In a recent thread about LBS maintenance, Slowman remarked that for bike shops to behave less like retailers and more like car dealers (eg: schedule maintenance appointments), they’d need to have financing and fleet sales for bikes. Which made me think…how awesome!
We know (from the poll on the right) that 60% of us own 3 or more types of bikes (combo of TT/road/mtb/cx, or all 4).
So who else would pay $200-$400/month in perpetuity for the following: Each year get a new bike, rotating through all of the types (ie: TT in 2014; road in 2015; mtb in 2016; etc.) Obviously with a price cap based on your financing plan.
Trade in the old one at the same time.Get free routine service on all of the bikes for the 3-4 years you own each.VIP service–walk-in, while-you-wait repairs for anything that takes less than 20 minutes of labor (ie: equivalent to a car oil change).By appointment service for bigger issues–schedule a day/time, either drop it off and pick up later in the day, or wait an hour or two to get it back.
Obviously, the details would matter. But some benefits for the buyer:
New bike every year, duh.
Don’t have to worry about saving for a new bike…just put the financing plan as a monthly withdrawal from your bank account.Takes care of the service hassle.
Benefits for the shop:
Predictable revenue stream through long term contracts.Customer loyalty.
Who else would sign up for this?
I’d have to have a lot of confidence in the longevity of my shop to sign up for something like that. Otherwise, cool idea.
In a recent thread about LBS maintenance, Slowman remarked that for bike shops to behave less like retailers and more like car dealers (eg: schedule maintenance appointments), they’d need to have financing and fleet sales for bikes. Which made me think…how awesome!
We know (from the poll on the right) that 60% of us own 3 or more types of bikes (combo of TT/road/mtb/cx, or all 4).
So who else would pay $200-$400/month in perpetuity for the following: Each year get a new bike, rotating through all of the types (ie: TT in 2014; road in 2015; mtb in 2016; etc.) Obviously with a price cap based on your financing plan.
Trade in the old one at the same time.Get free routine service on all of the bikes for the 3-4 years you own each.VIP service–walk-in, while-you-wait repairs for anything that takes less than 20 minutes of labor (ie: equivalent to a car oil change).By appointment service for bigger issues–schedule a day/time, either drop it off and pick up later in the day, or wait an hour or two to get it back.
Obviously, the details would matter. But some benefits for the buyer:
New bike every year, duh.
Don’t have to worry about saving for a new bike…just put the financing plan as a monthly withdrawal from your bank account.Takes care of the service hassle.
Benefits for the shop:
Predictable revenue stream through long term contracts.Customer loyalty.
Who else would sign up for this?
Would seem, like you would need the backing of a manufacturer for this (kind of like a car). But it is an interesting concept. Be interesting to see how the numbers would work out. Plus you would need a steady output source for the used bikes.
I have general agreement with the concept you’re proposing. Of course any system needs to be flexible to meet the needs of many.
Personally, I love bikes and love aquiring them. I don’t like disposing of bikes. I also love working on my bikes, twittering and wrenching to my hearts content. I wouldn’t be a customer for such a plan, but I could see that in various forms it could find a market.
I am guessing your numbers would be a bit low on a cost.of $400 a month ( just under $5k a yea)r. Not sure how you get all the maintenance on three or four bikes and a new bike every year for under $5k. The bike shop would probably have around $15k invested per customer, plus all the maintenance costs. On trade in , I don’t think the shop would get even half of the retail cost of the bike back on three or four year old bikes. Love the concept, but I bet the price would be higher than that. I would want a bigger cushion than $400 per month.
Yes, it would need backing of a manufacturer, or maybe the contract is run through a bank that collects money from the customer and distributes it to the LBS.
And to address concerns mentioned by G-man that the costs are too low for the LBS…you’re right, drop the free routine maintenance. The service-by-appointment and drop-in service are what would be important to me.
And for those who don’t want to give up a bike after three years…throw in a cyclocross and a town/cruiser bike, and extend it out to five years! Maybe an electric bike too for getting groceries.
I like the general idea, but there are a lot of risks in this system.
I mean, in the first 3 years you are giving out 3 bikes. Now the LBS can’t float the cost of those bikes, so you are basically going to be taking a loan… probably you, the bike owner, not the shop because if you wreck the bike, or stop being interested, get hit by a falling corporate ladder, etc you need to finish paying for the bike anyway.
Then if the shop is going to give you special services you basically have to increase that loan amount for a buffer.
I guess you could do it by having the bank give you a line of credit say worth ~2 bikes that you pay into at a higher than needed rate. So basically you have a 10k line of credit, get a 5k bike, and maybe an extra 10% for the shop for maintenance/service. Pay it like it is going to be paid off in ~1.5 years. But in a year you bump it back up with the next bike, continue on. Then the trade in value would come into play and cut 25% off the cost of the bikes when you started trading in the old ones.
I can’t see doing it. But I’m cheap - I’ll swoop in and buy the “Certified used” bikes that you guys trade in.
You mean like financing themseles. i thought some bike shops do finance through certain lenders. I looked at the lending terms on one of them 6 months to paid in full then interest rate skyrockets. It’s like best buy or sears or bed stores.
There are definitely a lot of ways it could go, and the financing end brings in a lot of complexities (that are a bit beyond me).
But the basic premise is that some people have perpetual car payments (ie: as soon as their loan is paid off, they trade in for a new car), so why not perpetual bike payments? It’s just another monthly cost, like mortgage, insurance, groceries, etc.
Many people have a really hard time saving up money to buy big ticket items. And even though the monthly payment/financing ends up way more expensive, if they didn’t do it that way they’d just spend the money on something else.
So this would be a win for the bike shop (more bikes sold, plus a cut of the financing profits), and an automatic new bike every year for the guy who can’t keep money in a savings account.
I could see a company like Trek pulling this off…except I wouldn’t want to commit to all of my bikes being Trek…
I’m intrigued, but as someone that loathes car dealerships and strives to be as non-car dealershippy as possible in my in-store demeanor, I think this sort of thing would really mess up the bike store dynamic. It would marginalize the customers who don’t buy into the program, which seems silly because (from an accounting standpoint) I think most shops would prefer a customer to buy a bike up front rather than paying for it over the course of a year or an indefinite period of time. Offering free service is a pretty big liability too, but it could be built into the cost of the program. That said, I’m one of those people that prefers to pay for things on an as-needed basis. I can certainly see the appeal of the concept you proposed to many of my customers.
My biggest concern, though, would be that this model would move the bike store even further across the table from the customer such as is the way with car dealerships. I would much to prefer to work to satisfy the customer’s wants and requirements rather than being solely concerned with hitting quotas and meeting manufacturer commitments to receive kickbacks.
I’m intrigued, but as someone that loathes car dealerships and strives to be as non-car dealershippy as possible in my in-store demeanor, I think this sort of thing would really mess up the bike store dynamic. It would marginalize the customers who don’t buy into the program, which seems silly because (from an accounting standpoint) I think most shops would prefer a customer to buy a bike up front rather than paying for it over the course of a year or an indefinite period of time.** Offering free service is a pretty big liability too, but it could be built into the cost of the program.** That said, I’m one of those people that prefers to pay for things on an as-needed basis. I can certainly see the appeal of the concept you proposed to many of my customers.
My biggest concern, though, would be that this model would move the bike store even further across the table from the customer such as is the way with car dealerships. I would much to prefer to work to satisfy the customer’s wants and requirements rather than being solely concerned with hitting quotas and meeting manufacturer commitments to receive kickbacks.
I think in this case it is built into the cost of the program. You just need to reword it as the servicing is included in the cost. But really, all servicing is a pretty big liability, paid or free.
The thing I like about this idea (the whole big picture of the OP), is that I can then turn around and buy a used high end bike for a reasonable amount of money that I know has been well taken care of. It is how I buy my cars.
One thing mentioned is that these style of shops would likely end up having to be sponsored by bike companies. I could see that many companies like Trek or Specialized woudl want sole source deals. This may mean that many shops end up with fewer choices overall. Good thing? Bad thing?
It’s been mentioned that $400/mo is not high enough…in my opinion, it’s more than I’d want to spend on this service. At $4800/yr I can buy a really nice bike. Even after a couple hundred dollars in service…plus most bike shops will include some minor service for the first year anyway. After three years, I can own 3 bikes each worth close to $5000. Or better yet, have a $2k mtn bike, $3k road bike, and up to a $10K TT bike! Plus, I’ve got some equity in those bikes (maybe $5-8K total?) I just wouldn’t consider it at this price. Maybe at $200/mo. Even then, I’m not sure.
The reason I’d like this, as has been mentioned, would be the plethora of nice, late model bikes I could choose from at a fraction of the cost.
