Bob Dopolina 

Uh...the first two pages of that thread are talking about rim failures with spokes pulling through. So what is your point exactly?

Raiden

SF and the rest of the bay area has money for boutique brands and niches that don't really exist anywhere else, existing side by side with REI and Sports Basement. I saw a 20something bike messenger on a carbon track bike yesterday in downtown SF. A bike messenger. It's the first carbon track bike I've ever seen in the flesh. Jump over the bridges into the central valley and the bike market is suffering hard. Out here, bikes are just toys, adults that ride them are best addressed as '***' from the passenger side of a speeding pickup truck. Nobody knows the difference between a bike from a shop vs Walmart.

Even if percentages for car sales dropped, there are still a lot of dollars in cars, and people still 'need' cars. There are still fees and financing that car dealerships can make money from that bike shops have no equal to (when a bike shop offers financing, it's as to not lose a customer that didn't expect a bike to cost $1000. When a car dealership offers financing, they and/or the bank are making money). When you go to have your car repaired, shops all charge similarly high prices. In bikes, the prices dropped from lack of necessity and the rise of the internet, and there were no more dollars left. I used to work at bike shops because I liked bikes and cyclists, not because I wanted to make a lot of money. Times change and these days I need money, so I'm back at a 'real' job that requires less brainpower and specialized knowledge, and also pays a lot more. When someone wants a bike repaired, they go to the internet where the messageboards will tell them how to do it (I'm not against this, I have spent a lot of time either giving advice or helping at community shops, because I like bikes and cyclists) or someone on craigslist will come to their house and give them a cheaper rate than a shop (maybe) (and the guys with nicer gear generally know better than to take such shortcuts).

Cars and bikes are apples and oranges.

Dave Cutter

No one... can compete with the big guys... period. If Walmart decides to sell hi-end bicycles they can literally buy a big brand name with all of it's expertise. Then offer that brand in its stores.... even exclusively if they desire. Imagine... in the near future... if you want a CF Pinarello you would have to special order it at one of the selected Walmart Stores. Think it can't happen? Don't kid yourself. If that sort of marketing becomes the next way for the big box stores to bring in new profits.... they WILL do it.

Big stores often express the profits they need by square foot of store space. And that is their weakness. But it leaves Mom and Pop stores working with the specialized or niche products. But none of the big names do much with services anymore. So there is that market too.

AbsurdChalk

"Lacks logic" does not seem logical.

wphamilton

That depends on the product and level of inventory.

Speaking of the internet in general, smaller operations can have some advantages that the big guys can never duplicate, and it's the big guys who can't compete. When I was selling "stuff" on the internet I didn't care if my wholesalers or distributors tried to take retail market share with direct sales. They cannot match the efficiency that a smaller inventory allows, the speed and costs of operations, the level of service and costs of servicing the customer, and the mistake rate. However, when they started drop-shipping for competitors I dropped them.

If local bike shops could duplicate or mimic the more successful internet models they could probably compete against big box stores but the question has to do with the product, and retail expectations. You need enough gross margin to begin with obviously. Small and easily stored and sorted products, but completed bikes would be a challenge there. You'd have to be able to streamline completion of an order, whatever that entails. I suspect that Bikes Direct operates more from an internet merchant model than from traditional bike store methods.

@bob dopolina have you seen any indications of local bike shops adapting in these ways? Understanding that one bike shop isn't going to stock every model derailleur or anything else, but a dozen flourishing shops might between them. Can they get just in time fulfillment? Has anyone attempted shared inventory management, or common fulfillment centers? Are distribution agreements still so restrictive as to impede it?

WhyFi

Search for some statistics and decide which ones you like.

Looking at the US data, the sources I've seen seem to agree that adult participation has remained steady for the last decade while youth (<18yo) participation has declined (here's one source). At the same time, commuting statistics, such as I alluded to previously, show a dramatic increase in cities where cycling infrastructure has been pushed. As far as specialty retailers, and why the number of shops is a poor proxy for participation, numbers indicate that there are fewer small shops but that the remaining retailers are still moving roughly the same number of bikes. IOW, there's a been a change in the retail landscape to fewer, larger stores.

WhyFi

In the US, at least, you still see strong influence of QBP being the 800 lb gorilla - there aren't many other outfits bringing stuff in to the country, so they have a strong distribution position. They might be a slightly skinnier gorilla with the recent change in Shimano import and distribution, but for most shops, "let me order that for you" still equals "I'll call up QBP."

Bacciagalupe

In Manhattan, REI moved in around the corner from an established bike shop (Bicycle Habitat) about 3 years ago. The local shop seems to be doing just fine.

REI has a similar selection of bikes, more swag, and a good bike repair shop. But they don't seem to have the sales expertise of BH. I'm guessing that makes a difference.


C'mon, man.

Walmart's customer base is not interested in $5000 carbon fiber road bikes. They are not going to spend the money to hire decent bike mechanics, sales staff, or carry decent gear. Bike manufacturers might fall all over themselves to supply a replacement for the Huffy or Schwinn crap sold there, but they are not going to compromise their brand by selling low-quality ultra-cheap crap with near-zero margins (which is exactly what Walmart would demand).

Walmart is not a real threat to a typical LBS. Performance Bike and REI are a bit more substantial, and (again) are already in the market.

WhyFi

Clustered competition, particularly for specialty retailers, is often good for the participants - there are quite a few scholarly papers on the subject and you can see it plays out in practice. On that note, EMS is also very close by, and they have (or at least had, as of a couple years ago) a decent number of mid-range bikes (I actually got my Xenith there). NYC Velo isn't that far away, either. I guess that some caveats apply in this situation, though - not many places can match the density of wealth in Manhattan (though not many places can match the retail rent in Manhattan either - something I learned firsthand).

wphamilton

How long does it typically take QBP to fill the order and ship it? What's the typical shipping time?

Hypothetically, if I have a bike shop and a cooperating shop across the state does have the part, and all of the inventory information is in, say, a cloud based management system, I could get the part in a couple of days. That could be an advantage compared to the shop that has to call up QBP, or compared to the big boy who has to deal with a large warehouse of inventory.

WhyFi

I think that many shops place weekly orders (or at least that's been my experience as a customer at various shops) and that, once placed, it's simply a matter of how far away you are from QBP (which is down the road from me just outside of Minneapolis). I don't see why you couldn't do exactly what you propose (I had similar informal arrangements with friendly competition in the audio industry [this was only for small-ticket items, though]), but I wonder how much of a convenience benefit that is for the customer - personally, if I can't have it the same day, it's pretty much the same to wait 3 days or 6 days.

Where a cooperative could get interesting is when the collective buying power reaches a volume discount point or (even better) when they can move enough of a certain product to bring it in to the country by themselves and bypass the likes of QBP altogether. Until that point, though, you're just taking on additional overhead moving product between shops with only the indirect benefit of slightly happier customers.

MrCoffee

Very interesting statistics. There is one dealer I forgot about, a BMC dealer who also repairs department store bikes. His is a specialty retailer of high-end equipment, yet still offers services to those with more limited means. I see a trend towards commuters and those who use bikes for short trips to cut costs on gas and car maintenance. According to one article, road bikes are in a long-term decline while mountain bikes have started to fork into the hybrids and comfort bikes, which gives me the thoughts that fewer people are interested in recreation as opposed to necessity.

As for myself, I see myself driving the car when it's more convenient and a bike is prohibitive, yet I will ride if a trip can save me money in parking and fuel costs. The upcoming winter concerns me a bit, though. I really need to find something I can ride through the salt and mud and dispose of in the Spring, which may give me the idea of looking into a cheap used mountain bike.

Gallo

I can not add anything but my own opinion.

I do not begrudge a LBS making money as I want them there to service me. I want one with a great mechanic that is well established and knows his bikes that can solve problems I cannot.

I would not buy a new bike online as I want the warranty service in case I need it. I also want to ride the bike before I buy it to make sure it is the one for me. While I feel bikes are way too expensive it is my hobby and choice I f I spend big bucks on a new bike. I could be a minimalist and ride 80's Japanese steel but I chose to ride a modern bike.

I often buy tires and other parts from online retailers as the cost is much better. If I need something that day and I spend more at the LBS I d not feel ripped of I am paying for the service.

regarding event participation It appears to me that there are more cyclists overall than there were in the 1980's. I think that organized rides are cool but lose their appeal after doing a few. I can spend 100 bucks and have a route and water setup with some snacks and sandwiches and ride 100 miles. Or I can buy 2 cliff bars for less than three bucks fill two water bottles and bring 20 bucks and ride 100 miles. I do choose to do some events but I do not consider them "must do's" at this point.

Maybe my view that there are more cyclists is not correct but trails that I had all to myself and friends in the 80's now has many using the trail system. Rider participation on road rides especially during the tour de france on weekends seems to have quite a few choosing to ride.

Most of the LBS I frequented back in the 80's are still in business. Not all to be sure and the names have changed but they are still there. I live in San Diego with year round riding our market might be different. One shop was Hals Schwinn Shop back in the 70's became Bicycle USA and is now Performance Bike

bt

keep reading, those are noob wheel builders ruining rims.

there are thousands of people in that thread alone who love the wheels.

StanSeven

In the DC area some LBS flourish because of smart marketing. One sells nothing but high end road and tri bikes. The sales people are mostly racers and the mechanics are top notch - some worked on European teams. They stock pretty much everything so you can test ride multiple bikes, pick what you want including all components, come back in two or three days and the bike is built and ready to go. Another has one of the best fitters anywhere in the country and specializes in custom bikes and those stock companies with a large variety of sizes like Colnago.

No large store or online company matches their service, knowledge, expertise, and immediate response.

Dave Cutter

Well then sell your REI stock and buy Bicycle Habitat.... you foresaw the market first.

When I was single I always thought that chumming up to some of the Walton women might be a good idea. You apparently know them much better than I got to. Since you know Walmart's future plans. Or.... you don't remember how other retailers have historically made moves to expand their customer base (often with mixed results). The Walmart retailers don't need to make deals with manufactures. They have the available cash to just BUY them.

Dave Cutter

So... who were the big guys you put out of business when you were selling "stuff"?

I don't disagree that the Internet has changed the market place. It most certainly has! But still when it comes to retail sales... NO Mom and Pop retailer (brick and mortar or Internet)... has ever bested their big guy competitor. Although that doesn't mean doom and gloom awaits. There will always be plenty of ways and means to make profit. Finding a way to profit in competitive markets is now, and always has been, the challenge.

Bacciagalupe

I don't claim to have any foresight at all. I'm simply pointing out that this type of competition already exists. I don't actually know enough about the retail mechanics of it, I can only guess that better sales staff helps the LBS keep going.


I don't claim that either. However, I do have a basic idea of their business practices and their customer base. Walmart is extremely demanding on its vendors. They require precise delivery schedules, they frequently tell vendors exact prices that they want to charge.

Their customers tend to be lower income, are incredibly sensitive to price. Or as one article puts it... Wal-Mart's Customers Are Broke - Business Insider

And in general, idea that Walmart is going to try to compete on high-end bicycles makes no sense whatsoever. I don't even know why you'd think this, except to argue the point.


Which retailers? What big-box retailer has purchased a bike manufacturer, with good results?


AFAIK they've never bought a vendor.

Why on Earth would they do that, anyway? If any vendor gives them a hard time, can't keep to the schedule, or fails in some other way, they can switch vendors. Buying a vendor wipes away those competitive pressures, increases the complexity of the organization, and will outrage other vendors. Existing retailers might also drop the brand -- why sell Cannondale in your shop, if Walmart is selling them at a lower cost, without any support, and wrecking the brand?

Also, lots of mergers don't work well. Walmart's expertise is in retail and, to an extent, distribution. What the f do they know about running a bicycle company? Why would they bother to buy a company in a sector that is not a big part of their bottom line?

This isn't something that requires a great deal of business sense or analysis. Walmart is not going to compete against your LBS. Performance or REI might one day, but maybe not.

Dave Cutter

I can tell you are only guessing. I even wonder if you even live in America. Competing with the shop next door... is NOT truly competing with the big guys. Large retail stores regularly close the doors on a location that fails to make profit. But they continue to sell and profit on a large scale. If the problem is big enough... they formulate a new plan.

Yes. Walmart didn't invent "just in time" distribution but they did perfect its use in retail.

Well if you read my original post... I didn't mean to imply that this was the only possible future for the LBS or even Walmart. But for ALL retail... it is always competitive and ALWAYS expand or die. If Walmart doesn't expand ether it's product line and/or its customer base they will dwindle away. And the Walton's know that.

None that I am aware of. There has never been enough profit in bicycles to cause this. But there was a time when Montgomery Ward, Sears and Roebuck, and MANY other retailers had their own brand names. Very few brand name bicycles actually are manufactures anymore... to any real extent anyway. What does the big name bicycle manufactures have left to sell.... other than office building? And retailers by brand names.... every week of the year!

Yeah... And since they never have... you assume they never will? We know what happens when we assume don't we?

I have never posted that they WILL. But if that is where future profits are.... retailers primary function is to make profits... (so that is what they will do). Not some other imaginary purpose someone else has composed in their own mind.

Apparently you we're in the lawn mower business when Sears and Roebuck decided to compete with you. Or in the Men's Clothing Biz when Sears decided to sell Hart-Marx. Or in the banking biz when retailers decided to have in-store banks, or in the medical profession when the local grocery store decided to have walk-in clinics.

Omiak

Surly bikes tend to come less assembled than any other brand I've encountered. They require more mechanical skill to assemble.

Cafe

What is QBP's and Specailized's market share currently? And can you tell me about QBP and how they market Surly so effectively? Surly makes some nice bikes but people pay an astonishing amount on steel surly bikes usually built up with inferior components. This cross check for example which is priced at a ridiculous $1250.

Surly Cross Check Bike

What do we really have here? It's a steel frame bike with inferior components...Deore, Tiagra, etc. I don't get it...there is nothing special about that frame...and that's what you are really paying for because the components are run of the mill sub-par stuff. It must be something about the Surly name. Specialized bikes are the same way.

Raiden

But there's very little proprietary hardware that takes any special knowledge. Steel frames, threaded bottom brackets, pressed cup headsets, rigid forks, very little 10 or 11-speed hardware or carbon fiber, etc.

StanSeven

QBP is just a very large distributor of parts. A large proportion of LBS use them. I don't think QBP has anything to do with marketing Surley. They just can get one if a LBS wants.

LesterOfPuppets

I was under the impression that QBP owns Surly, Salsa, All-City, et al.

WhyFi

Surly, All-City, Salsa, Foundry - all are QBP brands.