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Narrator: "He could not"
From what I've seen, it doesn't look like Jenson has a ton of bikes. It couldn't be that much money to cover a few warranty claims, especially for the positive word of mouth he would get out of it. The internet stoke of people saying "I had to warranty my YT and it was no issue " should be priceless for him at this point.
Your mentor nailed it.
Number of bikes shouldn't matter.
1) The warranty rate is probably very low, all things considered. So your net cost is measured in the 4 digit range.
2) Transition has shown the world how warranty should work in a D2C (or hybrid) environment. It really isn't even that hard. Always make sure the customer is happy and make it easy for things to get fixed in a timely fashion. Again...its not hard.
So many ways they can do this and come out looking awesome, yet somehow they choose the way to screw themselves the most.. Definitely a shaking my head, facepalm move..
IME, caring for one's customers and employees is one of the first things to go out the window when PE gets involved in a business. I'm sure there have to be exceptions, but 3 companies and now 7 CEOs later in my career have definitely made my previous Cautious Optimism regarding changing rein holders morph into Prove Me Wrong. So far I haven't been.
https://www.instagram.com/stories/highlights/17875129827446061/ - 5th story from the end is the response regarding YT/Jenson warranty from markus.
he notes jenson bikes labeled as sold without warranty (true, jenson was very clear about that on the sales page). he goes on to say if a customer needs help he wants to help - "go to jenson to start the warranty, they contact us, we have the parts and we will take care of you."
if i bought a bike that explicitly said it had no warranty, i would not ask for or expect a warranty. a customer buying this bike and asking for a warranty is just as shady as any of the other stuff we've been discussing.
if i saw markus say they'd try help, i'd at least hope for crash replacement or something but wouldn't be moaning about "hey there's no warranty"
Jenson has a FAQ dedicated to this... https://www.jensonusa.com/blog/yt-warranty-faq
As others are saying, there doesn't seem to be an objective/legal reason to not be able to provide a warranty. But not even having the balls to say, hey maybe we can throw in a discount to you as a YT supporter, with your proof of purchase, as a show of good faith. Cuz as Brines mentioned, there aren't a TON of bikes being sold by YT. And the amount that will have a failure and need any form of frame warranty should be tiny. So... It was SUCH an easy win, on so many levels. Be it warranty wise or discount wise. Literally anything. Chances are nothing would even come through that pipeline. And he STILL fumbled it, because he A) just can, especially with Jenson already making it clear they can't control what YT does and
he wants to save every penny going forward now, which while sensible seems to be a day late and penny short by now... 🤦♂️
Good to see Markdown Sellattaloss-man putting YT right in line with the modern corporate/customer relationship of "Hey customer, give us your money and/or go F yourself."
I can understand the statement on the Jenson site that YT USA will not warranty the bike since YT USA is no longer a thing. Just make it easy for the customer in any way possible. Especially since Jenson is willing to help with the warranty on any non YT part. Granted, pretty much all of those parts would require you to go through a shop for a warranty claim..
I think it’s pretty clear Markus will say anything he thinks is will help him. Doing it is a diffirent story.
forgot to say really enjoyed the pod. You guys kept it light. With just enough of classic team robot to keep me interested. Jeff’s insight was fantastic.
Really looks like essentially yt has only ever grown thru big investments that never turned into profits. And every opportunity to profit has been spent on the look of being successful.
If Marcus had half a brain he’d rebuild himself on the German market on a small scale and wait for the Industry to rebound before trying to be international. Wait enough time that the bad tastes of the last couple years wear off and the nostalgia for their hey day grows.
But he’s not gonna do that. I have no doubts he has not learned any lessons. He’ll always be the guy who cuts everyone down so he can feel on top. He’ll be the guy who goes big until he crash and burns. And it’s just a shame for whoever has floated his bs from the beginning middle and into the future.
One thing I always thought about YT, and I'd love to hear Brines opinion or maybe somebody who works at a shop and looks at inventory a lot...
But how exactly practical is it, even as a d2c brand, to have THAT many sizes of THAT many specs, typically at 2 colors each?
That's the shame of YT. I think people loved the Tues, loved the dirt loves, generally are at least ok with the Jeffsy and Capra. I think the Izzo and gravel bike were... A puzzling step for the brand though the Izzo turned out ok, imo. Just not sure if it was on people's radar since it's arguably not the best downcountry bike on the market and inherently not the cheapest option from YT having no alloy model. So I think it hung in limbo despite being a quite good bike/value, naturally.
I think the terminology used before was basically 'lower/consolidate your SKUs'. Something brands have been wise to do, post-covid. And it seems like YT just expanded more and more. And while I can personally appreciate the idea of opening up a carbon fiber core 2 build and an alloy core 3 build... It would seem to my uneducated brain that was NOT the correct way to move forward in an industry with slim margins getting squeezed by an economic crunch.
If anything the original model was superior and could have been consolidated more, through the covid collapse, all while still capitalizing on the uncaged marketing thing (limited edition models).
I could imagine just selling bikes in black only normally, 2 alloy models, 2 carbon models. Budget, mid range with the same spec but diff frame, and then high end. And then basically every year doing a run of only one of the models in LE. Creating a significant fomo experience you can market. And that gives you a long run time between risky LE runs. capra, jeffsy, tues, izzo, dirt love. ~5 years I guess (wouldnt have ever made the gravel bike)
The amount of leftover stock and discounting was... Surely avoidable.
Regarding 30-60-90 day credit terms on components, the bike brands that we know often don't buy directly from component suppliers, instead the assembly factory purchases parts using their creditworthyness with the component manufacturers. An assembly factory may then extend credit to the brand. Less frequently (though not infrequently) bike brands import frames and assemble locally (you mentioned YT did this), this can save them from holding a depreciating inventory of components by acquiring them just in time, and it can allow them to offer multiple build levels or model years based on whatever frames they have available.
There have been a few occasions where assembly factories have bailed out (or bought out?) struggling bike brands to keep the wheels of commerce turning, probably calling it vertical integration. For a time Specialized was about 50% owned by assembly factory Merida; Kenstone who you mentioned in the pod is blood-related to Kenda Tires and owns Haro and Masi (I have no idea how that came about); and IIRC the customer facing brand side of Giant bikes kinda sorta came about as fallout from the collapse of Schwinn. My guess would be that extending credit within co-owned, vertically integrated, organizations could be relatively frictionless.
To be clear, I have no knowledge of YT, or whether anything like that is happening here; I'm just offering that there are many ways this sort of thing has played out in the past.
Side thought: how does YT's scale compare to Felt's of 10 years ago? @jeff.brines and @TEAMROBOT 's ship of Theseus analogy seems almost inadequate there, but I'm happier if some part of any bike company survives than none.
Thanks dude, glad you enjoyed it. As always, we had a great time recording it.
The Walken that Markus was truly trying to invoke.
IYKYK
First of all they are going to need some new products that people want .i don’t see that in their line up.
I'd say they had a pretty good lineup.. If they bring out the new Capra that has been seen out in the wild, that would be a good kickoff. Granted, there aren't many of the bikes that excited me due to some geometry preferences, but they seem to have a pretty good following.
What would you say was missing from the lineup?
Made clearing out bench cuts and raking berms way more fun!
The Izzo needs a light update but all the rest were pretty on par with everything else. Any pretty much everything the next few years have very little room to move changes wise other than lightening up frames again with slight geo and kinematics adjustments. I think that alone is going to kick a lot of these brands in the ass for moving things waaaay too fast the last 8 years. We're back to 2008-2015 territory right now, so really, even if they run similar models again for another 1-2 years at the right price, they'll do ok in at least that department. I mean, almost 6 years in at this point at people are still forking out for the same specialized enduro's as they did in 2020.
@jeff.brines speaking of the pod. What binding company are you working for? It sounds like potentially a European one looking to get into the US market. I’d assume a small one without a big parent ski company. That would probably mean a touring binding.
Alpenflow?
@Digit Bikes great post, really appreciate you sharing this! As to the Felt question, I honestly can't tell you. Robot might have a better feel, but outside the Felt acquisition by Pierer Mobility during COVID, I don't have a ton of insight into how big they were.
@ebikepartyshirt, CAST Touring and SNDR Products (different brands, same company, technically). We're in the process of building a new manufacturing facility here in the Tetons, which has me banging nails (or rather, driving metal screws) a lot of my day until this thing is dried in (see, I do "real work" too sometimes...). If things go well, a very small portion of the "plant" will hopefully also be my office and "podcast studio" (lol) come mid winter! Psyched! Anyway, I only mention it because its really fun to be around a business that is doing everything they can to manufacture as much of their product as possible locally.
https://casttouring.com/
https://sndrproducts.com/
Funny, the Izzo is one that I would consider buying.. But, you are right in saying that it's due for an update. If you do it right, maybe you can extend the life an extra year or two.. By bike industry standards, that Enduro is really old, yet it still ranks well in the shootouts and seems to be more or less of a benchmark for the category..
I think the point about how if they change distribution model (and thus drive an increase in price to maintain any margin) is a big one. Around here, YTs (especially their ebikes) are/were super popular among a certain type of rider. Not to generalize too much, but they appear to be largely driven by loud colors and making sure their bikes have Kashima everything. They for the most part aren't very skilled riders. YT was probably appealing to them because they could get something with flashy colors and a high-end looking spec for thousands cheaper than other brands. Increase that price, and you're going to lose out on that key demographic.
So rad @jeff.brines! I love when things geek out on overlap. What Lars has done with Cast is so cool.
Somebody had to say it. And they usually treat their bike like a special operations rifle, with every attachment you can fit on it. Insta360 mounted to the bar, bluetooth speaker hanging off the saddle, the full enduro trailside repair tool kit they probly won't use correctly anyway, garmin cpu mount, phone mount right next to it.
Also usually decked out in basically full motocross kit for a green flow trail. Gotta love em
The CNC thing on the Cast homepage is cool 😁
Maybe a dumb question, what is the yt mill? Is it simply a yt storefront assembly point?
Using mill as a marketing term for a storefront ?
Basically, yes it was a storefront... But, they were typically bigger than an average bike shop and they were a bit over the top with displays.. Bentonville had a tattoo parlor in it.. Some cool stuff, but a bit extravagant for bike business money.. They also gave consumers the chance to ride a bike that wouldn't be found in any other bike shop.. I think the concept could work with a smaller vision..
The whole thing just seems so pretentious to me. It’s a bike, not a lifestyle brand. But I guess that’s why I don’t own a YT.
You could go rent/demo bikes for free from the Mills. Then you could order a bike from YT if you decided to buy. They also carried all the YT apparel and such for purchase at the store. They also served as a social hub for parties with a bar, espresso machine, etc…
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