New Congressional Bill Tackles Sales Tax Reform

taxfairnessSales tax reform may have new life, as a new bill has been introduced in the House of Representatives that would level the playing field between brick-and-mortar stores and on-line sellers related to sales tax collection.

Utah Representative Jason Chaffetz (R-UT) introduced the Remote Transaction Parity Act of 2015, HR 2775, in mid-June. He is seeking Congressional co-sponsors as well as overall support. His move is considered to be significant because he is a conservative Republican who realizes that this is not a new tax, but instead a fairness issue related to small business. As of last week, he had 22 Republican and 18 Democrat co-sponsors. The goal is at least 10 more co-sponsors so the House leadership will move on the bill.

Bicycle dealers are urged to contact their members of Congress asking them to both sign on as co-sponsors and support the legislation to finally put an end to a seriously flawed sales tax system that requires retailers with physical stores to collect sales taxes (in states where it is required) while many on-line sellers do not.

Retailers from many industries with brick-and-mortar retailers attended a recent lobbying event Continue reading

Survey Shows Rising Dealer Metrics in a Flat Market

retsur2015cover_300pxThe number of bike shops continues to drop each year, with another 4% decline projected in 2015, but a new survey shows that several other dealer metrics are actually trending up.

According to the NBDA’s 2015 Specialty Bicycle Retail Survey, the average bike store is now larger in both dollar volume (over $1 million per year, an all-time high), and physical size (6,461 square feet), than ever before. They are also improving in sales efficiency, with average sales of $185 per square foot, a record high for these surveys, and an increase of 3% from the previous year.

While there continue to be huge challenges, the IBD channel itself was apparently churning along fairly well in 2014. IBDs were responsible for $4.7 billion in retail sales last year, including used bikes, approximately 63% of the retail dollars spent on cycling in the United States. This reinforces the notion that while many are certainly fighting for their business lives, a lot of them are fighting successfully. Over half reported that their sales were up in 2014.

What are some of the challenges they are facing? Competition from the Internet was at the top of the list, with 72% of the retailers noting it as an issue. Competition from mail order was cited by just over half, Continue reading

E-commerce grows, but physical stores dominate retailing

The future of retailing

The future of retailing

Internet retailing continues to grow as technology sweeps the globe, a communications and commerce revolution unprecedented in human history, big news, gets lots of attention, exciting, scary, wow.

Or, maybe not so much.

A new report from a company called Timetrade pushes back against some of the hype and e-commerce love. The report notes that physical stores dominate retailing so thoroughly that calling it a mismatch is understating the case to the point of absurdity. And while e-commerce is expected to more than double by 2020 to about $550 billion, the money spent at stores will still be nine times what is spent on-line that year.

The Timetrade report is based on in-depth survey of 1,029 consumers about their shopping patterns and motivations. While the limited sample hardly qualifies it as hard research, the report does make a number of interesting points related to on-line versus bricks-and-mortar.

Some highlights:

  • 87% of consumers say they plan to shop in physical stores in 2015 at least as often as in 2014.
  • 85% say they go into stores to “touch and feel things.”
  • 71% say they would prefer to shop in Amazon’s physical store versus
  • 65% report that if an item they want is available online or in a nearby store, they prefer to shop in the store.
  • Mobile shopping is cited as a trend, but when consumers are looking to buy something, just 13% use a mobile device to do so. Most use mobile to browse, research products, compare prices, and then look for the nearest store location.
  • Nearly 90% of respondents are more likely to buy when helped by a knowledgeable staff member, and 50% value the expertise of sales associates.
  • 63% say that if an item is the same price at four different retailers, they decide where to shop based on the overall customer experience they have.
  • If a knowledgeable sales associate recommends items the customer may need based on what they know about the customer, 64% said they would leave the store much more satisfied.

Continue reading

How Washington Punishes Small Business

original_signMembers of Congress like to say nice things about small businesses in this country, but the track record shows it routinely favors big corporations instead, according to a May 7 opinion piece published in the Wall Street Journal.

The article was written by Stacy Mitchell of the Institute of Local Self Reliance, with the NBDA’s Fred Clements listed as co-author. Both are involved in Advocates for Independent Business, an umbrella group of 15 associations representing independent businesses, including bike shops, book stores, toy stores, running stores, florists, hardware stores and others.

“Members of Congress love to evoke the diner and dry cleaner, the neighborhood grocer and local hardware store,” the article says. “Ensuring the well-being of Main Street, we might easily assume, is one of their central policy aims. The legislative track record tells another story.”

The article notes that since the late 1990s, the overall market share of firms with fewer than 100 employees has fallen from 33% to 28%, according to U.S. Census data. There are nearly 80,000 fewer small retailers today than in 1999.

Starting a new business also appears Continue reading

Innovate, Adapt and Prepare to Fail Forward

bikeevolutionInnovation doesn’t come naturally to human beings, according to Stephen Shapiro, author and keynote presenter at this year’s Bicycle Leadership Conference (BLC).

Referring to the work of Charles Darwin, Shapiro noted that human evolution is not driven by survival of the fittest. Instead, it’s all about adaptability, the ability to change. This has a direct parallel to business survival today.

He noted that Sears was once ten times the size of Wal Mart, but is now a shell of its former self. Pan Am was once the number one airline in the west, but failed. Howard Johnson’s restaurants were once everywhere, but not anymore. Closer to home, Schwinn went from prominence to relative obscurity.

All were once robust companies at the top of their games. They failed to adapt in various ways and for various reasons, relying on solutions that had worked in the past and being sure of their own expertise. “Expertise,” Shapiro noted, “is the enemy of innovation.” Or, in the words of Continue reading

Six Trends for Bicycle Retailers to Watch

mobileimageMobile bike repair, e-bike dealers, and private label bikes are industry trends worth watching, according to Scott Chapin, bicycle industry risk specialist with Marsh & McClennan Agency in Minneapolis.

Chapin has a unique perspective on the market as he focuses on insurance for the bicycle industry, both retail and supply side alike. Marsh & McLennan receives between five and 10 new inquiries per week from cycling-related businesses looking for insurance, many of them start-ups and potential start-ups. This gives him some useful insight on what is trending and what the future may hold for the competitive landscape for our industry.

Some of the trends from Scott’s position on the front lines of the bicycle insurance world:

1) Mobile bike shops. Chapin sees a lot more mobile bike shops starting, many run by people with great experience with independent bicycle dealers as lead mechanics. “Obviously, this can be considered a threat to the retailer Continue reading

Bike League Embraces Bike Shops

supportlocalbsIndependent bike shops are an “essential component of the bicycle infrastructure that makes a community bicycle friendly,” according to a March 9 resolution from the League of American Bicyclists.

The show of support for bike dealers was approved by the League board of directors just prior to the organization’s signature event, the annual National Bike Summit, held last week March 10-13, 2015, in Washington, D.C.

This year’s Summit featured an energetic women’s forum, a multitude of sessions focused on infrastructure and equity, and a lobbying day where attendees visited Congressional offices to make the case for bikes and bike safety.

The resolution notes “the critical importance of independent bicycle dealers in providing access to bicycles, bicycle maintenance, bicycling information, and creating a community of people riding bikes.”

It continues, “Bicycle retailers provide tremendous support Continue reading