Secondhand bicycles offer a unique buying and selling opportunity because they are plentiful, easy to sell, and the perceived values can vary considerably. Computers become out-of-date too quickly. Clothing generally has less value, requires sizing, and much of it is stained or torn. Furniture can be bulky. But with bicycles there’s money to be had!

Bikes at garage sales can be incredibly inexpensive. The people may be moving next week, and haven’t been able to sell their bikes for a reasonable price. The owner of the bike may be at college and the parents want to sell it to help pay for textbooks. A bike may be broken and quite undervalued by the owner. It is very common to pay $25 for a typical mountain bike, one that sold for $300 when it was new. You can put $20 worth of parts in it, perhaps $50 for labor if you don’t do it yourself, and then sell it for $150. For a few months, in a somewhat offbeat scheme to support some relatives, I did this with twenty bikes per week out of my one-car garage. I just went to as many garage sales as I could hit on Friday, Saturday and Sunday, rounding up the bikes with my pickup truck. If I didn’t have a pickup truck, I could have rented a U-Haul for $40 or so on Sunday evening, and gather up all the bikes I had purchased over the weekend.

It is great if you can display your bikes locked up outdoors, with prominent price signs where many people drive by, but most people don’t have a place to do this. You might consider a consignment arrangement with someone who does. You can place classified ads in the newspaper, and although expensive, this generally works well. In most communities, the best bet is Craigslist. You can place ads for as many bikes as you want, along with pictures, and it is all free. Here’s more about Craigslist.

When I was doing this out of a home, I mostly dealt in medium-quality mountain bikes, a few road bikes, and one or two children’s bikes. In general, children’s and low-end adult bikes don’t sell for a sufficient profit to be worth your while. A twenty-year-old mountain bike that you price at $150 or $200 is the easiest thing to sell. I also had some relatively high-end bikes when I could find good enough deals. Typically, I’d pay $100 or $150 for a high-end bike at a garage sale, and sell it for $600.

As you develop your selling business, you’ll discover that you no longer need to get all your bikes at garage sales. People will start calling to find out whether you’ll buy their old bikes. You can enhance that by telling everyone you see that you’re always willing to buy broken or inexpensive adult bikes. (Remember, there just isn’t much money in low-end and children’s bikes.)

You’ll want to be careful about stolen bicycles. They don’t generally show up at garage sales because thieves don’t operate that way. They wouldn’t want the exposure. Still, you’ll want to be careful about anything in too good a condition at too good a price being sold by people between 12 and 25 years old unless their families are at the sale with them.

If you have doubts about the history of a bike, you can ask the seller for a receipt. Often they’ll have legitimate excuses – such as they didn’t save the receipt. But if they can produce a receipt, you’ll know for sure that the bike has not been stolen. Sometimes, you can ask whether anyone has taken a picture that includes the bike. If they show you an old picture on their smartphone, it’s a pretty good bet that the bike has a good history.

In many communities, the police have worked out some sort of system to register used bikes. If you start dealing with used bikes regularly, they’ll want you to let them know about bikes you purchase. This probably isn’t as important as when you get an actual store, but you’ll want to participate if you can to protect the community at large from bike theft. The police won’t charge you any money, but they’ll want you to provide the serial number, description and source of every bike you handle. They usually ask you to hold every bike for 72 hours so they can have a chance to follow up if something turns out to be stolen. The downside is that if a bike is stolen, you’ll have to give it up, and won’t be reimbursed for what you paid. The upside is that the owner from which it was stolen gets it back.

Imagine a twelve-year-old boy who saved all summer to buy his BMX bike, has it for two weeks, leaves it unlocked in a friend’s yard, as twelve-year-olds will do, and discovers it has been stolen. The poor thing will cry his eyes out. If you can help prevent that sort of scenario, you can be proud to do so. Wouldn’t it be a great gesture to clean and tune a bike that’s going to be reunited with it’s owner? I never got the chance. I registered hundreds of bikes with my local authorities, and no bike was ever reported as stolen. Part of the reason is that the majority of bikes I purchased were broken, not shiny, valuable bikes. I think another reason is that most homeowners fail to record the serial numbers of their bikes, laptop computers, cameras and such gear.

If the police recover bikes that have been stolen, but don’t have a serial number or some way to positively identify the bike and reunite it with its owner. they hold it a while, then sell it at a ‘police auction.’ You can sometimes buy some remarkably good bikes for very little money at these auctions. You’re bidding against the general public, most of whom are looking for bikes for themselves, and know very little about how valuable certain models are. Others will see a bent wheel, or a missing cable, and just assume the bike is beyond their ability to repair for a reasonable cost.

That’s not always the case. Sometimes, the police auctions are way too popular, and you’d be wasting your time to try to buy bikes there. For instance, at some auctions, you need to pay as soon as you win each bike, so you miss the opportunity to bid on the next several bikes that go across the block while you’re waiting in line at the cashier. Of course, in that case, bringing a friend to help is a good idea. Some of the best auctions happen in inclement weather. In late fall, the police will have their last auction of the year. These will be many good bikes that accumulated during the end of the summer. There’s less interest as soon as the weather cools, and if it rains, or snows, there won’t be many bidders. You win. Mostly. But there is an unexpected catch.

When you buy a bike at a police auction, guess what? It may still be a stolen bike! Normally, this means nothing, and having gone through the process, and paid money, it is morally and nominally yours. But if the original owner discovers you have his bike, you are obligated to give it back.

Buying and selling can also be about parts and accessories. I believe a person could watch eBay like a hawk, and pick up things like Campagnolo components, and bullet headlights from bikes from the 1950s. You could turn right around and sell them for more on eBay. There is 14-speed internally geared hub made by a company called Rholoff that sells for $1000.

The Rholoff Speedhub – 14 Speeds

via: http://commons.wikimedia.org/wiki/User:Marcela

If you could pick a used one up on eBay for $300, you could sell it for $600 – $700 easily. Interestingly, even a common three-speed hub sells regularly on eBay for $40. You might also mix and match with your local market, using Craigslist and garage sales. I think another good eBay business could be had by buying the lowest of the low bikes locally – you know, the department store $100 mountain bikes, disassembling them, and selling the pieces on eBay. Better yet, if you can score the older bikes, maybe something like a Peugeot PX-10 from 1970, you can disassemble them, and sell the parts for a rather remarkable sum.

Low-end larger bike parts such as frames, forks and complete wheels are hard to sell profitably due to the shipping cost. Hubs, shifters, derailleurs, handlebar stems and saddles sell surprisingly well.

For more about the general business of buying and selling bicycles, check out General Business Action Pack.