I can imagine the margin for LBS at least 40%. It is a lot, but if you factor in the 'risk', it's really not that big
What I mean by 'risk' is, if I own a bike shop, I will have to buy bikes in certain quantity, and usually it is a package purchase, like the whole line of bikes the manufacturer/distributor carry. Not to mention various sizes as well
To make thing simple, let just say every year I have to buy 100 bikes in various models and sizes
On a good month, maybe I can sell about 10 bikes, but on average maybe just 8/month
So, it took about a year to sell all of the bike I purchase, but there's still some other risk
If a customer wants to buy a bike in certain model/color/size but I have no stock, I have to source it from another shop or smaller distributor which means the margin is not that good
So in the end, I will have some old model bikes I got to move, that's why I'll give big chunk of discount for some liquidity to buy next year's bike
It's 40% profit in the end if you factor in every month's overhead etc, might turn out just about 20%
Well, I don't own a bike shop. I've thought about it, but for me the 'risk' is not my game