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Online vs. Bike Shops - Inevitable Change?

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5/28/2014 3:08 PM
Edited Date/Time: 5/29/2014 2:21 AM

For a few years now, online sales of mountain bike components has turned into one of the principle means of acquiring new bling for your bike. More recently, spearheaded by the likes of Canyon, whole bikes are being sold over the internet as well, completely foregoing the traditional channels of distribution. Of course, the main advantage of the consumer-direct model is a significant drop in prices, and that is never more true than on whole bikes. Most consumer-direct brands offer top-of-the-line spec for mid-range bike shop prices at most, which on paper at least seems like such a good deal that's it's impossible to ignore.

More recently we've started to see a move towards consumer-direct even by traditionally distributed companies, the most high-profile of which is no doubt Commencal. Tired of being "strong-armed by distribution", Max Commencal took the decision to pull his bikes from the shop floors to offer them direct to the consumer instead, citing the impossibility of "continuing to offer 4000 EUR bikes for 6000 EUR".

Where does this leave the bike shops? Are they destined to become simple service points, with less and less actual product available? We've already noted a fairly distinct drop in availability and choice of stuff in shops over the past few years, will whole bikes eventually follow suit? Is there enough money in service to allow shops to survive without selling much in terms of new bikes and parts? And if not, who will service our bikes going forward?

Are you ready to buy a bike you've never seen, and to send it back in a box when you need major repairs or to evaluate warranty coverage following a fault? What about the advice and shared experience available from a good shop? Would you substitute that for an internet forum?

In short, have prices become so high on bikes that a shake-up of the distribution model is inevitable, or is online sales of bikes only for a few brave riders? Will online sales plateau at the current level, or is further growth inevitable? Have your say!

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5/29/2014 5:49 AM

Specialized is going to change the looks of their concept stores with only Sworks bikes on display. If you want to try one or want a cheaper model someone will get it from the back of the store.

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5/29/2014 6:10 AM

enrico650 wrote:

Specialized is going to change the looks of their concept stores with only Sworks bikes on display. If you want to try one or ...more

That is never going to happen, nor does specialized have much say what we display in the shop.....

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5/29/2014 7:21 AM

Shops make squat on bikes. Service is the primary source of revenue with accessories, clothing etc pulling up the rear. I think shops have a very unique opportunity to become highly specialized with their service with a super wide range of parts in stock so they can fix your bike w.o having to wait a week for bearings or something else. Too often do I drop my bike off and have to wait a week or more for something to be repaired or I have to source the replacement parts myself because I can get them faster than my shop can. Shops are turning into showrooms regardless if they want to or not so my thought is that you might as well embrace it and find some way to capitalize off of it. I haven't figured out how to benefit but I'm sure there is a way.

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I'm Slow

5/29/2014 7:32 AM

ryan_daugherty wrote:

Shops make squat on bikes. Service is the primary source of revenue with accessories, clothing etc pulling up the rear. I ...more

shops will never stock a wide arrange of parts like you say because they dont have the capital to support all that inventory. they will have the most widely used and iniversal parts and still continue to order those bearings because it makes no sense for them to keep 30 diff bearings on hand.

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5/29/2014 8:02 AM

There are so many things wrong with the comments here. As a bike shop owner I can attest to the fact that bikes are what brings the money in, with service pulling up the rear. We're very good at what we do (you can't say that for all shops) and we make more than most on service because we're extremely thorough with our repairs. We've spent the past few years building our inventory so that we have a vast array of parts for repairs - including a massive selection of bearings. Internet forums are no place to get advice on repairing your bike, you NEED a professional bike mechanic for your own safety. Think about it, throwing yourself down a hill at high speed or off jumps and drops when you're not entirely sure the repair advice you got from some unknown source on the internet is reliable. I wouldn't take that chance with my motorcycle... My advice: find a better bike shop, one that cares and will go the extra distance for you. They're out there.

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5/29/2014 8:09 AM

sovereignruss wrote:

There are so many things wrong with the comments here. As a bike shop owner I can attest to the fact that bikes are what ...more

it took you years to amass those bearings? I have a solid bet in place that you did not sit down years ago and say, I think I am going to slowly buy bearings for the years to come. I bet you kept buying bearings as you thought you needed them and now you are stuck with alot of inventory that you will probably never sell through, instead of having a higher margin, higher volume part taking up that space, potentially making you more money.

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5/29/2014 8:19 AM

sovereignruss wrote:

There are so many things wrong with the comments here. As a bike shop owner I can attest to the fact that bikes are what ...more

This is on point. ^

I think the point people are missing is that direct sales is taking off in the high-end bike market. Local shops can't afford to stock a whole floor with $3000 bikes, it's just not economical. That's why for years you'd see "That One Bike", sitting up on a pedestal, whether it was DH, XC, or Road, it was a coveted piece of display/equipment that little kids would want to go visit. It's like a car dealership having "That One Muscle Car" out front, but the whole lot is full of $20,000 sedans.

The LBS will always be needed, because the money is made on the "consumer" bikes, which act mostly as a utilitarian purchase for both transport and entertainment. Those of us who are serious athletes (ride 3+ times a week for fun) or racers are not the average demographic. Granted, this is a broadstroke and doesn't apply to places where the outdoor sports scene is "the scene" e.g. Boulder CO, Stowe VT, Whister, etc - those places have high volume demand for top-tier equipment and thus, can stock that kind of gear.

At the end of the day though, a lot of people don't live in these large epicenters of activity, and many of us (myself included) live in a small town with limited resources/access to high-end equipment - and this is where direct sales is the best thing ever. Because no matter if I were to buy a race-ready bike from my LBS or online, if something was wrong, I'd have to call the company anyways due to the fact that no one locally (less than a 30-40 minute drive) can really be of assistance. So, in summation, the LBS will always have it's place, its roll will just change with demand, and DM will also have its place, but it isn't going to take over.

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5/29/2014 8:38 AM

prestondh wrote:

it took you years to amass those bearings? I have a solid bet in place that you did not sit down years ago and say, I think I ...more

If we were talking about frame pumps, you would have a point. Service items like bearings and small parts of that kind are low-turn, but shops who believe in having them around consider it a necessary expense required for them to deliver on the promise of their brand to their customers. It does take years to amass this kind of inventory for exactly the reasons you have given, you aren't going to throw $3000 at bearings and dropouts for the brands you sell in one shot. But over time, you don't mind holding them because if you have built your business on gaining trust and repeat business you will be servicing your bikes for a long time. Long term, if you train your customers to expect you to service their bikes fast and have the pivot bearings in stock and you don't, then you probably will lose that customer or at least lose their loyalty. So it's ok to have bearings laying around not turning as fast as gels.

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Memory Pilot Sox, Mudguards, Custom Mudguards

5/29/2014 8:43 AM

You can't buy great service on the internet. That is the foundation of my small shop. I stock a good amount of parts, and if I don't have something, I order it right away. The main distributors can get parts to me in 1 - 2 days. Being a service shop, you aren't bogged down with the new bike factor which takes up a lot of bandwidth. I fix every bike and make sure it runs smoothly. People bring in frames and parts, and I charge them to build and install. This seems to be working very well. Times are changing and the big shops with rows of bikes in front and service tucked in back, may be left behind.

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5/29/2014 8:52 AM

There is no doubt that selling bikes is what keeps the lights on at bigger shops. Service and parts make money, but often a single pricey road bike leaving the store will eclipse our entire days efforts. Yes there is going to be a drop in the younger better educated market buying bikes online, but they rarely pay rrp anyway, so no major loss! There will always be weekend warriors, and they will always want their bikes and advice from the experts in the shop. And at the end of the day, these people keep the shops in business and they aren't going anywhere fast. From what I've seen, the sport is still growing at an exponential curve and bike shops have never been so safe.

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5/29/2014 10:24 AM

This might sound good in theory but the distributors- QBP, BTI and J&B streamline things in a HUGE way. Could you imagine how much time it would take for a shop to order individual things from every manufacturers. Not to mention the other end of it... Would manufacturers then sit on huge amounts of inventory only to fill tiny orders for every LBS in the country.

Distributors are not the problem- the uneducated consumer is the problem.

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5/29/2014 10:25 AM

STOP BUYING STUFF ONLINE AND GET INTO YOUR LOCAL BIKE SHOP.

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5/29/2014 10:54 AM

yahoosafish wrote:

STOP BUYING STUFF ONLINE AND GET INTO YOUR LOCAL BIKE SHOP.

get the local bike shop to come close to prices.

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5/29/2014 4:22 PM

Good shops have to adapt to a new online retail landscape, those that do have the knowledge and expertise you can't get online. But we all need to save money when we can, so we might order a fork, wheelset, frame, online then bring to a good shop for a build or install. Looks like we use both. Local shops with friendly and knowledgeable staff will survive as long as they work well with parts coming from the internet.

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5/29/2014 5:49 PM

here's the way i see it playing out, having sat on all sides of the "screen" (i've done sales at LBS, MFG, mail order/distributor). from the MFG perspective you want to sell to EVERYone (but don't expect us to stop everything to ship you some tire levers when we're in the middle of packing 7 pallets for our best customer), for the LBS perspective you want to sell to everyone walking through your door, and as a mailorder/dizzy you want to sell to every phone call/smaller shop/desk jockey staring at a screen that comes to your website.

the small, mostly service oriented shops will keep their loyal customer base and continue to buy what they need from the distributors. the distributors make it easy, the shop keeps overhead down, its a proven and streamlined model. they might get lucky and gain a little more business/higher end business as their customers in turn are able to score a high end bike MFG direct/more people buy bikes, but these customers still want the face to face with the local shops. half the reason i go into my local shop is to BS with other local riders. at this level, i think MFG direct sales can't do anything but help, it in a sense just extends the shops reach a little further. the smart ones, might even sign on as a "factory authorized service center" to stock a few things like hangers and bearing kits for a specific brand that has no conventional dealer network; it just takes the shop knowing what they are getting into and not doing something stupid like buying 10 years worth of bearings for a product with a 2 year life cycle....

the mid range shops and chain shops will get hurt the worst. they aren't big enough to get an online presence to subsidize the slower days, they aren't "authorized" to sell certain brands online, and they are lacking the diversity of product choice that a larger shop offers. if their service game is subpar, its gonna be a long hard sell, and they will really have to occupy their niche smartly so they aren't glossed over for a shop with a more personalized service experience or a shop that just simply has more stuff on the shelf to sell.

the big independent shops already have most of their inventory available for sale online, if you're not selling online these days and just waiting for feet to stumble in the door, you are going to fold quickly as a big shop which has big overhead, big accounts payable, and big numbers of employees. look at it this way, i have time to go to the local shop once, maybe twice a week to get the usuals (tubes, lube, gels, impulse bling, tire kicking) but the internet is sitting in my pocket 24-7, in front of me 40+ hours a week at work, and this isn't even taking into account the time we spend on enthusiast based forums researching and making product decisions. point is, buying stuff online and getting it shipped is both cheaper and easier than going into a store that may/may not have it the moment you're in the store. i don't really see a threat from mfg direct sales at this level, these are the shops that have struck the balance of having lots of stuff on hand, servicing the customer effectively, and moving product in a timely, profitable manner regardless of whether or not the customer is physically staring them in the face.

the major chain stores/mfg direct store fronts will have to spend increased marketing dollars for diminished returns, think about it this way: pretty much everyone already knows who specialized/trek/giant is. they could double their marketing expenditure, but its not going to double their sales anymore, they simply have grown too large to see gains like that. their focus is now on keeping people from exploring the other options out there, be it through creative marketing that engenders emotional attachment to a specific brand ethos, selling the cycling experience (BG Fit anyone?) or the tried and true "we're just the biggest best" approach and copied/bought all the smaller brands that threatened our dominance. mfg direct sales (from the smaller competitors) will just snipe the occasional "on the fence" customer who wasn't sure if they wanted to be "mainstream" or wants to feel a little more individuality. sometimes NOT buying a brand can be a powerful statement, especially if you're from a certain brands HQ area.

where is all this going? i don't really know...but sum it up to say that the internet isn't necessarily bad, it can be a POWERFUL tool to expand a shop/brand presence. is the mfg-->distributor/mailorder monster-->quaint and cute LBS model we've come to know and love going anywhere? no, because "pyramid" sales is one of the oldest, most proven models in the book; any given product will find a hundred ways to trickle into the hands of the end consumer. the only people who have something to lose are the one's that are already ignoring the rules of success.

i will say this: i would NEVER buy a bike without at least seeing it in person first, you just don't know how its going to fit or ride, and while the numbers and specs might look cool on paper...your dollar is better spent on something you have tried out (and that the LBS will have parts for in a pinch).

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5/29/2014 5:53 PM

at the car stereo shop i used to work at (sockdrawer internet retailers/cheap copy cat brands have KILLED a lot of brand value in the auto consumer electronic industry) we used to charge a significantly higher labor rate if the items being installed were purchased somewhere else. half the time, it was broken before we even touched it. you get what you pay for!

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5/30/2014 12:11 AM

yahoosafish wrote:

STOP BUYING STUFF ONLINE AND GET INTO YOUR LOCAL BIKE SHOP.

JayDawger wrote:

get the local bike shop to come close to prices.

Mike at Mojo Wheels here. I match web prices everyday, on Everything we carry, with in reason. Its items like Easton and Shimano, particularly Saint Cranks that I could purchase from chain reaction for $40 less than qbp or bti dealer whole sale that really screw the IBD.

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5/30/2014 4:26 AM

enrico650 wrote:

Specialized is going to change the looks of their concept stores with only Sworks bikes on display. If you want to try one or ...more

jhart15 wrote:

That is never going to happen, nor does specialized have much say what we display in the shop.....

I work. for a concept store and its going to happen . they already showed us the layout and the way the displays are going to be set on the store .

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