What’s the price YOU pay?
The phone rings. Friendly, enthusiastic greeting. Exchange names.
Customer: ‘How much is your Superfast Lightweight Softail XC 2013?’
Me: ‘Good choice. Light as a feather – 9.99 KGS. RRP is R30 000’
Customer: ‘Yeah, I know, but what discount do I get?’
Me: ‘Have we met yet?’
Customer: ‘What do you mean?’
Me: ‘Have you visited our shop?’
Customer: ‘No – what’s that got to do with anything?’
Me: ‘Well, I don’t do phone sex’
Customer: ‘I’m not with you!’
Me: ‘If you want to talk price, you need to come into the shop for some foreplay, discuss your bicycle needs and how you’re gonna pay and then you can screw me’
Customer WITHOUT a sense of humour: Puts the phone down. Phones another bike shop.
Customer WITH a sense of humour: Laughs out loud. ‘Cool. I’ll see you around four’.
The next time you buy a bike consider, from the shop’s perspective, what’s in the price you’re prepared to pay for your new bike…
– first there is the VAT component
– then the cost of the bike to the dealer
– the cost of holding that bike and relevant accessories in stock
– rent, water, electricity, rates
– staff salaries, benefits, UIF, workmans compensation, training
– insurance cover and public liability
– courier delivery costs and postage
– assembling the new bike
– weekly shop cleaning services and cleaning products
– preparation of the bike for your specific needs (setting up and fitting your bits ‘n pieces)
– marketing costs (website, business cards, flyers, signage, branding etc)
– capital expenses such as workshop tooling, shop fitting, shop maintenance
– bank charges, credit/debit card expenses, accounting fees
– stock shrinkage and marking down distressed stock
– internet service providers, telephone and mobile phone costs
– other stuff: stationery, coffee, milk, sugar, water dispensers, beers on Friday
The average mark-up on bikes is around 35%. Given the expenses indicated above and the average mark-up the advertised price is a reasonable expectation by the shop owner.
Your question is: When should I ask for a discount? There a number of scenarios…
On entry or just-above entry level bikes (under R10 000) you should look for added-value
(first free services and a few essential accessories). If you offer to pay electronically, a discount of around 3% is reasonable. Cash is NOT a negotiating tool as it is expensive to deposit. Unless, of course, the shop is screwing the tax man.
Once you get to choosing a mid to high level R10K to R30K bike, 5% off the bike price and 10% off accessories is reasonable, again… if you pay electronically.
Clearly, buying a bike priced from R30K-plus to R90 000, means the 35% mark-up is big in Rand terms and a larger discount is negotiable.
However, when a bike is in high demand and short supply the dealer won’t give a ‘big’ discount as someone else will buy it tomorrow. The dealer should add value such as a free tubeless upgrade, saddle swop, stem length change and 10% off all accessories, shoes, helmet etc.
These suggested added-value and discounts will leave BOTH the customer and the dealer feeling good about each other and establishes a platform for a great, symbiotic long-term relationship. Neither party will have that feeling of being screwed!
Read also ‘Buy your bike, buy your shop’ elsewhere on this site.