The Complete Guide To The Home-Operated Bicycle Business

ASSESSING VALUE & CONDITION_____________________________________________________________CHART AVERAGE PRICES YOU CAN GET FOR BIKES IN GOOD CONDITION 16" wheel, general.....................................$2816" wheel, with training wheels..................$3520" wheel, curved frame tubes....................$20 - $35 ("stingray" or general, boy's or girl's)20" BMX, plain steel frame/steel wheel........$4520" BMX, chrome-moly frame/alloy wheels.$100 (considerable variety of price, ask local kids, they know what's in current style)24" thin tire, 10-speed...............................$5526" thin tire 3-speed..................................$4526" thin tire 10-speed................................$4527" American/Taiwanese...........................$4927" European/Japanese.............................$8027" Chrome-moly frame/alloy parts............$12527" racing quality......................................$200 - upMountain bike, 10-12 speed, America.........$55Mountain bike, 15-18 speed, basic.............$175Mountain bike, chrome-moly frame/alloy parts...$250Mountain bike, Deore-XT parts...................$400 - upCruiser, post 1965....................................$75-120Cruiser, pre 1965, original paint & complete with all parts.............$150 - upCruiser, 5+ speeds....................................$100-$150Unicycle...................................................$35 (with 3-piece crank)Adult 3-wheeler........................................$125-$175Child's 3-wheeler......................................$8-$12Folding bicycle..........................................$65_____________________________________________________________

ASSESSING THE VALUE OF A POTENTIAL PURCHASEThe prices in the chart on the preceding page are what I charge in rural Southern Oregon in 1989 for bikes in good condition. The prices may vary where you live. This chart reflects the actual price the bikes are traded at. They are often marked up to a higher "asking" price. I price the bikes to sell fast, and mostly they do. You can charge 25% more than these prices, but the bikes will take longer to sell. If your sources or repairing time are limited, maybe that's ok, but I think its better to move the bikes quickly, and make money. You can charge less per bike, if you have bought well, and I advocate this if you need to, but I seem to sell the bikes at the same speed if I sell them for less, so, basically, why sell them for less? Most of my customers wonder how my prices can be so low, anyway. Well, they don't have this course, or they would not be so surprised.Notes: Generally women's model bikes are slightly less valuable. If you mark them to the same prices as men's bikes, they tend to take 2 to 3 times longer to sell. If there are many young women in your community (college community) and a shortage of women's bikes, the situation may reverse. Be careful if you have a big inventory, because it is far easier to find used women's bikes than men's and therefore, if you buy whatever you can get, you will have too many women's bikes in stock. In the collectibles, classics from before 1965, women's bikes will often be worth only a third as much as men's. This is probably because more men's bikes were wrecked by the young men that owned them. In previous days, boys tended to play with their bikes harder than girls did. For example, when I got a new bike at age 8, I had removed and lost the fenders within the first two weeks.When you get a bike with accessories such as a luggage carrier, speedometer, or generator light, usually you will make more money if you remove the accessories and then sell them separately. (This is not true with vintage cruisers.)I go to yard sales and I look for bikes. When I come across a bike I examine it carefully. First, I apply a simple formula to determine whether I should buy a bike. I take the price of the bike, add the price of the parts I will need to fix it, and multiply the whole thing by three. If the figure exceeds what I think I can get for the bike, I don't buy it.This formula gives me a really large mark-up, but lets look at a potential purchase another way. Perhaps the mark- up is not so large when you consider that every bike purchase is a gamble, it may have a problem I missed, it may sell slowly, or I may have to discount the price to sell it._____________________________________________________________ Some Examples: --------------------------------------------------------

Bike: men's 3-speed Raleigh being offered for $15

Parts required: rear tire, tube $3 ====== total cost: $18Formula: $18 X 3 = $54 Retail according to the chart: $45, don't buy it! --------------------------------------------------------

Bike: girls 20", curved frame being offered for $3

Parts required: handlebar, stem $3 ===== total cost: $6Formula| $6 x 3 = $18 Retail: $20+, This one is a very good bet! --------------------------------------------------------

Bike: BMX plain frame, steel wheels being offered for $10

Parts required: none $0 ====== total cost: $10Formula: $10 x 3 = $30 Retail: $45, OK deal. --------------------------------------------------------

Bike: men's European 10-speed being offered for $25

Parts required: none 0 ===== total cost: $25Formula: $25 x 3 = $75 Retail: $80 OK deal! --------------------------------------------------------

Bike: adult 3-wheeler being offered for $40

Parts required: grips $1 ====== total cost: $41Formula: $41 x 3 = $123 Retail: $125+, OK deal --------------------------------------------------------

Bike: BMX chromoly frame, alloy wheels being offered for $20

Parts required: 2 x tires, tubes $12 handlebar, stem $6 grips $1 ===== total cost: $39 Formula: $39 x 3 = $117 Retail: $100, don't buy it! Not enough mark-up. -------------------------------------------------------- Bike: 10-speed, American bqeing offered for $8Parts required: h-bar tape $2 inner tube $3 ===== total cost: $13 Formula: $13 X 3 = $39 Retail $49, OK deal!

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For those of you using the simple plan, only three of the above bikes would have qualified. I am assuming that you can probably install hand grips on the adult three-wheeler no matter what your mechanical skills and how limited your space is. Using the simple plan does require more buying effort, but the situations are there. Last week I bought a men's one-speed, fat-tire cruiser for $7.50, in fine condition. Today I sold the bike for $39. Profit: $31.50!_____________________________________________________________ EXAMINING THE MECHANICAL CONDITION OF A POTENTIAL PURCHASEIf the prospective bike passes the formula, I look it over more carefully for hidden mechanical problems. There are so many ways you can go wrong here, especially if you are using the simple plan. If you are able to store parts and do your own repair work, a mechanical disaster is not so bad, you can simply strip a bad purchase for parts. You do want to make good buys, so on the next page is a list of what to look for. You may want to make copies of this chart and use them as you shop._____________________________________________________________ MECHANICAL EVALUATION CHARTsystem good bad devaluation ================================== === === =

Paint (note #1) ___ ___ $10/3.0/$35

Frame (note #2) ___ ___ $10/3.0/total bent back headtube? separated intersections? damage at top of seattube? dropout damage?

Fork (note #3) ___ ___ $10/.5/$25 bent back? dropout damage?

Bearing damage (note #4) ___ ___ $5/1.0/$15(ea)

Headset, bottom bracket, front hub, rear hub wheel alignment (note #5) ___ ___ $5/.25/$20(ea) laterally true? flat spots? corroded spokes? missing spokes?

Worn chain/freewheel (note #6) ___ ___ $20/.5/$20 coaster brake/3-speed (note #7) ___ ___ $5/.5/total cable? brake arm strap?

Hand brakes (note #8) ___ ___ $3/.25/$7 (ea) cables?

Tires (note #9) ___ ___ $2/.1/$10(ea) worn spots, bulges, tears?

Missing chainguard (note #10) ___ ___ $3/.75/$10 seat (note #11) ___ ___ $7/.1/$10 loose seat clamp?

Handlebars/stem (note #12) ___ ___ $5/.25/$15 slipping (check 2 ways)?

Loose crank (note #13) ___ ___ $30/.25/$30 cotterless arms loose? crank cotters hammered?

Bent seatpost ___ ___ $3/.1/$3 derailleurs ___ ___ $3/.5/$18 bent? cables?

Missing parts ___ ___ $3/.25/$10(ea) see below

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total: ______________ Check to see if any of the following parts are missing:shifters ___ front derailleur ___ coaster brake arm strap ___ rear derailleur ___ brake hand levers ___ derailleur nuts and bolts ___ brake calipers ___ chainwheel nuts and bolts ___ brake nuts and bolts ___ some spokes ___ cables ___ stem bolt ___ pedals ___ 3-speed cable attachments ___ chain ___ (chart simplified, prices may require adjustment)

FINDING THE MECHANICAL PROBLEMS (as indicated by the preceding chart) _____________________________________________________________

Reading the Chart, Cost AnalysisNotes: Look at the column headed "devaluation". There will be three figures listed. The first is approximately the cost in parts/supplies for you to repair the system. This first price assumes that you have the proper repair facilities and used repair parts when applicable.The second number is average time to perform the repair. This factor must be considered if your time is limited. If you do not have much time, a long repair can waste profitable time that you could use better, such as repairing easier bikes, talking to customers, going to more garage sales, etc.The third number is approximate devaluation of the bike from one in perfect condition. If you had a bike worth $100, but with bad paint, the same bike would be worth $35 less, or $65. The devalued price generally reflects what the bike can sell for if offered in unrepaired condition. Some of these conditions should not be offered for sale by you until repaired because of safety.These prices are not hard and fast rules. The prices and repair times vary considerably with each specific case._____________________________________________________________ The PaintNote 1: Evaluate the paint in terms of 'can you sell the bikes as is' for the usual profit? Most used bike customers expect that the paint will not be perfect. A few scratches are ok, but the overall appearance of the bike is an important factor to most buyers. In some cases, if you apply a custom paint job, the bike will become worth even more than one with factory paint in good condition._____________________________________________________________ The FrameNote 2: Frame problems are often hard to spot. Look for a headtube that has been bent back due to front-end collision. The headtube should be nearly parallel to the seattube. If the paint is chipped on the toptube or downtube 1/2" or so behind the headtube, the frame has been bent.On women's model frames, look to see if the seattube is bent at the toptube intersection. When bent, which is common with American-made women's frames, the pedals will be closer to the ground and will scrape when cornering. This bend usually gets worse with time.Look at each intersection of frame tubing. Are any lugs or welds separating?Look at the top of the seat tube, where the seat post comes out. Look at the back side where the seatpost bolt tightens the seatpost into position. Is this squished or deformed? Is the seatpost inserted only a short way and the seattube funnel-shaped? Is there any cracking here (particularly BMX bikes)?Look at the rear part of the frame around the rear wheel. Bikes that have been run over by cars backing out of driveways are bent so that the rear wheel is not directly behind the front wheel, and the chain likes to fall off.Any separation between the rear dropouts and the rear frame tubes? Sometimes a wheel bolted in without axle washers will squish the dropout slots out of alignment. Often this is a minor repair, just re-bend the dropout into shape with pliers. Forged dropouts (the thick ones) can crack, especially if they are the type that have a small screw built in. A built in derailleur hanger can be bent, cracked, have a too small cam surface or have stripped threads. Usually, the derailleur hanger can easily be cut off if is a problem.Look the frame over for obvious faults like dents. If there is any non-factory welding, chances are the welding was done too hot. The frame is likely to fail at the home- made weld.If you are looking at a bike with frame damage, you should avoid it unless you are expert at frame repairs. Another choice is to strip the bike for parts to put on another frame. Sellers who know their frame is broken may take a remarkably low price to be rid of it._____________________________________________________________ The ForkNote 3: The most common fork problem, and it is very common, yet hard to spot, is a fork that has been bent back due to collision. The upper two thirds of the fork should be parallel to the axis of the steering. A fork bent back less than 3/4" can usually be straightened if the bend is below the fork crown. Straightening a bend in the steering tube (top of the fork) is not safe.Look at the bottom of the fork for damage to the dropouts. Also turn the fork from side to side. If it is loose when straight ahead, but binds when turned to one side, the steering tube may be slightly bent, making proper headset adjustment impossible. In this case, the steering tube may be rubbing inside and wearing out, ready to break in two._____________________________________________________________ The BearingsNote 4: Look at the headset, bottom bracket, and front and rear hubs. There should be no more than slight looseness. A very loose headset or bottom bracket set may respond to adjustment, without having damage inside, but examine loose hubs carefully. Many times a loose rear wheel means a broken axle. Try to spread the dropouts apart to see if the axle is broken. A loose front hub, especially the small diameter ones, can have irreparable cracks around the inside of the flanges, behind the bearings. This condition should not be ignored because the hub can totally collapse, collapsing the wheel along with it. Examine loose wheel bearings (hubs) carefully, they can fool you._____________________________________________________________ The WheelsNote 5: A wheel laterally out of true more than 1/2" may not be repairable. A wheel with a flat spot more than 1/4" deep is difficult to repair. If a wheel has loose spokes or the wheel is out of true, the spokes may be too corroded to adjust. You can take a spoke wrench when you go shopping and test a few spokes on a suspect wheel.Broken spokes are hard to spot. They occur most often in the rear wheel. Most of your customers will not buy a bike from you if they see a broken spoke because they know that they cannot fix it. If the rear wheel has broken spokes that seem to be breaking near the flanges of the rear hub, all these spokes may be fatigued. If you replace only the broken ones, others may break later.Many bike wheels have kinks. These are small outward protrusions of the rim caused by hitting sharp edges or rocks in the road, especially when the tires are under inflated. They are easy to repair by squeezing with pliers or bashing with a hammer. Look around the tire for where it would skid when the kink lines up with the hand brake. The tire may be totally worn in this one spot._____________________________________________________________

Worn Out Chain And FreewheelNote 6: A worn chain and freewheel causes more headache for people in the used bike field than almost any other. Quite often people will ride their derailleur-equipped bike with not enough oil on the chain. They will compound the problem by using the smallest front sprocket along with the smallest rear sprocket for long periods of time. This results in a worn out chain and freewheel. They ride the bike until the problem becomes annoying, then they offer the bike for sale to you. They generally will not mention the problem. If you ask, they may tell you that the problem can be corrected with an adjustment. Don't believe it.The symptom is a jumping or clunking of the chain over the rear sprocket. It is more pronounced when the chain is engaged on the smaller sprockets. The symptom is slight at first, showing up only occasionally under high torque. It develops slowly, until the bike is almost unridable.The skipping is caused by the chain's wear, it becomes longer as each chain rivet becomes worn. At the same time, the trailing edge of each sprocket tooth gets worn away. The chain and the freewheel sprockets wear together. If you replace just the chain or just the freewheel, the problem becomes worse, you must replace both at the same time. Furthermore, a worn chain will cause rapid wear to a new freewheel, and visa versa. Because the front sprockets are much larger, having more teeth in contact with the chain, these do not often indicate wear and can survive many chains and freewheels.Many used bike sellers replace the chain and the freewheel with brand new parts, that is why the listed repair cost is so high.This symptom can be confused with a stiff chain link, which is easily repaired. A stiff chain link skips rhythmically, once for every revolution of the chain. You can see a stiff link by watching the chain go around as you pedal backwards. Most skipping is caused by worn out parts, however, not a stiff link.How do you spot a worn chain and freewheel? This is difficult. Look at the smallest freewheel sprocket. Do you see any hooking of the trailing edges of the teeth? Do you see a gray, pearlescent sheen? These are the only visible effects. If you have an older 10-speed bike, that looks like it has seen lots of miles, or a bike with no oil on the chain, you should expect that replacement will be necessary. You can also measure 24 links of chain. The length should be no more than 12-1/16". The only sure diagnosis is a test ride. If the bike is rideable, you can discover or rule out the problem by riding hard while shifted into the smallest rear sprocket and the smallest front.