INDUSTRY OPINIONS: Share your savings - BikeBiz

INDUSTRY OPINIONS: Share your savings

With a recession looming, retailers nationwide will be looking for ways to minimise overheads and claw back every penny. Mark Sutton asks independents ‘how do you minimise costs and maximise profits?’
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“Our overheads are kept to a minimum through sheer versatility. This is having our staff fulfil various roles within the business and working hard at each. The only really effective way that the shop makes savings is by trying to bulk order when possible. Through sensible buying we have very few warranty issues and on the rare occasion we do, our suppliers are very good at dealing with them.
Bills have obviously gone up across the board. That’s anything from the Shimano aftermarket parts cost increases to the fuel on which the company vehicles run and the electricity that keeps the shop lit.
Switching suppliers is not an option as the increases are across the board. The only option is to pass these costs onto the customer.”
Jason Rochford,
Shorter Rochford Cycles, London

“I FIND it’s almost impossible to source lower overheads. Virtually all costs are fixed. We have changed our telephone supplier recently, which has saved a little, but our greatest cost is salaries and you can’t start cutting down on staff or salaries if you want to retain customer service. I can’t think of too many ways of cutting down or making savings without sacrificing some aspect of the service we provide or the appearance of the shop. We are not going to start turning the changing room light off and I don’t think I could get away with rationing toilet roll!
Clawing money back via recyling isn’t easy when It costs twice as much to recycle as it does to throw. We are trying to contact a rag and bone man to collect our waste metal, not for financial gain, but because the volume of waste thrown is crazy.

Our quarterly electricity bill has gone up from £500 to £800. Business rates grow above inflation annually. Another increasing expense that is often overlooked is the cost of adhering to health and safety regulations, such as the necessity to get safety certificates for all utilities.
We have been going through a period of consolidation over the past few years to simplify the shop, ordering and to maximise the margin we receive. 95 per cent of all our buying is done through four main suppliers, which saves time, confusion and money. The costs from suppliers have gone, or are going up, some by as much as 20 per cent, which in 16 years of trading if the first time we have seen any tangible increases.
 Our best selling 16-inch wheel bike has gone up 25 per cent from £100 to £125. I fear that may be more than many parents are willing to accept.”
Andy Rackstraw, Saddle Safari, Marlow

“WE’VE been carefully looking at stock control and ordering. We buy in bulk when possible, making the most of the discounts available when multiple units are ordered.
Because we run with as few staff as possible we save on pay packets. The staff we do have act as shop floor staff, mechanics and also handle accounts.
We’re currently looking at the possibility of beginning a tyre re-cycling scheme, but we’ve yet to see how beneficial this could be. Another thing we are looking at implementing is introducing a recycling charge to the customer for disposing of their old parts. On servicing too, we may introduce charges for lubricants on top of charges for cleaning up mucky bicycles.
European goods have seen some of the biggest price hikes.”
Andy Frasier, York Cycleworks

“JUST recently we have been very carefully monitoring our accounts. One area in which we are looking to make savings is by reducing our banking charges where possible. For example we’re looking to put some of our cash away with the Post Office to save on the charges banks dish out, which over the period of a year can really add up.
Somebody, somewhere is making money from recycling cardboard. We have to pay hundreds a year to have our waste removed. It would be interesting to find out where the cardboard ends up to see if we could eliminate this cost.
We’re looking into sourcing our helmets cheaper as those made in America are not seeing increases, while the European sourced models are all going up by five pounds or more. Utility bills rose again this year.”
Noel Haynes, Lutterworth Cycle Centre, Lutterworth

ACT workshop survey: salaries rising
The ACT has announced the findings of the 2008 workshop survey. According to the findings, lack of space is still the biggest challenge facing workshops and the average wage for a mechanic remains below £14,000 even though almost 60 per cent are now Cytech qualified. It was found that pay packets below £10,000 are declining in number.
The survey also concludes that labour charges are on the increase, while over 50 per cent of respondent retailers reported that they charge £20-plus per hour for their time.
A full report with analysis of the results is available free to all ACT Members, or can be purchased together with the 2007 survey results for £49.99.

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