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The Complete Guide To The Home-Operated Bicycle Business

Part 3C. Assessing A Bicycle's Value and Condition


BETTER QUALITY ROAD BIKESMany bicycle enthusiasts ride a $600 mountain bike and have a $400 road bike that they ride on Sundays. Do you fit this picture? That's great, you are probably using you car less than other people, therefore polluting less, making less noise and danger. But perhaps you don't really respect cheapo bikes. Most people I know that are doing professional bike work, are not inspired at all by Sears bikes or Huffys, but perk right up when a Campagnolo-equipped Colnago comes in. This is not a profitable attitude. I say there is more money in the cheap bikes, both in selling them, and in the repairing. Not only that, I have more fun working on Murrays and Western Fliers. I consider it much more of a challenge to get a cheap American or Taiwanese 10-speed tuned up and running well, than tuning an expensive European model. The European bike is easy. On the fancy bike, if you have a problem, replace the part. On the cheapo, bend it, weld it, bang on it, and soon it will be a smooth and reliable running system, capable of reasonably close to the same performance as the bike costing hundreds more. I believe in cheap bikes. The customers that buy cheapos are a much more assorted lot, and far more interesting than the homogenous group that buys the expensive stuff. But you like the expensive stuff, and I'll tell you about this category too.If you ride with the "club" you may already have the connections to sell expensive bikes. If you are using the simple plan, you need to specialize in bikes already in good condition. Most people selling higher priced used bikes know how to take care of them and they are therefore in great shape. Actually, there is good profit to be had with these better bikes, just not as much and for as little risk as with the cheaper bikes.It is difficult to buy in this market because there is so much flexibility regarding worth of a bike. A bike is worth as much as the customer is willing to pay. One guy may think a certain Holdsworth is worth $800, but to most other folks, it would not be worth over $400. If you buy it for $600, you are in trouble unless you find that guy who will pay $800. Basic rule: don't go for a marginal deal. Unless a bike is a "killer" deal, don't buy it.Next question. Can your one potential customer pay the $800, or is he a wishful thinker? In this high price market you will have many shoppers who really like your wares, but cannot get enough money together. With these people you don't wheel and deal for a 10% discount, you arrange financing, or take something in trade, or wait for the right customer.Name-brand is important. Many of your customers are as interested in the mystique of the bike as its performance A Colnago, Zeus, or Masi is worth more than a similarly equipped Schwinn or Fuji because of name recognition. A bike without its frame tubing manufacturer's sticker is worth $50 to $100 less than one on which the sticker is intact.Campagnolo parts are worth more than Shimano, Suntour, or even Phil Wood, because - you guessed it - name recognition. Campagnolo is the ultimate in prestige names. (In mountain bikes, the name to look for is Shimano Deore- XT)Racers buy sew-ups, but almost everyone else wants high performance regular tires. The thinner, the better. The bike will sell better without a spoke protector and without reflectors, but I leave them on because I don't want to be responsible for a stylish customer who has a disastrous overshift or altercation with a car. Toe clips add much more to the value than the $10 they cost. A matching (frame-fit) pump helps sales. Make sure you have brand new handlebar tape on the bike. _____________________________________________________________  Please allow me to summarize here, before we go on. There is a better profit margin in lower priced bikes. With cheapo bikes, you make more money with less risk. CHILDREN'S BIKES ARE THE BEST SELLERS and the easiest to repair. By the way, scooters are dead, they don't sell like they used to. Freestyle BMX may be dying as we speak. 


 _____________________________________________________________  A CLOSER ANALYSISGiven all these considerations, lets look at those sample bikes we analyzed earlier more critically, because assessing their potential for making you money with just numbers may give you an incorrect picture. At the same time, read me carefully, I shall show you some other considerations in buying.------------------------------------------------------------

Bike: mens 3-speed Raleigh being offered for $15

Parts required: rear tire, tube $3 ====== total cost: $18Formula: $18 x 3 = $54 Retail: $45  This Raleigh is one of the "common bikes" and easy to buy but harder to sell. Men's 3-speeds are at every third yard sale. (Women's 3-speeds are even more common.) Kid's don't buy them, only middle age and older men who have had 3- speeds before and know their practicality are interested.People in this age group tend to buy bikes that match their sex, and tend to buy in couples, so if you stock a men's 3-speed, you should consider having a women's too.Kids want style, and 3-speeds are out of style. Bottom line: You can make money with this bike but it may take a while to sell it. Not a good choice for your very first investment bike. You would do well if you discount it to perhaps $29, but that would be only $11 profit. You can do better. -----------------------------------------------------

Bike: girls 20", curved frame being offered for $3

Parts required: handlebar, stem $3 ===== total cost: $6Formula: $6 X 3 = $18 Retail: $20The girls 20" bike will always sell well if the paint is in good condition. Sometimes even when the paint is bad, because the idea of a re-painting project will appeal to one of the parents. Most girls do not demand that the bike be up to current BMX-type style. This one is a very good deal because the repair is easy, the profit is high and likelihood of quick sale is high. Those of you limited to the simple plan may even look at the stripped handlebar stem and feel that you can handle that repair within your limits. The price of $3 I listed for the handlebar and stem is approximately what you would have to pay for used parts. These parts are fairly universal and easy to buy at yard sales, or even at a local bike shop. High-rise handlebars and American stems accumulate in the junkpile of bike shops, therefore they are cheap.----------------------------------------

Bike: BMX plain frame, steel wheels being offered for $10

Parts required: none $0 ====== total cost: $10Formula: $10 X 3 = $30 Retail: $45Yes, this is exactly what you are looking for!


Bike: men's European 10-speed being offered for $25

Parts required: none 0 ===== total cost: $25Formula: $25 X 3 = $75 Retail: $80Lets assume for discussion purposes that this bike is a Peugeot UO-8, 21" frame. A name like Peugeot or Raleigh carries a certain mystique that sells. But even if it were a Jeunet or a Humber, this deal is ok. 10-speed bikes are not as popular as mountain bikes, or even children's bikes, but they do sell, especially if you can sell a Peugeot for $80. Be especially careful buying a European lightweight bike, these are the most likely to have hidden problems that can suck away your profit. French, Italian and pre- (approx) 1975 English bikes have a special problem. They have non- interchangeable parts. Most of the parts on American 10- speeds will fit on other American 10-speeds. Most Oriental bike parts interchange. Most French parts interchange with other French parts too, but try to find French parts! ------------------------------------------------------------

Bike: adult 3-wheeler being offered for $40

Parts required: grips $1 ====== total cost: $41Formula: $41 X 3 = $123 Retail: $125+This could be good. However, be willing to expect to wait for a sale because the clientele for these bikes is limited in most communities. Furthermore, the people who are looking for one of these three-wheelers are usually older folks who want extra stability because bikes scare them. After they test-ride the three-wheeler, they may find three-wheelers are scary too. These bikes are also appealing to some handicapped people, but after a test-ride, they may feel that the three-wheeled bicycle idea does not measure up to their expectations. Also, industrial applications such as maintenance man's vehicle in a large factory, may fall short of the idea when tried in actual practice. These machines are slow and clunky. Many customers test them, few buy. This would not be a good first investment, but if you have several bikes for sale, an adult three-wheeler can be a good addition. Please consider that the three-wheeler takes up as much space and investment money as two or three regular bikes. ------------------------------------------------------------

Bike: BMX chrome-moly frame, alloy wheels being offered for $20

Parts required: 2 x tires, tubes $12 handlebar, stem $6 grips $1 ===== total cost: $39Formula $39 x 3 = $117 Retail: $100These bikes sell very well. There is a problem with style though. Some kids are so conscious of things a few months out of style, they make a big fuss about it and drive their parents away from the sale. On the other hand, just about any light weight chrome-moly BMX bike with alloy wheels is well worth $100. It will sell. Especially if it happens to have a chrome (color) frame. An added plus is plastic wheels, which are stronger than spokes ones. It is usually the parents that buy and maintain kids' bikes, so plastic wheels are appealing.Kids want hand brakes and a freewheeling rear wheel. Never mind that a coaster brake is much more durable and these bikes are the kind that get the roughest use. Ultimately, on a style feature as important as this, the kid is the boss, and will scream and scream if the parent attempts to buy a coaster brake. So if this hypothetical bike is a coaster brake, forget it. (Unless you know the exact makes and models in the BMX world and know this one has particularly good and modern components.) You would have to sell it at a discount or at least install a hand brake to make it look like a "real" BMX bike. Well, maybe not "forget it". There are times like this when my "total cost should equal less than a third of retail" formula needs adjusting. Whatever this bike is, you should be able to get $65 or more for it, and that's still good money. A BMX bike will always sell fast. If this bike has hand brakes and chrome, grab it! ------------------------------------------------------------

Bike: 10-speed, American being offered for $8

Parts required: h-bar tape $2 inner tube $3 ===== total cost: $13Formula: $13 X 3 = $39 Retail $49So typical. These are the bread and butter bike. The price is right, although there are lots more available if you don't get this one. It will sell if you keep the price down. Why not mark this one $39, and sell it fast. This is a good first bike. It would be ever better if it had upright handlebars. ------------------------------------------------------------ ------------------------------------------------------------  AVOIDING STOLEN BIKESAlthough a hot bike is uncommon at a yard sale (thieves don't want to sell out of their own homes), you must be careful about stolen bikes. Buying a stolen bike is almost as bad as stealing it yourself, because this encourages the theft of another one. More directly, if you happen to get caught with a stolen bike, your reputation could get wrecked overnight. This would definitely have an adverse effect on sales volume.The best protection is to get the original store receipt with the bike. Often this is not available, so at least write down the serial number of the bike along with the name, address, phone and drivers license number of the seller. If the seller is young, it is wise to check with the parents. Many communities have some sort of computer help available to you. In Santa Cruz, where I used to live, the police offered that I could call them at any time and check a potential purchase bike serial number. In Talent, Oregon, where I live now, I have to fill out a simple form when I buy a used bike, and send these forms to the police department once per week. Remembering when I was 12 years old, how I felt when my pride and joy bike was stolen is all that is required for me to cooperate with the bureaucracy. Recovering stolen bikes is something police do well. The computer lists that they compile help society a great deal.Common sense is really the best way to sort out the problem stuff from the rest. Would you really buy a fairly new mountain bike for $30 from a dirty teen-ager who seems to be in a big hurry and unhealthy-looking without some sort of proof that he is authorized to sell it? OK, maybe he didn't steal it, maybe he borrowed it from his sister, and just hasn't told her yet.On the other hand, at a yard sale, where the 40 year old woman with the 1988 Volvo in the drive, with two screaming 8 year olds in the yard and a big fluffy dog, who wants to sell her husband's old mountain bike for $65, because he just got this new one "over here", which she shows to you, the bike may be legitimate.You must cover yourself legally, you never know what can happen. You may buy a bike from someone who bought it from someone else, who stole it. In all cases, make a paper trail. To be safest, with every bike you buy, get the serial number, brief description of the bike, name, address, phone number, drivers license, and signature of the seller all onto the same piece of paper. Then if the police come to your door, you can prove that you bought the bike in earnest. Keep this paperwork for years after you have sold the bike. (Unless the police computer is doing it for you.)Sometimes serial numbers are hard to find. Here are all the common locations where serial numbers may be found:1. Under the bottom of the crank assembly housing (officially called bottom bracket).2. On the outside of the left rear dropout (where the rear wheel attaches).3. On the bottom front of the headtube (front tube of bike).4. On one side of the headtube.5. On one side of the seattube near the bottom bracket.6. On one side of the seattube near the top.7. On a flat surface of the largest part of the bike (the frame).99% of bikes have serial numbers. Those that are less likely to have been stamped are custom bikes, least expensive children's bikes, and one-of-a-kind machines. Rarely a regular new bike just doesn't get stamped right at the factory. Usually these still have a serial number, but it is so light that you cannot see it through the paint. Sometimes moving the bike or the light around makes a serial number visible. Some bikes have a serial number obscured by a reflector, cable guide, or chainguard.Some bikes have had the serial number removed. Although most cases of a filed off number are a legitimate cosmetic patch during re-painting, you should suspect the history of a bike with a missing number.Perhaps 10% of the bikes I have dealt with were carelessly stamped at the factory and the serial number is hard to read. When recording these numbers, never make an assumption. Any unidentifiable digit should be recorded as a "?". Therefore if you have a number that is probably 47896 but maybe it is 47396, you would write 47?96.If you do not fully trust a seller (even if you do) your protection is:Best: store receipt with the seller's name on it and an ID like a driver's license with a photo on it.Second best: a photo showing the seller and the bike in the same picture, preferably with different haircut, or something in the picture indicating it wasn't taken yesterday.Third best: an older relative of a young seller that will say the bike is not stolen.Be careful with kids, often they will want to sell their own bikes legitimately enough, but without their parents permission. You may buy it legally enough, but ____ help you if you have sold it two days later when the parents come in to buy it back.Fourth best: Tell the seller that you need to consult with the police, can you use his phone? See if the seller handles this request calmly. This threat/test may be even safer than the actual call itself.I don't want to scare you, just get you to take care of potential problems. In 14 years of trading bikes professionally, I have never had a stolen bike that I know of. And I am not as careful as I advise you to be. I go to many yard sales as quickly as possible and I don't have time for all this, I fill out paperwork later, sometimes identifying a seller only with an address. But I do try to look into the sellers character as much as I can and use common sense. Remember that you don't need to buy every bike that seems to be a good deal. There are plenty of cheap used bikes around.------------------------------------------------------------  


Have you heard of the police auction? Almost every town has one or two per year. The police sell off all the bikes that accumulate in their storage. Who owns these bikes? Not the police. These bikes still belong to the original owners! How can the police sell you these bikes if they don't own them? I don't know.If you buy one, sell it, and the original owner finds out where it is, this embarrassing situation will cost you some money. If you don't have a good binding receipt showing that you bought that bike (complete with serial number) from the police, your head is gonna roll, buddy! And guess what? Where I have been, the police auction people will not give you itemized receipts.chapter end.


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