Crazy Accident

"Colin Campbell" wrote: (clip) I didn't mean for you or anyone to
understand that I was suggesting the bike shop owed the owner of the new
bike anything. But if they made sure he knew that they sympathized, it
couldn't hurt their reputation.
^^^^^^^^^^^^^^^
Colin, If I misread your meaning, then my account must have sounded harsh.
Without knowing any of the parties involved, I can be 100% certain that the
LBS people certainly expressed their concern for what happened, not only to
the bike, but to the cars. I think your idea of lending the trade-in back
is a good one--I wonder whether they did that? It's not mentioned in any of
Llaikuf"s description. But, for the bike shop proprietor to say "We have
already ordered you a new bike..." would have been presumptuous, in my
opinion. It certain;y would have been appropriate for them to say,"Please
tell us if there is anything we can do to help. Do you want to borrow your
bike back until you work things out? If you need any help on an insurance
claim..." and so on.

"Mike Jacoubowsky" (clip) Any time the shop sells anything for less than the
recognized price margin to keep the lights on, they lose money...Selling at
cost means they lose money.
^^^^^^^^^^^^^^^
Mike, as the operator of a successful business, you have to be fully aware
of all your costs, and your understanding seems to be very clear. I am sure
you must be aware that accountants recognize another way of figuring a
cost--differential cost. This is the ADDITIONAL cost you incur by doing
something vs NOT doing it. In that type of cost calculation, the fixed
costs of running the business are not included. Example: what would it
cost you to donate a bike to charity? Of course you must include the actual
cost of the bicycle, plus shipping. Do you include a portion of the rent,
phone, taxes, utilities, insurance? No. These are fixed costs, which are
not changed by this particular transaction. Do you include the assembly
labor? Maybe, if you pay your mechanics for the actual time spent working
on bikes. If you pay them by the week or by the month, and they just do all
the work that comes in, there is no differential cost for this transaction.

What I'm saying is that you do not actually LOSE money if you sell a bike at
the invoice cost.

"Llatikcuf" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

Friend of a friend bought a ~$2000 Specialized bike at a bike shop. He
walks out to his car (the Audi in the pictures) turns around to see a
car jump the curb at high speed (flying at him about waist level -- no
joke). He drops the bike and dives for cover. The car (The Chevy) hits
his bike and barrels into his car. This all happens in the bike shop
parking lot ~20ft from the front door.

http://www.bicyclecenter.com/accident/

Bike shop said, "You bought the bike and walked out the door, not our
problem."

Any thoughts? Sure, it's not the shops fault, but I thought the shop
should help out a little - at least give him a new bike at cost. From
what I hear we have yet to see what the insurance will do.

-Nate

Suppose you put the bike in your car/suv/whatever and drove that vehicle 300
miles away and then this accident takes place. Do you still want the LBS to
"chip in?"

Suppose you flew the bike to Europe, assemble it in the airport parking lot
and the accident takes place... Do you still want the LBS to "chip in?"

Suppose you bought a $2000 armoire from an antique store, you wheel it out
to the parking lot and then the same accident takes place. You really think
the antique store will be receptive to a request to "chip in?"

Suppose you buy the $2000 bike, pay for it, but before you can get it out
the door, an out of control Chevy crashes through the LBS showroom window
and smashes the bike. Is the "chip in" factor" simply a matter of distance?
If so, how far do you have to go with the bike before the LBS doesn't have
to "chip in?"

Quoted message said:

What I'm saying is that you do not actually LOSE money if you sell a bike
at the invoice cost.

This is simply not true. Any product brought into the store is done with the
purpose of generating additional revenue, to cover overhead etc. If there
was not an expectation of selling it, it would not have been brought in. The
money & floor space would have been used for some other purpose. Otherwise,
I would carry an infinite amount of inventory, so I could handle any
opportunity that came my way. Clearly, that is not possible, and therefore
it is reasonable that *all* inventory carries with it the burden of the
various overhead costs.

In your example of donating a bike to charity, I'm not sure I see your
point. Yes, the cost of donating that bike to charity, to my business, is
little different than the retail value of that inventory, less pre-tax
profit. Margins are too slim, and costs too great, to act otherwise.

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

"Leo Lichtman" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

"Mike Jacoubowsky" (clip) Any time the shop sells anything for less than
the recognized price margin to keep the lights on, they lose
money...Selling at cost means they lose money.
^^^^^^^^^^^^^^^
Mike, as the operator of a successful business, you have to be fully aware
of all your costs, and your understanding seems to be very clear. I am
sure you must be aware that accountants recognize another way of figuring
a cost--differential cost. This is the ADDITIONAL cost you incur by doing
something vs NOT doing it. In that type of cost calculation, the fixed
costs of running the business are not included. Example: what would it
cost you to donate a bike to charity? Of course you must include the
actual cost of the bicycle, plus shipping. Do you include a portion of
the rent, phone, taxes, utilities, insurance? No. These are fixed costs,
which are not changed by this particular transaction. Do you include the
assembly labor? Maybe, if you pay your mechanics for the actual time
spent working on bikes. If you pay them by the week or by the month, and
they just do all the work that comes in, there is no differential cost for
this transaction.

What I'm saying is that you do not actually LOSE money if you sell a bike
at the invoice cost.

"Mike Jacoubowsky" wrote: This is simply not true. Any product brought into
the store is done with the

Quoted message said:

purpose of generating additional revenue, to cover overhead etc. If there
was not an expectation of selling it, it would not have been brought in.
The money & floor space would have been used for some other purpose.
Otherwise, I would carry an infinite amount of inventory, so I could
handle any opportunity that came my way. Clearly, that is not possible,
and therefore it is reasonable that *all* inventory carries with it the
burden of the various overhead costs.

^^^^^^^^^^^^^^^^^
I did not mean to suggest that there is no cost involved in stocking your
store. Of course there is, and if you visualized carrying infinite
inventory, you would incur both infinite capitalization and infinite rent.

What I said was that you can take an isolated item in your stock and do a
transaction, such as donating it, or selling it below retail, or selling it
at cost (whatever that is.) Suppose you are selling it at cost to another
dealer, with whom you are on friendly terms--let's say he has a customer for
it--and he has done the same thing for you at some time. Would you charge
him "bare cost," or would you add on all the overhead you usually consider
part of your cost?

Suppose that later on he sells a similar bike back to you, but his overhead
is higher than yours. Should he charge you more?

My example of a donated bike was merely meant to provide the framework to
illustrate the concept of differential cost.

Quoted message said:

In your example of donating a bike to charity, I'm not sure I see your
point. Yes, the cost of donating that bike to charity, to my business, is
little different than the retail value of that inventory, less pre-tax
profit. Margins are too slim, and costs too great, to act otherwise.

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

"Leo Lichtman" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

"Mike Jacoubowsky" (clip) Any time the shop sells anything for less than
the recognized price margin to keep the lights on, they lose
money...Selling at cost means they lose money.
^^^^^^^^^^^^^^^
Mike, as the operator of a successful business, you have to be fully
aware of all your costs, and your understanding seems to be very clear.
I am sure you must be aware that accountants recognize another way of
figuring a cost--differential cost. This is the ADDITIONAL cost you
incur by doing something vs NOT doing it. In that type of cost
calculation, the fixed costs of running the business are not included.
Example: what would it cost you to donate a bike to charity? Of course
you must include the actual cost of the bicycle, plus shipping. Do you
include a portion of the rent, phone, taxes, utilities, insurance? No.
These are fixed costs, which are not changed by this particular
transaction. Do you include the assembly labor? Maybe, if you pay your
mechanics for the actual time spent working on bikes. If you pay them by
the week or by the month, and they just do all the work that comes in,
there is no differential cost for this transaction.

What I'm saying is that you do not actually LOSE money if you sell a bike
at the invoice cost.

Scott said:

Qui si parla Campagnolo said:

Llatikcuf said:

Clarification to previous post:

I am not suggesting the shop give him a new bike at the cost of the
shop, that is ridicules. I am suggesting that the shop offer him a
replacement discounted to the shops cost. The shop made the profit for
their sale, why should he pay it twice? Is this such a crazy idea?

Because they lose the margin that they could have had by selling to
another 'customer'.

I'm surprised that no one, especially the numerous shop owners who've
contributed to this thread, have mentioned the potentially greater
profit inherent in creating an incredibly loyal customer.

No one's suggesting that the shop sell the bike for their invoice
price. Shop cost includes things like assembly.

For the sake of argument, let's assume a similar scenario but one where
there's no potential insurance payment involved. Factor in a
reasonable $$ amount to cover the overhead, sell the bike to the poor
guy at a reasonable price and create tremendous goodwill and
word-of-mouth advertising.

It's so much easier to keep a customer than to get one, so why lose one
who may have (make that 'most likely would have'😉 brought you others?

Why would the bike shop 'lose' a loyal customer after he got smacked by
a car? Hopefully the buying experience by the customer before he got
hit would make him a loyal customer.

A resonable $$ amount to cover the overhead is what the bike shop sells
the thing for anyway. Remember that in a bike shop the LOWEST margin
item is normally bicycles...

Dennis P. Harris said:

Scott said:

It's so much easier to keep a customer than to get one, so why lose one
who may have (make that 'most likely would have'😉 brought you others?

because the driver's insurance company should pay the full cost,
that's why! he's hardly going to lose the customer by not
providing it at "cost".

you obviously don't have any kind of clue about how small
businesses run, or how they become successful and keep their
customers. you also obviously don't want to be confused by the
facts, so into the killfile with you *and* this thread.

you snipped the part where I presented the argument assuming there was
NO insurance component. If the insurance paid it, then I don't think
for a minute the shop owes him anything. In fact, I think that the
shop should give him a replacement estimate that is based on full MSRP
(which is probably NOT what they sold the original for) so that the guy
can buy another one at regular retail. That way the shop makes a
little extra profit and the guy keeps the difference. Now, there's
your happy customer.

On 13 Nov 2005 08:40:49 -0800, "Scott" <[email hidden]>

Quoted message said:

you snipped the part where I presented the argument assuming there was
NO insurance component. If the insurance paid it, then I don't think
for a minute the shop owes him anything. In fact, I think that the
shop should give him a replacement estimate that is based on full MSRP
(which is probably NOT what they sold the original for) so that the guy
can buy another one at regular retail. That way the shop makes a
little extra profit and the guy keeps the difference. Now, there's
your happy customer.

Ah yes, the bike shop should participate in insurance fraud, because the
customer will be happy.

Where do you come up with this [censored]?

Jasper

Qui si parla Campagnolo said:

A resonable $$ amount to cover the overhead is what the bike shop sells
the thing for anyway. Remember that in a bike shop the LOWEST margin
item is normally bicycles...

Restaurants/food, car dealership/cars, etc.etc. It pretty much goes for
any $THING store that $THING is the lowest margin item, and the money is
made on extras.

Jasper

Jasper Janssen said:

On 13 Nov 2005 08:40:49 -0800, "Scott" <[email hidden]>

Quoted message said:

you snipped the part where I presented the argument assuming there was
NO insurance component. If the insurance paid it, then I don't think
for a minute the shop owes him anything. In fact, I think that the
shop should give him a replacement estimate that is based on full MSRP
(which is probably NOT what they sold the original for) so that the guy
can buy another one at regular retail. That way the shop makes a
little extra profit and the guy keeps the difference. Now, there's
your happy customer.

Ah yes, the bike shop should participate in insurance fraud, because the
customer will be happy.

Where do you come up with this [censored]?

Jasper

There's nothing fraudulent about giving a replacement quote based on
MSRP. And, there's no requirement that the guy buys a replacement bike
for the full amount received from the insurance company or from the
shop where he got the estimate, or even spend a penny of the settlement
money on a new bike at all.

If the insurance company and the 'injured party' work out a deal where
they agree to pay directly to the dealer for a new bike and the dealer
pads the bill and kicks the extra back to the buyer, well that's a
different story.

Qui si parla Campagnolo said:

Scott said:

Qui si parla Campagnolo said:

Llatikcuf wrote:
> Clarification to previous post:
>
> I am not suggesting the shop give him a new bike at the cost of the
> shop, that is ridicules. I am suggesting that the shop offer him a
> replacement discounted to the shops cost. The shop made the profit for
> their sale, why should he pay it twice? Is this such a crazy idea?

Because they lose the margin that they could have had by selling to
another 'customer'.

I'm surprised that no one, especially the numerous shop owners who've
contributed to this thread, have mentioned the potentially greater
profit inherent in creating an incredibly loyal customer.

No one's suggesting that the shop sell the bike for their invoice
price. Shop cost includes things like assembly.

For the sake of argument, let's assume a similar scenario but one where
there's no potential insurance payment involved. Factor in a
reasonable $$ amount to cover the overhead, sell the bike to the poor
guy at a reasonable price and create tremendous goodwill and
word-of-mouth advertising.

It's so much easier to keep a customer than to get one, so why lose one
who may have (make that 'most likely would have'😉 brought you others?

Why would the bike shop 'lose' a loyal customer after he got smacked by
a car? Hopefully the buying experience by the customer before he got
hit would make him a loyal customer.

A resonable $$ amount to cover the overhead is what the bike shop sells
the thing for anyway. Remember that in a bike shop the LOWEST margin
item is normally bicycles...

Two things:
1-you may not lose the customer by not helping him out (again, all this
assumes no insurance involvement. Settlement $$$ changes everything)
but you most likely will keep him if you do. If he was a first time
customer, you may be able to cement loyalty that wasn't there before

2-since the bike itself is the lowest margin item in the store, then
you really aren't losing that much, relative to what you have to gain

Quoted message said:

2-since the bike itself is the lowest margin item in the store, then
you really aren't losing that much, relative to what you have to gain

Is it just me or does something not quite click here? I'm reminded of the
old retail joke "Sure, we lose money on every one we sell, but we make up
for it in volume!"

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

"Scott" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

Qui si parla Campagnolo said:

Scott said:

Qui si parla Campagnolo wrote:
> Llatikcuf wrote:
> > Clarification to previous post:
> >
> > I am not suggesting the shop give him a new bike at the cost of the
> > shop, that is ridicules. I am suggesting that the shop offer him a
> > replacement discounted to the shops cost. The shop made the profit
> > for
> > their sale, why should he pay it twice? Is this such a crazy idea?
>
> Because they lose the margin that they could have had by selling to
> another 'customer'.
>

I'm surprised that no one, especially the numerous shop owners who've
contributed to this thread, have mentioned the potentially greater
profit inherent in creating an incredibly loyal customer.

No one's suggesting that the shop sell the bike for their invoice
price. Shop cost includes things like assembly.

For the sake of argument, let's assume a similar scenario but one where
there's no potential insurance payment involved. Factor in a
reasonable $$ amount to cover the overhead, sell the bike to the poor
guy at a reasonable price and create tremendous goodwill and
word-of-mouth advertising.

It's so much easier to keep a customer than to get one, so why lose one
who may have (make that 'most likely would have'😉 brought you others?

Why would the bike shop 'lose' a loyal customer after he got smacked by
a car? Hopefully the buying experience by the customer before he got
hit would make him a loyal customer.

A resonable $$ amount to cover the overhead is what the bike shop sells
the thing for anyway. Remember that in a bike shop the LOWEST margin
item is normally bicycles...

Two things:
1-you may not lose the customer by not helping him out (again, all this
assumes no insurance involvement. Settlement $$$ changes everything)
but you most likely will keep him if you do. If he was a first time
customer, you may be able to cement loyalty that wasn't there before

2-since the bike itself is the lowest margin item in the store, then
you really aren't losing that much, relative to what you have to gain

Mike Jacoubowsky said:

Quoted message said:

2-since the bike itself is the lowest margin item in the store, then
you really aren't losing that much, relative to what you have to gain

Is it just me or does something not quite click here? I'm reminded of the
old retail joke "Sure, we lose money on every one we sell, but we make up
for it in volume!"

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

like the old SNL skit "the Change Bank"

Scott said:

There's nothing fraudulent about giving a replacement quote based on
MSRP.

Yes there is. It is CLEAR fraud. The customer is entitled to be made
whole which in our system of laws means being compensated LCM. Here C
and M are about equal so it's the amount he paid - not some inflated mfg
'suggested retail'.

I hold with those who think the bike seller may, as a goodwill gesture,
offer a killer deal on the next bike he sells this unfortunate, but I
resist the idea that the LBS owes it to the customer to lower its price
any.

I think the LBS should sue GM for making crappy cars that crash into its
customers.

Paul Cassel said:

Scott said:

There's nothing fraudulent about giving a replacement quote based on
MSRP.

Yes there is. It is CLEAR fraud. The customer is entitled to be made
whole which in our system of laws means being compensated LCM. Here C
and M are about equal so it's the amount he paid - not some inflated mfg
'suggested retail'.

I recently won a case in small claims court where I sued for damages
after the operators of a local UHaul storage facility went into my
storage locker without my consent and threw a bunch of my stuff away
(frameset, rollers, a hitch-mounted bike rack, custom cue stick,
etc...).

I presented to the judge a list of items lost, with full replacement
costs based on MSRP of the items. The issue of what I paid for them or
if I ever intended to replace them never came up. I received full MSRP
for every item I lost, even though I did not pay anywhere near full
retail for any of them. The judge awarded me damages in the amount of
full MSRP of all items lost.

I only replaced one of the items with a direct one-for-one replacement.
In the other cases I either didn't replace them at all or substituted
a different item for the one lost. In a couple of cases I bought more
expensive items, in others I bought less expensive items. I kept any
money left over.

Maybe I'm missing something, but was the judge complicit in my fraud?

Paul Cassel said:

Scott said:

There's nothing fraudulent about giving a replacement quote based on
MSRP.

Yes there is. It is CLEAR fraud. The customer is entitled to be made
whole which in our system of laws means being compensated LCM. Here C
and M are about equal so it's the amount he paid - not some inflated
mfg 'suggested retail'.

I hold with those who think the bike seller may, as a goodwill
gesture, offer a killer deal on the next bike he sells this
unfortunate, but I resist the idea that the LBS owes it to the
customer to lower its price any.

I think the LBS should sue GM for making crappy cars that crash into
its customers.

Sure you're joking, but was there ANY indication that the fault wasn't
purely the driver's?

Bill "on a personal responsibility bent (not 'bent)" S.

Scott said:

Paul Cassel said:

Scott said:

There's nothing fraudulent about giving a replacement quote based on
MSRP.

Yes there is. It is CLEAR fraud. The customer is entitled to be made
whole which in our system of laws means being compensated LCM. Here C
and M are about equal so it's the amount he paid - not some inflated
mfg 'suggested retail'.

I recently won a case in small claims court where I sued for damages
after the operators of a local UHaul storage facility went into my
storage locker without my consent and threw a bunch of my stuff away
(frameset, rollers, a hitch-mounted bike rack, custom cue stick,
etc...).

I presented to the judge a list of items lost, with full replacement
costs based on MSRP of the items. The issue of what I paid for them
or if I ever intended to replace them never came up. I received full
MSRP for every item I lost, even though I did not pay anywhere near
full retail for any of them. The judge awarded me damages in the
amount of full MSRP of all items lost.

I only replaced one of the items with a direct one-for-one
replacement. In the other cases I either didn't replace them at all
or substituted a different item for the one lost. In a couple of
cases I bought more expensive items, in others I bought less
expensive items. I kept any money left over.

Maybe I'm missing something, but was the judge complicit in my fraud?

Probably more like punishing the storage stooges for their overt bad acts.
The "Crazy Accident" *was* an accident, after all. (Would the ruling
against the driver be harsher if she /purposely/ ran over the guy's bike and
slammed into his car? You betcha!)

It'll all get straightened out... BS

Leo Lichtman said:

"Colin Campbell" wrote: (clip) I didn't mean for you or anyone to
understand that I was suggesting the bike shop owed the owner of the new
bike anything. But if they made sure he knew that they sympathized, it
couldn't hurt their reputation.
^^^^^^^^^^^^^^^
Colin, If I misread your meaning, then my account must have sounded harsh.
Without knowing any of the parties involved, I can be 100% certain that the
LBS people certainly expressed their concern for what happened, not only to
the bike, but to the cars. I think your idea of lending the trade-in back
is a good one--I wonder whether they did that? It's not mentioned in any of
Llaikuf"s description. But, for the bike shop proprietor to say "We have
already ordered you a new bike..." would have been presumptuous, in my
opinion. It certain;y would have been appropriate for them to say,"Please
tell us if there is anything we can do to help. Do you want to borrow your
bike back until you work things out? If you need any help on an insurance
claim..." and so on.

You're right - the bit about ordering a replacement is probably just
fantasy thinking on my part. And, I don't know whether the fellow
traded in a bike, or whether it was his only ride. (That wouldn't be
the case for me. If I found a shop that would take a trade-in, I'd sell
them my Scandium bike which isn't stiff enough for my 183 lbs. in a 62cm
frame size, and keep my current carbon fiber daily rider. Also, I have
friends who have upwards of ten bikes in their garages, so they wouldn't
care if they got their trade-in back anyway.)

Bill Sornson said:

Scott said:

Paul Cassel said:

Scott wrote:

>
> There's nothing fraudulent about giving a replacement quote based on
> MSRP.

Yes there is. It is CLEAR fraud. The customer is entitled to be made
whole which in our system of laws means being compensated LCM. Here C
and M are about equal so it's the amount he paid - not some inflated
mfg 'suggested retail'.

I recently won a case in small claims court where I sued for damages
after the operators of a local UHaul storage facility went into my
storage locker without my consent and threw a bunch of my stuff away
(frameset, rollers, a hitch-mounted bike rack, custom cue stick,
etc...).

I presented to the judge a list of items lost, with full replacement
costs based on MSRP of the items. The issue of what I paid for them
or if I ever intended to replace them never came up. I received full
MSRP for every item I lost, even though I did not pay anywhere near
full retail for any of them. The judge awarded me damages in the
amount of full MSRP of all items lost.

I only replaced one of the items with a direct one-for-one
replacement. In the other cases I either didn't replace them at all
or substituted a different item for the one lost. In a couple of
cases I bought more expensive items, in others I bought less
expensive items. I kept any money left over.

Maybe I'm missing something, but was the judge complicit in my fraud?

Probably more like punishing the storage stooges for their overt bad acts.
The "Crazy Accident" *was* an accident, after all. (Would the ruling
against the driver be harsher if she /purposely/ ran over the guy's bike and
slammed into his car? You betcha!)

I don't know. He did turn down my request for 'treble damages'. If he
wanted to 'punish' them, making them pay extra sure would've helped.

Scott said:

Bill Sornson said:

Scott said:

Paul Cassel wrote:
> Scott wrote:
>
>>
>> There's nothing fraudulent about giving a replacement quote based
>> on MSRP.
>
> Yes there is. It is CLEAR fraud. The customer is entitled to be
> made whole which in our system of laws means being compensated
> LCM. Here C and M are about equal so it's the amount he paid - not
> some inflated mfg 'suggested retail'.
>

I recently won a case in small claims court where I sued for damages
after the operators of a local UHaul storage facility went into my
storage locker without my consent and threw a bunch of my stuff away
(frameset, rollers, a hitch-mounted bike rack, custom cue stick,
etc...).

I presented to the judge a list of items lost, with full replacement
costs based on MSRP of the items. The issue of what I paid for them
or if I ever intended to replace them never came up. I received
full MSRP for every item I lost, even though I did not pay anywhere
near full retail for any of them. The judge awarded me damages in
the amount of full MSRP of all items lost.

I only replaced one of the items with a direct one-for-one
replacement. In the other cases I either didn't replace them at all
or substituted a different item for the one lost. In a couple of
cases I bought more expensive items, in others I bought less
expensive items. I kept any money left over.

Maybe I'm missing something, but was the judge complicit in my
fraud?

Quoted message said:

Quoted message said:

Probably more like punishing the storage stooges for their overt bad
acts. The "Crazy Accident" *was* an accident, after all. (Would the
ruling against the driver be harsher if she /purposely/ ran over the
guy's bike and slammed into his car? You betcha!)

Quoted message said:

I don't know. He did turn down my request for 'treble damages'. If
he wanted to 'punish' them, making them pay extra sure would've
helped.

Sounds like they DID pay extra. How greedy are you?!?

Bill "sensing a pattern here?" S.