Starting a Used Bicycle Business
By Steve Gillman
If you like to tinker and build or rebuild things, and want
a green venture that keeps junk out of landfills, a bicycle recycling
business might be right for you. You can buy old bikes cheap
to make them usable again or to build new ones from the parts.
Either way you can sell them for at least several times what
you paid if you do this right. One type of used bicycle business
is described in the following true story...
Many years ago, where I lived at the time in Michigan, the
township government arranged a free spring clean-up event. On
that day the local residents could bring anything to a collection
point where a circle of large garbage trucks with compactors
waited. I brought a load of things to dispose of and I watched
as couches, plastic chairs and even fishing boats were fed into
these trucks and crushed. They put everything in those compactors.
Everything, that is, except for the bicycles people brought.
There was a man there with a pickup truck and trailer who
had already loaded up 50 or more bikes for himself. It was just
his first haul of the day, he told me (it's amazing how much
we throw away). He did this every year, and after fixing them
up he sold them out of his front yard. Between this and other
sources he processed a couple hundred bicycles annually. I didn't
ask how many he sold or for how much, but I do recall that he
had been doing this for years, so it was apparently worth his
time.
To buy, repair and sell used bicycles profitably you need
to know how to determine the value of the bikes, where to buy
them cheap, and how to sell them. Let's get started...
Using Online Resources
You can do three things online to help out your bicycle recycling
business. First, you can find places to buy bikes, because some
types sell for less online than what you can resell them for
locally. Second, you can sell your bikes online in order to get
top dollar for special models. Third, you can research the values
of bicycles online, and see what various brands are actually
selling for, so you'll know when you have a good buy.
There are over 32,000 listings pulled up for the search term,
"used bicycles" on eBay.
About half of those listings are for parts, accessories, and
related things, but there are plenty of bikes being sold. While
researching this I saw bicycles with bids as high as $2,000,
and I also saw some offered for 99 cents. The former gives you
an idea of what you can get for high-end bikes, and the latter
suggests another place to buy your bicycles, although you have
to find one nearby because the cheapies were all for local pickup
only.
On Local
Bike Trader you can sort by state to see what's for sale
nearby. You'll see used bicycles that are for sale from under
$100 to over $2,000. If you decide to sell your bicycles there
you can place an ad for free or pay $5 to $10 for a better position
in their search results.
The website Craigslist.com
is a great place to both buy and sell. But before you pay for
your inventory, click through to your local area and then, under
"for sale" click the link that says "free."
Bicycles are sometimes among the many things people give away
on Craigslist.
Other Sources of Free or Cheap Bicycles
My wife and I have had ten homes in five states, and everywhere
we've lived we see perfectly functional bicycles either thrown
out or sold for a few dollars. Keep an eye out on garbage day
or during spring cleanups. I once watched my brother take a perfectly
good bike from a pile of curbside junk, and it was ready for
his kids to ride.
When the basic inventory for this business isn't free, it
can still be cheap. Unless you are sure about the value of a
particular bike don't pay more than $10 or $20 for a bicycle
that needs repairs. Where will you find them this cheap? Here
are some possibilities:
Junk shops
Thrift stores
Garage Sales
Laying in yards (ask)
Preparing and Fixing Your Bicycles
You will have to put a few dollars into some bikes to get
them working again. New tubes will be a common requirement, although
patching them may often be enough. Brake pads are cheap, as are
reflectors. Other parts can often be scavenged off those bicycles
you gather that are not worth recycling. You'll learn a lot just
by working on the bikes, and you can start with less than $100
in tools, but there are ways to speed up your bicycle repair
training.
The website How to
Fix Bikes has some good how-to articles along with videos.
When you run into specific problems, like how to replace ball
bearings or change a new type of brake pad, you can often find
tutorials on YouTube.
In addition to fixing the bicycles so they are completely
functioning, you'll also want to clean them and possibly touch
up the paint. Repainting whole frames isn't practical except
for the most valuable ones, so you'll just be painting any scratched
spots or rusty areas (after you thoroughly clean away the rust,
of course). Adding items like new seats or racks usually won't
make sense from a return-on-investment perspective, but it depends
on the price you'll be putting on the bike.
How Much Can You Make?
If you work the low end of the market you might have less
than $20 invested in most of your bikes, including your costs
to buy and repair them. But you'll probably sell them
for $50 to $60 at most.
The fancier bicycles are the ones where you can make the most
money, but you have to learn the market. It sounds great to buy
a bicycle for $500 and sell it for $1,000, but if it doesn't
sell it hurts a bit more than that $10 bike that hasn't sold.
It makes sense to work your way into the higher-priced products
as you learn more, so you don't make any costly mistakes. You
should also keep in mind that even if there is a buyer for a
$1,000 used bicycle, it may take some time to find him or her.
How much can you do? Who knows? Manta.com lists dozens of
used bicycle businesses, and a couple dozen of those companies
make over $500,000 annually. Upon closer investigation, though,
it seem that all of these higher-revenue businesses also sell
new bikes and/or do bike repairs. In other words, they are generally
full-service bike shops -- something to consider if you want
to grow your business.
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