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to offload - it could be ex-demo, could be returns and warranty. “We sometimes sell it for them and sometimes buy it [outright].” Operating on such a scale in the used bike market comes with its own risks, but Cycle Exchange has the infrastructure to manage the challenges.
“The downside is we’re using our own cash a lot of the time, but the upside is we’re not forced to buy anything we don’t want to,” said Connelley.
“The pricing model two years ago was purely operated on the retail price and then a condition and desirability factor. “Our pricing model now gets fed by various different sources on the internet, including Ebay, so we can get a very close handle on exactly where pricing is across the market.” CE Commercial has seen the
company go beyond borders and develop relationships in mainland Europe, something that has cooled in recent times. “Brexit killed that because of the import duties,” said Connelley. “Plus the stock situation across the market meant that a lot of the outfits we used to trade within Europe don’t really need to sell beyond their own borders. “We used to do a lot of business with professional teams, but that’s been more of a challenge because of that 40% tax that hits bikes when it comes in. “As you can imagine, that makes quite a big difference.” Among those professional teams are Ineos Grenadiers
and Team DSM. This not only presented customers the opportunity to own a piece of the peloton, but also some great marketing content. “We’re not out of that game,” said Connelley. “We’ve always got an eye on what we can do in Europe.”
A game changer Another string to the Cycle Exchange bow was added when the company started to offer free home collection. “It’s a complete game changer,” said Connelley. “We were totally reliant on retail purchasing directly from customers so the only way we could carry on the growth story coming out of lockdown when stocks start to dry up was to really ramp up buying from individuals. “The only way to do that is to show up at someone’s
door.”
The service means customers don’t have the hassle of organising a courier. This removes the worry of packaging the bike so it doesn’t arrive damaged - a common problem
www.bikebiz.com for many e-commerce companies.
“Generally it’s a mechanic driving the van so if there are any issues we just agree on the part price and then the cash is in their account pretty soon” said Connelley. “It was just frictionless and enabled us to keep growing
our stock pool all through Covid and afterwards. “It costs more to buy it that way but we figured it was
better to make some margin over nothing.” Destination retail
With consumer purchasing habits shifting to predominantly online first, many businesses are looking to reduce investment in physical retail. Cycle Exchange is bucking that trend with a modern location that features a workshop alongside collaborations with 139 Coffee and RideWrap. Earlier this year the store also hosted its first event to preview Parcours’ collaboration with Classified. “The way e-commerce has evolved, retail stores are really part of your marketing budget,” said Connelley. “For us 90% of our sales are done online, and that might be online after speaking to us or it might be online after coming in a couple of weeks before. “You have to have the right people in a location so that, even if customers don’t actually come here, they know it’s here, they can see it on social media, click on the website or call someone.
“So in my mind retail spaces are becoming more and more marketing because you’re using it to help close sales.”
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