The Spoke N’ Rider is located in downtown Mountain City, 1 mile from Smart University.  The shop is a 4,000 square foot specialty store housing up to 200 bikes and a full inventory of road gear.  There is an 800 square foot shop that is dedicated to repair and maintenance.  All bikes remain on the show floor so that no bikes go unseen when a customer enters the shop.  Accessories, on the other hand, are inventoried at a minimal level.  There are only 400 square feet allocated for accessory inventory, so just in time (JIT) inventory is the method of choice.  The shop sells, on average, 70 bikes a week.

The Spoke N’ Rider plans to expand their shop by adding 1,500 square feet.  The added yearly cost of this expansion is $30,000.  The cost for the additional mortgage incurred by the expansion will be financed through The Spoke N’ Rider’s existing mortgage company.  As part of the expansion, The Spoke N’ Rider will have to hire 2-3 additional part-time employees.  The one-time cost for this expansion will be only $5,000, since the construction required is minimal.

The Spoke N’ Rider allows for special orders on most bike lines.  Vendor catalogs are available to the consumer for this type of sale.  The consumer is required to pay 50% of the cost at the time of order, almost guaranteeing the shop the sale once the bike has arrived.  

The Spoke N’ Rider’s return policy for bicycles is restricted to manufacturing defects.  Once a consumer has purchased a new bike and ridden it, under normal circumstances, the only reason for return would be manufacturer defect.  If this happens, the owner is able to return the bike to his supplier for credit on his next order.  This policy has been successful, because, for the most part, customers who are purchasing a large ticket item spend time evaluating the offerings from the competitors and suppliers before making an investment.  The Spoke N’ Rider rarely sees impulse buyers on this type of product.  

Accessories are returnable within 30 days of purchase with a receipt for cash or credit.  As with the biking suppliers, accessory suppliers generally give the shop owner credit for returned merchandise.  

These two return policies have been in effect over the last five years and have proven to be effective.