N_C

First I'll start by saying I have no problem with Trek's products they build a good bicycle.

But here is what they are doing to the small bike shop in my town. There are 2 stores that sell quality bikes. One is called Albrecht Cycle. They are the small privatley owned LBS. Albrechts main line is Trek, they are also a Giant and specialized dealer as well as others.

The other is Scheels. They are a high end all purpous sporting goods store. They are in the process of building new super size stores all over the country. You may have one in your town soon. Because of this they want to expand their line of bicycles that they carry. Scheels now wants to carry Trek.

So the rep. basically told the owner at Albrechts they have to drop of of their lines. Thsi needless to say dod not make the owner happy.

Scheels wined and dined and flew the Trek rep. to their new stores, etc. So it sounds like Scheels will get the Trek line. Now Albrechts can still carry it if they want to. The rep. is not telling them to drop their Trek line by any means. but it will seriously affect the sales of the Trek line at Albrechts because Scheels will offer the same line of Trek bikes for a lower price. Talk about unfair to Albrechts.

So the owner at Albrechts is boycotting Trek and if he drops any line of bikes it will be them. And they will simply increase their line of Giant, Specialized and other brands. hopefully Trek and Albrechts will come to a good solution before this happens though. Things are still up in the air regarding this issue right now and time wil tell what happens.

I do not know whos idea it was originally for Trek to do this. Whether it was Trek's, or Scheels, or a joint idea. I don't think the owner of Albrechts knows either. But it does not matter this is a classic case of the big guy undercutting the little guy.

Now don't get me wrong I like Scheels, I buy things other then bicycles there when it comes to high end sporting goods. That is because they have a good selection of outfitting, camping, etc. gear.

Has any thing like this happened in your area? If so which companies were involved?

roadfix

Home Depot....in a grander scale...

Maelstrom 

I have seen it happen before. Trek wants to make money and see this as a chance to increase sales in the area. And I hate to say it but it does usually work. Ironhorse sells exclusively through Sportcheck in Canada. This sucks because sportcheck limits the sales of the bike to areas based on quotas. BC is not included in the high end mtb sales section. This highly limits my choice when I wanted to buy an ironhorse. But overall I bet this move increased sales of general bikes sold. I just think they could sell more diversifying their product to other areas, which sportcheck won't do.

The one thing that was lost was the lbs feel and the knowledgable staff. The staff at sportcheck are trained in the most rudementary way and only enough to impress people. Not really knowing anything.

heresy

I have never heard of Scheels. I guess they are not in California.

It would be interesting to see if Scheels tries that in many markets they enter. If so, the LBSs could probably mount a decent antitrust case against them.

RacerX

Giant did the same thing to a lbs in the socal area. Every bike company is going to go with where they smell the money.
Too bad there is no loyalty anymore.

Dannihilator

Well, by boycotting Trek might do Albrecht Cycle a world of good, as a matter of fact if Albrecht drops Trek as a line, it might be a reality check to Trek. As a matter of fact by increasing the Giant/Specialized line at Albrech's will do a world of good. Both brands make a very high quality product and in my honest opinion, better then Trek. Trek has made their impression through Lance, their have been no major technological advance from trek, where there have been major technological advances from both Specialized and by Giant. Giant has perfected the use of CarbonFiber as a woven. While trek's CF frames are nice, they haven't done one thing to improve the strength, Giant has. Specialized just builds one kick butt bike. So what I'm trying to say it will be a good business decision to drop Trek instead of Specialized or Giant.

Dannihilator

Not exactly, the lbs I work at is exclusively a Rocky Mountain Dealer, and has been ever since they opened, very loyal. Last year, the shop started to carry Tomac as a minor line, Tomac started trying to get the shop to drop RM so they can have Tomac as the main line, Tomac offered better money. The line that got dropped was Tomac.

DanFromDetroit

This tactic is very shortsighted on the part of Trek. This seems like a way to squeeze the smaller retailers to the benefit of Trek, but there will be a backlash when the smaller retailers fold or drop Trek, leaving only one or two major outlets for Trek in that area. At that point the "Scheel's" in the area will be the 800lb gorilla that will dictate terms to Trek after the small LBS community abandons them.

It is in Trek's long term best interest to cultivate both types of retailers, possibly by offering the low end of some of the Trek lines to the discounter at good price while preserving the premium product for the smaller LBS and offering a better rate for warranty work to the smaller shops. There are probably other incentives for smaller retailers that could be found as well, just to keep them as a viable alternative to the mass marketers.

my .02

Dan

Montag

My LBS had the same thing happen to them from Giant. Unfortunately, I don't think there is any one company to blame. It's the way business is right now. I was originally considering Giant when I bought my first road bike this spring, but decided on another brand that my LBS carried...similar bike for similar price. I feel it's much more important to remain loyal to your LBS if at all possible.

Hunter

No not me. Of course I am one of two LBS in about a 100 square mile area, and I don't sell Trek. However I do know for example that 242 LBS closed across America because of lack of support.

supcom

Sounds like a little competition going on. I certainly don't see anything unfair about that. Competition is the consumer's best friend.

I can see where Trek would have plenty of incentive to find another retailer in your town for their product. They only have about a 1/3 chance of one of their bikes selling in Albrects. I'm sure Trek wants the LBS to drop one line of bikes so that the Trek bikes will sell better. And now that they have a higher volume retailer, they have some negotiating power with the smaller LBS.

Merriwether

This issue cuts both ways. There's the downside from the small shop's point of view, as others have said.

On the other hand, a larger dealer will be able to get a lower price from manufacturers like Trek, and hence sell bikes for less money to you.

Which reminds me of something I've wondered about from to time. Why don't we see larger chains trying to get a piece of the higher end bike market? That's where more than half of the money in retail sales is made in the U.S., after all, with far fewer units.

Now you might say, "no way! How could some store like Big or Walmart have its typical retail floor employees do specialized fitting and buidling work, requiring real mechanical skills?" Well, of course, they couldn't.

But that doesn't mean they couldn't hire people to do mechanical work. With their huge capital reserves, and their economies of scale in retail space, big stores could spend the money to hire skilled mechanics, build in-store shops, and then efficiently sell bikes like Trek or Specialized. So why don't they?

I'm guessing one reason they don't is brand identity. Big5, Sports Authority, WalMart, etc., make their name by selling lots and lots of adequate stuff really cheaply. Higher end bikes don't fit that model so well. (Although an upscale place like REI could get away with selling good bikes, and, in fact, they do; with some brands, at least.)

Another reason is that the fact is that it would take a lot of investment to build up the skill and equipment necessary to sell good bikes. Bear in mind that the cost is increased because these stores wouldn't just be starting from scratch, but would have to spend extra money to outbid the existing reservoir of mechanical skill in the present LBS distribution system. Yet a large store would be doing all this for a market in which there just isn't much growth potential. So you can see why large stores think there are better things they could do with their money.

Then, the manufacturers probably welcome the greater leverage they have over small shops, which they must see as some security in keeping an eye on quality control and profits. So, they'd probably be reluctant to sign on with a big chain and surrender some control in exchange for more money in the short term.

So, in the end, I guess I think that if the bike market remains more or less stagnant, we won't see a lot of bigger stores trying to compete with LBS on higher end units.

Feldman

Trek will be sorry. Trek has the reputation of a high-quality company BECAUSE OF HIGH QUALITY DEALERS! Trek's product is fair to middlin' out of the box. Quality dealers make the difference by doing meticulous assemblies, spotting defective manufacturing and defective designs and specifications. Occasionally some genius from Trek tries to promulgate the myth of the 30-minute bike assembly which, of course, exists only at stores that don't care what their floor bikes work like. Dealers who know and care about product quality have the wisdom to ignore this. A friend of mine, a former Iowan, is an ex-Albrecht's employee. A Trek that passed through Albrecht's' hands would be a very, very different bicycle than a Trek assembled and floored by a management-heavy chain store without real mechanics or a real service department.
Watch for Treks at Wal Mart any day if this succeeds.

Feldman

What I meant to say, in a nutshell and in no uncertain terms, is that Trek's dealers make their bikes' reputation. They owe their good name as a manufacturer 100% to their dealers.

SamDaBikinMan

I have not ridden Trek since 1994 since I bought my first Cannondale. Before that it was my only bike. But thats just my preference.

They need to drop em like a rock.

randya

Large sporting goods stores such as Scheels are the Walmarts of the bicycle business. They are only in business to maximize their profits, and they do so by minimizing their costs (low wage, poorly trained employees), and maximizing sales volume. Forget about getting quality service or support from these types of shops. Copelands Sporting Goods is the equivalent of Scheels in Oregon. The few times I have been in their shop, looking at helmets, I couldn't even find someone in the bicycle department to help me.

supcom

Because the big box stores live off low profit margins and high volume. It's all about dollers per sq ft of floor space. I would expect the average Xmart sells more cheap bikes in a month than the average LBS does in a year. An Xmart gets by with very low labor costs per dollar of sales as well by very agressively managing the number of employees and keeping labor rates as low as possible.

The entire Xmart culture is opposite that required to sell and service a high end bicycle.

Merriwether

I agree. One way to put what I was wondering about is why such stores aren't willing to change their culture to accommodate high quality bike sales. But I think it's just too costly for them-- they have no experience with that kind of specialty retailing, and it would be too expensive both in direct financial terms and in less tangible things like brand identity to make it worth doing.

Dahon.Steve

The local bike shop owner should contact sportings good store manager and offer to service the bikes for a fee and maybe split the profits with them. The Trek brand should be dropped in a heartbeat and replaced with another brand like Bianchi.

More than likely, the Treks at the sporting goods store will be low or mid-level bikes. I highly doubt they will sell Lance's bike. I suspect these bikes will be assembled much in the similar fashion that Schwinns are put together in Toys R Us.

Rev.Chuck

We were a Trek dealer from 78' to 87' (As I understand it ) and dropped them because they decided to sell bikes to any shop in town. Until this time we were the only Trek dealer and had established them in the area.

danr

Well, business is business. I'd like to live in a perfect world where Treks, Tomacs, Rocky Mountains, Giants, Cannondales, Konas, Fujis, Huffys, GF, Bianchis, and Lemonds can all be sold side by side. However, whether we like it or not, many people in these bike companies are in it just for the money and that fantasy bike shop of mine will probably never happen.

I don't plan on boycotting anything just because a couple of sales reps are trying to sell bikes.

Diesel

Trek has recently opened Trek superstores in my part of the country. The store
carries all Trek owned bike manufacturers and I have to say I purchased my last roadbike from them. I know that since I bought it from Trek I won't have to worry about the LBS going out of business or dropping the line of bikes I prefer.

N_C

The bike dept. @ Scheels is pretty good and their staf is well trained. I've never had a problem finding someone to ask question to. Even though I've never bought a bike from scheels and never will I do use them as a comparison to Albrechts. In fact even if Scheels offers me a better price then Albrechts I still buy from Albrechts every time. Why? Well loyalty for one. And in the case of the smaller guy competing against the bigger one I choose the smaller shop.

The only time I do not go to Albrechts for service is when I have to have something done to my bike and Albrechts is not open and I can not adjust or repair it myself. Or if Albrechts does not have something in stock and I need it before they can order it for me and Scheels has it available. And yes Albrechts knows this, they have no problem with it. Because they know 98% of the time I come ti them. They are not concerned with the 2% that I have to go to Scheels. Again its because of my customer loyalty with Albrechts.

To bad Trek can't show the same loyalty.

Now wil this turn me off to Trek's? I don't know. I am considering a Trek mtn bike. Maybe I'll boycott them my self and buy a Giant or Specialized from Albrechts.

N_C

Is this store a Trek company owned and operated store? Is this something new for them?

NitroZip

We have the original Scheels in our area, and they have always sold Trek. So have the lbs down the street. Don't know of any problems between the 2.