While at work recently, I retired to the library to catch up on some reading. I had a copy of the August Bike magazine in my hands. Inside was an article by Mike Ferrentino about retail bike shops verses mail order. I found this article particularly interesting. Mr. Ferrentino explained that during this time of depressed economies and hard times for many shops, Bike would demonstrate their support of retail bike shops by excluding any advertisements for mail order businesses. Being in the retail business, I thought I might offer my perspective on the matter, and make a plea for your business.
First and for the record, no, bike shops cant compete with the prices you see in the mags for mail order companies. There are many reasons why these companies can sell product for so cheap. Some get what is called OEM pricing. Original Equipment Manufacturer pricing is extended to a business that builds finished product for resale. This is also how bike companies, like Trek, make a profit. Since they are purchasing product to complete a bike for resale, they receive deep discounts, better than wholesale. OEM was meant to protect the profit margins of product sold at wholesale. This protection provides invaluable revenue, much of which is used for research and development. This increased money, in part, has lead to the fine technological innovations the bike industry has experienced in the last ten years. So, it would be wrong to condemn OEM pricing. The problem occurs when greedy companies see and opportunity to abuse this privilege, and order excess parts for the sole purpose of resale at a profit. In this case, the company in question makes the same margin as a wholesale or retail distributor would, except they sell directly to the public, effectively cutting out the middleman.
Another way that mail order companies can offer such great deals is by purchasing products from gray market sources. This can be especially destructive for everyone, including the consumer. Many times the purchases are not authorized, sanctioned, or monitored by the maker of the product. Gray market is an industry slang term that describes a supply and sale any product that does not travel through regulated channels. At first glance this may not seem harmful, but consider these types of gray market traffic. Some shady mail order distributors have been caught selling stolen, recalled and even warranty returned product to consumers, with the false pretense that the sale will be supported by all manufacturer warranties and guarantees. These cases are actively pursued and investigated by the makers of these products in the attempt to protect the reputation of their company and the safety of their customers. Weve all seen these companies. Adds appear in magazines for a couple of months. Then theyre gone. Two months later, the same company begins selling the same products with the same marketing campaign, and the same risks, under a different name. If you happen to be unlucky enough to purchase product from these people, you are stuck with product the maker never intended for sale, possibly due to safety reasons, with no recourse of action. Hopefully you will not discover this when your bike breaks unexpectedly, rendering you the newest member of the semi-injured clique.
(In fairness to the reputable on-line and mail order companies, I will admit that this is not the majority of the companies out there. I will also offer that these crooks can be easily avoided by purchasing from companies that have a solid word-of-mouth reputation and an established history. If in doubt, contact the maker of the product you are interested in buying. Ask if they are authorized to sell their product. I can assure you that finding a too-good-to-be-true deal may sound like something you cant pass up, but you should probably investigate.)
In addition to these examples, add any of a hundred others. Companies sell parts from discontinued bikes. Companies take advantage of quantity discounts, where they receive incredible savings because they buy so many units. Companies start an online business that is tied into their retail business so they can get the same perks and stay competitive in a very hostile market. The fact is everyone needs to make a profit. You cant survive without one. So the question becomes, as a consumer why not buy and save big bucks? Why not let these companies battle it out, and let the strongest survive? Why not?
The answer is; honestly, we wont survive. I dont mean my shop. I mean bicycle retail. I mean the shop you have a relationship with. The guy you trust to fix your bike when all hell breaks loose. Im talking about the shop that considers your business so important, that it they will exchange a part you ordered on-line, just to make you happy. Maybe they install it for free. Maybe they tell you its not the right part for your bike, then tell you which one you need that will work, knowing you wont be buying it from them. I would ask you to think about it. Where online do you receive that kind of personal service? The real price I spoke about is the real threat of loosing these shops. Will every one fold? Probably not. Will on-line and mail order completely dominate the bicycle industry? Not right away, but eventually. Will it eventually trickle down to the bike companies themselves? Absolutely. Is it worth the money you save? You will answer that.
In this day and age, society asks you to save everything from paper to seals. Ill spare you a sappy, Greenpeace inspired spiel about the moral obligation of consumers to protect bike shops. At its fundamental level, it is business. And the strongest will survive. As businessmen, we knew this when we opened our stores and we live with this reality daily. Being a family man, I also appreciate that there are more important things to spend money on than bike parts. I understand the importance of saving as much as we can to make a better life for ourselves, and those we love. But as consumers, you have an awesome power. Where you take you business, and to whom you give your money dictates whom will be around in five years, and who will not. I can promise you that when your favorite bike shop closes, and you can no longer reach your trusted bike tech, or when Research and Development dollars begin to dry up from an industry in recession, and new models are seen every two or three years, you will know the true cost of cheap parts.
Check it out, monkeys. Ask your local shop how they feel about the pressure of price matching to online and mail order companies. Ask them what it does to their profits. Ask them why they do it. Ask them why they dont. PM James at Giant (sorry to throw you under the bus, dude.) Ask him how bike companies feel about these predators. Ask him what he foresees for the bike industry if these companies do begin to dominate the industry. Ask what the long-term effects would be. Ask anyones opinion whom you truly trust. You have the power of choosing. I would only ask that you make an educated decision. And if you work in a shop, be honest with your customers. Answer their questions as completely as you can. They are the reason we are here.
In the interim, thanks to Mr. Ferrentino and Bike magazine for supporting the bike shops dedicated to growing the sport we love. To everyone else reading this, its Saturday morning, dont you have a ride to make?
First and for the record, no, bike shops cant compete with the prices you see in the mags for mail order companies. There are many reasons why these companies can sell product for so cheap. Some get what is called OEM pricing. Original Equipment Manufacturer pricing is extended to a business that builds finished product for resale. This is also how bike companies, like Trek, make a profit. Since they are purchasing product to complete a bike for resale, they receive deep discounts, better than wholesale. OEM was meant to protect the profit margins of product sold at wholesale. This protection provides invaluable revenue, much of which is used for research and development. This increased money, in part, has lead to the fine technological innovations the bike industry has experienced in the last ten years. So, it would be wrong to condemn OEM pricing. The problem occurs when greedy companies see and opportunity to abuse this privilege, and order excess parts for the sole purpose of resale at a profit. In this case, the company in question makes the same margin as a wholesale or retail distributor would, except they sell directly to the public, effectively cutting out the middleman.
Another way that mail order companies can offer such great deals is by purchasing products from gray market sources. This can be especially destructive for everyone, including the consumer. Many times the purchases are not authorized, sanctioned, or monitored by the maker of the product. Gray market is an industry slang term that describes a supply and sale any product that does not travel through regulated channels. At first glance this may not seem harmful, but consider these types of gray market traffic. Some shady mail order distributors have been caught selling stolen, recalled and even warranty returned product to consumers, with the false pretense that the sale will be supported by all manufacturer warranties and guarantees. These cases are actively pursued and investigated by the makers of these products in the attempt to protect the reputation of their company and the safety of their customers. Weve all seen these companies. Adds appear in magazines for a couple of months. Then theyre gone. Two months later, the same company begins selling the same products with the same marketing campaign, and the same risks, under a different name. If you happen to be unlucky enough to purchase product from these people, you are stuck with product the maker never intended for sale, possibly due to safety reasons, with no recourse of action. Hopefully you will not discover this when your bike breaks unexpectedly, rendering you the newest member of the semi-injured clique.
(In fairness to the reputable on-line and mail order companies, I will admit that this is not the majority of the companies out there. I will also offer that these crooks can be easily avoided by purchasing from companies that have a solid word-of-mouth reputation and an established history. If in doubt, contact the maker of the product you are interested in buying. Ask if they are authorized to sell their product. I can assure you that finding a too-good-to-be-true deal may sound like something you cant pass up, but you should probably investigate.)
In addition to these examples, add any of a hundred others. Companies sell parts from discontinued bikes. Companies take advantage of quantity discounts, where they receive incredible savings because they buy so many units. Companies start an online business that is tied into their retail business so they can get the same perks and stay competitive in a very hostile market. The fact is everyone needs to make a profit. You cant survive without one. So the question becomes, as a consumer why not buy and save big bucks? Why not let these companies battle it out, and let the strongest survive? Why not?
The answer is; honestly, we wont survive. I dont mean my shop. I mean bicycle retail. I mean the shop you have a relationship with. The guy you trust to fix your bike when all hell breaks loose. Im talking about the shop that considers your business so important, that it they will exchange a part you ordered on-line, just to make you happy. Maybe they install it for free. Maybe they tell you its not the right part for your bike, then tell you which one you need that will work, knowing you wont be buying it from them. I would ask you to think about it. Where online do you receive that kind of personal service? The real price I spoke about is the real threat of loosing these shops. Will every one fold? Probably not. Will on-line and mail order completely dominate the bicycle industry? Not right away, but eventually. Will it eventually trickle down to the bike companies themselves? Absolutely. Is it worth the money you save? You will answer that.
In this day and age, society asks you to save everything from paper to seals. Ill spare you a sappy, Greenpeace inspired spiel about the moral obligation of consumers to protect bike shops. At its fundamental level, it is business. And the strongest will survive. As businessmen, we knew this when we opened our stores and we live with this reality daily. Being a family man, I also appreciate that there are more important things to spend money on than bike parts. I understand the importance of saving as much as we can to make a better life for ourselves, and those we love. But as consumers, you have an awesome power. Where you take you business, and to whom you give your money dictates whom will be around in five years, and who will not. I can promise you that when your favorite bike shop closes, and you can no longer reach your trusted bike tech, or when Research and Development dollars begin to dry up from an industry in recession, and new models are seen every two or three years, you will know the true cost of cheap parts.
Check it out, monkeys. Ask your local shop how they feel about the pressure of price matching to online and mail order companies. Ask them what it does to their profits. Ask them why they do it. Ask them why they dont. PM James at Giant (sorry to throw you under the bus, dude.) Ask him how bike companies feel about these predators. Ask him what he foresees for the bike industry if these companies do begin to dominate the industry. Ask what the long-term effects would be. Ask anyones opinion whom you truly trust. You have the power of choosing. I would only ask that you make an educated decision. And if you work in a shop, be honest with your customers. Answer their questions as completely as you can. They are the reason we are here.
In the interim, thanks to Mr. Ferrentino and Bike magazine for supporting the bike shops dedicated to growing the sport we love. To everyone else reading this, its Saturday morning, dont you have a ride to make?
Never mind the fact, that by the nature of the business, you're a mark from the moment you walk in, and you're always being pushed for the up-sell. No thanks.
Man, I can't rewmember the last item for my bike or my board that I got at a shop! With the initial investment of a few hundred dollars for a good tool set (more $$ over time
) I figure I've saved Sista Kreep and myself a few thousand dollers! Thats the profit that I care about! I have enough to worry about, without wondering how the guy that opened the LBS is doing....he took the risk, I don't need to pay for it.
's humble opinion.
Who knows what the CS would have been like with him. Regardless, I'm glad I chose the Bullit not because of the recall, but because it totally fit my style of riding better, AND I got it for less than the Enduro.
This gives a HOLE new meaning (no pun intended) to the phrase: bend over and grab your ankles
These guys are complete IDIOTS!! Idiots, I tell you! Don't EVER, EVER go there to have your bike worked on. You might just end up in a body cast!
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