When OEMs go direct to customer are they selling to the customer at the same price they were selling to stores or are they selling at...
When OEMs go direct to customer are they selling to the customer at the same price they were selling to stores or are they selling at the same price as the store?
If the price is the same then why not buy through the shop and put some cash flow in the local bike scene.
If the price is lower with the OEM I need to ask what is the value to me of purchasing from the store. Do they have multiple sizes on hand for me to try? Will they swap out bars, saddles, etc at a reduced cost?
What I am seeing is typically the OEM is selling at the same price as the store. They are “cutting out the middle man” and pocketing the extra margin.
On the flip side I have seen local bike shops offering less and less on the service side. If bike shops want to stay in business they either need to focus on selling the customer service or focus on selling to idiots who don’t own computers.
To answer the question, they have to sell at the same price as the bike shop otherwise everyone would literally just go online and buy there, bring it in the store if they want it "built" (they basically come built now) and call it good.
Here is the steel-manning as to why you do this.
1) In theory this allows the bike company to sell at lower prices to the end user while retaining the same net margin (averaged/appropriately weighted) across both sales channels. If the OEM ran these sales through the bike shop, they'd in theory have to move their consumer-ended price up to retain the same margin.
2) The more of XYZ bike in existence, the more service needs. The more service needs, the more any bike shop carrying that brand is likely to realize a bump in labor needs which = good for shop.
Now, of course, D2C might cannibalize some sales. I just bought my latest specialized from the internet despite the fact there is a shop 30 minutes away (they didn't have the bike in stock btw) but the entire experience was better for me as a consumer by cutting out the shop (in this case).
When OEMs go direct to customer are they selling to the customer at the same price they were selling to stores or are they selling at...
When OEMs go direct to customer are they selling to the customer at the same price they were selling to stores or are they selling at the same price as the store?
If the price is the same then why not buy through the shop and put some cash flow in the local bike scene.
If the price is lower with the OEM I need to ask what is the value to me of purchasing from the store. Do they have multiple sizes on hand for me to try? Will they swap out bars, saddles, etc at a reduced cost?
What I am seeing is typically the OEM is selling at the same price as the store. They are “cutting out the middle man” and pocketing the extra margin.
On the flip side I have seen local bike shops offering less and less on the service side. If bike shops want to stay in business they either need to focus on selling the customer service or focus on selling to idiots who don’t own computers.
To answer the question, they have to sell at the same price as the bike shop otherwise everyone would literally just go online and buy there...
To answer the question, they have to sell at the same price as the bike shop otherwise everyone would literally just go online and buy there, bring it in the store if they want it "built" (they basically come built now) and call it good.
Here is the steel-manning as to why you do this.
1) In theory this allows the bike company to sell at lower prices to the end user while retaining the same net margin (averaged/appropriately weighted) across both sales channels. If the OEM ran these sales through the bike shop, they'd in theory have to move their consumer-ended price up to retain the same margin.
2) The more of XYZ bike in existence, the more service needs. The more service needs, the more any bike shop carrying that brand is likely to realize a bump in labor needs which = good for shop.
Now, of course, D2C might cannibalize some sales. I just bought my latest specialized from the internet despite the fact there is a shop 30 minutes away (they didn't have the bike in stock btw) but the entire experience was better for me as a consumer by cutting out the shop (in this case).
Lost in that is the high margin accessories shops can sell if they stock intelligently and do proper companion sales.
I don't know where all the former Radio Shack employees disappeared to, but bike shop owners would do well to learn the sales techniques they employed to capture more sales and loyal customers.
Any time the sales engagement in store is removed, it's proven that the product being sold moves further toward commodity & further away from value added product. Value added meaning the consumer has a "meaningful" engagement with the brand they purchase that provides a chance for loyalty and repeat client.
Commodities are devoid of emotion. Tough route. Even if Yeti is the original "teal blue" dentist bike.
9 out 10 dentist prefer to buy bikes online vs going to a bike shop M-F between 10 am and 6 pm and dealing with some 19 year kid who can't afford a 10k bike. True story.
I also wonder if this is a thing that has been in the works for a while for Yeti, or if, like many outdoor brands, they need to turn inventory into cash real fast, so they are opening up new avenues. Looks like they are keeping MSRP accross the board so probably the former.
Also, yikes, 10k bikes that come with race face alloy wheels? yeesh. buying online from Yeti = still a raw deal.
9 out 10 dentist prefer to buy bikes online vs going to a bike shop M-F between 10 am and 6 pm and dealing with some...
9 out 10 dentist prefer to buy bikes online vs going to a bike shop M-F between 10 am and 6 pm and dealing with some 19 year kid who can't afford a 10k bike. True story.
Dentists have Friday's off guy. And they're not touching the thing unless it's to ride it.
They'll pick it up fully ready to roll from the dealer, all pressures set.
Sure, maybe there's the arrogant "put it on a rack and drive around" ferda boyz dentist out there. But real dentists have others handle the logistics.
Lost in that is the high margin accessories shops can sell if they stock intelligently and do proper companion sales.
I don't know where all the...
Lost in that is the high margin accessories shops can sell if they stock intelligently and do proper companion sales.
I don't know where all the former Radio Shack employees disappeared to, but bike shop owners would do well to learn the sales techniques they employed to capture more sales and loyal customers.
Any time the sales engagement in store is removed, it's proven that the product being sold moves further toward commodity & further away from value added product. Value added meaning the consumer has a "meaningful" engagement with the brand they purchase that provides a chance for loyalty and repeat client.
Commodities are devoid of emotion. Tough route. Even if Yeti is the original "teal blue" dentist bike.
One cannot build a business out of brick and mortar high margin accessory sales.
Margins are part of the equation. The other part is profit as a percent of monthly operating income.
You need to move a bazillion tire levers, sealant, chain lube & Minions to really start to inch toward something that looks like breakeven when you add up rent, wages, utilities, interest expense etc etc etc.
Your entire hypothesis has been blown up by Tesla and Amazon. Hell, even Vital is a great example of other places a person can 'engage' about product in a high value way.
Things change Bizutch; trying to drive the car through the rear view mirror has seldom done me any favors.
Lost in that is the high margin accessories shops can sell if they stock intelligently and do proper companion sales.
I don't know where all the...
Lost in that is the high margin accessories shops can sell if they stock intelligently and do proper companion sales.
I don't know where all the former Radio Shack employees disappeared to, but bike shop owners would do well to learn the sales techniques they employed to capture more sales and loyal customers.
Any time the sales engagement in store is removed, it's proven that the product being sold moves further toward commodity & further away from value added product. Value added meaning the consumer has a "meaningful" engagement with the brand they purchase that provides a chance for loyalty and repeat client.
Commodities are devoid of emotion. Tough route. Even if Yeti is the original "teal blue" dentist bike.
One cannot build a business out of brick and mortar high margin accessory sales.
Margins are part of the equation. The other part is profit as...
One cannot build a business out of brick and mortar high margin accessory sales.
Margins are part of the equation. The other part is profit as a percent of monthly operating income.
You need to move a bazillion tire levers, sealant, chain lube & Minions to really start to inch toward something that looks like breakeven when you add up rent, wages, utilities, interest expense etc etc etc.
Your entire hypothesis has been blown up by Tesla and Amazon. Hell, even Vital is a great example of other places a person can 'engage' about product in a high value way.
Things change Bizutch; trying to drive the car through the rear view mirror has seldom done me any favors.
It's funny. The bike shops that were successful in the past are the ones successful now.
It's the "brands" that get greedy & try to blame the shops for their own shortcomings.
Specialized, Trek & Giant buying up dealerships isn't out of stupidity. The dealer model, when handled as an actual business, worked and still works.
Bike shops can be cheap start ups.
They can be burdensome nightmares.
They can grow into chain operations that outgrow the organization of those running them.
But they work when ran correctly. The market has just been far too saturated with far too many boutique brands trying to occupy floor space in dealerships that aren't professionally ran.
To answer the question, they have to sell at the same price as the bike shop otherwise everyone would literally just go online and buy there, bring it in the store if they want it "built" (they basically come built now) and call it good.
Here is the steel-manning as to why you do this.
1) In theory this allows the bike company to sell at lower prices to the end user while retaining the same net margin (averaged/appropriately weighted) across both sales channels. If the OEM ran these sales through the bike shop, they'd in theory have to move their consumer-ended price up to retain the same margin.
2) The more of XYZ bike in existence, the more service needs. The more service needs, the more any bike shop carrying that brand is likely to realize a bump in labor needs which = good for shop.
Now, of course, D2C might cannibalize some sales. I just bought my latest specialized from the internet despite the fact there is a shop 30 minutes away (they didn't have the bike in stock btw) but the entire experience was better for me as a consumer by cutting out the shop (in this case).
Lost in that is the high margin accessories shops can sell if they stock intelligently and do proper companion sales.
I don't know where all the former Radio Shack employees disappeared to, but bike shop owners would do well to learn the sales techniques they employed to capture more sales and loyal customers.
Any time the sales engagement in store is removed, it's proven that the product being sold moves further toward commodity & further away from value added product. Value added meaning the consumer has a "meaningful" engagement with the brand they purchase that provides a chance for loyalty and repeat client.
Commodities are devoid of emotion. Tough route. Even if Yeti is the original "teal blue" dentist bike.
9 out 10 dentist prefer to buy bikes online vs going to a bike shop M-F between 10 am and 6 pm and dealing with some 19 year kid who can't afford a 10k bike. True story.
I also wonder if this is a thing that has been in the works for a while for Yeti, or if, like many outdoor brands, they need to turn inventory into cash real fast, so they are opening up new avenues. Looks like they are keeping MSRP accross the board so probably the former.
Also, yikes, 10k bikes that come with race face alloy wheels? yeesh. buying online from Yeti = still a raw deal.
Dentists have Friday's off guy. And they're not touching the thing unless it's to ride it.
They'll pick it up fully ready to roll from the dealer, all pressures set.
Sure, maybe there's the arrogant "put it on a rack and drive around" ferda boyz dentist out there. But real dentists have others handle the logistics.
One cannot build a business out of brick and mortar high margin accessory sales.
Margins are part of the equation. The other part is profit as a percent of monthly operating income.
You need to move a bazillion tire levers, sealant, chain lube & Minions to really start to inch toward something that looks like breakeven when you add up rent, wages, utilities, interest expense etc etc etc.
Your entire hypothesis has been blown up by Tesla and Amazon. Hell, even Vital is a great example of other places a person can 'engage' about product in a high value way.
Things change Bizutch; trying to drive the car through the rear view mirror has seldom done me any favors.
It's funny. The bike shops that were successful in the past are the ones successful now.
It's the "brands" that get greedy & try to blame the shops for their own shortcomings.
Specialized, Trek & Giant buying up dealerships isn't out of stupidity. The dealer model, when handled as an actual business, worked and still works.
Bike shops can be cheap start ups.
They can be burdensome nightmares.
They can grow into chain operations that outgrow the organization of those running them.
But they work when ran correctly. The market has just been far too saturated with far too many boutique brands trying to occupy floor space in dealerships that aren't professionally ran.
You are who you align with.
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