Start A Bicycle Junkyard
The idea of a bicycle junkyard appeals to me. Perhaps that is strange, since I have spent many years on the "pro" end of the bicycle market building frames, and servicing racers and tourists. Most people who have once dealt with the "pro" scene professionally, never want to turn back. I don't know why that is - maybe it's an ego thing. Anyway, I'm rather attracted to the other end. And the junkyard business is the extreme other end.
Imagine having an acre or two of land covered with bikes, frames, wheels, handlebar stems, derailleurs, and so forth. Whenever anyone needed a wheel or any sort of bike part that is not a shiny new one, they'd certainly come to you. There wouldn't be all that much money in each sale. A good wheel for a standard family-type bike would sell for only about fifteen dollars. But, you may get many such sales per day.
Your inventory wouldn't cost very much. I speak from some experience. I did set up a bicycle junkyard about eight or ten years ago, but it was not my exclusive business. I also sold new and used bikes, and repaired bikes. Still, the junkyard was visible from the road, and that was all the advertising I needed! Interestingly, it grew by itself. Many people came in who had bikes they just wanted to give away. Someone had died, moved away, or for one reason or another, here was a garage full of bikes, there was a yard with a huge pile. All I needed to do was come get the stuff. I found that a truck is a good idea. I used a Japanese pickup truck at the time, and on more than one occasion, I had to make five or even ten trips to get everything from one donation!
When I first started the junkyard, I actually bought collections of bicycle junk, but later on, that was not necessary. My purchases were profitable. As an example, I would purchase perhaps three small pickup loads for $100. They would be mostly thin-tired ten speed bikes in broken condition. I might end up with only twenty back wheels in good condition, but each would sell for $10 or more. So I doubled my money just on the wheels. But there were also six complete bikes which I could sell for $25 each, and literally a hundred little parts and pieces, each worth a few dollars. Altogether, I probably made $1000 for each $100 I spent.
Of course it wasn't all smooth sailing. Some of the wheels needed alignment, and the bikes needed repair. Parts do sell better when they are cleaned up. And it takes a while to realize your $1000 profit - you've got to wait until the customers come in who need the things you have. But, if you gather a large collection of such things, you'll have a large clientele coming for them.
Treat your clientele well. I think the most important factor in growing your business is to have a high ratio of customers who go away satisfied. For instance, if you have more people coming for steel handlebar stems and upright handlebars than you can supply, get some new ones from a wholesaler. The people who came to your junkyard are hoping for very low prices, but if all you have is something new, at an average price, they'll typically buy it, and be satisfied.
Also know that you'll get literally tons of stuff you'll never sell. That means that before you start this business, you had better be ready for it. Make sure your landlord and the city zoning board know that you plan to fill the yard or building with bike parts. Be ready to pay for runs to the city dump to get rid of your excess "merchandise."
On the other hand, don't do your dump runs too soon. You might think that 400 Huffy bicycle frames are too many, but they do have a purpose. Let your piles of bicycle junk grow high, and people will be more attracted to your collection, thinking it is very large, and therefore you must have whatever they want.
Lots of children will be attracted. This can be good or bad, depending on whether you like children. You can service them like any paying customer, or discourage them by giving them little of your time and interest. The choice is yours. Of course, all the little ones will eventually grow in to adults, and you'll want them to think of you as a nice guy at that time.
And speaking of attraction, you've got to be careful that you don't let customers get hurt. The general public trusts any professional setting way too much, in my opinion. They don't realize how loose-around-the-edges a store can be. Don't let your junkyard be one of those dangerous places. If you let them wander among your junkyard, make sure that they cannot pull tall piles of metally things down on themselves, or step on things which could puncture through their sneakers. Also do something to protect people from getting cut by sharp objects, even if is only posting a blatant sign which tells of the dangers of wandering in your junkyard unattended.
There is another approach. You can disassemble your collection, and categorize and price everything individually. It will be nice and neat, no one is likely to get hurt sorting among the piles themselves, and you can generally charge a bit more for something which is already cleaned and inspected. So with this technique, you don't actually have a junkyard, but a well-maintained collection of second-hand equipment.
Prices: You can charge up to two-thirds of the price for which an item sells for new, as long as the item is in good condition. You can charge way more than the price for which something sells new, if that something is no longer available.
What sells: The following are top sellers that are readily available:
* Rear Wheels, for thin and fat tire bikes. * American one-piece cranks. * Left cotterless cranks. * Rear derailleurs. * Comfortable, casual Handlebars and stems. These are generally used to replace low, racing style bars so often found on thin tire bikes. * Pedals - right side pedals are far more needed than lefts. * Brake handlevers. * Luggage carriers. * Kickstands. * Tires. * Grips.
The following are easy to sell, but hard to keep in stock or are hard to find in good condition:
* Steel handlebar stems. * Chains. * Security devices such as locks, cables and chains * Saddles. * Lighting. * Inner tubes. * Better-quality everything.
Alloy and the higher-quality parts for modern bikes are hard to purchase at reasonable prices. However if you seek these bikes out, on a one-by-one basis, they are available. Be especially careful about purchasing stolen bikes however. Make sure to document every purchase, and make a show of documenting every purchase. You want any potential thieves to say, "That dealer will turn you in if you try to bring a stolen bike there."
A very good source for such bikes, if you have the time, however, is yard sales.
One of the wonderful things about a bicycle junkyard is that it is good advertising for any other bicycle-related services you may want to offer. You can fix, sell and rent bikes out of your junkyard. If you have a nice retail building, you can even run a 'pro' shop right alongside your junkyard. I think you'll find the junkyard is more profitable, however!
One last word about the junk business: It is very environmentally-friendly. When you stop to think about how much pollution and waste is involved in manufacturing new bikes and parts, it is a grand idea to supply second-hand merchandise when you can. Furthermore, the transportation for your second-hand merchandise is usually no more than across town. With new bikes, there is more waste and pollution as the bikes are transported by train, truck and even oceanliner. And it is transported twice. First, the raw materials have to be transported to the factory where the bike is built. And do you know what else they do at these factories? They surround new bikes with four or five pounds of cardboard and plastic - more waste. If you decide to deal in second-hand merchandise you can be proud of your low-impact income!
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