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 -- the rest is up to your organization.

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 and go against mission statements that talk about re-use. 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

This varies from one community bike shop to another, as a result you may want to try experimenting with a few different models before settling on one in particular.

What do you think is a fair price?

Try giving the person the option of setting the price by asking, what do you think is a fair price? This puts most people off guard, in a good way, and more than not you will probably get more than you might have asked for in the first place. There will always be a few people that will make a low-ball offer, when that happens (and it will) just counter offer with something reasonable and remember that on the whole people will pay more when you empower them with setting their own prices.

An interesting example of this in the food industry is One World Cafe in Salt Lake City, Utah, USA. Eat all you want, pay want you want, and if you don't have any money at all, you can volunteer. (Really great food by the way.)

Used Parts

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 & Bikes

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 in the future. The reason it is so hard now is due to previous abuse by community bike shops and individuals looking for cheap parts.

Used Bikes

This is something you should experiment with, because it depends on several things.

• If you don't have a lot of shop space, and bikes start to stack up. Lower the price. This will get bikes out the door faster.
• How much does your local thrift store sell as-is bikes for? $25? How much does Walmart sell low quality working bikes for? $125? Community bike shops have a unique nitch in between those to prices.
• Make things easier for volunteers, sell at flat rates.
• Did you use new cables, cable housing, bearings or grease? What did that cost you?
• Is it "as-is?" Did you have to pay an employee to fix it? How much volunteer time went into it?

In Salt Lake City mountain bikes are $50 and Road bikes and cruisers are $75. This was done because mountain bikes were less popular, not all volunteers know what "campy" means, and donations stack up quickly. If something is nicer, we set it aside.

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.