Some Truth. And an Idea.

An hour or so ago, I was just putting the finishing touches on a blog post that I had written out of frustration, anger, and ignorance.  Then the phone rang.  I spent 45 minutes talking with a IBD who has his shit together.  I’m talking, to-fucking-gether. Because of this fella, I relegated another blog post to Draft Folder Purgatory…but then after one beer…some clarity.

This is going to require some help from all 7 of my readers.

Truth:

1)I want to create a blog that is inspirational, educational, and of value to Independent Local Bike Shops.

2)I have really sucked ass at blogging for the most part.  Acknowledged.

3)Inside of my head and heart lies a passion for local bike shops and the people who make them work.

4)I don’t want to suck ass at blogging any more.

5)I want to dedicate time to deeply understanding the challenges of sustainability in bicycle retail.

6)I want to create positive changes in the bicycle industry and give sound advice to retailers.

An Idea:

There’s a project that I would like to pursue.  A series of case studies where:

(Truth x Analysis) + (Passion x Emotion)= Retail, aka, The Independent Local Bike Shop.

This is where you come in.

Over the next 12 months I would like to work with and study, in detail, 4 Bicycle Retailers who are interested doing a deep dive into their business.  Roughly one shop per quarter.

We’ll have a minimum of one weekly meeting via skype and will report a minimum of one blog post to the world every other week.

You will remain anonymous unless you decide to release the information publically.

The timing right now is perfect!  There is an opportunity to discuss the stress of yearly preseason orders and yearly projections.

If you’re a bike shop owner who is willing to share everything for the sake of education, I’m talking to you.  Please feel free to contact me at GregPattersonBlog@gmail.com.

Until next time.

Greggers

 

Genuine Thanks

 

Last month, April 14h at 9:15 am to be exact. I departed Knoxville, TN bound for Nashville.  There I met Ethan of Salsa Cycles. Over the next 10 days we would hold 8 Salsa Demos with our beloved Salsa Dealer network in cities around the South East. On Thursday we’d rendezvous with Martin Sahaydak, QBP’s Eastern Regional Manager, in Greensboro, NC.  Martin had just flown in from a trip with one of my fellow #QBPrep colleagues, Lauren in Florida.

Needless to say it was an exhausting week. But dang… It was fun!

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Our stops were as follows:

  1. Bell’s Bend- Nashville, TN
  2. Olde Rope Mill Park- Woodstock, GA
  3. Enterprise South Nature Park Lot #5- Chattanooga, TN
  4. Mead’s Quarry “The Dirty South Trails”-Knoxville, TN
  5. Lake Crab Tree Park- Morrisville, NC
  6. Revolution Cycles NC Pop-Up Shop- Greensboro, NC
  7. Big Leaf Slopes Park- Statesville, NC
  8. Trails End at Bent Creek- Asheville, NC

Each and every Demo Event was unique and impactful in some way.   Those 10 days were honestly some of the best that I’ve spent on the road in 2 years.

Big thanks to the Salsa Tribe who hung out with us at our demos.  You are awesome! Even bigger thanks to my Southeastern Salsa Dealers for helping make it all happen.  You are inspiring and building a really passionate community of cyclists. Well done folks!

Greggers

 

 

 

 

 

The Magic of Margin with #Greggers

Today we’ll briefly (kinda) examine a hot topic of conversation floating around the Bike industry.  It’s a word uttered in disgust by some shop owners.  A word touted by sales reps and industry insiders.  A word that can be expressed as a percentage or as a dollar figure.  Two star-crossed syllables, coveted eternally by Vendors and Dealers alike.

We use this word to make decisions, to evaluate our strategy, and also to pivot when necessary.  It’s both revered and at the same time, unfortunately, shrouded in mystery.
Yes, it’s on the tip of your Tongue:
“Maybe, we should only stock keystone accessories.”
     “Anybody know how many points we get on this?”
          “Rent’s going up.  How we gonna pay for it?”
               “Greggers, whatta’ you think?”    
                    “I’d don’t know. Ask Watts.
                            ” Never order these again.”
 You any good at crossword puzzles?  Its Margin.  MARGIN.  *Ding*
Margin can be calculated and analyzed many ways. Its complex and often misunderstood…In other words.  Read this shit and let’s try to get a bit clearer on what Margin is. I guess, maybe.

I know, right.  Who thought it would be this hard?
Understanding Margin starts with knowing that it is one tool in your tool chest for understanding your business and making decisions.  
It is not the Holy Grail, Dr. Jones.  
 Let me repeat that.  Margin is one tool.   Albeit, a pretty good one.

I have 3 favorite types of Margin.
 IMG_0005
Gross Margin % : The Selling Price (REVENUE) of an item minus Your Cost (COST OF GOODS SOLD) divided by the Selling Price (REVENUE). SIMPLE!
  1. Take time to be checked in with your GROSS MARGIN % on a total average basis as well as a category basis.
  2. Don’t make the mistake of being obsessed with increasing the GM of every product you buy or sell. Rember margin is only one tool in your toolbox.
  3. Understand that a high gross margin doesn’t always mean high consumer value.  Also read, if you are unable to sell a product, or your employees and customers do not recognize the value of a product then it’s gross margin is effectively ZERO.

Operating Margin %: REVENUE minus COST OF GOODS SOLD and the OPERATING COSTS associated with operating your bike shop, divided by total  REVENUE. (IE: Rent, Payroll, utilities, etc.)
  1. Operating Profit Margin (OPM) is all relative. There is NO right or wrong number. Frankly, this is a measure of efficiency. How good are we at turning our resources into dollars?
  2. OPM is not an answer to a question. But rather, a way for us to ask meaningful questions about our strategy and execution.
  3. Once you have found your approximate OPM, use it as a benchmark and refer to it Quarterly with your accountant and your team. Naturally, as a business owner, you probably already know where you’d like to see improvement in your shop’s efficiency. Get motivated and implement a strategy that you believe will improve your OPM then check your result against your benchmark.

Net Profit Margin % : If your shop is profitable this number will be greater than Zero and will represent REVENUE minus COST OF GOODS SOLD, OPERATING COSTS, TAXES, and INTEREST ON OUTSTANDING DEBTS, divided by REVENUE.

  1. Net Profit Margin is how we place a value on a business in a Capitalistic society. If you want to see this type of valuation happen in “Real-Time,” watch shark Tank.
  2. If you’re a shop owner or manager, Net Profit Margin is how we prove that our business has an intrinsic value that can be shown in dollars.  It also lets us know the investment value of the dollars we have spent.
  3. As an owner, should you ever decide to Sell your shop, Borrow money for another venture, or Retire; knowing your Net Profit Margin will gve you a head start in planning for your future.

Okay friends, so thats MARGIN as I understand it. If you have questions or want to explore these topics further hit me up on Facebook, Insta-whatevers, or in the comment section below! Here’s to the IBD.

Hugs,

Greggers

 

You want answers? -I want the truth!

So friends here I am late in the evening typing feverishly.  Freshly settled in Chattanooga, TN and a few delicious beers into the game.  (Big Thanks to Community Pie for the refreshments.)

The previous post I made was clearly a bitching session.  A classic WTF moment.  Honestly, it felt good just to release my own unorganized “Bike Industry Banter” into the world.  Now… Here I am lamenting over the things I should have mentioned.

Mostly, I’d like to give a shout out to a friend and colleague, Andy Corson, for calling out my weak ass attempt at my blog post and asking me…

“So what IS happening Greg?”

and

“What’s happening with IBDs?”

Corson et al.,

Onto your shit-eating-grin questions…

  1. Damn you Andy. Kenneth J. Bloggins.  Don’t be a dick.  I love you. Wanna guest post?
  2. IBDs and suppliers are not in alignment.  At least not in most cases.  Bicycle retailers are struggling.  They are on the ropes.  Most of which have opened a shop because they like bikes.  Not because they know how to manage a retail store or the host of other responsibilities that come with owning a bike shop.  IE: HR, accounting, purchasing, AR, Cash Flow Analysis, social media rock stardom, staff training, merchandising, selling strategy, proper punctuation, and-the-list-goes-on.
  3. Every shop owner and employee I talk to feels out of touch and out of sync with what’s happening in the wonderful world of bicycle retail.  Mind you, these are Bicycle Retailers who have no idea what in the hell the future holds.  How is it possible that the salt of the Earth people who create the bicycle industry, day in and day out, have no fucking idea where we’re headed?  That just seems super fucked up.  Are you serious Clark?
  4. Bike shops are closing left and right.  And good ones.  On top of that, a few really great shops are losing key people.  Why? Because they are not making enough money or finding legitimate solutions to their problems to continue forward.  Hello, Tobie D. and Jeff K.
  5. The bike industry is approximately 5 light years behind the curve when it comes to using technology.  At least according Sam, a long time Chattanooga bike shop dude.  I have to agree with Sam here.  When’s the last time a manufacturer, supplier, distributor actually invested in the retailer as a part of their retail strategy online?  And no, I’m not talking about the we’ve-made-a-corporate-decision-to-sell-bikes-and-shit-online-and-in-order-to-placate-you-as-a-retailer-we-are-going-to-offer-you-some-money kind of way.  Is it really that hard to include the retailer, the most important aspect of the bicycle industry, into the decision making process?  If, as an industry, we’re going to through a billion dollars at strategy, it might make sense to look beyond the walls of the building you go to work in every day.
  6. I’m tired. 5 points was enough.  I have shop visits to do tomorrow.  Mark my words.  I’ll be back.

Go away, I’ve been asleep for hours by the time you’ve read this.

Greggers.

Okay Okay Okay…

Education, Alignment, Investment, and…Support?.?  Maybe those are productive topics.  I’m out for realz this time.

#editwhat?

 

 

 

Bike Industry Banter

Holy shit.  Bicycle Bizz Behemoths have made major moves in the last couple of weeks.

Shimano slashes prices across the board at MSRP and for their retailers.

Giant announces direct online sales to consumers.

Heads roll over at Specialized.

Chain Reaction Merges with Wiggle.

What are we seeing here?  Obviously, our industry’s largest forces are retrenching and preparing for a brave new world.  In back room meetings and over expensive lunches heads of state are contemplating and executing their new strategies.  Meanwhile, bicycles dealers are chomping their Triflow stained fingernails down to the quick and wondering how or if they fit into this new and dynamic landscape.

I ask…

Where’s all of the communication folks?  Where’s the transparency?  The partnership?  The appreciation for the men and women who work everyday on the front lines?

Come on already.  What the hell is happening?  I could literally spend all day talking to dealers about what we think is “really” going on, why this or that happening, and what these implications mean for our beloved Independent Bicycle Retailers.

The real question here is, why must we speculate?

The IBD brings incredible value to the bike industry.  Our nation’s bike shops serve as a hub of cycling culture in every community.  Even a shop in a sleepy rural town, where sales jerks like myself never visit, means something to someone.

Bike shops are special. They are the heart, soul, and personality of the cycling universe that I want to live in.  Each of them housing an eccentric group of people who do a job because they have a passion to share the joy that only a bicycle can bring.

Also, bike shop employees are experts.  At least the good ones.  They connect a forum trolling-review obsessed-online slave network of people to the things that really matter.  People, community, the coalescence of metal and rubber that make up a bicycle.

So, come on friends.  If we’re going to make big moves, let’s make them together. Fuck.

 

 

Your Bike Shop is a D20

I had a great conversation today with a good friend of mine.  It started as a dialog about his shop, the barriers to success the store was facing, how he was choosing to move forward, and also how it was affecting his life as an entrepreneur.

So, yeah, important shit.

The thing is, if you’re reading this, you probably deal with similar stresses everyday as and IBD.

Think of your business as a D20…Screen Shot 2016-02-04 at 4.02.25 PM

 

There are so many facets to running a bike shop today.

  • What do you stock?
  • How do you train your employees?
  • Can you manage cash flow through an off-season?
  • What the hell is our Strategy?
  • Where do I find my ideal customers?
  • Why did I open a bike shop anyway?

…I think you get the picture.

So you’re still reading? Okay, take a minute to look at your own business. What are the individual pieces that make up running a bike shop?

We start by taking the questions from the list above and creating a series of pieces that create a whole.

Seriously make a list.  I’ll help you get started..

Stock management, training employees, managing cash flow, creating a strategy, identifying and reaching ideal customers…see how easy that was.

Now, what are you good at?  Where do you need help?  What has gotten away from you?  Will focusing on one piece effect another? How?

If you have the time, please share your list with the rest of us.  The goal here isn’t to answer all of the questions or derive a silver bullet solution to running a standout bike shop.  What we want is an understanding of the foundational pieces that make up a living breathing bike shop.  Moreover, to build a frame of reference from which to start a conversation that is sorely missed in our industry today.

Thanks for playing.

 

 

Online vs. Instore Selling, 3 tips from Google

If you, like many other Brick and Mortar retailers, are looking for ways to optimize your in-store sales, read this.  Think with Google has brought us a high level view of modern consumer behavior in regard to online and instore purchasing.

Not convinced?  Here’s a sneak peek of 3 tips…

1.Digital to Physical Customer Traffic

2.Don’t Break Your Customers Smart Phone

3. Measure Shit that Counts.

Read the Full Article here…

The 3 New Realities of Local Retail