Friday, March 16, 2012

The Sad Reality

The bike shop has pushed the rest of my life off center stage.  Hopefully I will find some balance sooner than later.  But I am afraid I am back into it. The repairs are not just trickling in anymore.  It would be helpful if I don't burn out until September. 

Do something long enough and no matter what goes on around this something one does day in day out, the rhythms remain the same, even if the resulting conditions change.

I changed my age old bike shop business model three years ago now.  And yes, it has changed the way I interact with my customers.  Mistakes become bigger deals as I have had to learn to walk a narrower financial ledge in order to keep the doors open.  No longer is dickering the exception, it is now the rule.The customer is coming in with the idea of spending as little as possible for the product or service they want.  The retailer (me) hopes to maximize his profit, but  has become used to settling for the minimum profit he needs to get by. 

And contrary to what much of the consuming public might think, retailers hate price increases more than they do.  More often than not, a retailer will absorb the price hikes as long as they can before they tack on any increases in their store.  Unfortunately, recent fuel increases have necessitated many of us to raise our prices more than once a year.  I have seen my shipping costs triple over the last three years.  Finally after five years of resisting, I find I have to completely go through my labor charges and adjust them upward.  I have no choice..........Well, yeah I have a choice, but only one if I want to keep moving forward.

As much as I would like to think the bicycle industry is anti oil, it's very existence depends on oil. Not just the costs of delivering my inventory, but the cost of energy to actually make my inventory has skyrocketed.  A bike that I charged say, $350 for three years ago is now approaching $500 or more on many bike shop floors.  Yeah  I know it is not all energy costs.  Much of it is related to exchange rates, national economics, blah, blah blah.  But at the heart of every increase somewhere sits the price of oil.

It is appropriate then that crude oil comes out of the ground a stinking sticky goo that attaches itself in permanent stains to anything it touches.  It has seeped into our culture and now reigns somewhere near God as the most important thing in our lives.  We can deny it's influence on us.  But we are just fooling ourselves.  Oil runs our lives whether we have a car or not.

A sad reality, but it is the way of our world.



The Blog Fodder said...

Fuel costs in America are among if not the cheapest in the world. I have no idea why Americans complain about gas prices.

BBC said...

Before oil it was trees. I know a lady that charges twice what she should be able to get away with but she is so nice that people still buy from her.

I asked her about that, "I don't sell as much volume but fuck it, it's not as much work."

A smile and bullshit oils stuff I guess.

Ol'Buzzard said...

We live in a corporate-politico world. There are alternatives to fossil fuel based energy that would decrease our oil consumption and bring down gas prices; but, because of the oil industry's clout, our politicians are afraid to support them.
Many countries do have more expensive gas, but their salaries are adjusted to compensate. As gas prices go up in the U.S. the buying power of our stagnated economy decreases, and everybody suffers except the mega-rich.

I have a 2001 GMC pick-up that gets 10 mpg: but what little travel I do it is cheaper for me to buy the gas than carry a car payment - and on a fixed income that doesn't keep pace with increased prices, my net output has to be my primary concern.
the Ol'Buzzard

BBC said...

have a 2001 GMC pick-up that gets 10 mpg.

There may be something wrong with that truck, a 2001 should get better mileage than that.

John Myste said...

Perhaps you should have a side business that is some kind of discount shipping. You would only need to break even, so you could be very competitive, because the goal of this other business would be to provide free shipping for yourself, so your bike shop can also be competitive.

The cost of shipping would no longer affect you, giving you an edge over competitors in your bike shop and your break-even model is you shipping business would give you an edge.

Of course, I know this would not really work. You cannot compete with UPS or Federal Express even with a break even model. Still, I thought of it, and for two seconds it seemed like and interesting idea.