Professor Elam

Wednesday August 20, 2014

The WSJ reports on the emergence of bicycles for more than $10,000. I began riding a ten speed when I worked as an internal auditor for the City of Austin  on 8th street. The business school was on 21st steet. With no where to park a car as a student, the solutoin was door to door bicycling where I could chain the bike to a post outside the business building. I purchased a straightforward steel bike made in France with ten speeds. 

Back then a Reynolds aluminum frame with Capanaglo gears was state of the art. Today carbon fiber with Japanese electric select is all the rage. 

One thing that puzzles me is the lack of a secondary market for bicycles. Rather than stock an inventory of high cost new bikes, it looks like there would be used bike lots, just as there are used car lots. But nope, that is not the case. 

Can you utilize your knowledge of accounting to see the advantage of a used bike shop?

Lower inventory cost if you take bikes on consignement from owners.

Lower rent as you would not have a fancy show room.  INdeed the bike shop might have a presence on the web with lots of photos just as cars.com has. 

Potential large customer base in a town with lots of college students. 

More flexibility in pricing as you would not have a cost in the bicycle, though you might be buying from individuals at low trade in prices.