Is My Local Bike Shop Ripping Me Off?

[plappyflugilips]

Hi,

My wife took her bike to our LBS for repairs and I was surprised to see how much markup they put on the components:

£22.99 for a Shimano UN-55 bottom bracket (£11.99 on Wiggle)
£29.99 for a Sora rear mech (£15.95 on Wiggle)
£21.99 for a SRAM PC971 chain (£10.99 on Wiggle)

When you consider that the Wiggle prices above include VAT, which the LBS would not have to pay when buying wholesale, then they are adding more than 100% markup on each item. They also charged £50 for 70 mins labour for fitting the above.

I am all for supporting local businesses and would much prefer a small business owner to have my money than a massive corporation, but I can't help feel like they're pushing it a little bit too far by doubling all their prices. If they charged more reasonable rates then they would guarantee my business for years to come but now I am tempted to buy all the necessary tools and do all my own maintenance from now on.

I would be interested to hear what people think - am I being unreasonable?

[beardy]

but now I am tempted to buy all the necessary tools and do all my own maintenance from now on.

A conclusion that I came to long ago but there are other people who charge more for their services than the bike shop does, so for them it makes sense to use the bikeshop.

[cycleruk]

You could always go back and question the LBS prices.
Wiggle quote "saving 41%" which would make the normal price £22.50 ?? (Ribble £21) although Chainreaction say RRP = £29.99

[[XAP]Bob]

You don't know what their wholesale price are.

£50 for 70 minutes labour isn't a bad rate - nationally garages average £75/hour (2014 report by Warranty Direct).

[Valbrona]

Note that some shops don't actually do their own repairs. Round my way a bicycle repair man-in-a-van turns up, parks outside the shop, and then does the repairs. I have also seen him parked outside a shop a few miles away, also doing repairs. When shops outsource their work there is invariably a price premium.

[oldmanonabike]

How does the bike shop avoid VAT by buying wholesale??

[plappyflugilips]

Some good points. I know very little about their business (or businesses in general) so perhaps they are tied to a wholesaler and can't take advantage of cheap online prices. The amounts I was charged seem perfectly reasonable when you look at that RRP for the bottom bracket.

I agree that the labour charge seems ok - I have no objection to paying a decent hourly rate, I just mentioned the labour charge to put the other costs in context.

How does the bike shop avoid VAT by buying wholesale??

I think I may have been mistaken re: VAT. The LBS can reclaim any VAT paid to its supplier, but of course they then pay net VAT to HMRC (output VAT less input VAT).

Despite all this, I am almost certainly doing my own repairs from now on. Apart from anything else, it will be good to learn new skills and be more self sufficient!

[Psamathe]

...
£50 for 70 minutes labour isn't a bad rate - nationally garages average £75/hour (2014 report by Warranty Direct).

I had always assumed that the hourly rate is not just to employ the technician but also to cover the costs of equipment, gear and operating costs (e.g. car lift, regular safety inspections of lift, big premises (bigger than bike shop per vehicle), emissions checkers, courtesy car, etc. I'd think a car service place would have much higher overheads per engineer than a bike shop - but by how much in real terms I've no idea.

Ian

[blackbike]

Why not avoid labour charges by doing the work yourself? Bicycle maintenance is fairly easy to learn, especially now we have the internet.

I happily pay others to do what I cannot do myself because of lack of expertise - for example legal work or repairs to my car, but replacing bike bits is largely a matter of common sense and spending a few quid buying some tools.

[PH]

I doubt your LBS is ripping you off, like most of us they're just trying to make a living on a very unlevel playing field. Whether it makes sense for you to use them depends how much value you put on their product and services, but if you only measure value in £££s then you'll be better off shopping elsewhere. All retail has changed in the last decade or so, some good some bad, amongst the good are some small businesses that have found a way to offer something the larger players can't, interesting times.

[[XAP]Bob]

...
£50 for 70 minutes labour isn't a bad rate - nationally garages average £75/hour (2014 report by Warranty Direct).

I had always assumed that the hourly rate is not just to employ the technician but also to cover the costs of equipment, gear and operating costs (e.g. car lift, regular safety inspections of lift, big premises (bigger than bike shop per vehicle), emissions checkers, courtesy car, etc. I'd think a car service place would have much higher overheads per engineer than a bike shop - but by how much in real terms I've no idea.

Ian

Most of the kit is the same (different scale maybe) and yes, premises need to be larger for a car than a bike, but that often manifests in more convenient (expensive) locations for a bike shop...

Emissions check isn't relevant, unless your getting an MOt, and that's where it's maintenance should be charged. I've had courtesy bikes from a bike shop, generally not that hard for them to supply one, but I've rarely had a courtesy car from a garage - I did get one whilst some warranty work was being done... But never for regular servicing etc (whilst I have had a courtesy bike for a service).

At <£50/hour the LBS is already 30% cheaper than the hypothetical average garage, so I'd suggest it's fair.

[al_yrpal]

YouTube is your friend, just about everything you need to do to any bike is explained in detail on there step by step. Some videos are not so good but you can generally find ones covering exactly what you want. Books I have found fairly useless. The charges dont seem unreasonable to me. But why pay out all that money for something thats quite easy to do yourself?

Al

[Malaconotus]

Your LBS has charged the suggested retail price for all those items, on which they'd expect to make a gross margin of around 45%, which these days translates to a nett margin of +/- 0%.

The big online retailers commonly sell direct to the public for less than the wholesale price through the authorised distributor.

Yes, you've paid more than you would have if you bought online and fitted it all yourself. Which is exactly what happens every time you use a joiner, or plumber, or painter and decorator. Except that the hourly rate for a bike mechanic is about half that of any similarly skilled trade.

[blackbike]

Aldi did a bike tool kit a few days ago for £14.99 as part of their weekly special offers.

There are still lots left at my local store.

[hamster]

My local bike shop told me that they couldn't get just the groupset for the same price that Ribble sell an entire bike. Remember that Wiggle, CRC, Ribble etc ship huge amounts and therefore can drive quantity discounts with the importer.

A pal runs the local Sony centre. He sees TVs on Amazon for less than he gets them from the manufacturer.