of the articles that you’ve recently posted or written. And it was kind of interesting how you had definitely had a succession plan in and I’m wondering when you sold the shop, how long have you actually been thinking about and planning for that or did it happen really quickly?

David DeKeyser  02:48

I would say probably 10 years, so about seven or eight years into the business. My wife and I had always had a desire to live in the western United States someplace in Green Bay, Wisconsin is obviously not that it’s colder and darker and wetter and all that stuff. So about eight years into the business, we actually went through the process of trying to sell the business a little bit and things didn’t feel right. It felt it just it, I guess, for lack of better words, it just didn’t feel right at that point in time. But when we kind of wrapped that up, and we decided, what do we want to do next? As far as the business, I started concentrating on profitability, because the business broker that we were working with, it became really obvious to me quickly that you are only as good as your last two or three years’ worth of financials. And if you could build that business up, then you had something to sell and you can’t sell a business that isn’t profitable. Unless you find you know, the needle in the haystack type of thing. So we just really worked on becoming profitable. And in that, we started really harvesting every little bit of data that we could out of our point of sale system. And the last four to five years, we really ran the business with the intent that we wanted to sell it. And that was, you know, we were successful in the end. They’re

Scott Chapin  04:26

interesting. And did you get so we’ve had some conversations and I’ll ask you to tell a story about kickstands because I just I thought that was really interesting how, how you actually had drill-down data on that but you know, before I have you tell that little story, what resources did you turn to actually try to figure out how to become very profitable and to be able to have your books be so detailed to the nth degree of for any type of products? Service etc Did you try to figure out a lot of that on your, your own? Or did your accountant help you or tell me a little bit about how you actually became good at that?

David DeKeyser  05:10

Yeah so on the books end of things, we had an accounting firm that I had my accountant and then a QuickBooks pro advisor so I had somebody kind of on-call all the time that could log into my software and tell me if I had something goofed up but you know, the books part of it is is actually pretty easy. If you have a good accountant and a QuickBooks Bertie, we use QuickBooks Some people use something, you know, a different program. But if you have somebody that’s good, kind of watching your stuff and kind of tuning you up, you know once or twice a year before tax season, you know, so kind of late spring and then early fall it would only take a half an hour so for my pro advisor gal to go through everything and kind of make sure that it looked right for the business side to have things we use lightspeed point of sale which you know, is I’m thinking now is getting to be one of the bigger ones along with ascending. And through kind of trial and error. So you know, going back I said it took about 10 years to feel confident to sell the business and those last five years so that five years leading up to that we were really honing in on making sure that all the data that was in our point of sale was was really good. And I think it takes a while to start to understand what you’re actually looking at and pulling up reports and all of that, you know, it’s not something that happens overnight. And if you are putting in junk data, and just using your point of sale as a cash register, you’re never really going to get what you want out of it and it becomes so easy. You know, becomes second nature after a while to know what you’re looking at how to pull up those reports. But I loved to experiment, you know, with you know, we talked about the kickstands a couple of times. But you know, you would take a service item, you know, changing a flat tire or doing a tune-up and you would experiment with you know, could you get a few more dollars, could you add items on to that labor item on and that type of thing and you have little successes and you just start spreading those over, you know, the rest of your, your business, and that’s kind of how we got to that point, I think of you know, figuring out our point of sale and QuickBooks and all that was we just we made a conscious effort to really immerse ourselves in it.

Scott Chapin  07:49

So did with looking at, you know, hard goods, soft goods service, in that last 10 years of doing business? What’s sector actually grew the quickest once you started tinkering with, you know what you can charge was it the service side of that become from a growth standpoint, once you talk a little bit about that and maybe how you decided to look at that sort of carte blanche for everything that they’re doing, having a charge for that and how that really, overall affected your, your profitability on that side of things.

David DeKeyser  08:26

So I think the industry as a whole, what I always experienced was when people did tune-ups, somebody would come in and they’d get a tune-up and, you know, your say your tuneup is $50 or 75, whatever, whatever you’re charging, but then they would buy a pair of brake pads or get some new tires, you know, or what bar tape whatever it was, and nobody was charging to install the bar tape or the brake pads but if somebody came in and they just needed brake pads, we would charge him for the brake pads and in an installation fee, and even that was new Probably 10 years ago, you know, it used to be if you bought it, you got it installed for free. So we just started tack, you know, our labor skews, basically in the computer went from a couple of tuneups and like flat labor to all of a sudden there were 50 items in there and you are charging for each of those items. And it is you as anybody that’s worked in a shop can imagine it, you know, on a tune-up if you’re getting a bottom but you know, if it’s a good tune-up, you go from a $50 tune-up and, you know, 25 $30 worth of parts to all of a sudden you’re double or tripling that that repair ticket by adding these things on. The scariest part was I thought for sure people would push back at it. And the exact opposite happened. We had zero pushback and I think people are used to it. You know, if you went to the dentist or the car repair plate, you know, everything is itemized, and consumers expect that it doesn’t shock them, but in our industry, it’s just, you know, people throw everything on for free. We even got to the point where, you know, if somebody was buying a basket or something with a new bike, some of those things we would charge to install if they were, you know, hard training wheels were one of those things that were always hard. So we, you know, we started, if something took a little more time, we would, we would start tacking on a labor charge to it. So labor was the big one that opened it up to us. And so,

Scott Chapin  10:27

so that sort of you my next question you sort of alluded to, so you didn’t necessarily increase your shop rate per hour. It was it more just you’re getting more just by doing everything carte blanche.

David DeKeyser  10:41

Yeah, just making sure that we’re kind of line item and everything was the term that was always in my head as if a mechanic was going to do a tune-up, and you know, there are the items that are included in the tune-up. If something was going to be done extra, from a labor standpoint, then we charged for it and if that answers that question,

Scott Chapin  11:02

it does not do you think just in general, that a lot of shops feel that if they were to either do like you by actually individually having charges for specific service items, or just, in general, increasing their labor rate, do you think that’s that fear is unwarranted that the customer will push back? I mean, I know what your experience was. But if you talk to others and where they’ve had a similar experience, like I thought that we’d lose customers or I thought they would get upset at us or go to a different shop. How real or not real is that? Is that fear?

David DeKeyser  11:40

I think it’s a really unwarranted fear. And most of the dealers You know, when you talk to a shop, you get kind of two answers. There’s no way I could do that. My customers would push back I can’t rip them off. This is you know, everybody, all of my customers have smartphones and they know what everything costs. Well. That’s a funny argument. Several Everybody’s got a smartphone no matter where you are. And then the other side of it is the dealers that have started to implement, you know, making sure that they’re, they’re charging for things that are being done it from, from what I have experienced, I don’t think anybody’s really had much pushback. And if you do, it’s small enough that it’s, you know, it’s not going to warrant going backward.

Scott Chapin  12:24

Right. So you wouldn’t want to dictate Yeah, you don’t want to dictate your shop policies and procedures for the one half of 1% of people who may say something under their breath about the rate.

David DeKeyser  12:36

Yeah, and I think there’s a lot more that would say something under their breath about, I experience a lot of dealers retailers, that are really, really afraid that they’re going to offend that one out of 100 customers and instead of harvesting the 99 out of 100. There, they’re kind of bowing down to that one that might say something And I get and I get that it’s you know, you remember the one bad situation? You don’t remember all the good ones usually.

Scott Chapin  13:09

Right? Now, did you? Did you ever have a bike team like a lot of shops have where you fly the shop’s colors wear the jersey and you get a percentage off? Or did you? Did you just avoid doing that all together? Tell me a little bit about that.

David DeKeyser  13:27

So, my wife, Rebecca was a very avid and fairly high level, you know, regionally, right bike racer. So she, she was kind of the driving force behind the teams. And as time went on, and she kind of faded away from the racing scene. We did continue with the teams Yes, with discounts and you know, the shop flag and all that type of thing. And that was one of the biggest experiments. I think for me One of the scariest was we basically just stopped. We’re done. We didn’t do teams anymore. And all of the people that were on the teams that you thought were your best friends, they disappeared

Scott Chapin  14:15

overnight. So they are just they’re just doing it for the discount. Is that safe to say?

David DeKeyser  14:20

Yeah, I mean, we had a handful of people over the years that were on the discount program, you know, that was on our grassroots teams or mountain bike team, we had a triathlon team that we were sponsoring. There was a handful of people that I think understood what their role was in relation to the shop was to be an ambassador for our store, right? But it was such a small It was literally, I could count him on on one hand, and

Scott Chapin  14:48

so you would have been better off if you knowing what, what you eventually learned. Maybe there were three or four people who were good spokespeople. And if you were to give anything at all, just give it give them The discount because they were doing all the marketing and PR are we Yeah,

David DeKeyser  15:04

basically, you know all the referrals. So when you sponsor a team, you know, what are you really looking for, you know, the team, the racers are going to races where everybody else is sponsored, right? So they’re kind of preaching to the choir and they’re preaching to people that are in different churches, so they’re not going to come to your church anyway. So you want those per you know, the person during the week when they’re at work, and they’re a bike racer, and they’re there, you know, the person in the cubicle next to them says, Hey, I’m thinking about buying a bike instead of that person saying, Hey, I know where you can get a good deal because this is where I get my good deals. They say you want to go down there and talk to them because that’s the place to go, you know, they’re going to help you out. Price is not an issue, you know, that that shouldn’t come up. They’re sent, you know, they’re asking an expert where to go and they’re sending them to an expert. And that usually, you know, that usually doesn’t happen. So but for me, it was during this increase in labor, income. was where I started to realize that our best mechanic who is also our store manager, was doing the lion’s share of the teamwork, team mechanical work. And a lot of times that was, you know, no charge because it was somebody tubeless mountain bike tire that wasn’t holding air. I mean, he was just stuck in this time sinks all the time. And then if we were charging, it was at a discount. So I was tying up my, my best person on this discount rate business, and it was terrifying to cut it off. Because you know, you’re supposed to be, you know, that’s what you’re supposed to do if you have a bike shop is you’re supposed to sponsor racers and be involved and be, you know, part of the community in parentheses and all that stuff. And for us, as soon as we cut that off, it was a noticeable increase in our margins that you know, you can’t really so you’re able to track that right

Scott Chapin  16:57

away. I mean, how long did it take you to realize Like, oh, we would have been better off if we had never done that.

David DeKeyser  17:03

I would say, you know, so I think we stopped doing the teams in the fall of probably 2014 or something. I think it was probably by July of 2015. I could see the data right there are our gross dollars were the same, but our margin had shot up incredibly. staff was much more relaxed. They weren’t dealing with, you know, the Friday night emergency racers Yeah, yeah, yep. And I don’t have anything against racers or anything like that. I think that there are shops that probably do have it figured out but I think that if they looked at it as far as what it’s doing to the bottom line, I don’t I just can’t I can’t find the math to work for me personally. A be I just don’t know another industry that takes what should be its best customers and gives them discounts right on everything. You know, I have one of my closest friends on the fly fishing store, and he always laughed at me. He’s like, my best customers come in and buy stuff all the time. But you know, nobody gets sponsored, really for fly fishing. Yeah, you know, but so he had these great customers were in biking. It’s like they go through this progression where all of a sudden, now they’re a racer, they buy your shop jersey, and you give them a discount, and they’re your best customer.

Scott Chapin  18:24

No, and I can’t around because I used to be a sponsored racer myself. And I keep thinking about all the times the day before the race like something’s not working some like they never charged me for any of that. I’m thinking back of like, gosh, you know, that’s ridiculous and in for that, it just, it just seems strange that I would even ask that and this was, you know, 20 years ago, and now it’s like, No way like I just, you know, charge me more. charge me more to help me on Friday before.

David DeKeyser  18:55

Exactly. There’s just there are so few industries that have that mentality. We’re going to take the people that are coming in the most and start feeding them discounts.

Scott Chapin  19:06

Right. Interesting. Was your shop on a bike path? Yes. Yep. How does being on a path? I mean, was that like a pretty, you know, a fairly high dependent variable and your profitability or tell me a little bit about that because I talked to a lot of retail clients and there were like one of them that I work with, they’re about to move to a new location and it’s because they want to be buying the bike path. I’m just kind of curious what your sense of the value of being in that location.

David DeKeyser  19:37

So that’s one of the things that I never really felt like I was able to put a finger on really help other people. It’s a net positive for sure. Because you have such an incredible test ride experience, you know, somebody’s not riding around in a parking lot dodging cars. So so it’s an It’s a nice experience. We were on a very busy bike path. It’s a paved rail-trail the fox River Trail from Green Bay, way south in Wisconsin, it’s next to the fox River. So it’s you know, a lot of it’s pretty it’s in an urban area. So there’s, you know, lots of neighborhoods, so it’s extremely busy. You know, and you’d get the odd person that comes up with a flat tire or something that you know you would fix but it was so hard to quantify because it’s just one of those things that feel so good about being on that path. You know, you’re where things are happening. The flip side was the front of the store is on a really busy road. And I think that the exposure there was probably more important in the bike path, but I had a lot of people that would argue the exact opposite to me that would say that the bike path if you have a bike shop, and you can be within spitting distance of a place where people can ride it’s always going to be positive. I just don’t know how to measure it. Exactly.

Scott Chapin  21:13

Yeah, how to quantify it, but for sure from us, from our customer experience on the specific to the test, ride, and safety. It’s all it all makes sense. It just feels good. Yep. All right. So I self admittedly have a DD so I’m just jumping all over the place. And that’s just how this is going to be. So I want you to tell me the kickstand story with the buyer of you’re the individual that purchased your shop. And I think they were questioning whether or not they should be throwing in kickstands. But I just think that having these metrics is just a perfect example. So I’ll let it go from there.

David DeKeyser  21:52

Yeah, so I don’t want to give away too much here because the buyer still you know, right on it, give away any trade secrets or anything like that, but The wit I’ll go way, way back in time. So the kickstand story started. We were at a, I think I think it was like a trek event years ago. And there was everybody who gave away kickstands. When you were back in the 90s. You know it was when you bought a bike, you got a kickstand bottling cage. And you just threw that stuff in even though you had to pay for it. And we had some seminar and they brought this dealer out and he had started charging for kickstands. And this was a really high volume place. And the guy I would love to say who it was, but I don’t know I’ll get it wrong. Anyway, I think he bought a Cadillac or something based on him. You know what he had made and kickstands in a year or two. And it that always stuck with me. So we started charging for kickstands, obviously right away. So I’ve been charging for kickstand for years. And you know kickstands are now like 15 bucks or shops that you know are Getting 20 bucks for like a Greenfield kickstand. And if you’re a high volume recreational shop, you get to sell a lot of kickstands. And when we were selling the store, the buyer he hasn’t he owns another store in town and i and I think either they had been in he had recently bought that store as well. And I don’t remember if he was charging for kickstands or not for sure at that time, but I pulled up the data and it was, you know, I think he was pretty shocked at what those numbers were, especially when you go back, you know, five or 10 years do you think wow, I left all that money on the table. So to be able to pull up that information to know how to get it on on your kickstands or your grips or your you know, finish line lube or whatever it is, is so incredible because you start to see those little successes and I think that’s kind of the moral of that story. Right? is is is a CEP there are several models so that story number one charge for the things that you can which is basically everything consumers are expecting it. B track all of that data so that you can go back and see and see that success because it really makes you want to experiment with other things and kind of see what you can do. And I’m excited to see kind of what he does with the business as time goes on because you know that was exciting for him to see that. You could have success with just these little shifts in mentality and not just giving things away. Those little things that I think the general in the bike industry that people give away is where all of the hidden profits are.

Scott Chapin  24:49

Right. And did you Is it safe to say for the last 10 years have you won in the shop you in just about every situation sold? All everything at full margin

David DeKeyser  25:05

Yeah, that drove me nuts when so that’s another one of those things that you know is really common in the industry is when you’re buying a bike you get a bunch of stuff for 10% off, you know or, or even 15% off and I fought that tooth and nail you know don’t even give the person that deal and I don’t know why the bike business is still like that But you knew when somebody had been to one of your competitors who still was kind of giving away the farm on every sale so yeah, our goal was no discounts on anything, you know, the margins have gotten tighter the prices have, you know, been in business have continued to rise in the margins have kind of come down. There’s just not the room to be giving away everything to get a bike sale anymore in my opinion. So we didn’t do the discounts and we really never had an ad advertised sale and the 18 years that we own the business which could be, I think several podcasts. But yeah, we never ran a spring sale or a Summer Sale or an end of season sale or anything like that. The entire time that we were open.

Scott Chapin  26:17

Interesting. And there’s something you just said about margins profitability, it made me think of you so you did you own the real estate at your DePere location the whole time or did you end up buying a separate place or buying a place that you’d been leasing

David DeKeyser  26:40

so when we first opened up, we were in a strip mall, and we opened in March of 2001. And by about 14 months later, it would have been may of 2002. We made the offer on the on-property That we ended up buying. And that was obviously, I think, a great decision because it was on a bike path, which wasn’t even open really at that point in time. But yeah, so we, we, we rented in a strip mall and then moved just a year later to our location where the business still is.

Scott Chapin  27:20

Got it. So in my world, I review a lot of leases, mostly for the insurance and indemnification sections, but I see what the lease rates are. And I can only speculate that knowing what I see lease rates are in certain parts of the country, certain cities, that that is definitely a big problem for many retailers. I mean, what are your thoughts on is that really a determinant for profitability if you are unable to get into a position to purchase your own real estate, or what are your overall thoughts on that?

David DeKeyser  28:04

Yeah, I think that I think that this might be one of the elephants in the room as far as the industry kind of going forward is if margins continue to shrink, labor rates continue to rise. I mean, there’s an article every other week about mechanics aren’t making enough money. And I don’t disagree with that. But as a retailer, those things are all coming for your bottom line, you know, whether it’s your lease rates or the mechanics needing more money, etc. The sad part is in a lot of areas of the country it’s starting to feel like you can’t afford you know your occupancy expenses basically because Lisa Siri, they’re so expensive or commercial property is so expensive. It there’s a lot of areas of the country where it’s still in my mind a bargain and yeah, I can make a bunch of money. But I think that there’s there is some Really, I don’t have an answer to it, but I can’t imagine being someplace where you know, you’re, you’re spending an exorbitant amount of money compared to your, your peer that’s in Iowa, you know, and you’re in California margins

Scott Chapin  29:16

are the same if you’re ordering city of Hayward, Wisconsin and exactly a different Yeah,

David DeKeyser  29:22

yeah, everybody’s buying the stuff for the same price. So now when you’re in one of these kinds of the high cost of living areas, your labor rates are going to be a lot higher, your occupancy expenses are going to be a lot higher. So it’s a huge deterrent, I think, to not only profitability but to those areas being served by, you know, retailers eventually because they’re just going to kind of get priced out of the market.

Scott Chapin  29:48

So you’d recommend if, if possible if you can figure out a way to purchase your own real estate without burying yourself long term due to potential appreciation of the building. Cross lease agreements between the two different legal entities, those are all ways to help the bottom line.

David DeKeyser  30:07

Yeah, yeah, hundred percent. I think that if you have any chance to buy real estate to run your business out of I can’t really think of too many reasons why he wouldn’t. You know, I’m sure there’s something out there somebody could trip me up with but I just don’t see it, you know, because that’s not going to go away, you’re always going to have that and the beautiful part about it is that if you buy something and you can afford it today, it’s not going up your you know, your mortgage is not going to go up in price. And that was one of the things that I always kind of laughed about to myself was when we bought our property we paid our monthly mortgage payment was $600, less than I was paying in rent. And it was it wasn’t more space and you know,

Scott Chapin  30:56

that X for X amount a year and it was

David DeKeyser  30:58

it was fixed where That, you know, the lease was going to keep going up. And that’s, you know, in our market, I think we were, you know, I remember thinking $10 a square foot was kind of the going rate for good retail that was 20 years ago, 25 years ago and, you know, now these little strip malls that go up in kind of the,

31:19

the

David DeKeyser  31:20

retail ish type areas, I mean, they’re getting $25 a square foot, you know, that’s, that’s more than doubled what I always thought was the appropriate amount to pay. So, yeah, if you can buy and I think there’s a lot of areas of the country where commercial real estate is still affordable. I think we also get trapped as an industry, by people wanting to be in the best building or the best location and retail you know, I wouldn’t go in a back alley if you can avoid it, but people are going to find you a few. You know, if you have either A brand you know where they’re on the dealer locator and they punch it into their phone, they’re going to drive right to your door anyway, I just I don’t know if having to be in those best locations is really feasible in the future because the rates have just gotten so high.

Scott Chapin  32:14

Yeah, and we’re seeing a lot of, we actually are seeing a lot of the newer shops, basically say we’re not in the prime retail space, we’re a block off, our lease rates are significantly less. And we’re going to try to start out with a small, smaller footprint and make it work and they’re generally again starting from scratch. So there, they’re just trying to make sure they can get over the hump and a lot of our service-centric bricks and mortar locations, and it’s, it’s pretty interesting. And the clients that I’ve spoken to, they’re like, Well, yeah, people will go a block off, and oftentimes you have better parking too, so it’s easier to get it. Exactly. Yeah. So so with your little your internal science experiment Financial science experiment with all of the tinkering you’re doing with service and charging full retail. How great of a difference did that affect your profitability over say the last five years that you own the shop? What did it continue to improve? Or was there sort of a leveling off after you had done all these changes?

David DeKeyser  33:27

So I think it leveled off probably about five years ago, you know, as far as profitability, what we could kind of get out of it, where we were comfortable. I think we I think if we had wanted to carry on the experiment, I think we could have possibly gone up higher. But there you know, you do hit some points where you’re thinking, I don’t know if I can charge any more for this or that, you know, or you’re not going to be able to charge more for the product itself. Real You know, there are a few places where you can kind of write your own rules. But, you know, you’re kind of hamstrung by the vendors and what their advertised pricing is on things and then on labor there, there’s a certain point, you know, and going back to the beginning where I said that people aren’t surprised or at all about you their repair ticket being like line items, where they’re, they’re paying extra for the things that would not have been included in the tune-up. But there’s a point where I think, it does start to feel like you’re gouging you know, and, and, and so many retailers, I think to feel like that’s if they charge at all and that I’d argue is absolutely not the case. But those the 10 years that we had our point of sale system, and we’re working with it, the first five years were really kind of the experimentation. And then the last five years, it just, it became, you know, it just made it so much easier to run the business that then I think we were enjoying kind of the fruits of the labor, of having really dialed in the point of sale. were ordering was no longer a lot of work, you know, it becomes so easy that then I think we were just enjoying the, what the point of sale was given to us in terms of making it easier to run the business.

Scott Chapin  35:15

So would you say that for a lot of retailers, the specific changes that you did, it’s really going to be kind of specific to the market or type of products, but you have to kind of create your own own recipe for profitability is or do you think you’ve done is gonna follow suit for just about

David DeKeyser  35:36

anybody? I think what we did and there’s a lot and I’m not the only guy that that did this, I didn’t kind of invent this wheel. There’s a lot of really savvy retailers out there a lot smarter than I am. It’s basically you get away from the discounting. You know, it’s kind of is one of them you know, there are all these little areas that you do you get away from the discounting, you start charging for things you Get the employees behind it, you know where, I mean, you can have an employee that wants to throw on everything I did a mechanic once that every time he did a basic tune-up, he had the drive train off the bike because it was dirty. And you know, it’s like, they didn’t pay for that. But it’s dirty. You know, see? Yeah, you can’t do that. So you just have to get the employees behind it, where they’re not, you know, throwing everybody a water bottle or discounting you know, everything under the sun. So, it’s it, I don’t think anything was really specific to us. I think it’s just specific across the industry to just, you know, really make sure you’re holding your margin. And if you can’t, what does that telling you? It’s telling you No, is the product bad? Is the product oversaturated in your market? You know, if you’re, if you’re having to fight, if people are coming in and saying they can get, you know, product x down the street for cheaper. You have to look at that really hard because as soon as you start, you know, well I’m gonna I’m going to automatically match that price. If that goes on long enough, you’re gonna be in trouble.

Scott Chapin  37:05

Right? So to kind of back to when you’ve sold the business and having a really good set of books is there. You know, I know in some businesses, there’s, they’re sort of when you’re doing a business valuation, it’s the business itself, plus inventory, but there’s a factor based on profitability. We do you have a pretty clear understanding of what you should be able to get based on profit margins, gross sales, and those specifics?

David DeKeyser  37:41

So yeah, valuing a business is really is I think one of those things that most obviously from people I’ve talked to that nobody understands it but it’s actually a really, really simple formula and it’s based on profits. At the end of the day, your books are going to go to the SBA. really speaking they’re gonna go for a bank they’re gonna use an SBA loan to buy you know bike shop like this and you have to be able to show the profitability and everything just goes into a formula okay if this buyer is you know, they’re bringing some of their own money we’re gonna, the bank is going to give them x and the debt service to that loan has to be able to be shown by the business to cover that and pay the new owner there’s no black magic really in valuing a business inventory is always a separate deal. So and you know that the buyer is going to pay for your inventory. If you have a bunch of dated inventory then you know that’s you’re going to negotiate, you know a percentage off of that but the bank is basically buying the business and what the profits have shown in the past to be right to do there’s no while we think it could do better if you know the new owner. Just was, you know, on-site more or had more enthusiasm or whatever, you know, those are all. That’s all great to talk about. But the only thing that’s going to help you sell the business and value the business is what your profits were.

Scott Chapin  39:16

Alright, I think we’re running low on time. But I have one more question. So if you could go back in time and change a business practice, what’s the single greatest thing that you wish you either hadn’t done or had done?

David DeKeyser  39:34

Wow. Oh, boy, I wish I had been better at managing people. I think I had some really, really amazing employees over the years. And I had one employee that was that I had hired at the previous business and he was with me, Store Manager. He’s still with the business. And he and I really jelled. He, I think it was primarily him because he was just he could deal with me. But I think that if there was one thing I could go back and do better, it would have been able to I would have tried to be better at understanding some of the employee’s needs and wants a little bit better. Because it when you lose a good employee, it’s always really hard to replace them. And I think for me, that was the big thing was I think I was maybe too hard on some people not understanding enough others.

Scott Chapin  40:38

Perfect. Well, thank you. I think we will conclude. Thank you so much, David, and, and we’ll I’m sure you’ll be on another one of these. So

David DeKeyser  40:51

yeah, it’s a lot of fun. I love talking about this stuff.

Scott Chapin  40:53

Great. Thank you. All right.

David DeKeyser  40:55

Thanks, Scott.

Scott Chapin  40:56

Bye-bye.

Rod Judd  41:04

This has been bicycle retail radio by the National Bicycle Dealers Association. For more information on membership and member benefits, join us @nbda.com

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post How to Run a Profitable Bike Shop appeared first on National Bicycle Dealers Association.

Being the bike shop of the future is all about being a great retailer of today.  The current retail world is not for the faint of heart. Bike shops are under pressure that they historically weren’t…to be legitimate retail leaders in terms of the product they offer, the people they employ, and the style/brand experience they offer. The great shops these days pay close attention to the retail trends outside the bike world and create experiences for their customers that rival the best retail from any category out there. In this fun presentation, industry veteran Brian Hawkins will share a ton of insights into the trends that bike shops should be paying attention to, and what the great bike shops of today and tomorrow will look like.

For more information about how to be the bike shop of the future, reach out to Brian Hawkins, owner of Fixture Lab.

Support the show (https://nbda.com/articles/donation-form-pg511.htm#!form/Donate)

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The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

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The post Being the Bike Shop of the Future is all About Being a Great Retailer of Today appeared first on National Bicycle Dealers Association.

In this episode, Specialty Bicycle Retailer and NBDA board member Chad Pickard interviewed Woody Smith, owner and President of Richardson Bike Mart. Chad and Woody cover the history of Richardson Bike Mart, the challenges Woody Smith has come across and how he navigated them, and how he successfully coordinates 4 stores, 17 brands, and 116 employees.

Latest Technology. Old Fashioned Service.

At Richardson Bike Mart, we’re dedicated to sharing our knowledge and our passion with you, whether you’re visiting us to purchase your first bike, you’re returning to us for your annual bike maintenance, or you’re new to the area and in search of riding buddies. We carry a wide selection of best-in-class bicycles, cycling apparel, and cycling accessories, and we offer many beneficial programs to ensure that you’re enjoying the exceptional value and convenient service.

You can expect our product selection to feature the latest and greatest, but our dedication to you remains as it was when Richardson Bike Mart was founded in 1962.

Support the show

Woody & Chad

Thu, 8/20 11:48AM • 58:36

SUMMARY KEYWORDS

bike, store, people, bicycle, business, buy, years, bike shop, big, customer, BMX, industry, gm, vendors, Dallas, Richardson, employees, woody, rode, work

SPEAKERS

woody, Rod Judd, Chad Pickard

Rod Judd  00:10

You are listening to Bicycle Retail Radio brought to you by the National Bicycle Dealers Association.

Chad Pickard  00:17

Welcome to Bicycle Retail Radio. Today we are going to talk about something that started back in 1962. And then we’ll start to unlock the secrets to having the largest bike store in the southwest. My name is Chad Picard and I own a few bike stores up in South Dakota under the name of spoke-n-sport. And I’m also on the NBDA board and today, we have with me the very mirthful woody Richardson Bike Mart.  Good afternoon, Woody, how are you?

woody  00:43

Good afternoon doing great. And I did have to look up what mirthful meant, but it means it means Mary and I I’ve since we’ve met several times over the years, you’ve always had a smile on your face and very happy to be wherever you’re at. So I think the Merkel fits you well.  I’ve been called a lot worse. So thank you.

Chad Pickard  01:04

So today we’re talking about Richardson Bike Mart. And if we could, I’d like to talk about history, just a brief history of Richardson Bike Mart, and it started in 62. And there’s actually actually looked up, there are some cool things that happened in 62. The computer mouse was invented, the cassette tape was invented, and LEDs were invented back in 62. And it was also the first time that Ed McMahon said here’s Johnny and Janis Joplin was voted the ugliest man on campus at the University of Texas in Austin. So Oh, yeah, surprising, right.

woody  01:46

Oh, my.

Chad Pickard  01:47

Yeah. So give me a brief history of Richardson Bike Mart.

woody  01:53

Well, in 1962, a guy named Mike Hall started BIke Mart. And so he called it My call bite mark my calls bite mark excuse me, this plural. He had four locations here in the Dallas area. And in the 60s, and then he had the one in Richardson that he owned it back then your swing rep was, you’d always work with your swing rep and he was a swing dealer and you work with a swing rep said, Hey, I don’t want that Richardson location anymore. I want to get rid of that. So he told the swing rep, which was Jim Hoyt. And Jim point, said, Okay, I’ll try to find you a buyer for it. And so he left there, and he started thinking about it going, you know what, I’ve been on the road for 10 years. And this is 1970 Excuse me. 1980. So he went out and went home totally as his wife. He said, Hey, you know what, we want to start a family. be traveling all the time. This is getting hard. So why don’t we try to buy this Richardson location and bike shop? And so he went back and said, Hey, we’d like to buy it. It was 1200 square feet at the time and he owned my call own the other three bite marks the building property in the buildings. So he wanted to appeal to you when he couldn’t buy this was because it was in a strip center. And so, so Jim boy, but Mike calls Bike Mart November 1980 from my call change it to Richardson Bike Mart because it was the richest allocation kind of organically named it that way because he would pick up the phone bite mark and it was a rich simplification. And so he really didn’t go out and say I’m going to name it This, in fact, it took a whole year before it actually changed the sign on the signs from different people in success over the years and he’s one of them. And he just lifted up on the wall just said bite mark and the bite mark name had a good name for it. And, and so 1980 Jim white, about that changed which some bite mark and then I come along at nine. I had worked at a previous bike shop and essentially I called the peddler and the bike shop. And then I was there for six years. I came here in 89. And you continue the history.

Chad Pickard  04:13

Yeah, yeah. So when the current Richardson bike market building that you guys were in, when did you move into that building?

woody  04:19

Okay, so from 1962 to 1987, it was about two miles south of here on Koi and beltline. So it was a strip center. And then in summer of 97, we just went north here to the Campbell store to the where it’s at now. So that was 14,000 feet down there at that time, and then he went down here and built this 25,000 square foot building. And so that when we opened up a business for business on January 2, 1998,

Chad Pickard  04:55

and that building is now how big

woody  05:00

33,600 and some feet I don’t know exactly but

Chad Pickard  05:05

that is impressive. Yes sir. Is that it? That was it was a Was it a grocery store?

woody  05:13

No, he built it from scratch a lot of people come in here and they go oh this is no furniture store job it but he built it from dirt. So the shopping center ended with a building is that you’ve been in here before. And so he just added on it down and said Hey, I’ll sign a 20-year lease with you I want to build a 20,000 square foot store is a big gamble at the time. And so it a lot of people had bets that he would make it like two years and three years ago I had even some doubts. I was like oh boy, this is a big place. And but it with the lance factor, sort of when the Tour de France in 99 and in 2000 in the business road market went crazy. And here we are and that it was just organically. We’re blessed with a good business to justify the big footprint.

Chad Pickard  05:57

Yeah, and it is impressive. If you ever in the area of Be sure you swing by. I have been to the previous store when I was I lived in Denton for a while just north of Dallas and, and Richardson bike Mart was the place in the region to go buy stuff. So many options of products and things. And so we would regularly drive down 35 and, and hit up Richardson bike Mart. That’s awesome. So, and you guys have been in that location since and in? Did you open up other stores? at specific times?

woody  06:34

Yes. So uh, in 87. Then, we have a store in Dallas, and it was called bicycles a limited and he owned it since 1971. He built that store from scratch as a freestanding building. In fact, he’s still the landlord today of that building, but he wanted to sell the business he went to get out. And so Jim white bought that. That business from him changed the name from bicycles limited to renter some bite mark. And then that would happen in 87. And then in 19 in 2003, Jim built a freestanding building, bought the dirt, bought the property, took, took the bicycle limited guys idea, and said we’re going to be a landlord now. So he bought the dirt in the property and built a 15,000 square foot store in Frisco, which is a suburb north of Richardson, about 12 miles. And then and then recently in 2018, so Jim Hoyts been involved in all this since then, so so in 2012, I bought out the gym and in January 2012, I took over as owner, majority owner, he still has a controlling share of it, and he’s still involved, helps me mentors me and the in 2018, we open store McKinney, which is another suburb north of Dallas, and that was all by myself. And so that was kind of took a note from what They did it. And I couldn’t afford to buy the dirt in the building and build it from scratch because that’s the only way I could get it. So I end up partnered with my CPA. And so, so we both own a portion of it to my wife and on him. And so that was born in May of 2018. And it’s a, it’s a little over 10,000 feet 10,400

Chad Pickard  08:23

and that’s in an area that’s, as I understand is growing pretty fast, right?

woody  08:28

It is it. It’s growing about 10% a year, excuse me, two or 3% a year, and it’s grown 10% over the last four or five years it’s been it’s also just hitting this big growth. Just in the last few years. It’s nearly 200,000 people live just in McKinney now. And so strategically all the stores you look at a map in Dallas, we got kind of just north of downtown Dallas store and then Richardson store. The big store is in a kind of Far North Dallas, if you may, and then Frisco is about another 12 miles north of there and McKinney’s about another 11 miles north of there. So so they’re all about 1012 miles apart strategically and kind of worked out pretty good.

Chad Pickard  09:10

Good. So you’ve been around for a while, you’ve probably seen disc brakes come and go and then come back again. And you’ve seen carbon bikes come and go. And you’ve seen, even suspension has become available since you started working in a bike store. So you’ve seen a lot of changes in the industry, what are some of the changes you’ve seen at Richardson bike Mart, that you’ve had to really take a step back and say, Hey, well, this is something different. We really need to change the way we’re doing business to survive. But what or have you experienced any of those changes? And what did you do to navigate those?

woody  09:51

Oh, wow. Great question. And we’ve had, yeah, I think Yeah, the ebb and flow just like the stock market, you know, you have to change with the times and you have different competitors come and go. I guess the most recent challenge we’ve had we had it sadly because some of these are friendly competitors, but we had 11 lbs his local bike shops go out of business. And between the fall of 2018 in the spring of 2019, so seven month period we lost 11 bike shops in the Dallas Fort Worth area. And which doesn’t sound like a lot but then you say, Oh, it’s 20% well 20% of bike shops my business Oh, that’s that we know happens their inventory gets liquidated. Everybody in the brothers got to sell on for 20 to 50% off and so who doesn’t want to deal? I do. And so people go to those stores and buy their continental tires at 45 and 60 for whatever and their bikes and so anyway, so we had a struggle last year a little bit with that and but now we’re actually going to have a so the last shop went out of business in Bro see here may is May of 2019 this year so last shopped when a business liquidated inventory so I think we’ve had a clean slate since it so it almost to the day when that happened it after they closed the doors plus it also in the business just took off as people are running out of choices for sure. So we were blessed with people just saying you know what, we’re going to come to Bike Mart, they’ve been around a long time hopefully. And we’ve served people well we serve the community. We give back to a community hundreds of thousands of dollars a year and we just we’re always been connected in that and so those are the challenges but in how you’d handle them as you know, look at your payroll your biggest expense and you say okay, where can I trim? Where can I save? I did lay anybody off. I’m thankful for that. We have 116 employees and between all four stores and me just I didn’t have the heart to have to leave somebody off and things didn’t get that tight but they got pretty tight. Where I’m not used to and that took him out of the comfort zone and but we survived it. And we’ve had that even flows, you know, not 11 was a big hit. When 11 happened, boy, nobody was buying bicycles for about six months or eight months, it was just like, Oh my gosh, what happened in 2008 when President Bush was coming out of the office and President Obama was going in remember, for our guests and guests were in the south that’s a lot of money in and California is no big deal but that was high for around here and I think it was even higher as six and $7 in California at the time. But and so but you have to adjust your expenses and that’s the bottom line and what will you do your marketing?

Chad Pickard  12:46

Yeah, so with 116 employees, what are some tips that you know when working with those staff over the last? I mean, bike Mart’s been around 57 years, I believe What are some things you’ve done with staff that has helped grow your business and kept the ball moving forward because I hit 116 employees is a lot I I have three girls and getting them to move direction when we’re at the mall is well, it’s impossible. I think we all know that.

woody  13:19

Yeah, I got three girls too and a son, my, my youngest, so I can appreciate that. Um, yeah, it’s like herding cats, right? So communication. Every store has a GM I had to put them in leadership roles and say we have weekly calls we do with the GMC, I am operation manager. We talk to the gems every Tuesday on the conference call. And then he and I visit the stores weekly, and to see him and have sit-downs and one on ones with him. But it’s important communication is the biggest that’s the under communication underlying that. When you have more than a couple of stores, that’s the best advice I could tell somebody is communication. Have procedures in place written down, follow them. And in training, you know, that all comes in and around that years ago, you could fudge a lot of stuff with the internet and things you could even talk to customers if you didn’t know, some things, you could kind of fudge your way through those things and maybe get through it. But now the customers know is kind of the opposite. They actually know more than us and so they pretty much telling us I want this bike or you know, whatever. And a lot of cases because I think it’s 81% of people search the internet before they walk in your door and look at your website. So that’s a big number. So people were well prepared, but training and so we went on to Dan, I’m a huge Dan man fan and he has a gear training and the acronyms g and represents different letters for different Parts of sales training, and it works, it’s a recipe. It works. And if you train your people that you’re training and they get that seven hours of training before they start just don’t gear if it’s a salesperson, and then they get about four or five hours of what we call RBM University. So our RBM is just Richardson Bike Mart that’s our acronyms there. So we use so RBM University is just an in-store, we’re going to teach you about the business about our core values. Expectations go over the employee manual, you know, you should be shaven, and shirt tucked in, you know, the Grinch, well, no holes in your shoes and shirts and stuff like that. And so, name tag on so those are the things we kind of go over during that but so training is the biggest, biggest part of hurts.

Chad Pickard  15:56

You mentioned communication as being one of the most simple Certain things among your staff what tools do you use to communicate? Is it? Are you just shooting employees texts? Hey, take out the trash. Are you having one on one? Is it emails? Is it just here’s the manual read it, this is our communication and do your best? So what’s that communication like, between the leadership and staff?

woody  16:20

Okay, that’s great. Um, the, we have a company newsletter that goes out every other week. So when we get paid, which is every other Friday, we have a newsletter, it goes with it, it welcomes new staff, it’s coming on board, or somebody is leaving us and moving on to something else. Well, well, we’ll give them a goodbye, little knowledge there. And then we also list if we have any new product coming in. things around sales, big events are coming up. All these things like in the next two to four weeks, so employees know how to prepare and then so that’s at that level of a groundstroke of some people do better with more one on one time. So we have our gms will meet with this with the they have we call, we have a store manager and the GM and the GM and store managers will beat with staff. We have two meetings on a Monday and a Friday. And a reason we do two, it’s the same meeting both days. But you can’t get everybody when you have a seven day a week business, you have to we’ve been just doing two meetings, I don’t want to ask anybody to come in on their day off. So I always feel bad about that. So we do a Monday and a Wednesday, it’s the same meeting both days. The difference is just a different day, and different people will be there. And so we go over anything that we need to go over procedures, maybe we do a little role-playing for gear training. Maybe there’s a new tire that’s out or a new bike that just comes in and new 2020 Gizmo, we talked about that a little bit. But we always have a list prepared and we don’t shoot from the hip on that. So we have to bring things prepared. And then that’s it for the sales side, the server-side they do meetings every other week. The same type of thing. But they do on the server-side, hey, work orders are getting paid, we’re hitting our goal, you know, we’re trying to hit on one, you know, it’s up to you to $100. To labor, we want to do $100 with the add ons, when you do a repair has to go. Or it’s actually a buck 25. And some of the stores it just ends will store they’re talking about, but we’ll go over the goals, see how we’re doing. So those are communicated lots of different ways to email sometimes directly if we can’t if a part-time person is not here a whole lot. We’ll email him directly. Hey, good job on last month, you did a great month. Can you work on these two or three things for me, please? You know, things like that.

Chad Pickard  18:35

So you’re training roughly, you know, a full-time employee, roughly how much training are they getting a week with those? And I’m assuming there’s maybe some other training going on as well.

woody  18:47

Yeah. Well, when that’s been seasoned, they’re probably getting, oh, maybe an hour. I’d say two hours a month is true training, I’d say is what They’re getting a factory. Now. That’s beside the track University and the specialized University and the X verticity. One, you know, and whatever else they want to do in their own time, there’s other ones. But that’s, that’s above and beyond what we do with that we give. We give called bike bucks for that. So you do that at home when you do it, it emails the GM and then they get a notification and they give them roughly about 1215 bucks an hour equivalent and storage credits what they get. So it’s kind of a nice way to do it without paying them throughout the payroll. Okay.

Chad Pickard  19:35

And then do you do any sort of yearly, I don’t know, maybe like staff retreats for leadership or anything like that, to work on, you know, like a bigger store, bigger picture, things like a store, mission statements, core values and things like that.

woody  19:52

Yes, that’s funny. You said that John Burke. President of Trek asked me to do that a couple of years ago during the Continuous Improvement. And he does With his leadership team, and now it’s like so just last week we had our managers of store managers, and at the service manager and assistant service manager level we meet and we talk about kind of recap of what 2020 2019 has done and what 2020 is going to what goals we can do to improve we’re always trying to the constant improvement I’m always continuous improvement person, I’ve always wanted to do that personally, like a father, as a husband as a boss I like to continuously improve I always want to but can always get better and so we have a wide-open policy about that it stores run by a team. I just happen to own it and but it’s run by with a team atmosphere. And we all need to be on the same page and we all need to pull the rope the same way. And so so we have a little retreat so we had we rented a house outside Dallas up there and pilot point right where we went to school nearly up there and didn’t and then and we rented a little house it had a pole in it and it was 400 bucks is a VR Yo deal. And then we wrote from there we rode gravel we rode and some of the guys wrote mountain bikes is electro not too far. So we had about three hours of playtime and about four hours of meeting time talking about again, what was the good, the bad, the ugly, we do what they call SWOT analysis, SW, OT so its strengths, weaknesses, opportunities, and threats. And so we, we let everybody go around the room and, and talk about it, let them participate, you know, where are they at with that, and, and, and bring up the strengths, the weaknesses and so forth. And opportunities.

Chad Pickard  21:37

Doing that event? Have you ever been blindsided by anything that you know, someone just said, Hey, here’s a threat that completely caught you off guard or maybe an opportunity that just you felt like you were totally blind to something and it ended up turning out to be a very important point in time to change the way business is done or to take advantage of something

woody  22:01

Yes, and, Boy, that’s a great question. I’d have to go in my memory bank and think about something to do a boy. Yeah, that’s an obvious one. Well, though and the one Chad, you and I talked about it, we have them when it comes to recently mind is Scheels Sporting Goods, it’s come to town and they’re big boy, and they’re built. They’re their biggest store they’ve ever built here in Dallas. In fact, it’s about five miles away from our Frisco location, or about 12 1314 miles from the big store of Richardson store where I’m at. And so yeah, you get a little nervous about that. And, and I want to talk to you about that. And I talk to Brent from biotech and, and get his two cents. And I know he had a story here and I talked to some buddies that have something else at Boulder, and they all said the same thing. And so anyway, well, yeah. So that things like that do come up. And yeah, we need to hear about those things and know what’s going on. And, yeah, we’ve had to make some changes, but that’s the most recent one. I could say. That and by the way, I didn’t finish but so the store that’s at the manager level of those meetings were, and now we’re doing, we’re going to Bentonville, Arkansas, which is the mountain bike Mecca. We started that last year, and we actually had a blast. And we again, it’s been two or three hours plan, not three hours plan. And then about four hours, five hours of business. And then we break bread, have a beer, and maybe talk to another hour or two about that in a relaxed atmosphere. And again, we look at a recap of what 2019 was, like, we’ll look at 2020 it will take some of the manager feedback and see if the GM citizens lined up. We won’t share that feedback with them until we want to hear what the GM say because gyms have a different perspective than the store managers do. And the service managers is that they’re, they have different challenges and different successes and different worries every day. So, so that so that’s how we’re doing it now. And that’s only been like this is only the second year now. So but it’s as to say what as the best thing I did and again, communication It’s been a great day in it in the team building has been huge. Getting the team together. I’ve seen a closer bond with everybody. It’s just been, it’s been great to see I love to see it. Awesome.

Chad Pickard  24:14

That’s awesome that you’re able to do that with your staff. Oh, yeah. Do you so you’ve worked at Richardson bike Mart since 89? Correct?

woody  24:23

Yes, sir.

Chad Pickard  24:24

So what do you do to take the blinders off? Or maybe that’s not the right way to say it. But I mean, you’re always in the same store or set of stores? Do you ever feel that you just you’re too focused, and you need to start looking for other places. You don’t want to or maybe you that you get maybe complacent because you’re always in the same place. But what do you look at too, you know, make sure you’re moving the ball forward and you’re changing as retail changes. Did you ever struggle with that?

woody  24:55

Yeah, I get concerned. um you know, I love to Go to Rei. You know, I admire what they do. They’re a billion-dollar company. They’re obviously smart of what they do in merchandise Well, they serve customers where they serve the community. Well, they admire them. I do a CI event with john Burke from Trek, and I’m honored to be able to have that. I told him, that’s a $20,000 value, and he just laughs because that’s part of being a Platinum Plus dealer with him. And you get that free time with them. And it’s, it’s four hours of just in, he shares other recipes, if he may with other store successes, or I won’t name the store. But that’s the agreement that everybody has when they go into those meetings. And he’ll look at ingredient go, Hey, you know what your gross margin is? 43.7 Wow, what are you doing to make it that hot? So I can share that recipe with other people or are like your marketing budgets only 1.5% two percent kind of going rate for the most job, what do you what are you doing or not doing? What may be your baby you’re leaving money on the table? You’re not using all that money to get the most out of the business. And so those conversations are just priceless. And so you come back and you have a page of to-do items. And we go back and we place and we start starting on the item. And so though and so, so going to the CI Vance, I’ve been enjoying these, these podcasts through MBDA demands are been great. And the Harley Davidson store since a parallel, I’ve got a buddy it’s in the motorcycle business. And I go to his store, I visit him out once or twice a year and see how they merchandise they have similar challenges similar environment that we have. And so I try to, you know, look at those types of resources, but mostly I just try to take care of myself. I try to stay I trust him as own and do what we do well Just keep serving the customer is the number one thing you can do. And that’s that I’m all about the sales floor. And I love being on the floor. I love selling. I love working the service counter helping customers. I love seeing somebody come back go you sent me by three years ago, I’ve lost 40 pounds, you’ve made a difference in life. Those things just keep going. Oh, yeah,

Chad Pickard  27:19

I agree with you. 100%. You mentioned the motorcycle industry. Are there other resources outside of the bike industry that you look to for I mean, you mentioned merchandising, maybe other industries that have certain processes in place, or maybe they’re viewing service writing different like the car industry or anything like that.

woody  27:41

You know? That’s funny said that too, because my  Huffines Chevrolet is down the street from us and we bought most of our company cars there and employees buy cars here. They give us good deals. And they sponsor our race team. And so they put money in that club and we’re very grateful for that relationship. And they have a p two equivalent. If you Made a group when they get together of non competing dealers and they talk about their challenges and Hey, what’s your payroll like and what how do you deal with this and commissions and websites and all that stuff like that? They talk about this. Anything is on the table you can talk about and the FY two help helped me get through I did PT grid for about three years and I got to where I had to get out of it for a little bit because I was getting on this the Shimano 20 collective group. And I couldn’t do both at Burma candle both ends and it just my wife had had my high.

Chad Pickard  28:35

Yeah, and for those of you that don’t know, our P2 groups is a program through the NBDA where we match up probably about 15 to 16 retailers that are non competing, and we meet twice a year, once in the spring and once in the fall and we talk about the topics that we’re struggling with and, and look to improve our businesses through key profit indicators. We if you go back a couple episodes I believe there’s a podcast about it. So if it’s not a podcast, it’s certainly one of our webinars that you can find posted in the forum. But the PTS have been a really good tool for those that maybe feel like they’re in an ocean and are trying to figure out some of the nuts and bolts of the industry and you know, kind of where should I be and what should I be spending on payroll and marketing and rent, leases and things like that. So yeah, I think thanks for bringing up the P two group I’ll put a plugin for that. If anybody’s interested they can get a hold of the NVDA and definitely happy to talk about it. But let’s get back to Richardson bike mark. You’ve with it with a store the size of Richardson bike Martin, not just the one location being 33,000 square feet but with four rather large stores or three other rather large stores. You work with a lot of bike brands and whatever What’s that? What’s that like working with 17 bike brands?

woody  30:04

Some people call you crazy. It’s like are you nuts. So we’re very, we’re very grateful for to the big the two big E’s in here and we have Trek and Specialized and, and that’s a rare thing. And we are very grateful for we make them to make both vendors happy is a tough dance. We do our best we like to be a sub. I’d like to tell people there’s no name on the building, but Richardson Bike Mart in every bike shop should do the same thing. You’d be selling your brand, don’t sell whatever brand, we’re grateful for track. We’re grateful for specialized. We’re grateful for the other 15 below it, but trig specialized makeup, most of our business, but then we do a lot of other things we do for brands and BMX bikes, we do three brands and recumbents. We do a lot of recumbent trikes in that’s a pretty big business here in Dallas. We do Two folding brands of bikes, three bike brands in five road bike brands we do we’re almost 5050 it varies year to year, it could be 4555 but it’s mountain bike road, sometimes it flips depends on the weather is if it’s wet, you’re dry, you’re so we like to get people from, from their first bike all the way up to there, to their racing bike or racing mountain bike and now in between and so working at it is a hard balance. But usually, we’ve been, we respect them, they respect us and, and we challenge us for different things and we try to grow this category or that category. We try to do the best we can and we try to negotiate those terms every year when we sit down with them, what their goals are, what their needs are, be respectful to that. And but mostly it’s the tracking specialized, it’s you know that That’s the game keeping those in compliance and where they need to be.

Chad Pickard  32:06

Sure. And I suppose that at some point, you just you got to have bikes on the floor. And if one brands out, you just got to move down the list and get them from the next. The next brand, I suppose. Oh, yeah, yeah, yeah,

woody  32:21

yeah, absolutely. Yeah. I think their strengths and weaknesses, you know, trek has a nice $399 mountain bike especially starts at 550 it’s just that’s too much for some people and we’re sensitive to that we want to be we have a lot of students at a couple of different locations that have that want basic bikes, basic transportations, and so with that said, we’re thankful to have those opportunities.

Chad Pickard  32:50

Gonna grow that in the future is is is 17 the limit now,

woody  32:55

now we had 22 in here one time and it was just too much I know it sounds like a lot Keep in mind that most of stores only have about five or six brands. I mean, yeah, tracks specialize Santa Cruz. Those are the top three brands we sell in here as far as dollars out of here, you know there.

Chad Pickard  33:16

And you mentioned BMX is what’s the BMX climate like in Texas is growing or is it? What’s it like?

woody  33:25

Well, being a mixer for 11 years I did that was my love. That’s right. And my, my Savior, for a lot of ways kept me out of trouble and on the straight and narrow as best I could, and it was a I’m very, very, very grateful to have BMX in my life. And so I look at BMX as so the answer your question, BMX is on the up. First time in a while that the vendors kink and fit. Sunday we’re running out of bicycles in 2019, but run out of bicycles in the 2020s To come sooner than later. That’s a good problem to have because we’ve had about that went through for years there have dry and the kids were buying that red shiny iPhone and not the red shiny bicycle and, and they did that 12 to 16-year-old just wasn’t riding much, but now we have this generation going up. So what that tells me is people like me, eventually aged out and they get into a mountain bike or they get into a road bike. Once they do that BMX for a couple of years, that is a favorite pastime of their life. I’m living proof of it. And I’ve got plenty of friends that come in the store that I’ve raced against. And they still bike, they’re still involved. It’s set the ground roots of the love for the bike. So the bicycle erotica, bicycle retailer and read all those things I say all these things. And one thing that never gets measured is BMX. I don’t see too much on it’s always juvenile or whatever. But when I see that needle moving, that tells me that we’re two to three years away from big things. kids getting kids becoming young adults, young adults begin bike riders, becoming Customers for life

Chad Pickard  35:01

and also employees and mechanics as well. Oh, you bet. Yeah, The thing is exciting. And it’s good to hear that it’s that the needle is moving on that.

woody  35:12

Yeah, it’s working good on the race side here in Dallas, and it’s working good on the freestyle side, so it’s working pretty good on both. Okay. The National caliber track here in Dallas is pretty nice.

Chad Pickard  35:23

Awesome. Cool. Very cool. And I had forgotten that you race BMX. I raced a little bit of BMX it not until I was in my 20s. But I raced a bunch against a bunch of 14-year-olds. So that was how I get most improved racer one year and that was, I think, yeah, I think they were scared of me or something. So moving on, what what’s something about our industry that’s always you know, that that you’re curious about or that keeps you maybe keeps you moving forward or you just want to keep learning more about it and Proving I mean, you said you’ve, you’ve done continuous improvement events with john Burke, you’ve done it with your staff, but is there like that one, Northstar that always moves you forward?

woody  36:13

Ah. Well, serving the customer. We have a serving mentality. That’s part of our core value. We have a serving mentality. If we can serve the customer, everything. It’s like the Good Book says you serve others, you’ll be blessed. And that’s what I’m living proof of it. I the Good Book says it and I live it every day and I’m so blessed to be able to say that and live it every day. The moving this moving the star forward, getting people on bikes, and seeing the more bike trails, more mountain bike trails, more bike lanes we ever have more bike awareness we’ve ever had. And I just can’t seem to not think that where the industry is headed. Setting up for a bike boom 2.0 we had a big bike boom in the 60s and 70s where swing could make it a bicycle. So we’ve never sold as many bicycles at that time ever again. And even though Yeah, states are almost doubling it was it people just don’t there’s they have too many other options, you know, CrossFit and a whole bunch of other things they can do nowadays, but the bicycle industry, I think is poised for another bite boom. And I don’t know when that is, but I think I’ll see it next. Yeah, it could be three to six years, three to eight years between e-bikes and the BMX or youngsters coming through. I just think we’re poised for that with gas, electric cars, GM making bicycles. What? Why is the car industry want to mess the piddly little bicycle? When something’s up there? I mean, why would they be doing it? All the major cars, all the major motorcycle brands are all doing it. So there’s got to be something there. That’s just my opinion. And I feel pretty strong about it. I can’t prove it. I just it just my gut.

Chad Pickard  37:59

All right. I hope you’re right I and yeah the mid-70s when sold more bikes than any other year I think everybody got a Schwinn varsity and then also a Peter Frampton comes alive record. I don’t know about that second bit of that second fact, but I’m gonna go with it. Yeah. Okay, let’s do it. Let’s go back and talk about your staff a little bit. What what what have you learned from your staff over the years that that’s, that’s helped you improve your business?

woody  38:34

I love having young people because young people bring a different perspective. And I tell you to know, early on to Hey, you see something question it. Why are you doing it this way? I don’t know why are we doing this way? And so I love that. I love young people and we have seniors, I’ve got guys in their 70s of work here and I’ve got them all in between. And I’ve got a suit. We got 1314 women, I believe wish I had about 30 or 40 of them in here, but I can’t get up women to work the business. The bus my daughter my number two daughter works here my number one daughter worked here for a long time until she decided to get married have kids and number two daughters following her footsteps and my son work for some but I think the staff of bringing new energy new ideas in questioning that’s what they can bring that question why do you do this way? And we may have a good reason maybe not so good reason. You know what, I don’t know why we do it that way. Did you think we should do it? Well, okay, well let’s try it. So

Chad Pickard  39:43

and I think that’s important as we get older and as we mature in our industry, our stance on things or the things we believe we become more rigid almost to a fault. And so it’s good to have the youth come in, in fact, If you read the Good Book, it’s Moses 40 years to solve some of his problems. But if having young people come in looking at things differently in different ways we can we can change and change our course and still continue to be relevant to new customers and create new experiences for them. So that’s awesome.

woody  40:19

Yeah, thank you.

Chad Pickard  40:22

Is there you have a special skill then that you contribute some of your success to is it? Is it just being a listener? Is it not being content with where you’re at? what’s, uh, what’s the hidden skill that that woody has that keeps him going?

woody  40:40

What keeps me going every day. I love coming to work every day. I don’t mind my wife says how do you work? I’m 52 years old. He’s Addy. You stay energized. Well, I’d love to get my workout in. I do four or five days a week I do something I run. I bike. I will work out at the gym. I will do something four days a week, five days a week minimum. I got to have a workout. I’m again a better boss. I’m a better husband, a better dad. And I gotta have my workout at least an hour or two and Saturdays I tried to work out and hit a two to three-hour ride one of our rides from the store. And but what energizes me is I look forward to what I’m doing. I love the people I work with. I love the challenges every day. There’s always something sometimes Yeah, it gets a little sometimes it gets a little tiring, but, but most time it’s good. You know, I like it. I’m sorry. I hope I answered your question. Yeah.

Chad Pickard  41:39

Yeah, that’s just that’s what I’m looking for. Uh, what do you see is the biggest challenge in the next one to five years in the bike industry.

woody  41:49

Oh boy, that’s a great one. Um, well, it shops a goddess state. They get to keep evolving if shops don’t stay current and with trends and changes in the click the click and collect through a specialized great program. I know I know john, you sell giant they have a similar program. trek has something quality bike process is the retail to home thing. If you’re not doing those things, you’ve got to be you need to get on it next year. You know, and that changes are going to happen and you get a bid and I happen to or with you without you so in so long term you just can’t survive if you don’t change with these things. But that those are the things that I think that the industry has to look at the next one to five years is creating a really good service department because that’s where the profitable part is keeping, aligning yourself with great vendors that give you really good margins, and they try to not outprice you are under pressure, I should say on their website versus your website. Those are some challenges and some of the vendors, but we want to play in that market that clicks and collect program when the customer can buy from their website and we get most of that money. That’s a pretty good deal. I mean, people liked it. I had a customer that’s been five bucks for 15 years here and he bought it. He was at home watching TV and just bought it bought a bike online and I say hey, what made you buy that asset? I am just curious enough, not wise way or just whatever I just said, You know, I appreciate you use our website. What made you want to turn to that not come and just buy it because I just wanna make sure it was there tomorrow is I want to check that box I’ve done. I was like, Okay, good reason. Thank you. I said thank you for your business and I appreciate that he doesn’t know we make five or six or seven points less than if you just walked in but That’s how people want to do business and I don’t make the rules I need to, we need to embrace that. And we got to figure out how we can embrace it and how we can, right now working on language to the website, how can I, how can we write that on a language without? The customer knows that if he knew that we took a margin hit, I think I could probably open with them enough to say, Hey, would you please buy it from us and just come into the store or buy it from our website, and then order it for you that way or whatever. And we just got to figure that language but I think it’s important. In the next one to five years, people are just going more and more online. And, and I’m grateful for Shimano for up in the Amazon. We look like robbers there for a long time we were we were 50% less and my, my buyers were buying products from Amazon two to three years ago because it was cheaper. That was from Shimano, and we’re not a small dealer, and it just really upsetting but they’ve learned I’ve cleaned that up. They’ve gotten better I see everything on there now. Within retail are sometimes about eight or 10% lower. It’s about the worst I can deal with that. But I can’t deal with 50%. And we look like we’re robbers and I mean, if we’re buying it for Amazon and current inventory for cheaper then we can buy for. And so somebody in there’s making money, Amazon’s making money the person that listed it’s making money. So there’s some sort of a gray market going on there. And so, a lot of stuffs been cleaned up so long as we keep lining our stuff up with vendors that are doing the right things. And cleaning up stuff like that and sharing the profits with on the website. Visit a manufacturer still need us bike shops and we need as healthy when you didn’t. We need to make sure our search departments are good. vendors are aligned and you’re continuously improving your own websites and stores. That’s the three best things I can tell you.

Chad Pickard  45:56

We talked about vendors a little bit earlier and you just brought it up again What What role have had vendors played in the success of Richardson bike Mart or even? What are some of the conversations you have with vendors? Are they? I would imagine that the size that you are you have a little bit of pole to get some things done. Not asking you to give away any trade secrets or anything. But what are those conversations like? I mean are they do you feel vendors are on your side or you feel they’re pushing the other way?

woody  46:33

Well, sometimes I second I start thinking about it going well, it looks. It looks like their bridge. They’re trying to become a retailer, wholesaler and some of these things, you start scratching your head. Well, I can tell you right now, if it knows me, any vendor knows me anybody outside the industry inside the industry. I’m not a bully. I don’t ask for much. I don’t ever ask. When vendors come in here and we go to lunch. I take them to lunch. They don’t buy me lunch ever. They don’t buy my team lunch. Ever. That’s one of my pet peeves. I just, we don’t I don’t want I’m not going to do we don’t we want, we want to be a good partner. And what I do ask for a favor if there’s not favor but I’d ask that’s legitimate ask not asking too much and not taking advantage of the rep or the situation, then I usually get a really good favorable response. And so so that’s, that’s my best advice would be.

Chad Pickard  47:33

Again, you’re coming back to open communication with your vendors really yeah, it’s

woody  47:37

been open with them and say, This is my challenge, hey, you’re shrinking my margins on this. Let’s just take that as an example. You’re shrinking my margins because margins are shrinking. Like it or not, we’re losing a half a point is it’s hurting the industry a little bit in the big vendors. And so how can we get margins backup, what can we do you know, is there something if we grow our business certain amount of certainty what are your needs? And it’s important to hear their communication with them and say, What are your needs? And what are our needs and we can be selfish. It’s a one-way deal. You’d say we’re the customer all the time, but the end of the day, they’re a vendor and we rely on them they market their product and they get people to come in our stores they advertise on their website that we’re stocking dealers and so those are all it’s a partnership needed in both sides and I respect that a lot. And we don’t I don’t ask we don’t I don’t my buyers stuff know that we that’s a taboo don’t ever we don’t believe we don’t we just I just want my fair share and that’s why when I went to Shimano, I said you know what, all I want is my fair. I don’t ask to get any better pricing anybody else but somebody’s been something when you can when I can buy stuff for 20% less than my price on Amazon and they’re making money on it occurred out I’m mad. I mean, You got me, you got my attention real hard. I mean, and the worst thing about it if people think we’re releasing, they go, man, they’re so high up there. Well, because they’re shopping one or two things or five things, you know, there’s the most popular Shimano chains or cassettes, or whatever. And all sudden, now we look like these.

Chad Pickard  49:18

Yeah, we lose a lot of authority when we mark something at MSRP or matte pricing, and our clients can you know that that pricing so transparent, they can just go on whatever website and get it for half price, we lose a lot of authority. And when we say, you know, in the months to come when we say hey, you need this type of bike for that type of riding, you know, they’re not going to believe us. Yeah, it’s good that some of that’s, you know, the internet is I feel is still new for retail for the bike industry. And it’s great seeing us navigate through that. And I certainly believe in the win-win. vendors have to win. I mean, they have to be sustainable. retailers have to win. They have to be sustainable. So good. With an organization as big as yours, do we need more bike stores? Do the smaller stores that are just starting out maybe in 1000 Square Foot retail spot? Or maybe they’re going big right away? What advice? Can you give them? a, you know, maybe something you’ve learned or something that you think they might need to hear about growing their own business?

woody  50:33

Well, yeah, they get their head examined. If they’re trying to get the buy business, I’d say I take that money and maybe invest into something else but since but if you really, really, really want to, and you like to make just a couple points a year then yeah, you’re in the right business. You have to love what you do, obviously. So that’s where it all comes. Well, I would say You know, you have to be inventory turns are huge. If we’re they’re smaller, bigger starting off it, you can’t over inventory yourself and you can’t pay your payables and then you get behind it. And it’s just a never-ending spot, especially if you have a recall on an item and you get too many of this or that. As those things like that can really hurt you. You know, be involved in the community be connected and communities or schools or churches I believe in that I believe in. We donate to every single person or company or organization, nonprofit for profit. I don’t care. Every buddy gets a yes that walks in here are that emails are are they cause or is the census the lender and, and so every GM and every store has that wide-open budget. You think, wow, I can do that. Well, what we do giveaway services, a lot of times and most of those things, every church every school has got we’re trying to raise money for a playground. We’re trying to work Doing a company team-building thing for some event and can you give us something for auction? Yeah. And so what we give away is bicycle tune-ups. And with labor and we give a $90 chip away and we got I got about 30 bucks in my thought is what we have in that true cost if you may, in a tune-up so but when does it become a customer in the store, and almost everybody has a bike in the garage, we’ve all been to parties and like I got a bike I need to bring to you Chad, I need to get that looked at, it’s got dust on it this thick, I’ve ridden five tires flat, we want to get those customers in the store, we know we can if we get them in the store, we can get them excited to ride again, if we can do that if we have them in the store. And so do those coupons and if I give me if I give a helmet or if I give him a pump or give him an I never see him again, those items go away. So I found that giving away services is little liability and a whole bunch of wind to get them back in the store. And so I like to give away a two to one or a or and or I should say I give sometimes both away. It depends on how big the event is. I’ll give have a date, a date night or date weekend. Rental bike voucher. So it’s for two bikes for two people for two days. And so they can. So his or her maybe a dad and a daughter or dad and a son or a wife and a husband, whatever they can go rent some bikes and whether the mount biker whether they’re a roadie, whether they’re we’ve met tandems they can go out and rent the bikes, it’s to two bikes for two days for free. And so those are good values. Again, get people in the store, get him smiling. You know, we’ve got people on bikes, they smile, they go, man, this is fun. I think I want to pop a bike. And so those are things that you those rental bikes already been paid for we’ve, you know, effectively they’ve been taking inventory, you know, you don’t have any costs into them. So you can give that stuff away. And you get an opportunity to try to sell them something. So those are Win-Win things. So be connected in the community and stuff like that. And say yes, don’t be that person that says no

Chad Pickard  54:00

Well, that’s all the questions I have what is there anything that you’d like to add?

woody  54:07

Ah, yes, my networks are mentors, mentors. Jim Boyd is my mentor. He’s my dad. He’s my hero and Jim Hoyt. Just a little bit of background, he was born and raised in Indiana on a farm. He went to the Vietnam War at 18 years old. He served for 23 years 22 or 23 months in the Vietnam War. He was 101st airborne. And so he was infantry. He was in the frontlines fighting the war every day. What a man He’s my hero. He, yeah. Purple Heart to silver stars runner up for the Medal of Honor. He comes back alive. He fought on Hamburger Hill if you know anything about Vietnam, wow. Well, that’s a big part of history. He is one of those members he’ll get the name from. A bunch of people died up there and it looks like hamburger meat. The way that people were shot up and everything is terrible, terrible times. He was one of the very fortunate, fortunate to come down from that, that mountain fight. And he came back a started swim bicycle 1970 work 10 years, it’s when bought bite mark 90. And he’s been my mentor ever since. And I always admired him from afar. I work for a competitor down the street. And I always saw him do this when swinging meetings and stuff like that. They’re simply Oh, he was like the rock star. He was like, everybody knew him. He was like, they didn’t I didn’t think he’s approachable and all that and, and finally a couple of years and asked for him for a job and he said, Yep, you hired me on the spot. It’s the 32nd interview. I didn’t know what I was getting paid. I didn’t know. I didn’t know anything. I didn’t know when we got paid. He just said he said what can you do? I said, Sir, I was the GM of the bike shop, I can do anything I can. I did it all you basically fixed bikes to a customer walks in, you take your apron off and you go wipe your hands and you go help a customer sell a bike. Then you go back and you fix the bike and you go order that but part you need some quality and then You go back and fix the bike, you did it all. So and that’s what you do as a small business you had three or four or five people in the store you know employees and so I put him in service in between sales and I’m very grateful for the opportunity I’ve had to work with him and mentor me through the all this and I’d say a big shout out to john Burke because he’s been to those meetings for with him for CB six ci Vance probably in six years and those are really really helped our business and helped me personally as a leader and to help focus in on the things that are important. And then and then MBDA PT group really helped me you know, get to know you guys in senior the stores and here’s your challenges and it’s me feel like I wasn’t alone. And there are others out there. You know, I’m in business, biomass, biomass for myself, but not by myself. Other people around me that can help me. Just ask him and send those emails out, ask them questions and all that it was just great stuff that the group it offers. But anyway, it’s been my honor to be part of this group. And I hope everybody out there can learn something from this. And if you ever want to email me, I’m just simply woody at bike mart.com if you want to email me, I’d love to hear from you. And what else?

Chad Pickard  57:29

Yeah, thank you for that Woody. I don’t really quite unlock all the secrets of opening up, you know, the largest store in whatever part of the country we’re in. But yeah, if you have questions, what he has his email address, you can certainly email me if you have questions. It’s Chad at sn s bikes calm. And then there’s You can also reach out to the NBA through their website@nba.com. And I guess that concludes everything. I think we’re done. Woody. Thank you.

woody  58:03

Thank you so much.

Rod Judd  58:12

This has been Bicycle Retail Radio by the National Bicycle Dealers Association. For more information on membership and member benefits, join us at @NBDA.com.

Chad Pickard
Owner, Spoke-n-Sport – South Dakota (2 locations)

In 6th grade, Chad took apart and rebuilt his first coaster brake hub.  It was that curiosity that kept him working in bike service shops from the age of 14 till buying Spoke-N-Sport in 2001.  Mountain bikes and Hans Rey ignited his passion for technical trail riding a few years later.  Chad’s work experience is almost 100% bike stores but he is always looking to other industries to improve the customer experience in his two stores.  Chad serves on the bike committee in Sioux Falls and has played an active role in defending the rights of cyclists at the state level including the most recent 3-foot / 6-foot passing law.

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