How Much Money Bike/Bicycle Shop Owners Make On Average

You’re an avid cyclist and you are thinking of making a jump from your current career to opening up your own bike shop. Before you switch gears, let’s have a look at the numbers and factors that influence just how much a bike shop owner makes.

The average bike/bicycle shop owner makes $50,000 per year.  The most important factor affecting the salary of a bike shop owner is their shop’s expenses relative to its profitability, such as shop size, shop location, size of payroll, profit margin, and ridership in community.

Most bike shop owners say that being an independent bike shop owner is  

a labor of love. 

While the bike biz has never been a cash cow, consumer trends in online retail and big box sports and outdoors stores have hit the bike shop owners hard in the past decade. Profit margins have never been high in independent retail, but with corporations flexing on what used to be a niche market, bike shop owners are feeling the pinch.  

“At the end of the day, ‘it’s just a bike,’ and we are paid accordingly,” Geoff Hewett of Two Broke Spokes in Florida told Bicycle Retailer.

Profit> Expenses> Salary

How Much Money Bike/Bicycle Shop Owners Make on Average

The profitability of your bike store will ultimately determine your salary, but your profitability will be determined by expenses—some in your control, some not.  An average bike shop pays 42.2% of gross sales in overall expenses, while a high profit bike shops pay about 35% of gross sales in overall expenses.

Payroll

Payroll will be your biggest expense as a bike shop owner. The number of employees you have and the wages you pay will determine your payroll percentage, which impacts your expenses and then your salary as the bike shop owner.  The average store pays a little over 25% of gross for owner and employee salaries, high profit stores pay 22.5%.  

The Bureau of Labor Statistics put the 2021 median wage of bicycle repairers at $16.68 per hour, or $34,690 per year, with the low end at $12.00 per hour and the high end at $22.22 per hour. 

In the bicycle industry, it is claimed that 70 percent of a mechanic’s time on the clock is billed labor.

A full time employee is responsible for $134,854 in revenue at an average bike shop. For sales staff, the founder of ERIK’S Bike Shop, Erik Saltvoid used to pay a low wage, but he also offered a very low commission, which incentivized employees to close the deal.  

Said a former ERIK’S employee “…I made minimum wage, with a small percentage for commission…1% or 2% of the total sales. By keeping the wages low, offering in store discounts and bike manufacturing discounts they were able to pitch potential employees that, ‘There’s not a lot of money in the bike industry… but people who work for us have a good quality of life and good perks of being a part of the bike community.’ By keeping wages low, they increased their own bottom line.”

ERIK’S Bike Shop is now over 40 years old business and has grown to around 30 stores all over the midwestern United States. A glance at their employment opportunities page reveals they pay better now (and offer great benefits), but the point is that they grew into that over the years, offsetting their employees’ lower wages with commissions that increased their overall sales and became what they are today.

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Location and Size

Paying for your space will be your next biggest expense, second only to paying your employees.

The ideal location will increase your profitability, but a space that checks all the boxes is hard to come by. It’s preferable to have a slightly smaller location in a visible, convenient-to-reach area than a larger space further out. 

At the same time, bike shops are usually destination shopping—most people don’t step out for a coffee and come home with a $2,000 bike from a shop they just so happened to pass along the way. Bike shops should be in a suitable area, but it doesn’t have to be prime real estate, as a trip to the bike store is often premeditated.

Starting out, the space just needs to be big enough to meet your sales projections. For a bicycle shop, your occupancy expense should be no more than 10% of your gross sales.

A guideline such as how many dollars per square foot you should sell in order to cover your rent comfortably is helpful. Try to aim for around $400 per selling-square-foot

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Profit Margins

Profit margins are a complex issue for independent retailers of all stripes right now. It’s hard to compete with Amazon for bike helmets when they can offer every brand in every size and color, and at a lower price than the one brand in two sizes and three colors your shop can carry, with its sensibly limited space.  To increase your store’s profitability, and ultimately your salary, you must sell.

DeKeyser says in How to Run a Profitable Bike Shop, “Never blindly assume you are unable to command full margin for an item until you try. The same is true for your service center where you can regain margin lost from elsewhere.”

To increase profitability without having to cut prices, offer your customers the full-service experience they can’t get online, and go above and beyond the competition by properly training the staff you already pay for.  

High-profit stores and average profit stores report 11.4% and 6.5% of their revenue is from repair parts and labor, respectively.  To remain competitive, brick and mortar stores need to provide quality repairs and exemplary service— something online retailers are unable to do.

Another aspect of profitability is your dealer contracts—to manage your expenses, be sure to study your dealer contracts carefully. Ensure you’re making a fair profit from them. Work with the distributors that work with you and cut the rest loose.

Increasing Profitability by Increasing Ridership

How Much Money Bike/Bicycle Shop Owners Make on Average

To increase the profitability of your bicycle business, cultivate a cycling community. Start a cycling club in your area and keep it active with monthly group rides. Getting your club to engage in civic activities like litter clean-ups and food drives is a good way to raise your profile and weave your brand into the ‘buy local’ consciousness of the community. 

Host city rides and trail rides for your die-hard riders, but also plan event rides like pub crawls, and themed rides such as cemetery rides in the fall and Christmas light rides during the holidays to keep it light and fun. This will encourage people who might not consider themselves serious cyclists to join you and become part of your cycling community (and market). 

This brings us to a small image problem cyclists have— if you’re sincere about growing ridership in your community, you and your staff cannot be bike snobs.  

As retail expert Tom Shay tells Brooklyn Bicycle Co., “How many people start out riding one of the name brand product lines [such as] a Huffy [or] Schwinn…they’re getting the message that they’re being laughed at.” 

Potential cycling enthusiasts don’t drop thousands of dollars on a bike and cycling clothes and gear before they know whether they can stick with cycling, so don’t begrudge the people who coast in on a $150 bike from Target. Everyone starts somewhere, so meet your new riders where they are—to keep new riders rolling in, your shop needs to project an open and welcoming vibe to all.

Have Fun, but Keep Your Eyes on the Road Ahead

Although the average cycle shop owner won’t become a millionaire, most say that they’ve got the bike grease in their veins and money is secondary. Still, a person has to make a living. The most effective way to increase your salary as a bike shop owner is to maintain a tight control over expenses, negotiate dealer contracts, carefully select your space, manage employee wages, and grow ridership.

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Frequently Asked Questions

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Besides sales and repairs, what else can I offer customers to increase profits?

Consider offering bike rentals. It’s a way to make money while potential customers try out a bike, or while someone’s own bike is in the shop for repairs, or if someone just wants to check out the town on a quality bike!

What’s the margin on e-bikes?

The realized margins on e-bikes aren’t super high, around 30% or less.

However, e-bikes are here to stay, and most bike shops now carry them. E-bikes have a learning curve, but with proper staff training, offering even a limited e-bike selection is a good idea and maybe even expected.

To learn more on how to plan your own bike/bicycle business click here!

Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.