Bricks and mortar versus clicks and mortar

In November 1999 Russell Sears set up, a website retailing low-end bikes from the likes of Barracuda and Universal. He had never sold a bike in his life before, but hes got a computer, a modem and a website, and nowadays thats all you need. Web-only bike shops are springing up all over the place. Bicyclenet succeeds where others fail because the legwork has been put in to get the site indexed on hundreds of search engines.

BikeBiz took a virtual tour around his shop then asked him a few pertinent questions. By email, of course.

BB: When and why did you start Bicyclenet?
Bicyclenet was started back in the summer. It was conceived around
August time with a determination to go-live prior to Xmas. The actual
go-live date was 8th November 1999.

There is no single reason for starting the business. In my real life I work in the IT industry and have a passion for making IT work. By this I mean an interest in using the power of information technology to change the way
that we do business generally. The internet is a very powerful tool and it
is starting to have a large impact on our private and business lifestyles.
For some time now I have watched from the sidelines as many new internet
businesses have quickly grown into successful operations, way beyond the
hopes and expectations that were the original driving forces behind them. As
a technologist and a businessman I have been able to see some of the flaws
behind those businesses that were not so succesful. This has been the main
reason for launching an Internet shop; I wanted to get it right, starting
with all the technical aspects.

Why a bicycle shop? This is not such an easy one to answer, as it was mainly borne out of a personal fascination for cycling and a keen interest in light
mechanical equipment. Also, from a business perspective, the spectrum of people that cycling embraces is enourmous from young to old and from amateurs to out and out enthusiasts. When I was a keen cyclist back in the 70s, there was really only one style of bike to own and that was racer. At that time I was a member of the Hemel Hempstead Cycling Club and the proud owner of a Holdsworth racing cycle. Nowadays, there are many different styles to suit the individuals taste and application, many of which, from an engineering point of view, are incredibly well engineered machines. So, putting these key elements together best describes why I decided to go into business and satisfy these passions.

BB: Is this a full time job for you?
No, I wouldn't be able to make ends meet at the moment. I dont want to rely
on Bicyclenet yet for a living as there is a long way to go and I aim to be
in it for the duration. It really isnt the case that I am running the business as a hobby, but it is true to say that both I and my business partner are putting countless hours in of our spare time to get the business off the ground and will continue to do so until such time as it becomes a full time occupation.

BB: Whats your business background?
I started work back in the 70s as an apprentice technician with British
Railways on telecomunications and signalling equipment, having spent a year
at an engineering college in Watford (hence the interest in mechanical gear). In
recent years I have been running a division of a global company involved in
the delivery of IT solutions to the newspaper market. This is my current
full time employment.

BB: Have you been involved with bikes before?
Only from an interest point of view. I dont confess to really understand
the full tecno-babble involved with bikes today, but I am learning fast and
am having a tremendous amount of fun into the bargain.

BB: Who does the site aim at?
We are aiming at the general public. These days, there are many people who
dont have the time to shop in the conventional way and would prefer to use
the internet as their shopping basket. We are not trying to prise people
away from their local bike shop, but pick up on those people who surf the net
looking for what we can sell them. You see, unlike the corner shop, nobody
passes Bicyclenet on the way to work. If they want to walk into my shop they
have to click on something on their computer, which in essence means they
have to come looking. It is my job to provide them with the ease of finding the
shop, by working with the search engines that are out there and using the various tools that are on offer. Once inside, we have to make the shop look
interesting and above all it needs to be easy to get around inside. You see,
the guy with the mouse in his hand only has to click on one button and he is
back out on the pavement. Its easy to turn customers away, but not so easy
to keep them inside. Back to your specific question, we are aiming at
everybody, but honing in on the dads who are looking to buy junior a new
bike for christmas or birthday and on the teenager with the
paper-round who is saving up for the new full suspension bike, so that he
can be like his mates. We are hoping to get some interest from the odd
enthusiast (sorry, shouldnt call them odd) who wants a specialist machine,
but at present not building too many big sales into the business plan.

BB: How do you reach your customers, both on and offline?
Essentially, I reach them through their enquiry for a cycle. Most of the work to date has been to build a site which sits well with the search engines. There are dozens of search engines in the UK alone and the number is increasing rapidly. The search engine is like the index of a book. You may be somewhere in the book, but unless you can be found in the index, you're not going to get too many people land up on your page. Bicyclenet can also be found in many of the UK's virtual shopping malls. These are basically groups of e-commerce sites which are held together via a single search database, so once into the mall the guy looking for a bike will soon find you.

Clearly there are many other ways to reach your customer base both on and
off the internet and these will be tapped into in the fullness of time. As I
stated earlier, we are here for the duration and will take each step at a time. One thing that I am clear on from day one and that is that a disappointed internet customer has the ability to tell millions of your potential customers, so the need to be a good service provider is paramount.

Word of mouth is very powerful and I can proudly boast that we are making
space of time that we have been trading, we have had referrals to the site
and repeat orders from customers.

BB: How will you succeed when there are search engines that can find the
cheapest UK price on bikes? What do you offer as well as low prices?
We offer a great service. One thing the internet will never provide is a
truly personal service and once the customer comes to your site you need to
treat him the same way as if he was right there at your counter. Many people
want to talk to you before ordering and feel assured that they are making
the right choice as far as size, durability and style is concerned. Pictures
on a computer screen dont do this, so we offer a very personal service. We
are also careful to use responsive suppliers both in terms of hardware and
delivery. It is important to tell your customer when delivery will happen,
then ensure that it happens, and finally call them up to tell them it
happened. The rules of good service are the same in whatever business you
run. The key elements are responsiveness, knowledge and communication.

BB: You have two suppliers: Universal and Moore Large. How and why did you go
for them?
If you look around on the internet at bicycle shops, what do you see? I see
shops that tell you about themselves but sell you nothing and I see shops
that can sell you a bike for £1000 upwards. What I dont see too much of
are bike shops that can sell you the range at everyday prices. I chose these
two suppliers because they supply range and they supply volume and they do
it at internet ready prices. I dont know too many people, even those that trust the technology, who would part with £1,000+ too easily over the internet. In the US the story is different, but they have been at it for a lot longer than we have and they dont get the unnecessary scaremongery of fraud thrown at them from every angle.

BB: How many bikes have you sold so far?
That would be telling. In all seriousness we have sold more bikes than we
put in our business plan so far, but not enough to make us rich. We have
climbed a steep learning curve and still have a few yards to go. But then
this is very early days. I keep being reminded of the lonely winter months to come and am trying to figure ways of drumming up business. Is it really as bad as they say?? I guess Ill find out soon.

BB: List your goals for the site.
I want Bicyclenet to be the Halfords of the Internet. I want it to be a good
name and a trusted supplier of family cycles. Sure, I want it to be
successful as well.

BB: Its well known that even mega net companies like dont make money, do you? may not be making money, but the people who are running it sure
are!! The answer is yes, I wouldnt do it if I didnt think it would make money and it is making money. I have already stated that it doesnt make enough to
employ anybody full time, but the intention is to carry on building it and
promoting it until it does. Margins are very low and the forecast is to increase turnover significantly. Our geography is currently mainland UK and that is a large territory, so it is feasible to aim at turnover whilst maintaining a low
margin. The procedures that we have built into the company right now are
capable of withstanding a tenfold increase whilst maintaining the same
infrastructure. We are built on stable foundations and our ambitions were
taken into account when choosing the right supplier network.

BB: How do you offer servicing back-up for people who buy your bikes?
We offer support throughout the warranty term on all products that we supply. If a component requires repair or replacement this will be arranged through negotiation with the customers local retail oulet and it is either carried out at our expense or via direct billing to the manufacturer, depending on the model and the nature of the problem. Basically we act as the one stop shop and provide a seamless support service to our customers. As for long term servicing, we currently have plans in place to offer regional support provision around the UK.

BB: Do you hold stock and make deliveries yourself?
"We use our own designated transport company to pick up the goods and deliver on to our customers. We can achieve a 3 day order fulfillment cycle doing it this way, rather than using our suppliers delivery methods which in the early days was taking way too long. One of the keys to good internet
business is prompt delivery.
In most cases stocks are held by Universal and Moore Large, however this year we will be looking to stock some of the more popular items including accessories.

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