I've almost never seen an iMac require attention after setup. When's the last time a PC tower operated by nontechnical people ran nicely without IT attention for 5+ years?
In this case, OP mentioned Erik's did have an "IT" employee. I'm guessing the IT individual's knowledge did not extend to having dedicated POS machines or understanding the concept of user profiles and group policy/rights. With cloud-based/hosted POS systems now, security concerns don't necessarily stop at one's browsing/computing platform.
The $6 usb/wifi dongle from Monoprice stays connected for weeks at a time.
As long as we're pulling out anecdotes, I've put together PC's with that service lifetime, for use in business. I've serviced brand new iMacs that don't support certain printers, or other hardware, and the users of these require very much attention indeed.
Why would their software suddenly stop working on old hardware?
Try to find a modern version of some software on OSX 10.4, for example. Development has likely frozen years ago, meaning bugs won't get fixed, security is out the window, and everything sucks forever.
http://www.eriksbikeshop.com/2013-Furley-Cyclocross-Bike/PR3...
You also have to take into account you have to pay the mechanics to build the bikes before they go to the stores. They you have a driver and warehouse staff you have to pay to unload and get the bikes to the store, so there's some labor involved which cuts down on the margins they have.
That was the gross margin on bikes, which I'm pretty sure means (sale price - purchase price)/(purchase price). Correct me if I'm wrong about the formula.
Not included in this is 36% number is the shops cost in selling the bike, which includes,
* Assembling the bike (unpacking, assembling, getting rid of packing materials, which are substantial).
* Tuning and Selling the bike.
* Post sale service.
At least for Erik's, a big part of the post sale service was to get people back into the shop and try to sell them accessories. I don't mean un-necessary parts or work, but things like clothes, bike computers, etc..
For many shops I suspect there is not much profit per bike left after these other expenses.
Erik's stream-lined much of this process, for example most bikes were assembled at the central warehouse by a dedicated crew.
You may be thinking of markup, which is the profit dollars as percentage of cost, and is often used in retail.
A 100% markup results in a 50% gross margin.
I worked at PerformanceBike (corporate - MIS) for many years. There the economy-of-scale did help somewhat when negotiating purchases from the manufacturers and I wouldn't say margins on bikes were "razor thin" but I do agree the bulk of sales were accessories and services. However, I have no insight into their current operations.
I was at Performance during several of their acquisitions such as Supergo, Nashbar and another chain in NOVA and all of those operations did have very low margins as the OP mentioned.
- $300 for the steel frame (retail cromo disc-compatible frames are in the 400-500 range)
- $200 for cheap disc wheels
- $100 for the disc brakes
- $200 for the remaining components (levers, crank, seatpost, saddle, etc)
So yes, $800 seems perfect. I couldn't hope to build a bike that cheap at retail cost.
They cost $500-$1000, but you get a high quality product that will last a long time. The ROI makes a lot of sense in the long term. Unless you are the type of person that has to buy a new bike every 2 years because it's shiny.
That is perfectly possible with Windows.
Locking machines down to a POS, this would be no easier in OSX than Linux, and the premium hardware (with associated cost and limited options) makes this the opposite of thrifty.
Full disclosure - this is who I worked for (http://www.eriksbikeshop.com/EriksHistory.aspx)
Some things about what made ERIKS so successful:
1) bike shops make almost zero money on their bikes. The margins are razor thin. They make a majority of their profit on accessories. For example, they buy kickstands for 25 cents and sell them for $12.
2) ERIKS actually used Macs in all their locations and used a custom built POS system. They only needed one IT guy who ran 8 stores when I was there (they have around 14 stores now). He said if they were using MS, they would've had to hire a bunch more support people. It helped keep costs down.
3) At first ERIK looked for lower rent, out of the way places to set up shops. What he called, "sub-prime" locations. Rent was lower, and because of their superior marketing, they didn't need a prime location to drive traffic.
4) They trained their sales staff. This was a biggie. As a new salesperson, you went through a full sales training. You were trained in sales techniques. How to close, how to get people to buy accessories, how to approach someone, how to go through the process and asking the right questions to get to a single bike to sell. By far this is really where they separated themselves from other stores. Most places would hire bike "enthusiasts" and let them casually sell a bike if a person was interested. They had a very pro-sales approach and it showed in their numbers.
5) Keeping wages low. This is probably a contentious subject for most. But as a salesperson, I made minimum wage, with a small percentage for commission. I think it was 1 or 2% of the total sales I had. By keeping the wages low and offering in store discounts and bike manufacturing discounts (which the manufacturers offer, not ERIKS) they were able to pitch potential employees that, "There's not a lot of money in the bike industry (lie), but people who work for us have a good quality of life and good perks of being a part of the bike community." By keeping wages low, they increased their own bottom line.