Bike and Part Sales

For bike and part sales you need to make sure you have proper Insurance, and that you are paying the necessary taxes.

Selling Parts

New Parts

Keep them separate from the used stuff and make sure you price them correctly and add the appropriate tax.

Used Parts

Free Ride has a great way of selling parts. They have a color-coded bike that hanging that shows what parts are called and then each parts bin has a similarly colored part bolted to the front.

Selling Bikes

New Bikes

This is a sticky thing to get into, since it may put you in direct competition with your local bike shop. The community bike shops are sometimes not non-profits and pick up unique brands that no one else sells, like track specific bikes.

Used Bikes

All bikes that you sell should be checked over by a senior mechanic. Not only does this make sure that bikes are in working order but it provides constructive feedback for volunteers and/or staff that are still learning.

Pricing

What can your volunteers/staff handle? If things are always really busy and making change is a hard thing to do, you may want to consider flat rates for all your used parts, like $5 or $10. Keep the nicer parts in a glass case and price them accordingly. New parts have an Manufacturer Suggested Retail Price (MSRP) that you should stick close to so that you don't under cut your local bike shop. A typical MSRP is double the wholesale cost; as an example a $15 wholesale part will MSRP for $30.

Selling parts at distributor (aka wholesale) cost is a bad thing. It undercuts local bike shops, violates your distributor agreement, and if you get caught doing it, it only makes it harder for other community bike shops to get distributor accounts.

Taxes

Generally speaking if your local Salvation Army adds sales tax when they sell used bikes -- your shop needs to as well. If you have a Distributor and are buying new things at wholesale you need to add sales tax because it has never been taxed before. So to recap, everything that is new needs to be taxed, and everything that is used needs to be modeled after your local thrift store.

There are two ways of dealing with taxes:

Taxes during sale

This is when something costs $5 and you add 7% (or whatever it is) to a total of $5.35 which the customer pays. When you file your sales taxes uncle sam gets the 35 cents for that sale and you get $5. If you are going to do it this way, make sure the volunteers/staff that use the register (you will probably need a register system) are trained in how to use it. Not everyone has had a retail job.

Taxes after sale

This is when something costs $5 which the customer pays. When you file your sales taxes you subtract 7% (or whatever it is) from the $5 sale. So uncle sam gets 35 cents and you are left with $4.65. While this means you usually don't need to make change which translates to less training for volunteers and staff it also means you have to take into account when budgeting that 7% (or whatever it is) will go to uncle sam.