Silca Wax Program
Before the pandemic bike shops were on a quest to be more profitable, to do more with less, and to manage inventory effectively. Then the bike boom happened and that all went out of the window. But now, we're back to a relatively thin margin for error in the quest to be profitable. The best place to start isn't where you'd think. Spoiler, it's the service department.
We'd like to offer a great example from SILCA_Velo, a brand that we represent in New England. The Silca Wax Program is a $250 investment for a shop to offer a unique service that most customers would prefer not to perform themselves. Cleaning and waxing a chain is messy! The performance benefits are so great that many will pay to have it performed on a brand new chain. Yet, so few bike shops currently offer this service.
Bike Shops that offer the Silca Wax Service charge on average $50 per service and perform 150 per year. That's $7500 that you didn't make last year! This includes offering the service individually and also (most effectively) adding it as part of your highest end service packages.
Now, what would you do with an extra $7500? We'd do any one or more of the following:
- Give the over-worked service manager a raise
- Spread the new revenue across the wages of the entire service team
- Hire an additional part-time member of the service team
- Buy new tools and equipment to augment the service department
- Take a family vacation
Adding this extra service is just step one. Step two is even simpler. What would happen if you took your top 10 highest priced labor sku's (usually packages) and raised the price by $5? Or even better, the highest sku quantities sold?
To use round numbers, your profit goes up $5 multiplied by the quantity sold. In most shops, this method of adjustment can add anywhere from $15k to $50k depending on your labor volume and dedication to analyzing these numbers and acting on them. Everything you need to do so is right in your POS system unless you're using a cigar box instead.
So the bigger question is, what will you do with an additional $22,500 or more?