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  • JasonM

    How filthy are the Trek dealers going to be after they have stripped their shops out of all other brands to now learn they will be getting a few dollars to assemble them only!?

    • Sean

      I would have thought this may only really be an option for high end bikes. Most punters surely would still want to walk in to a shop to get the kids a bike for their birthday?

      • JasonM

        From the linked article,

        “The chosen retailer will receive a service commission equal to their normal margin — which varies depending on the size of the store’s business with Trek — minus an estimation of the costs that Trek shoulders (and the retailer avoids) in making the online sale. That includes the cost of carrying the inventory, shipping and sales. The bottom line? Retailers will receive roughly 80 percent of their normal margin on these new sales.”

        They have now lost control of the premium end of their business. They are now going to be getting an assembly fee on bikes from $2000 to $10,000 rather than the commissions for the sale. I know what I would prefer as the business owner. And how many times has a punter been into a store with a $2000 budget and been talked into stepping up a level? That will also go.

        • jules

          this has been tried in the automotive industry, with very limited success. while it makes sense from a logical perspective, managers seem to forget that the product is more than just the bike itself – but includes the glowing sense of importance that comes with purchasing a shiny new bike. the smiling sales person revving the buyer up with “oh aren’t you a lucky duck!”

          as petty as it may sound, that is a substantial part of what people are really buying when they buy a new bike (or car). it’s also why retailers find it hard to shake the conventional sales model of showroom and sales staff.

          • yeah bra

            Have to disagree, at least from my own perspective, buying a new object is about the object (and perhaps status from the object). A salesperson revving my ego doesn’t come into it, and to be honest, I find the sales staff to often be a necessary evil in bigger purchases like cars, bikes, electronics over $1k, etc.

            That said I have no idea if the Trek concept will work. Dropping a significant amount of coin on a bike that you haven’t been fitted to or test-ridden seems like a leap of faith to me.

            It’s certainly a step change and I feel sorry for stores that have invested heavily in Trek to get landed with this.

            • jules

              people feel differently about these things. I like to think I’m impervious to sales guff, but I’m not – last bike I bought, I caught myself getting annoyed with the retailer for not making me feel special enough.

              but a lot of people do value that experience. sales is a real science and they don’t go to all that trouble for no reason. it works (at least some of the time, on some people) – make no mistake.

              • Sven

                Pre-empting the arrival of Canyon in Australia with a similar sales model? I know one Trek dealer who expressed disgust in Canyons way of doing business so they are going to be well pissed off about their mainstay brand going the same way….

                • Sven

                  That said, there is no mention in the article (that I can see) that this is happening outside of the US.

                  • We didn’t find any reference to anything outside of the US for the time being. I’ll ask the guys at Trek to see what the plan is for Aus and the rest of the globe.

                • yeah bra

                  This is likely to be a US led initiative. May or may not be rolled out in AU immediately. But unlikely to be provoked by Canyon coming to Australia. It would seem that they are attempting to innovate (or perhaps innovate themselves out of a business issue).

              • yeah bra

                Well there’s a difference between feeling valued and having your engine revved (ego fed) for making a purchase.

                But anyway I understand that people are different and in that have different preferences, but I think the proof is in the pudding with the growth and growth (and growth and growth) of online. People are more than happy to trade an experience with a sales person for convenience or value. Luxury goods, everyday shopping, niche stuff, whatever. It’s all popping off online.

                No doubt a sizeable but diminishing minority will prefer the sales experience, but the sectors that will avoid online will do so only for practical reasons.

                A good example, which you noted earlier, are cars. Significant hurdles exist for online distribution of cars. I mean, who wants to buy a new car, sight unseen and without a test drive?

                Bikes share similar attributes with cars – fit is crucial and test riding seems to be the norm. The key difference is the median price is much lower and doesn’t involve finance, so a liberal return policy can be used to get over objections a la Canyon.

                Even then, I’m unsure if it’ll work. But not for a lack of sales staff!

                • jules

                  what you’re neglecting here is that online purchases don’t mean buying ‘sight unseen’. for example Subaru has a display centre in Melbourne which provides customers with the opportunity to ‘experience’ the product, including test drive it. what it also does, which is less visible to the customer, is give the supplier (Subaru) closer control over how their products are marketed. I’d suggest that part of the rationale for online sales (with Trek) is to take back control of the marketing and sales from retailer, who are prone to going ‘off message’ – e.g. the classic gripe is intra-competition between retailers, such as by discount price wars where the supplier sees the margin on their product disappearing as retailers fight among themselves. when you’re a premium brand like Trek or Specialised, those are not brands whose marketing strategy tends to emphasise price discounts.

                  • Steel

                    Yes. Ford have been grappling with this for some time. If you’ve seen those horrendous Ford dealer ads, you’ll see why OEMs are exploring direct sales models. Also, Ford have had problems with their dealers selling terrible aftermarket chinese accessories branded with Ford logos and then copping the warranty claims for parts they’ve never manufactured.

                    Interestingly Tesla are going a direct sales model. Being a new player they’re taking some risks.

                    I think Trek would be crazy not to get into online. People now expect to be able to go online and buy anything.

                    Where I do have some sympathy is about reading about the LBS response to online trade. I’ve read that many ditched brands which could be purchased in store and online in favour of the in-store exclusive brands such as Trek. Trek seem to be smart enough here to cut them in on the deal, but it’s not going to be without some pain as JasonM points out above.

                    • jules

                      from what I understand though, the problem that (automotive) suppliers have discovered with attempting to move to direct, on-line sales is that they just aren’t as skilled in selling to customers as franchise dealers. this seems to have been a major reason why the previously-forecast “it’s all going online” hysteria has quietly died down. this relates to my earlier point about the more subtle, soft customer needs that conventional bricks and mortar sales models cater for better than online models. it’s about more than just delivering a piece of metal or carbon to a willing buyer.

          • Peter

            On the downside of sales staff are the ones who treat you like sales fodder.

            I recently test rode two bikes in my LBS, then, when asked how soon I wanted to buy, I said not within the next two months (which was after the sales ended) and the sales guy took the bike off me, turned his back and walked away with it. No thank you’s no goodbyes. No prospect of a real sale in the immediate future and so I was a nobody to him.

            It’s a pity, ‘cos I would have bought a bike from that shop if they had been patient with my middle aged, small income driven obsession to test ride and research bikes until I find the best bike deal for my money. Now I’ll take my business elsewhere.

            • jules

              that’s just poor salesmanship. smart salespeople know it’s worth spending a bit of time with people – if you’re there, you’re interested at some level. maybe 9/10 people won’t end up buying from you, but that’s just how the game is played. trying to pick the 1/10 who will buy and pissing off the other 9 – you’d want to be very skilled at picking who is the 1 and who is the 9.

    • jules

      I think they mean to introduce it as an alternative to bricks and mortar retailing. it doesn’t sound like dealers are going to be denied the opportunity to continue retailing in conventional fashion. really this is an opportunity for retailers to strip out overheads. although having said that, obviously the long game is to make licensed retailers redundant.

    • Andy B

      I think the sales of online components etc will hurt them more as they are losing the sale altogether
      As the ease of buying parts online and getting them delivered will be a lot easier than getting to the store (for myself anyway)
      Saying that at least trek will be getting the sale at all rather than to other online businesses

      They may find In some instances if the bikes must be picked up from a store they could see an increase in sales due to impulse buys and ease of buying online
      I know there has been times where its hard for me to get to a Trek store but I was keen to order a bike (twice with treks)
      That could of been made easier by purchasing online and then picking up in store

      I think they stores will still benefit from existing loyal customers and potentially bring in sales that may have gone elsewhere online
      Better to make the move for trek than lose out completely I guess

  • velocite

    I’m not in the industry so am not full of knowledge on the topic, but I would have thought it could be great for them. Depends on the size of the commission, of course. But if it increases sales that will obviously be a plus, and would it not all but eliminate their investment in new bicycle stock with the related risks?

  • Neil

    How about Danny Pate’s tweets regarding Danielson. Brilliant.

    • jules

      safe to say they are not mates :)

      • Dave

        Feel the buuuuuuuuuuuuuuurn!

    • Thanks for the heads up. I just updated the article to include those tweets.

      • Eddy

        Check out LA’s reply to Vaughters tweet.

        • jules

          it looks a lot like sour grapes from LA who is still angry that everyone else hasn’t been made to suffer the way he has. I do think he has a point, but it’s still sour grapes

          • Iantas

            But it was on point

            • jules

              if you mean that JV should pack it in, I’m unsure I’d agree. his team appears to have good intentions. what is JV to do if a rider chooses to ignore the team philosophy of not doping, and manages to dodge internal controls? assuming that’s what happened, of course. is it an excuse to make JV a pariah? I’m not convinced it is.

              • Abdu

                I really want to dislike JV, I really do, but this Tweet from Lance actually makes me like the guy…
                Firstly he mumbled something once about maybe kinda sorta doping, but it’s nowhere to be seen anywhere on the interwebs. Just his years with Team Discovery and Credit Agircole. We know he did. He knows. Then he rolled into a bankroll of Lance contacts to start and support his team, from the junior team to Chipotle to now. Then he pushed Trent Lowe out into traffic to be completely run over, shafting him completely when it was Matt White he should have blamed. Don’t even get me started on the sideburns and wine wankery. His team is one of the worst performers on the Tour, given their $ and quality of riders their returns are woeful. They should have had 2-3 real Grand Tour victories,
                This latest Danielson thing is embarrassing but in no way JV’s fault. Danielson is a moron. If you stack JV up against Tinkoff (with their having had the likes of Riis, Sorenson, De Jongh, Rogers, Contador, Kreuziger, Basso..) JV looks pretty damn good.

                • jules

                  couple of points:
                  – JV claims he rode clean with Credit Agricole and even fronted up to negotiations with them, declaring that he was over doping and not to expect him to perform as well as at Discovery. he claims CA were OK with that.
                  – I’m not entirely convinced about JV being the villain in the Trent Lowe saga. JV is no saint, for sure, but if spitting riders who don’t perform out of the World Tour is a crime then we’re going to need to build a lot of new prisons.
                  – It’s worth thinking about why Garmin may not be out-performing teams like Saxo-Tinkoff.. there are several feasible explanations of course.

            • jules

              if you mean that JV should pack it in, I’m unsure I’d agree. his team appears to have good intentions. what is JV to do if a rider chooses to ignore the team philosophy of not doping, and manages to dodge internal controls? assuming that’s what happened, of course. is it an excuse to make JV a pariah? I’m not convinced it is.

  • Holby City

    Great shot of Phinney capturing a moment when his hands are barely touching the bars

  • Ross

    Can’t shops continue to buy bikes and sell them to customers as they do now? This new system is in addition to what they already do so potentially more income/profit for the shops. Shops don’t have to do any of the peliminary ground work to get the customer, the customer already knows what they want (or have liased directly with Trek to work it out), all the shops need to do is take delivery of the bike and assemble it, then call the customer to tell them it’s ready to collect, or deliver it to them. I would of thought (and article seems to support this) that shops would like this as they don’t have to spend heaps of cash buying stock of bikes that may not sell or that have to be discounted as new season stock arrrives. Shops still get paid money to assemble the bikes.

    Sounds like a win win for customers and shops. Hope other bike manufacturers are taking note (looking at you Specialized…).

  • Derek Maher

    Olev will probably be put on the US sanctions list like many of his Russian compatriots.
    Of course some may think its unfair on the poor monkeys being compared to Obama ?.
    Regarding Trek and buying online.Well I have long ago given up with retailers and do all my shopping online when it comes to cycling or other hobby interests.One can always browse the net for info on brands from people who have used the product.The exception would be getting a custom built bike and there the net is also usefull for recomended builders.
    Lars Boom had a good win in Denmark.The weather was foul and the roads slippery.
    Looking forward to the Vuelta with most of the top teams and riders taking part.Hope its like this years Giro.

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