No One Wants to Take a Vow of Poverty

Just a quick note about nothing.

The Mrs. and I were just talking about health insurance and we are still recovering from sticker shock from the available health care options we qualify for.

Any one that works in the bike industry knows that unless you are working in the highest echelons of the industry that, as a whole, the industry does pay that well.

People who work on the front line, meaning shop employees and a quick look on Salary.com will confirm that.

When we look at the amount of money that the US bike industry makes per year (roughly the same amount of the GNP of Somalia) I have to think the reason why there hasn’t been any significant, across the board pay raises for the majority of front line works is the industry doesn’t want to do it.

That’s especially true when you consider that some big players have direct financial ties to some extremely large investment companies.

A little while ago Bicycling posted an article called 6Cycling Companies That Have Surprising Owners. 

What’s not talked about in the article is that Vista Outdoor (Camelbak) did $2.08 billion in sales in 2015.

Dorel (Cannondale/ Schwinn / GT) is a $3.134 billion dollarcompany.

You get the idea, these are big companies and as a result they have a lot of clout.

I’m not saying that these companies hire goons to come into bike shops and threaten to beat up people if they ask for raises (they don’t) but given that there is a real need to keep labor prices down to an absolute minimum the amount of margin a shop owner can reasonably make on bikes, goods and services are also forced downwards too.

As a business you have to keep prices down just to keep a roof over your head but given the increasing complexity of modern bikes, the demands of customers that expect excellent customer service, but you’re not going to be able to retain high quality service technicians and sales people if they are making subsistence level incomes.

Perhaps the solution is a general acceptance that we as an industry need to accept the fact that we are no longer selling toys but expensive, sophisticated, high-tech performance equipment and start charging accordingly.

Will this shift mean that some people may not be able to afford some goods and services?

Yes.

Will some shops price themselves outside the reach of their customers?

Yes.

But that may open up some opportunities for people that specialize in refurbishing used bikes because goodness knows there’s a need for those things too.

No one started working in bike shops expecting to take a vow of poverty but as it stands now that is what you have to do if you want to work at one. 

I'm not an economist but if any one has any better ideas on how to fix this broken industry I'd love to hear it.