Rack N Road: In It for the Long Haul

This article originally appeared in the September 2023 issue of THE SHOP magazine.

Answering a help wanted post at a “bike shop” led Ryan McCann to the car rack and hitch business. He later helped open three chain stores in the Denver, Colorado, area, oversaw their internet shop and became the head of marketing.

This involvement allowed him to buy a Rack N Road location in San Rafael, California. In many ways, the story of the Rack N Road business mirrors McCann’s involvement in the industry.

THE RACK N ROAD TIMELINE

The founders of Rack N Road, Greg Bauer and three others, recognized that the car rack business was changing. In the 1980s, bicycle shops would offer generic, one-size-fits-all bike racks that would fit on the roofs of cars.

But those early racks relied on the car’s rain gutters for attachment. As car manufacturers started removing the gutters from their designs for a more streamlined look, the rack makers had to expand the variety of clips needed to secure the bike racks to various vehicles.

“That’s when it became complicated,” says McCann.

For some rack systems, McCann recalls there being 300-400 separate SKUs of door clips for all the various models on the road. This made it difficult for bike shops to offer a quick solution, particularly since their main focus was usually on bike sales rather than installing hitches and racks.

Bauer approached rack manufacturers Thule and Yakima with the concept of a chain specializing in car racks and hitches, and Sports Rack started in Redwood City, California, in 1991.

By 1999, the chain had grown to 16 locations and included a sizable internet-based storefront. McCann notes the business plan often followed the popular outdoor retail chain REI Co-op—wherever REI opened a new store, Sports Rack soon followed.

The company also formed its own manufacturing company, BVG, to make bike racks and seven other products, offering them through a private label line. Land Rover was one of BVG’s customers, and sensing the popularity of the line, Thule quickly bought out the manufacturing business.

In 2001, the company pivoted, sensing that bike sales and the economy were slowing. It transitioned to Gear on the Go and began offering more baby/family-related products like strollers, pull-behind carts and bike trailers. As its clientele aged and started families, the company changed to reflect the new priorities.

Then in 2005, the company retooled as Rack N Road with seven stores in three states. The company ended up dropping internet sales, as the freight costs for individual deliveries were cost-prohibitive.

“This stuff does not ship. Oh boy, what a mess,” says McCann.

In 2015, the owners offered the chain’s top management a chance to buy out specific stores, and McCann acquired the San Rafael location in Marin County, north of San Francisco in an affluent section of Northern California.

OWNER’S JOURNEY

When McCann was 20, he was looking for a job and his dad mentioned that a “bike shop” had a help wanted sign. The shop was a Sports Rack store, and McCann was hired full-time at $5.50 an hour.

After a few years he was promoted and helped open three stores in the Denver area. In 2005, those stores were sold to a rival business, and McCann returned home and focused on marketing efforts for the company.

When the offer to buy a store was made, he quickly took ownership of the San Rafael location. The other stores were similarly bought up, and the new owners have formed a “buyer’s group” to coordinate purchases while remaining independently owned and operated.

McCann’s store was established in 1997 and is situated along a major freeway near several new car dealerships. He estimates business sales are 80% focused on racks and hitches, with 20% devoted to truck accessories, tire chains and other small add-on items.

The shop is 4,500 square feet and can handle 10 cars in the install area. He typically has seven employees year-round, and an additional three join in for the summer rush.

The store stocks keys and lock cores for all the major rack brands—typically, five customers a day come in looking for replacement keys, he says. It also inventories small parts that clients often misplace, and McCann’s policy is if the customer has a used part that “fits in your hand,” he gives them a new one free of charge, helping to build loyalty.

Rack N Road clients typically return every three to five years for a system, once they “buy a new car or learn a new sport,” he reports.

ADDED OFFERINGS

Besides sales, the company also rents cargo boxes. The program allows customers to experience the products’ versatility and many either become yearly renters or buy one outright to hold their gear.

McCann notes that when he first started in the business, the shop charged $50 to install hitches. These days, due to the advanced sensors and wiring placed at or near the rear bumper of newer vehicles, the price is $650 for the additional time and effort.

For instance, many customers don’t know they have a feature to open the rear hatch of their vehicle with a sweep of their foot under the bumper. That option impacts which hitches can be installed.

So, McCann ends up having two hitch options on hand before an installation, because even if the customer insists they don’t have that foot-activated “option” they often do and just never knew how to use it.

Customers can generally get a roof rack installed the same day, and a hitch can be ready in a week. Some employees have been with the shop since 2016, and he relies on them to help train new hires.

A renewed focus on customer service and inventory was prompted by the pandemic. When COVID struck, deliveries slowed tremendously, and when companies couldn’t deliver as promised, customers became upset. McCann remembers it got so bad that vendors would not provide estimated shipping dates, so orders arrived whenever and wherever.

During the early days of the pandemic the auto business was exempt from shutdown orders, but if an employee felt unsafe and wanted to stay home, McCann encouraged it. His business slowed a bit in March and April of 2020. However, that May, it skyrocketed as customers wanted to get out of the home yet still stay socially distanced.

SUNNY SKIES

McCann credits his staff with the shop’s strong sales. His advice to fellow business owners is to locate core workers who can help run and grow the company, admitting that at times it’s easy to “take your eye off” the basics.

“Staff will think you are a mind reader, but I’m really not,” he adds.

The company does a few pay-for-click campaigns on the internet to stimulate new business, but most customers come in thanks to referrals or from having seen the store from the freeway.

The market’s future may be in hitch-mounted and related racks, McCann predicts. With more cars, SUVs and CUVs offering larger panoramic windows in their roofs, he believes that roof racks will become less popular. Raising a bike is more challenging and riskier, and the available installation spots become sparser.

He also envisions dealerships and car manufacturers offering more in-house versions of racks and hitches, with some customers opting for OEM products without realizing the many options available in the aftermarket, adding yet another challenge.

Not to be deterred, among the newest opportunities is a rising interest in overlanding, as well as catering to more affluent customers willing and able to pay for feature-rich systems. Through it all, as long as drivers want to take it all with them, Rack N Road will be there for the long haul.