The Complete Guide To The Home-Operated Bicycle Business

For a few reasons, the more bikes you fix up and sell, the more profit you get per bike. One reason is the more bikes you show, the more you'll sell. If you have two bikes on display you'll get less people stopping to look at them than if you have 10. Among ten bikes, it is more likely you'll have something for a customer looking for specific requirements than from a collection of only two bikes. If you have been working with large numbers of bikes, you will more likely have the used parts that you need for each case from the leftovers of other bikes.

If you do happen to have facilities for selling, storing, and repairing you can make much more money. But you may have limitations. You probably live in a small place, or where a big business is not legal. In this case, you may have to be careful about the size of your parts pile, or how many customers come to you. Or, you may not enjoy selling or repairing.

You can still store lots of parts, do all the repairs or sell all the bikes you want. How? Get a partner! That is a magic solution to many problems.

If you have a lack of tools or space, you may consider taking a partner into the business who has some space or tools. If you don't like the idea of repairing at all, perhaps your partner can do all that, while you do the buying and selling. My wife has no interest in repairing, she cleans them, I repair and buy them, we both sell them.

Of course a partner can create problems too. What if your partner wants wall to wall carpeting for your sales area, and you do not? What if it turns out that your partner whose job is to fix the bikes does not know enough about bikes to determine which end of a bike to sit upon? You must structure the partnership so that it gives you certain freedoms.

If your partner is in charge of selling, don't refer to him or her as a partner. You consign bikes to your "partner". If the partner flakes out, you can take the bikes elsewhere. If your partner handles the repair end of the business, you can own the bikes yourself, and pay the partner for the repairs. If the partnership works out, partner can take care of all your bike repair needs, on a piecework basis. If your partner is not living up to your needs, you can have someone else do it. By this method of division, you can't get burned badly because you can always change the arrangements.

(My wife and I are equal partners, but we know from long experience that we work well together.)

If all you need is tools and space, perhaps you can rent shop space from someone who has a nice facility such as an automobile repair shop.

The following is an article I wrote for a magazine called Workstand Update. The article is aimed at professional sales people who work primarily with new bikes, but I think the material is just right for used bike sellers too.

Note: the hypothetical customer is referred to as "him". English being what it is, I could have had a hypothetical female as easily, but not both while maintaining clarity in this text.

When selling bicycles, there are some techniques and considerations beyond regular accessory sales. The considerations are the efficient use of your time and making sure not to lose a potential sale. These techniques will help:

* Make personal friends of everyone who enters the shop. This takes only a couple of minutes and can be invaluable when a customer is "sitting on the fence" (undecided about making the purchase). For me it works like this:

When a customer first comes in, I start by complaining or at least commenting about something such as excessive paperwork. You can also try telling a mellow joke or comment about something in the news, a friend who won the lottery, etc, be creative. This opens the conversation. Already you have done something the customer will remember, you have treated him like a person instead of a customer. Saying "Can I help you?" is a mistake, it is very impersonal.

The next thing to do, if you have time is to talk about whatever the conversation takes you into, except bikes. Talk about cars, your kitty-cat, crossword puzzles, etc. Take a genuine interest in this person. Don't be contrived, be real. This will cement the friendship.

Now you can work your way to asking your customer what brings him to the shop and proceed to become professional. Even now don't forget to be friendly. I don't mean fake smiles or "the customer is always right". He'll see right through this. Just treat this person as if he is your neighbor, not your customer. At this point, if the customer has shopped around and seen many comparable bikes, how can he not buy from you, his entertaining friend?

Of course, there are exceptions to every rule, and this kind of personal treatment takes practice. You may not have time for conversation or you may have a person who does not like your brand of humor. You'll make a few mistakes but this is the only way you'll learn. And if your interest in the customer as a person is genuine, you'll never lose.

* As you continue the sale, don't change character. I've seen sales people suddenly become very business-like, losing their previous light attitudes. This SCARES potential customers.

* After establishing a friendship, ask your customer all about what kind of riding he expects to do. Find out what he is looking for and how much wants to spend. Some sales people are afraid to ask about money, but if done tactfully, this will not scare the customer away. After all, haw can you sell something specific to someone if you do not know specifically what they want? I usually just say, "and how much did you want to spend?"

* Find out what size your customer needs right away, and know what is in stock as much as you can. It's kind of embarrassing to interest him in a particular product and not have that item in stock in his size.

* Does your customer seem to be looking at a particular bike? He may just be interested in that one because he likes the color, but for whatever reason, that is the bike that takes his interest. Work from this bike. Explain how it does or does not fit his requirements and watch his reactions. Frequently he can throw you a curve here. I have had many customers throw logic out the window and proceed to fall in love with a bike that does not make sense. You will have to be creative. You have to try to divert this person to the proper bike for his needs without taking his love away. Or maybe, it is the right bike for him. Is it? Do not force your opinion too heavily or you may loose a sale. On the other hand, you must not let someone buy a bike that doesn't fit right both in size and application without letting him know why this is not the right choice to make. Ultimately, it is, of course, his choice.

Usually, however, it may just be the color or the manufacturer that he doesn't like about the bike that is right for him. Try showing him a suitable alternative, such as the bike he is looking at, of a different manufacture but the right frame size, for instance, and he may accept it or at least tell you more about what he will accept. Your move.

* Don't oversell. There are times when it is good to pour forth tons of information, but such times are rare in bike sales. Talking your head off is intimidating and costs you valuable time. Let the customer ask questions. If you sense too much quietness, you can always say, "I don't know exactly what to tell you, so just feel free to ask me whatever you like."

* There are various schools of thought on the subject of test riding, but I feel the advantages outweigh the disadvantages for interested customers who you feel you won't be able to close without a test ride. While this customer is out test riding, he'll start to feel like he already owns the bike, to picture himself showing off the bike to friends, etc. During this moment of privacy out on the road he will review his finances and will usually work out a plan to rationalize this expenditure. Generally, the customer won't go far or fast, and will therefore be impressed with the ease and smoothness of the bike. He won't go far enough to be fatigued or bounced about or be scared by traffic. At the same time, you, the sales person, have a moment to prepare yourself better. You can look up other information or take care of other customers while this one is out of the shop.

The disadvantages should also be understood in allowing test rides. You can have bikes stolen, your customers can have accidents, and the bikes can get dirty or scratched, "used".

Some sellers take their sales pitch on the road by riding along with the customer on another bike. If you have established an informal friendship, this is soothing to some customers. The salesman explains how to work the gears, explains what certain noises mean, and so on. Less confident rider/buyers seem to like this approach, and it protects the seller against theft or rough bike treatment. But this method does not allow the customer time away from the salesman which I feel is very beneficial in most sales.

* When a customer needs time to think, you must give him room. Do not stay near him and keep talking. This can cost you the sale. Leave this person alone for a few minutes. I always try to have "something else" that seems to demand my attention for a few minutes, a little paperwork or something.

The timing here is important. Sometimes you can tell from body language when your customer needs time alone (other times there is a long, somewhat awkward silence....). Sometimes you can create this time by having suddenly to attend to that "something else" or you can even say, "I'll go and leave you alone to think about all this information for a few minutes, just yell if you have any questions." Often I let these customers wander around until they indicate the desire to talk again by approaching the sales counter or glancing in my direction, which is pretty reliable body language.

When I go to another bike shop and I see a salesman staring at a customer who is staring at a bike and you can hear a pin drop, I feel like turning that salesman upside down, and taking over the sale myself, or something equally obtuse!

* The exact moment of the close is when the customer says, "Yes, I'll take it". You may do something to cause the customer to say "yes", give him the right conditions to say it. You can actually force this moment by saying something like, "so that's the one for you?" Or maybe this is the time to offer a "special deal", e.g. "I'll tell you what, if you decide you want this bike TODAY, I guess I could throw in that cable and lock you wanted." (Notice the pressure for today.) Be careful about closing too soon, it can seem like a high pressure tactic to the customer, causing him to back off.

If you use the "throw something in" method, be careful to know the limits, you don't really want to give your whole profit away just to close the deal. It is easy to get carried away. If you throw something in on almost every deal, you run the risk that by reputation, your the customers will come to expect a freebie.

* DO NOT OVERSELL. When it is time to close, it's time to close. With practice you will learn to identify the right moment, don't let it slip by. I've seen this mistake more than once, I've done it. The customer is ready and here's Jeff, yak, yak, yak, while the customer has second thoughts.

* The last thing to keep in mind as the great salesman that you are, is to try to sell whatever accessories that you can with the bike. This is the time to suggest a lock, rear carrier, handlebar bag, lighting, etc. You don't want to mention accessories until after the closing "yes" from the customer so you don't scare him with the grand total. At this time, however, see what else you can sell, because accessories are high mark-up items. Usually there is more profit in the accessories sold at this time than in the bike itself.

Another thing you can do at this time is "bird dog" your customer. Tell him that you will do "X" if one of his friends comes in to buy a bike. It can be direct or indirect. You can make the friend the same deal you just made for this customer, or you can give a free speedometer to this guy if the friend buys a bike, for instance.

I would like to suggest the book by Dale Carengie, How to Win Friends and Influence People and the book by Joe Girard, How to Sell Anything to Anybody. Learning the techniques in these books will make you money. _____________________________________________________________

I'm sure you don't need to be told that clean bikes are easier to sell. But I do have some techniques to pass along:

Steel wool without soap (grade #1 is my favorite) cleans the rust off of chrome plated parts. Its effectiveness is amazing. I use steel wool on rims, fenders, cranks. It cleans alloy (aluminum alloy) rims well, too.

Most cleaning of the painted surfaces I do with Lemon Pledge furniture polish. I spray some on a rag, then wipe off the dirt. The stuff is easy to use, cleans well, and leaves a clean, lemony smell. I use the Pledge on seats too.

You can spray the tires with clear or black spray paint. Somehow it makes the tread on marginal tires look thicker.

On bikes with really bad paint that you don't want to totally repaint, you can touch up the main areas of the toptube, downtube, headtube, fork and seattube with spray paint if you have a color that matches fairly close. It will be obvious that you put paint on, but the bike will look better than without this attention. If you have an artistic eye for color, you might try touching up large areas with a different color. If you balance this overspray with similar spraying of other areas of the bike, it could end up looking better as a two-tone bike than it did when it was new with a single color.

You can paint black on the exposed foam of a ripped seat to make it look less ragged. Make sure to use paint that won't shed onto a customer's white pants during a test ride.

On a bike with badly rusted wheels, you can remove the tires and tubes, then spray paint on the rims and spokes. A black cruiser with red wheels looks kind of nice. Do not waste your time preparing the surface. It would be too time consuming to attempt to clean the rim or spokes before painting. Just shoot cheap paint over the wheel as you spin it. If you are going to re-spoke a wheel, you have a terrific opportunity to polish or paint the rim while the spokes are removed.

Since fenders are less popular these days, on a bike with mangled fenders, just throw them away and sell the bike nude. In Santa Cruz, a cruiser with fenders seldom could be sold. If I took the fenders off the same bike, it would sell right away.

Grips and handlebar tape are inexpensive. On a bike with dirty grips or worn tape, don't hesitate to replace. If a bike has an odd color combination, get rid of the offending parts and replace with something of a normal color. It is harder to sell a red three-speed with a blue seat and green grips. The bike will move out of your inventory sooner if you change it to a black seat and black grips.

The two types of handlebar tape are adhesive backed cotton, (aka "cloth tape") and non-adhesive plastic. Cotton tape has only one color option that you should take seriously. Black. Any other color gets dirty immediately and cannot be cleaned.

If you are going to use plastic tape, remove the previous handlebar covering. Cotton tape can be wrapped over the old covering. If the bike has extension ("safety") levers on the brake levers, remove them. Remove the handlebar end plugs.

Wrap the tape any way you want, starting from the top or the bottom of the handlebar. If you start from the bottom, you will have to fasten the end of the tape with something like electrical tape at the end. If you start from the top, you can tuck the end of the handlebar tape under a handlebar plug. Be careful not to overlap the tape too much, especially if you are going to wrap the tape once or twice around the brake levers, because the makers of the tape give you very little to spare. You must stretch the tape the whole time you are wrapping it on. Cloth tape will wrinkle and plastic tape will slip if not stretched.

Replace the plugs and the extension brake levers (if equipped). The extension levers may have little springs in their pivots that keep the mounting screws from unscrewing and falling out if left loose. If an extension lever binds after installation, loosen the mounting screw.

Repairing opens up a whole new world of fun and profits for you. Bikes must be in perfect condition to be easy to sell. A bike with just one thing wrong such as a broken pedal or a derailleur that won't engage low gear is worth about 1/2 as much as a perfect specimen.

You may start to accumulate tools that make repairs possible that you could not do at the beginning. Having the tools also means that you can buy bikes which other people would consider unrepairable. these bikes are very inexpensive.

Now you can buy any old bike working or not. You can back up your bikes with a guarantee. You can sell pure repair work, too. Most professionals charge $20 to $30 for a tune-up, which takes less than an hour after practice.

Some of you reading this may feel unqualified to repair bikes. Have you been telling yourself for a couple of years, that you are going to get around to learning bike repair someday? How about today? This is a great learning opportunity. Instead of risking your own bike, instead of being in a hurry to get your own bike back on the road after you take it apart, you can take your time and practice repair work on the investment bike.

There is just about nothing in the repair of bicycles that you cannot resolve given enough time and perhaps an occasional phone call to the bike shop mechanic.

There is one thing that is important, get it right! Don't test ride a bike until you know it is safe. Don't offer a bike for sale, unless you have given it a good hard test ride first. Make sure all the nuts and bolts are tight, and be sure that the chain will never fall off. You can get the local bike mechanic to check over your work for $1 or $2. This is a cheaper and better way to learn bike repair than paying for lessons.

Repair work demands that you act responsibly. Someone can get hurt if you screw up. You can get sued for malpractice. Just follow these rules, and you'll do alright:

* Test ride every bike you repair. Ride it hard. Even if the bike comes to you just for a flat tire repair, you are sort of responsible to tell the customer that the handlebar is loose.

* Don't undertake a job you are not sure how to perform properly on a customer's bike. Learn it on one of your own bikes first. Be honest about your limitations.

* Make sure all nuts and bolts are tight, and that and type of clamps (like axle nuts, seat attachment, handlebars stems) are actually working.

* Make sure to discuss exactly what you are going to do and how much money you are going to charge for repairs before you do them. The customers feel schnookered if you do something different than they had expected.

I have always followed these rules and having repaired over 14,000 bikes, no one has ever been hurt because of my work and I have never been threatened with a law suit. I have never met anyone in this business who has been sued. I guess no lawyer will take a case against someone who doesn't have tons of money. You can get liability insurance if you find yourself making enough money to want to protect. Mine costs about $300 per year. I suppose it would be nice to have insurance to cover someone's recovery costs if I ever did mess something up. But I won't, I always try to remember that I have to pay attention. I stand back after each repair I do and review the case in my mind for a minute. This is a good way to catch potential problems before I test ride the bike.

REPAIR PRICES

            These are the labor prices that a typical shop charges:

R&R tire/tube                  3.95  R&R stem/bars                  9.95

R&R tire/tube (off bike)       1.95  R&R seat/post                  2.50

R&R tire/tube (3-spd rear)     4.95  R&R h-bar tape                 2.95

                                     R&R h-bar foam                 5.95

True wheel (minor)             3.95

True wheel (incl some spokes) 11.95  Install basket                 3.95

True wheel (major)            18.95  Install carrier                3.95

Build wheel                   19.95  Install car rack (appt only)   9.95

                                     Install child carrier          9.95

O-haul front hub               7.95  Install lock holder            1.00

O-haul rear hub (f/w type)    12.95  Install braze on (ea, no paint 6.00

O-haul/replace freewheel       9.95  Install mirror                 1.00

O-haul rear hub and f/w       18.95  Install generator set          9.95

O-haul multi-speed hub        28.95  Install fenders                9.95

O-haul coaster brake          17.95

                                     Complete tune-up (1-speed)    14.95

Adjust headset                 3.95  Complete tune-up (multi-speed)29.95

O-haul headset                18.95  Safety check                   9.95

Adjust bottom bracket          2.95  Complete O-haul               69.95

O-haul bottom bracket         15.95

                                     Clean-up (limited)             9.95

Adjust brake (ea)              3.95  De-rust (limited)             19.95

O-haul/replace brake/lever (ea 7.95  Clean driveline (limited)      8.95

R&R brake cable (ea)           4.95

                                     True fork                     18.95

Adjust derailleur (ea)         4.95  True frame (minor)            18.95

O-haul/replace der/shifter (ea 9.95  True frame (major)            49.95

R&R derailleur cable (ea)      4.95

Repair/replace chain           4.95

R&R pedals                     1.95

O-haul pedal (ea)              7.95

An oxyacetylene welding set is a good investment because you can sell repairs you would not ordinarily be capable of. You can fix broken frames, luggage carriers, other bicycle applications and non-bicycle applications, once your clientele knows that you offer welding. Additionally you can repair, even make your own equipment which saves money and down time, and you can do certain repairs more quickly using heat, such as stuck pedals and bent cranks. You must be well practiced before you offer welding services to the public. You have lots of material to practice with if you have a bike parts junkyard. Now go ahead and build that 27-speed recumbent that you have been dreaming about.

Spray painting makes an ugly bike more salable, but I try not to paint very many. It is time consuming and costly. Most bikes can be sold with really terrible paint, if you sell them cheaply enough.

The proper way to paint a bike is to remove the old paint down to the bare frame. This is done with a metal scraper, chemically-stuff, or a sandblaster. Then you spray primer with a good (i.e. expensive gun), then the color. Since you have gone to so much trouble, you should use polyurethane enamel because it is the best. All these techniques are time consuming and messy. There is a chance you might poison yourself with paint. This is not what I want to do for a living. I limit myself to fun things.

I usually take the bike fully apart. Sometimes I sand the old paint, not at the intersections, just the easy areas of the tubes. These areas are the ones that take the most beating, the hard to sand areas do not need it as much. I don't sand the paint to remove it, I just rough it up so the new paint will stick well, or smooth the old paint out where it is all nicked up. Sometimes I don't even sand the frame and fork at all, if the old paint is clean and smooth. Then I spray a layer of white which livens up whatever color goes on next. When it dries I shoot the colors. The white is important. Have you ever seen a bike that has been repainted something like yellow over blue? It looks repainted from 40 feet away! The blue darkens the yellow.

I use aerosol cans so I don't have to clean any equipment when I am done. Cleaning a paint gun is very time consuming. Practice will dictate how far away to hold the spray can and how much paint to apply per coat. I hold the can about 8-12 inches away. If you put on too much paint per coat, the paint will run and sag before it dries. I use the cheapest paint I can get that works ok. Some cheap paints do not have enough pigment, requiring many coats. Some clog their tips all the time. Right now I am having good luck with the True-Value house brand paint which is $1.49 per can. (True-Value Hardware stores) Be careful about mixing brands of paint. If you spray some paint on a bike, then some more of another brand, even if the first coat has dried, you can get some horrendous effects. I have seen paint that stays sticky and will never dry up, and I have seen an inadvertent wrinkle finish caused by mixing paint brands.

I have had good luck with two-tone paint jobs. The most popular seems to be yellow overall and red or blue overspray at the headtube, bottom bracket and rear dropouts. I shoot the lightest color first, usually yellow. After it dries, I get a nice complimentary color and spray in quick, careful little blasts, trying to get the look of one color fading into another. I hold the spray can about 18" away from the bike frame. If I sprayed from any farther away, the paint would dry before it hits the bike, making a very wear- prone paint job. There is a limit to how well this can be done with ordinary spray cans, but with a good choice of colors and a little practice it will look great.

Perhaps I am wrong, but I believe all spray paint is poisonous to some degree. Do not breathe the fumes. Wear a filter mask, or hold your breath until you can get upwind of your spraying.

The bikes look more professional if you can preserve something of the original decals or head tube badge. You can carefully peel off decals then glue them on later, or you can put masking tape over anything you don't want to paint. When you peel the tape off later, the paint will lift off the covered area with the tape. Some bike sellers make their own decals to put on later.

These paint jobs that I do look really nice, but they are not strong against scrapes. I usually tell my customers that the paint is wimpy but they don't seem to care. I have not lost a single sale because I use the Q & D approach. The price is right. If I charged for a polyurethane paint job, the bikes would have to cost 4 times as much.

There is more frosting on the cake. With a junkyard of used parts, you can buy bikes that need parts, and fix them at no cost. You can buy a bike with a whole wheel missing for a dollar or two. With a wheel installed, you can sell the same bike for $40. Even if you never buy bikes or parts specifically for the parts pile, your inventory will grow. If you buy a bike without handlebars, and another bike that has the handlebars, you get one of every other part for your junkyard. Another profit comes with the customers who will buy parts from you. Some of these customers who fix bikes themselves are really fun because you can talk "shop" with them.

When you were a kid, did you collect baseball cards, dolls, or marbles? That's like the way I feel about my junk yard. I really have fun when someone who is in the same business comes over to trade parts.

If you don't have a large area for parts, just keep a few of the most valuable things. These would be things that you know will sell for sure, or items that you will need to fix up some more bikes. Seats, derailleurs, and rear wheels are good bets.

frame w/o fork (1) $3 tire $3 fork (2) $10 tube (3) $1 frame w/fork, American $5 brake cable (4) -- frame/fork, Chrome-moly $25 cable for lock $1 seat $5 rear wheel 20" coaster $10 seat post $1 rear wheel 26" cruiser $15 handlebar $2 front wheel, any size $8 stem $3 rear wheel 27" $12 derailleur $5 rear wheel, mountain bike $25 shifter $5 rear wheel, alloy bmx $20 brake hand lever $2 headset $2 brake caliper $4 cotterless crank w/double $15 kickstand $1 one pedal (5) $2 generator light set $6 octopus (6) $5

Note: Of course the prices will vary depending on the condition and model of specific parts. No way would I sell a top of the line Suntour rear derailleur for $5, for instance. On a slow day I might let a junky seat go for $1.

Note 1: I have customers who want frames in any condition for art projects and such things. Frames that I would have thrown out I sell for $3.

Note 2: Notice that I charge more for a fork than for a frame and fork. That's an idiosyncrasy in the market. When someone needs a fork to match the broken one on their bike, it is worth $10, which is half the price of a new one. But when someone wants a frame and fork, any color will do, and the customers will only pay about $5 for a frame, even though new American-type frame with a fork would cost $50 if bought new.

Note 3: Used inner tubes are not usually available, since I sell new ones for only $2-3. When you sell a new tube and someone puts a hole in it during installation, you have to explain that the factory does not provide holes with their tubes. (Please see note 7) When a customer has a problem with a used tube, you cannot use that explanation. I think selling used tubes is a bother because the customer may put a hole in it and because you can inadvertently sell an already punctured tube.

Note 4: I don't sell used brake cables for the same reason, except more-so. I don't want a customer to have a problem with a brake cable breaking.

Note 5: Customers think it is great that I will sell one pedal. Manufacturers only offer replacement pedals in pairs.

Note 6: I just wanted to see if you were paying attention. There are no octopi for bicycles. (that I know of)

Note 7: There is an inner tube issue that comes up all the time, where you can really exercise your Dale Carnegie techniques. A customer has a punctured inner tube. The customer bought the bike from you and only rode it a short distance, but it is flat. 98% of the time, the customer had a legitimate puncture, but doesn't believe that. He thinks the tube was defective. You could tell the customer to go away and never bother you when you are at work. That would be bad, the customer will warn his friends about you. You could fix the flat, not charge anything, but perhaps this will cost you time in the peak of the season, when you are busy and time costs you money. I think the best approach is to tell the customer that it may be your fault, and that if so, you will fix the flat for free. But if you can prove that the flat is a puncture, the customer should pay you to fix the flat, maybe at a reduced rate. Usually you can pull a thorn out of the tire, or show that the hole in the tube lines up with a hole in the tire. That does it, everyone is satisfied and you make some money for fixing the flat!