15 ms·

End of the road for independent bike distributors?

112 points by darrennix 9y ago

blakesterz 9y ago
Spent years working in a bike shop, so this was a really interesting read for me. He may be right, but I can't help be think that most people just don't care enough about their bikes to have enough customers to sustain a good Service Shop. Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They paid $100 for it at Walmart. He said something in there that caught my eye: "Think back to the '80s when market experts were predicting that internet sales were going to doom UPS and FedEx ... Huh?! Crazy as that sounds, that's what experts said, which made absolutely no sense to me." Is that true?
- qaq 9y ago
  They might be proven right with Amazon shifting toward using their own delivery services if top N retailers follow and switch to delivery options other than UPS and Fedex the prediction might come true
  - twothamendment 9y ago
    The world is a big place, even the USA. So many of Amazon's dreams and current services apply only to cities of a decent size. It can't be worth it to them to have their own delivery to the middle of nowhere. Even UPS struggles with overnight in my area. I'm sure Amazon will succeed in their goals, but there will be some pie left for the others.
    - qaq 9y ago
      As you outlined yourself Amazon will be using it's delivery services in high density, high margin areas leaving low margin low density areas to USPS, UPS etc. This will def. hurt UPS and Fedex.
      - ghaff 9y ago
        Maybe. You’d have to explain to me though why there isn’t a major delivery service today that has a strategy to skim the delivery cream in dense urban areas. Not an expert in this market but I expect there are costs associated with urban delivery that offset the advantages of density to some degree.
      - gebeeson 9y ago
        TLDR: Losing volume from Amazon isn't so bad. As I worked support in a UPS hub in Jacksonville, FL, I can confirm that actually, losing some volume from Amazon will help. The facility I worked at was at volume capacity per hour over five years ago. Updating the belt system in the building is problematic due to space available and time lost during the shutdown. Year over year the volume has only grown as more people order more online. The capacity in that hub remains the same which means they have to run more sorts/shifts and the operations start to collide together and so on. A little less volume could be seen as a good thing. As long as revenue holds.
- yodon 9y ago
  To answer your question, the quote about the internet supposedly lowering FedEx’s market value in the 1980’s is total nonsense. The financial markets had zero awareness of the internet in the 1980’s (with good reason, as the Internet didn’t become commercially significant until Marc Andreesen wrote the first web browser called Mosaic in 1993 putting the internet in the hands of normal people for the first time). If we read the quote charitably and conclude they had a typo and meant to write the 1990’s it’s still nonsense as FedEx’s stock price was completely unaffected by the crash at the end of the internet boom in 2002, demonstrating the market saw no significance of the internet to FedEx’s market value, positive or negative. The market didn’t begin to think seriously about connecting the dots between FedEx and the Internet until well into the 2000’s, at which point it was clear online buying would be good for FedEx.
  - cat199 9y ago
    yep. I can recall 90's / early 2000's stuff about email being a concern for mail service before ecommerce was as big, but thats completely different than the 80's and ecommerce, neither of which were a thing.
- garethsprice 9y ago
  > Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They paid $100 for it at Walmart. As with many other markets, the middle is being hollowed out - there's a large low-end ($100 Walmart bikes) and a niche of high-end pro-sumers who have disposable income and time to spend on expensive hobbies (I believe a "decent" mountain bike starts at $1,000-2,000, going up to $xx,000). The old middle ground ($300-500 bikes bought by unknowledgeable consumers who need the help of local stores) is what is being gutted by the decline of the middle class' disposable incomes and the specialized knowledge high-end hobbyists can now attain thanks to the Internet. Service businesses can do well targeting the high end. The low end products are disposable.
  - dmschulman 9y ago
    This is incorrect in my experience. I live in a city with a high percentage of bike commuters and they all ride bikes that fall squarely in the middle of your price range (anywhere from $400-$1000). There is actually an entire segment of the cycling industry that has sprang up around catering to this demographic, urban commuters who want something functional and hip looking and are willing to pay the premium, but don't need a $1000 mountain bike for their trip to and from work. I have not taken a full survey of every bike commuter I see in my city, but I feel confident in assessing the cost of their ride falls under or just around $800 (assuming they bought brand new and not used, I think less people tend to buy new). The amount of these hip cyclists grossly outnumbers the amount of "prosumer" cyclists (spending $2,000 on a carbon fiber bike) I see on the weekends riding trails. I would imagine these numbers are inverted in the suburbs, where you wouldn't find as many bike commuters, but the suburbs are also lower density than a city and therefore fewer potential bike riders to compare with. EDIT: Also your point about middle class incomes and their effect on how much a consumer can afford to spend on a bike doesn't square with economics. I see your general concern regarding middle class wages not keeping pace with economic growth, but if a bike is essential to someone's lifestyle they will find a way to afford what they need. And on a related note, many city dwellers are starting to give up on the concept of owning a car, favoring their bike or public transit or ride shares as a means to get around. Do you know how many bikes you could afford if you sold your car and no longer had to maintain its upkeep/insurance?
- analog31 9y ago
  >>>> Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They paid $100 for it at Walmart. That's probably true to a certain extent, but so called "department store bikes" have been a constant baseline of the bike industry for decades. So I think that the ups and downs of bike shops are largely independent of that baseline. People still do buy slightly nicer bikes, and are still willing to get them serviced. At the very least, they buy those consumables. Most people need help figuring out which part will fit on their bike, and how to install it.
- UncleEntity 9y ago
  > Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They be pricy... A while back some girl hit me so we threw my mangled bike in her trunk and went up the street to a bike shop. Would've cost more to fix it (just in parts, who knows about labor) than I paid for the thing so we just went to their sister shop that sold used bikes and she replaced it out of something in inventory. I could fix it myself for probably 1/3 of what the shop was asking but most likely won't bother unless my current bike gets stolen or hit by a car.
  - icebraining 9y ago
    Yeah, that's the typical result nowadays when manufacturing is so cheap. I can see that changing somewhat here in Europe as more new products get an ecotax slapped on top, but it will take a while to surpass the cost of a knowledgeable worker in a developed country.
    - jdietrich 9y ago
      It's more that the price benchmark has been set so low by Bike Shaped Objects. A good back wheel will cost more than a bargain-basement department store bike. The good wheel will easily last for 10,000 miles if properly cared for. The department store bike will be good for nothing but scrap after a thousand miles. The value equation depends entirely on whether you use your bicycle as a mode of transport or a piece of leisure equipment. For people who potter about in a local park once in a blue moon, a Bike Shaped Object is perfectly satisfactory. Their bike is probably going to rust away in their garage before they actually wear anything out. These cheap bikes are built as disposable items for infrequent and undiscerning users. For a regular commuter, quality matters. It's worth paying $50 for a pair of Schwalbe Marathon Plus tires, because they're damned near impossible to puncture and they'll outlast four sets of off-brand tires. It's worth paying $60 to get your bike properly serviced, because a breakdown will make you late for work and preventative maintenance works out cheaper in the long run than neglect. It's worth paying $90 for a Brooks B17 saddle, because it'll survive until the heat death of the universe and it's as comfortable as an old pair of sneakers.
  - 9y ago
fiftyacorn 9y ago
I dont think this is new - a lot of bike shops are repair only now, with a few loyal customers. I also think that bikes are getting more technical - electric shifters, the tolerance limits on gears means that its increasingly hard for people to repair their own bikes. So bike repair makes sense, and they can probably charge At the higher end - lets say $1000+ bikes bike shops can still do a good trade as people new to the sport probably need a bike fit to ensure they are getting the best machine for them
- Finnucane 9y ago
  My current bike I did buy at a local shop partly because I wanted to be able to test-ride before I made the purchase. And I'm glad a did. I tried a few different models, and have been pretty pleased with the choice I made. But most of the subsequent maintenance has been done by shops that are primarily service shops, and not dealers. They sell bits and supplies, of course, but their bread & butter is repair work. My experience is that I get better service from them than from dealers that just want to get your bike out of the shop as quickly as possible.
tonyedgecombe 9y ago
I wonder how e-bikes are going to fit into all this, although I'm happy with mine the buying experience was awful.
- workthrowaway27 9y ago
  What do you mean by this?
  - UncleEntity 9y ago
    From what I've seen the E-bikes have their own 'dealer network' independent of regular pedal bike shops. There used to be one next door but they moved a while ago, think the rent was getting too high since they've been steadily improving the neighborhood.
    - tonyedgecombe 9y ago
      Quite a few of the shops in my area are stocking them but they all seem to be holding their nose when they talk about them.
    - lardo 9y ago
      Most of the large traditional manufacturers are into ebikes now and although a LBS might only have 0-2 in stock, they can all get you one within a week or so.
      - petre 9y ago
        They're rather expensive to stock. 2x to 4x the price of a regular bike.
  - ams6110 9y ago
    Where I live, there is an e-bike shop and the owner has the requisite opinions on "green living" and "sustainability" but knows FA about bikes.
sevensor 9y ago
I live in a college town with several bike shops, all of them still tied to the traditional retail model. The one I suspect has the worst prospects is the most upscale one. They have a big clean showroom full of expensive sporty bikes, but their mechanics are second-rate. You can tell because their shop is in the basement and you're not allowed to come down and watch them work on your bike. And the one time I made the mistake of going there for service they sniffed at my decent, well maintained commuting bike because the paint was dinged up and it was covered with road dust, charged me twice what the repair was worth, and didn't fix the problem. The shop I'm rooting for has a tiny showroom and a big repair shop right behind the counter. There's grease on everything, and I'm pretty sure they've been under-charging me for labor because they know I commute by bike. They already order and assemble bikes for people, and they also rent by the day. They, I suspect, will be just fine.
- criddell 9y ago
  One model that wasn't mentioned explicitly in the article but I think might work is let customers have their bikes purchased online be shipped to the shop for assembly. I ordered my last bicycle from BikesDirect and it was tricky to get it set up just right. A bike shop could probably do it in an hour. It took me five or six hours. Even if assembly doesn't directly make a lot of profit, it's a great time to sell accessories and service plans.
  - ams6110 9y ago
    > A bike shop could probably do it in an hour. It took me five or six hours. Yes but then you miss out on an almost "bonding" experience with the machine and feeling of intimately understanding it. That's why I do most of my own car repair, even though it takes me longer than a shop would take. Read Zen and the Art of Motorcycle Maintenance about the "Romantic" vs. "Classical" approach to such things.
    - criddell 9y ago
      > Yes but then you miss out on an almost "bonding" experience with the machine and feeling of intimately understanding it. That's true. Thirty years ago I had more time than money and working on my stuff was very satisfying. These days I would rather go to the movies with my wife, help my kids with their homework, walk my dog, or take a nap. I'm doing better financially, but my time is scarce. I've read Zen. I loved the motorcycle travelogue part and but was bored by his treatise on quality.
whistlerbrk 9y ago
I have spoken with many bike store owners and employees, they know they can't compete with the prices you can get for parts and accessories from online retailers. But very few have an alternate plan. The ones I see who are being smart about this reality are instead focusing on having absolutely excellent mechanics and experiences like shop rides to get groups out on amazing day trips / overnights. There is a huge value add in teaching people skills and thus converting them into more advanced cyclists who'll want better gear.
- china 9y ago
  This is spot on - the shops that will survive will be the ones that provide knowledge, service, and experiences. Group rides, classes, free espressos while your bike is being serviced, etc.
  - NicoJuicy 9y ago
    Well, actually, a cook and kitchen shop in a big city just closed. They did all that and still people just ordered from the web
- curun1r 9y ago
  One other thing that I wish more shops would offer is fit tests. The one I did was over an hour of adjustments to a stationary bike that was designed to be adjusted (i.e. the frame measurements could be changed) and them watching me ride it with a slow motion camera. At the end of it, I now have exact measurements that let me order a custom bike or know whether a stock bike will fit me if I order it online. It simplifies the online shopping process immensely because I know there are specific brands that simply don't work for my body type without extensive modifications once I get the bike. It's probably not applicable to people who are looking for a $100-$200 bike, but for people that are looking at $2k bikes, getting this kind of test done is well worth the $100 or so that it costs. Having a bike that isn't just adjusted properly but is the perfect size for your body makes such a big difference in how enjoyable it is to ride. It's funny to look back at the first few bikes I bought and the buying experience. I basically looked at features, reviews and aesthetics to arrive at the one I wanted and then had the shop adjust it for me. And while I could ride it, it was never anywhere close to the comfort I feel on a bike that I've selected based on my exact dimensions and riding posture. If people are going to buy their bikes online, shops should lean into that fact and try to provide services that facilitate the customers preferred buying experience. This kind of ~$100/hr service is both a money maker and a way to enhance the online shopping experience.
strictnein 9y ago
> "Dan Sotelo was the founder of Onza" Onza stuff was awesome. Was always insanely jealous of the bar ends and clipless pedals one of my friends had.
mc32 9y ago
Even the service model is not that encouraging. I knew someone whose dad owned a bike service shop in Japan; it wasn't a vibrant model. I got the impression they scraped by, but by and large it was a labor of love--nothing wrong with that, but it does not have ample opportunity, except maybe for a franchiser.
CWuestefeld 9y ago
This is interesting on its face, but also as an analogy. My employer is a B2B reseller of computer hardware and software, and this sounds very much like your industry. Cloud services are eating into hardware sales, and manufacturers (e.g., Adobe) are going direct, disintermediating us. There's no sense fighting back, but there's new opportunities for those helping with cloud services, and with managing software licensing and so forth.
CaptainDecisive 9y ago
I live in Edinburgh, and I've personally counted half a dozen of these little, one or two person IBS type shops open up round town in the last couple of years. They have a small retail space at the front, an open workshop at the back, and the mechanic stops working on a bike to have a chat with you when you come in to the shop. Edinburgh's pretty bike friendly, so given the number of these shops springing up, they must have a viable business model here.
- walshemj 9y ago
  Edinburgh is hilly and all those sets (cobbles) make those fat tired MTB's look a sensible choice
rhombocombus 9y ago
As a 17 year veteran of Independent bicycle dealers, this hits it right on the head. The most successful shop I ever worked at focused their inventory on parts and offered 24 hour turnaround provided the bike didn't require special ordered parts. Service is the only thing that can't be replaced by the internet.
- sizzzzlerz 9y ago
  And service is what distinguishes bike shops from each other. In reality, bikes are commodity items, things you can buy anywhere and are sensitive to price. The same for computers, appliances, and most electronics. Service, however, is unique to that store and people remember good service (and bad). When I get good service at any type of store, I feel good about the experience and am more than likely to spend my money with them again. And a key point, I am willing to pay more to get it.
- hodgesrm 9y ago
  Also, on things the average citizen can't/won't easily order online. Spokes are a trivial example but there are also lots of add-on components.
- liveoneggs 9y ago
  except when you can throw away your $150 bike and replace it for the cost of its repair ;)
drdeadringer 9y ago
A local bike shop closed business a few months ago. They had had a location on Downtown Main Street for years, but for some reason [I'm guessing rent] moved several blocks away from their old location -- and several blocks closer to where I live. I imagine that this negatively impacted their foot traffic, even though it was directly in line with my own walk-to-the-bus commute. I shopped at both of their locations several times, but not routinely or regularly. When the "inventory sale!" signs started going up, I admit that a part of me literally saw the writing on the wall but I didn't want to believe it. I believed it when I walked by and saw the location empty and deserted, a lonely 8x11 explaining what was up. I'm curious as to what happened, but suspect that I was part of the problem -- not shopping there more often, for product or maintenance service, even though I am just one person.
jandrese 9y ago
There's a bike shop that opened near me but I've had the impression that most of their income comes from the coffee shop in the front and the bikes are more of a passion of the owners. They're nice folks, but their bikes start at $800 and go up very quickly from there. I actually did give them a chance and tried out a couple of the bikes when I was looking to replace my tired out commuter bike but I just couldn't feel the $600 premium. The biggest surprise is that the shifters didn't even feel any better, it was the one area where I expected the better bike could really make a difference but they were no better at shifting quickly or under load than my old shifters.
- walshemj 9y ago
  That's about the sensible minimum for a decent long lasting bike I definitely noticed when I went from cheap MTB to one twice the price the stopping power was phenomenal I almost sent my self over the handlebars in a driving rain storm as I was used to the soggy breaks in the wet of my old bike.
cdelb 9y ago
This has been an ongoing debate in the mountain bike world for a number of years now. Direct to consumer brands have clearly been making a dent in the traditional retail model. Intense just announced a hybrid model, where shops stock demos and consumers receive their new bike directly from Intense. Seems like a win-win - shops don't have to stock slow moving inventory and consumers get lower prices year round. This artcle explains the pros/cons in detail: https://www.pinkbike.com/news/intense-announces-lower-retail-prices-and-hybrid-direct-to-customer-sales-model.html https://www.pinkbike.com/news/intense-announces-lower-retail...
- ghaff 9y ago
  Not about bikes specifically but I've been a bit surprised that formal showrooming hasn't become a bigger thing. My guess is that, if you're going to have storefronts, for a lot of things you might as well stock merchandise for impulse buyers or those who want to take something home right now.
joe_the_user 9y ago
Title should say independent bike dealer
intrasight 9y ago
I've recently become aware of Canyon Bikes as well as other direct-to-consumer manufacturers. In one video I watched, the buyer had a mobile bike shop come and setup their new bike. I think the mobile bike shop approach plays well with the direct-to-consumer model.
- icebraining 9y ago
  A whole mobile bike shop sounds expensive. More likely these companies will make deals with "freelance labor firms" to get someone there to assemble it. IKEA has already signaled as much by buying TaskRabbit, but my guess is that there's a good opportunity for an independent middleman to sell services for companies that need a broad geographical coverage but don't have enough sales to keep dedicated teams everywhere.
  - Zigurd 9y ago
    Ikea sells a city bike with belt drive and a mount system for racks and a trailer for $400. It is a better-documented assembly process that the you-get-what-a-bike-shop-gets experience of ordering the cheapest online bike, but still a bit challenging on the Ikea scale of difficulty. It has a 25 year warranty on the frame and a 10 year warranty on the belt drive.
dockd 9y ago
As bicycles prices start moving toward motorcycles and cars, I don't understand why the shops still feel like the margins can't/won't change. They say 20-30% profit is small, but compare that to buying a new car: 2-3% profit. And to keep the car comparison going: during the summer, bike shops routinely book two weeks out, which is almost unheard of with car service. I'm both surprised and not surprised to hear that clothing is not a big seller--I've never been a fan of getting clothing without trying it on. However, once I know how a brand fits, that's not as much of an issue. It is surprising to walk into a bike shop and want some shorts only to find they don't stock anything under $80--you really have to work hard to find $80 shorts at the mall. So maybe the problem is they need to do better at picking what their customers want. Unfortunately, I don't have good ideas at what they should sell in addition to labor. Need it now items are great (tires) but it's hard to make all of your money just on mechanics.
- hondo77 9y ago
  > It is surprising to walk into a bike shop and want some shorts only to find they don't stock anything under $80--you really have to work hard to find $80 shorts at the mall. So maybe the problem is they need to do better at picking what their customers want. Funny that you put it that way because I wouldn't buy any shorts under $100 (haven't found any at that price that will be comfy on a 100-mile ride). I suppose that's what bike shops are up against: customers whose wants and needs are all over the place, which is what suits big online retailers.
Rantenki 9y ago
I am baffled why the manufacturers aren't all offering direct B2B for the bike shops. There clearly isn't enough margin left for the average bike shop if they aren't moving the volume of bikes due to direct sales, but at the same time, all the supplies they need for servicing bikes are sold through some intermediary that's skimming a cut for the service of aggregating all the different manufacturers. https://www.ogc.ca/ https://www.ogc.ca/ and https://norco.com/ https://norco.com/ haven't substantially reduced their margins since I last worked in a bike shop 20 years ago. And aggregation is not a service that would be required anymore if the shops could just go direct to Shimano, SRAM, Fox, Maxxis and DT-swiss (etc). That aggregation can be performed by the bike shop itself via a B2B solution.
hodgesrm 9y ago
Great article! I had a similar notion a while back for ski shops. Here are a couple of additional ideas from that thought experiment. 1.) Deeper web presence. For example, why not sell coupons for services on the stuff people buy on the web? 2.) Subscriptions. Basically an add-on support fee for your bike. This makes sense for anyone who commutes, especially if you can make it trivially easy to collect. That leads to... 3.) Additional services. Combine bike parking in cities with on-going maintenance . This already exists in some cities.
ilamont 9y ago
I buy bikes from local specialty shops because they know how to put the bikes together and service them properly. Other customers like to use them to try accessories before purchase. The family-owned shop I use in the Boston area (https://farinas.com https://farinas.com) has a pretty solid, all-season business model: Bikes on the second floor, lawn mowers and snow blowers on the first floor, and the repair shop on the first floor. I see they also sell generators and chainsaws - items that may not be easy to ship or service online.
hosh 9y ago
Similar to that recent article posted here about how "experience retailers" are inverting the relationship of the vendor. (Where an experience retailer is actually a marketing arm of the manufacturer). But yes: I would love to able to drop by and get my bike fixed by someone competent.
jessaustin 9y ago
This is generally correct, and certainly aligns with larger trends in commercial real estate. On-premise retail of easily-shipped items, with no value-added ties to online retail, is on its last legs. The strip mall of the future has coffee shops but no clothing stores. Bike shops are fortunate that they have this sort of transition to attempt. Lots of menswear shops have an in-house tailor, but it's not as though they can refocus the business around that. Bike shops aren't the only party trying to hold back the sea, however. Some specialty equipment distributors are so proud of the "network of bike shops" (often with various goofy "badges" and "qualifications") they had to build 20 years ago that they won't ship outside that. As if it's to their advantage to erect barriers to potential customers! Someone should send e.g. Surly a link to TFA. The author has a better idea of how they ought to run their business than they seem to have.
jpao79 9y ago
I'm surprised the bike manufacturers have not stepped up to create their own branded shops as a way to provide/control a more direct 'experience'. Imagine separate 'Specialized' stores, 'Cannondale' stores or "Gary Fisher' stores all with carefully crafted service and support. It's similar to how the local generic electronics store (including CircuitCity and now BestBuy) got squeezed from the bottom by Target/Walmart on the low end and the high end by the Sony/Apple/Bose Store at your local luxury Westfield or Simon's mall. Even woman's fashion is trending way - Target/Walmart/Costco for the majority and direct 'experience' stores like Coach/Burberry/Tiffany with Macy's and Kohl's getting squeezed out.
- jdietrich 9y ago
  Specialized and Giant already have single-brand stores in many markets. Giant have a handful of stores dedicated to Liv, their women's sub-brand.
- analog31 9y ago
  There's a chain of Trek stores. And Trek owns Gary Fisher.
Zigurd 9y ago
Tire Rack has done this to the tire retail business. You can get the tires you want from Tire Rack, and get referred to a shop that will mount and balance them. That's what should happen to bike sales.
dredmorbius 9y ago
This brings to mind Moen's Law of Bicycles: "Good customers make for good products" http://linuxmafia.com/~rick/lexicon.html#moenslaw-bicycles http://linuxmafia.com/~rick/lexicon.html#moenslaw-bicycles
zbentley 9y ago
Hmmm. A lot of this rings true, but a couple of things seem to indicate to me that brick-and-mortar bike shops may continue to exist over time: Bikes are an interesting confluence of both very personal (i.e. the style/"feel" of someone's new bike is important, or the "fit" if they're buying with a bit more experience), very expensive (relatively), and very physically large (and hard to assemble). That means that people will want to try out bikes before they buy, since the investment is substantial. Bikes need to be assembled to try out. If a brick-and-mortar store went online-only, it might be a substantial outlay for them to ship bikes to people to try out, and a hassle for folks to assemble them before trying them (unless they were shipped assembled, which is a much larger container). It seems like that might be cost/difficulty preventative for moving a lot of merchandise compared with the benefits of a showroom. Sure, bike stores might have to become more showroom-only, but I don't think they're going away.

112 points by darrennix 9y ago

Spent years working in a bike shop, so this was a really interesting read for me. He may be right, but I can't help be think that most people just don't care enough about their bikes to have enough customers to sustain a good Service Shop. Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They paid $100 for it at Walmart. He said something in there that caught my eye: "Think back to the '80s when market experts were predicting that internet sales were going to doom UPS and FedEx ... Huh?! Crazy as that sounds, that's what experts said, which made absolutely no sense to me." Is that true?

qaq 9y ago
They might be proven right with Amazon shifting toward using their own delivery services if top N retailers follow and switch to delivery options other than UPS and Fedex the prediction might come true
- twothamendment 9y ago
  The world is a big place, even the USA. So many of Amazon's dreams and current services apply only to cities of a decent size. It can't be worth it to them to have their own delivery to the middle of nowhere. Even UPS struggles with overnight in my area. I'm sure Amazon will succeed in their goals, but there will be some pie left for the others.
  - qaq 9y ago
    As you outlined yourself Amazon will be using it's delivery services in high density, high margin areas leaving low margin low density areas to USPS, UPS etc. This will def. hurt UPS and Fedex.
    - ghaff 9y ago
      Maybe. You’d have to explain to me though why there isn’t a major delivery service today that has a strategy to skim the delivery cream in dense urban areas. Not an expert in this market but I expect there are costs associated with urban delivery that offset the advantages of density to some degree.
    - gebeeson 9y ago
      TLDR: Losing volume from Amazon isn't so bad. As I worked support in a UPS hub in Jacksonville, FL, I can confirm that actually, losing some volume from Amazon will help. The facility I worked at was at volume capacity per hour over five years ago. Updating the belt system in the building is problematic due to space available and time lost during the shutdown. Year over year the volume has only grown as more people order more online. The capacity in that hub remains the same which means they have to run more sorts/shifts and the operations start to collide together and so on. A little less volume could be seen as a good thing. As long as revenue holds.
yodon 9y ago
To answer your question, the quote about the internet supposedly lowering FedEx’s market value in the 1980’s is total nonsense. The financial markets had zero awareness of the internet in the 1980’s (with good reason, as the Internet didn’t become commercially significant until Marc Andreesen wrote the first web browser called Mosaic in 1993 putting the internet in the hands of normal people for the first time). If we read the quote charitably and conclude they had a typo and meant to write the 1990’s it’s still nonsense as FedEx’s stock price was completely unaffected by the crash at the end of the internet boom in 2002, demonstrating the market saw no significance of the internet to FedEx’s market value, positive or negative. The market didn’t begin to think seriously about connecting the dots between FedEx and the Internet until well into the 2000’s, at which point it was clear online buying would be good for FedEx.
- cat199 9y ago
  yep. I can recall 90's / early 2000's stuff about email being a concern for mail service before ecommerce was as big, but thats completely different than the 80's and ecommerce, neither of which were a thing.
garethsprice 9y ago
> Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They paid $100 for it at Walmart. As with many other markets, the middle is being hollowed out - there's a large low-end ($100 Walmart bikes) and a niche of high-end pro-sumers who have disposable income and time to spend on expensive hobbies (I believe a "decent" mountain bike starts at $1,000-2,000, going up to $xx,000). The old middle ground ($300-500 bikes bought by unknowledgeable consumers who need the help of local stores) is what is being gutted by the decline of the middle class' disposable incomes and the specialized knowledge high-end hobbyists can now attain thanks to the Internet. Service businesses can do well targeting the high end. The low end products are disposable.
- dmschulman 9y ago
  This is incorrect in my experience. I live in a city with a high percentage of bike commuters and they all ride bikes that fall squarely in the middle of your price range (anywhere from $400-$1000). There is actually an entire segment of the cycling industry that has sprang up around catering to this demographic, urban commuters who want something functional and hip looking and are willing to pay the premium, but don't need a $1000 mountain bike for their trip to and from work. I have not taken a full survey of every bike commuter I see in my city, but I feel confident in assessing the cost of their ride falls under or just around $800 (assuming they bought brand new and not used, I think less people tend to buy new). The amount of these hip cyclists grossly outnumbers the amount of "prosumer" cyclists (spending $2,000 on a carbon fiber bike) I see on the weekends riding trails. I would imagine these numbers are inverted in the suburbs, where you wouldn't find as many bike commuters, but the suburbs are also lower density than a city and therefore fewer potential bike riders to compare with. EDIT: Also your point about middle class incomes and their effect on how much a consumer can afford to spend on a bike doesn't square with economics. I see your general concern regarding middle class wages not keeping pace with economic growth, but if a bike is essential to someone's lifestyle they will find a way to afford what they need. And on a related note, many city dwellers are starting to give up on the concept of owning a car, favoring their bike or public transit or ride shares as a means to get around. Do you know how many bikes you could afford if you sold your car and no longer had to maintain its upkeep/insurance?
analog31 9y ago
>>>> Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They paid $100 for it at Walmart. That's probably true to a certain extent, but so called "department store bikes" have been a constant baseline of the bike industry for decades. So I think that the ups and downs of bike shops are largely independent of that baseline. People still do buy slightly nicer bikes, and are still willing to get them serviced. At the very least, they buy those consumables. Most people need help figuring out which part will fit on their bike, and how to install it.
UncleEntity 9y ago
> Most people have a bike, but would never bother taking it somewhere fancy like this to get it fixed or serviced. They be pricy... A while back some girl hit me so we threw my mangled bike in her trunk and went up the street to a bike shop. Would've cost more to fix it (just in parts, who knows about labor) than I paid for the thing so we just went to their sister shop that sold used bikes and she replaced it out of something in inventory. I could fix it myself for probably 1/3 of what the shop was asking but most likely won't bother unless my current bike gets stolen or hit by a car.
- icebraining 9y ago
  Yeah, that's the typical result nowadays when manufacturing is so cheap. I can see that changing somewhat here in Europe as more new products get an ecotax slapped on top, but it will take a while to surpass the cost of a knowledgeable worker in a developed country.
  - jdietrich 9y ago
    It's more that the price benchmark has been set so low by Bike Shaped Objects. A good back wheel will cost more than a bargain-basement department store bike. The good wheel will easily last for 10,000 miles if properly cared for. The department store bike will be good for nothing but scrap after a thousand miles. The value equation depends entirely on whether you use your bicycle as a mode of transport or a piece of leisure equipment. For people who potter about in a local park once in a blue moon, a Bike Shaped Object is perfectly satisfactory. Their bike is probably going to rust away in their garage before they actually wear anything out. These cheap bikes are built as disposable items for infrequent and undiscerning users. For a regular commuter, quality matters. It's worth paying $50 for a pair of Schwalbe Marathon Plus tires, because they're damned near impossible to puncture and they'll outlast four sets of off-brand tires. It's worth paying $60 to get your bike properly serviced, because a breakdown will make you late for work and preventative maintenance works out cheaper in the long run than neglect. It's worth paying $90 for a Brooks B17 saddle, because it'll survive until the heat death of the universe and it's as comfortable as an old pair of sneakers.
- 9y ago

fiftyacorn 9y ago

I dont think this is new - a lot of bike shops are repair only now, with a few loyal customers. I also think that bikes are getting more technical - electric shifters, the tolerance limits on gears means that its increasingly hard for people to repair their own bikes. So bike repair makes sense, and they can probably charge At the higher end - lets say $1000+ bikes bike shops can still do a good trade as people new to the sport probably need a bike fit to ensure they are getting the best machine for them

Finnucane 9y ago
My current bike I did buy at a local shop partly because I wanted to be able to test-ride before I made the purchase. And I'm glad a did. I tried a few different models, and have been pretty pleased with the choice I made. But most of the subsequent maintenance has been done by shops that are primarily service shops, and not dealers. They sell bits and supplies, of course, but their bread & butter is repair work. My experience is that I get better service from them than from dealers that just want to get your bike out of the shop as quickly as possible.

tonyedgecombe 9y ago

I wonder how e-bikes are going to fit into all this, although I'm happy with mine the buying experience was awful.

workthrowaway27 9y ago
What do you mean by this?
- UncleEntity 9y ago
  From what I've seen the E-bikes have their own 'dealer network' independent of regular pedal bike shops. There used to be one next door but they moved a while ago, think the rent was getting too high since they've been steadily improving the neighborhood.
  - tonyedgecombe 9y ago
    Quite a few of the shops in my area are stocking them but they all seem to be holding their nose when they talk about them.
  - lardo 9y ago
    Most of the large traditional manufacturers are into ebikes now and although a LBS might only have 0-2 in stock, they can all get you one within a week or so.
    - petre 9y ago
      They're rather expensive to stock. 2x to 4x the price of a regular bike.
- ams6110 9y ago
  Where I live, there is an e-bike shop and the owner has the requisite opinions on "green living" and "sustainability" but knows FA about bikes.

sevensor 9y ago

I live in a college town with several bike shops, all of them still tied to the traditional retail model. The one I suspect has the worst prospects is the most upscale one. They have a big clean showroom full of expensive sporty bikes, but their mechanics are second-rate. You can tell because their shop is in the basement and you're not allowed to come down and watch them work on your bike. And the one time I made the mistake of going there for service they sniffed at my decent, well maintained commuting bike because the paint was dinged up and it was covered with road dust, charged me twice what the repair was worth, and didn't fix the problem. The shop I'm rooting for has a tiny showroom and a big repair shop right behind the counter. There's grease on everything, and I'm pretty sure they've been under-charging me for labor because they know I commute by bike. They already order and assemble bikes for people, and they also rent by the day. They, I suspect, will be just fine.

criddell 9y ago
One model that wasn't mentioned explicitly in the article but I think might work is let customers have their bikes purchased online be shipped to the shop for assembly. I ordered my last bicycle from BikesDirect and it was tricky to get it set up just right. A bike shop could probably do it in an hour. It took me five or six hours. Even if assembly doesn't directly make a lot of profit, it's a great time to sell accessories and service plans.
- ams6110 9y ago
  > A bike shop could probably do it in an hour. It took me five or six hours. Yes but then you miss out on an almost "bonding" experience with the machine and feeling of intimately understanding it. That's why I do most of my own car repair, even though it takes me longer than a shop would take. Read Zen and the Art of Motorcycle Maintenance about the "Romantic" vs. "Classical" approach to such things.
  - criddell 9y ago
    > Yes but then you miss out on an almost "bonding" experience with the machine and feeling of intimately understanding it. That's true. Thirty years ago I had more time than money and working on my stuff was very satisfying. These days I would rather go to the movies with my wife, help my kids with their homework, walk my dog, or take a nap. I'm doing better financially, but my time is scarce. I've read Zen. I loved the motorcycle travelogue part and but was bored by his treatise on quality.

whistlerbrk 9y ago

I have spoken with many bike store owners and employees, they know they can't compete with the prices you can get for parts and accessories from online retailers. But very few have an alternate plan. The ones I see who are being smart about this reality are instead focusing on having absolutely excellent mechanics and experiences like shop rides to get groups out on amazing day trips / overnights. There is a huge value add in teaching people skills and thus converting them into more advanced cyclists who'll want better gear.

china 9y ago
This is spot on - the shops that will survive will be the ones that provide knowledge, service, and experiences. Group rides, classes, free espressos while your bike is being serviced, etc.
- NicoJuicy 9y ago
  Well, actually, a cook and kitchen shop in a big city just closed. They did all that and still people just ordered from the web
curun1r 9y ago
One other thing that I wish more shops would offer is fit tests. The one I did was over an hour of adjustments to a stationary bike that was designed to be adjusted (i.e. the frame measurements could be changed) and them watching me ride it with a slow motion camera. At the end of it, I now have exact measurements that let me order a custom bike or know whether a stock bike will fit me if I order it online. It simplifies the online shopping process immensely because I know there are specific brands that simply don't work for my body type without extensive modifications once I get the bike. It's probably not applicable to people who are looking for a $100-$200 bike, but for people that are looking at $2k bikes, getting this kind of test done is well worth the $100 or so that it costs. Having a bike that isn't just adjusted properly but is the perfect size for your body makes such a big difference in how enjoyable it is to ride. It's funny to look back at the first few bikes I bought and the buying experience. I basically looked at features, reviews and aesthetics to arrive at the one I wanted and then had the shop adjust it for me. And while I could ride it, it was never anywhere close to the comfort I feel on a bike that I've selected based on my exact dimensions and riding posture. If people are going to buy their bikes online, shops should lean into that fact and try to provide services that facilitate the customers preferred buying experience. This kind of ~$100/hr service is both a money maker and a way to enhance the online shopping experience.

strictnein 9y ago

> "Dan Sotelo was the founder of Onza" Onza stuff was awesome. Was always insanely jealous of the bar ends and clipless pedals one of my friends had.

mc32 9y ago

Even the service model is not that encouraging. I knew someone whose dad owned a bike service shop in Japan; it wasn't a vibrant model. I got the impression they scraped by, but by and large it was a labor of love--nothing wrong with that, but it does not have ample opportunity, except maybe for a franchiser.

CWuestefeld 9y ago

This is interesting on its face, but also as an analogy. My employer is a B2B reseller of computer hardware and software, and this sounds very much like your industry. Cloud services are eating into hardware sales, and manufacturers (e.g., Adobe) are going direct, disintermediating us. There's no sense fighting back, but there's new opportunities for those helping with cloud services, and with managing software licensing and so forth.

CaptainDecisive 9y ago

I live in Edinburgh, and I've personally counted half a dozen of these little, one or two person IBS type shops open up round town in the last couple of years. They have a small retail space at the front, an open workshop at the back, and the mechanic stops working on a bike to have a chat with you when you come in to the shop. Edinburgh's pretty bike friendly, so given the number of these shops springing up, they must have a viable business model here.

walshemj 9y ago
Edinburgh is hilly and all those sets (cobbles) make those fat tired MTB's look a sensible choice

rhombocombus 9y ago

As a 17 year veteran of Independent bicycle dealers, this hits it right on the head. The most successful shop I ever worked at focused their inventory on parts and offered 24 hour turnaround provided the bike didn't require special ordered parts. Service is the only thing that can't be replaced by the internet.

sizzzzlerz 9y ago
And service is what distinguishes bike shops from each other. In reality, bikes are commodity items, things you can buy anywhere and are sensitive to price. The same for computers, appliances, and most electronics. Service, however, is unique to that store and people remember good service (and bad). When I get good service at any type of store, I feel good about the experience and am more than likely to spend my money with them again. And a key point, I am willing to pay more to get it.
hodgesrm 9y ago
Also, on things the average citizen can't/won't easily order online. Spokes are a trivial example but there are also lots of add-on components.
liveoneggs 9y ago
except when you can throw away your $150 bike and replace it for the cost of its repair ;)

drdeadringer 9y ago

A local bike shop closed business a few months ago. They had had a location on Downtown Main Street for years, but for some reason [I'm guessing rent] moved several blocks away from their old location -- and several blocks closer to where I live. I imagine that this negatively impacted their foot traffic, even though it was directly in line with my own walk-to-the-bus commute. I shopped at both of their locations several times, but not routinely or regularly. When the "inventory sale!" signs started going up, I admit that a part of me literally saw the writing on the wall but I didn't want to believe it. I believed it when I walked by and saw the location empty and deserted, a lonely 8x11 explaining what was up. I'm curious as to what happened, but suspect that I was part of the problem -- not shopping there more often, for product or maintenance service, even though I am just one person.

jandrese 9y ago

There's a bike shop that opened near me but I've had the impression that most of their income comes from the coffee shop in the front and the bikes are more of a passion of the owners. They're nice folks, but their bikes start at $800 and go up very quickly from there. I actually did give them a chance and tried out a couple of the bikes when I was looking to replace my tired out commuter bike but I just couldn't feel the $600 premium. The biggest surprise is that the shifters didn't even feel any better, it was the one area where I expected the better bike could really make a difference but they were no better at shifting quickly or under load than my old shifters.

walshemj 9y ago
That's about the sensible minimum for a decent long lasting bike I definitely noticed when I went from cheap MTB to one twice the price the stopping power was phenomenal I almost sent my self over the handlebars in a driving rain storm as I was used to the soggy breaks in the wet of my old bike.

cdelb 9y ago

This has been an ongoing debate in the mountain bike world for a number of years now. Direct to consumer brands have clearly been making a dent in the traditional retail model. Intense just announced a hybrid model, where shops stock demos and consumers receive their new bike directly from Intense. Seems like a win-win - shops don't have to stock slow moving inventory and consumers get lower prices year round. This artcle explains the pros/cons in detail: https://www.pinkbike.com/news/intense-announces-lower-retail-prices-and-hybrid-direct-to-customer-sales-model.html https://www.pinkbike.com/news/intense-announces-lower-retail...

ghaff 9y ago
Not about bikes specifically but I've been a bit surprised that formal showrooming hasn't become a bigger thing. My guess is that, if you're going to have storefronts, for a lot of things you might as well stock merchandise for impulse buyers or those who want to take something home right now.

joe_the_user 9y ago

Title should say independent bike dealer

intrasight 9y ago

I've recently become aware of Canyon Bikes as well as other direct-to-consumer manufacturers. In one video I watched, the buyer had a mobile bike shop come and setup their new bike. I think the mobile bike shop approach plays well with the direct-to-consumer model.

icebraining 9y ago
A whole mobile bike shop sounds expensive. More likely these companies will make deals with "freelance labor firms" to get someone there to assemble it. IKEA has already signaled as much by buying TaskRabbit, but my guess is that there's a good opportunity for an independent middleman to sell services for companies that need a broad geographical coverage but don't have enough sales to keep dedicated teams everywhere.
- Zigurd 9y ago
  Ikea sells a city bike with belt drive and a mount system for racks and a trailer for $400. It is a better-documented assembly process that the you-get-what-a-bike-shop-gets experience of ordering the cheapest online bike, but still a bit challenging on the Ikea scale of difficulty. It has a 25 year warranty on the frame and a 10 year warranty on the belt drive.

dockd 9y ago

As bicycles prices start moving toward motorcycles and cars, I don't understand why the shops still feel like the margins can't/won't change. They say 20-30% profit is small, but compare that to buying a new car: 2-3% profit. And to keep the car comparison going: during the summer, bike shops routinely book two weeks out, which is almost unheard of with car service. I'm both surprised and not surprised to hear that clothing is not a big seller--I've never been a fan of getting clothing without trying it on. However, once I know how a brand fits, that's not as much of an issue. It is surprising to walk into a bike shop and want some shorts only to find they don't stock anything under $80--you really have to work hard to find $80 shorts at the mall. So maybe the problem is they need to do better at picking what their customers want. Unfortunately, I don't have good ideas at what they should sell in addition to labor. Need it now items are great (tires) but it's hard to make all of your money just on mechanics.

hondo77 9y ago
> It is surprising to walk into a bike shop and want some shorts only to find they don't stock anything under $80--you really have to work hard to find $80 shorts at the mall. So maybe the problem is they need to do better at picking what their customers want. Funny that you put it that way because I wouldn't buy any shorts under $100 (haven't found any at that price that will be comfy on a 100-mile ride). I suppose that's what bike shops are up against: customers whose wants and needs are all over the place, which is what suits big online retailers.

Rantenki 9y ago

I am baffled why the manufacturers aren't all offering direct B2B for the bike shops. There clearly isn't enough margin left for the average bike shop if they aren't moving the volume of bikes due to direct sales, but at the same time, all the supplies they need for servicing bikes are sold through some intermediary that's skimming a cut for the service of aggregating all the different manufacturers. https://www.ogc.ca/ https://www.ogc.ca/ and https://norco.com/ https://norco.com/ haven't substantially reduced their margins since I last worked in a bike shop 20 years ago. And aggregation is not a service that would be required anymore if the shops could just go direct to Shimano, SRAM, Fox, Maxxis and DT-swiss (etc). That aggregation can be performed by the bike shop itself via a B2B solution.

hodgesrm 9y ago

Great article! I had a similar notion a while back for ski shops. Here are a couple of additional ideas from that thought experiment. 1.) Deeper web presence. For example, why not sell coupons for services on the stuff people buy on the web? 2.) Subscriptions. Basically an add-on support fee for your bike. This makes sense for anyone who commutes, especially if you can make it trivially easy to collect. That leads to... 3.) Additional services. Combine bike parking in cities with on-going maintenance . This already exists in some cities.

ilamont 9y ago

I buy bikes from local specialty shops because they know how to put the bikes together and service them properly. Other customers like to use them to try accessories before purchase. The family-owned shop I use in the Boston area (https://farinas.com https://farinas.com) has a pretty solid, all-season business model: Bikes on the second floor, lawn mowers and snow blowers on the first floor, and the repair shop on the first floor. I see they also sell generators and chainsaws - items that may not be easy to ship or service online.

hosh 9y ago

Similar to that recent article posted here about how "experience retailers" are inverting the relationship of the vendor. (Where an experience retailer is actually a marketing arm of the manufacturer). But yes: I would love to able to drop by and get my bike fixed by someone competent.

jessaustin 9y ago

This is generally correct, and certainly aligns with larger trends in commercial real estate. On-premise retail of easily-shipped items, with no value-added ties to online retail, is on its last legs. The strip mall of the future has coffee shops but no clothing stores. Bike shops are fortunate that they have this sort of transition to attempt. Lots of menswear shops have an in-house tailor, but it's not as though they can refocus the business around that. Bike shops aren't the only party trying to hold back the sea, however. Some specialty equipment distributors are so proud of the "network of bike shops" (often with various goofy "badges" and "qualifications") they had to build 20 years ago that they won't ship outside that. As if it's to their advantage to erect barriers to potential customers! Someone should send e.g. Surly a link to TFA. The author has a better idea of how they ought to run their business than they seem to have.

jpao79 9y ago

I'm surprised the bike manufacturers have not stepped up to create their own branded shops as a way to provide/control a more direct 'experience'. Imagine separate 'Specialized' stores, 'Cannondale' stores or "Gary Fisher' stores all with carefully crafted service and support. It's similar to how the local generic electronics store (including CircuitCity and now BestBuy) got squeezed from the bottom by Target/Walmart on the low end and the high end by the Sony/Apple/Bose Store at your local luxury Westfield or Simon's mall. Even woman's fashion is trending way - Target/Walmart/Costco for the majority and direct 'experience' stores like Coach/Burberry/Tiffany with Macy's and Kohl's getting squeezed out.

jdietrich 9y ago
Specialized and Giant already have single-brand stores in many markets. Giant have a handful of stores dedicated to Liv, their women's sub-brand.
analog31 9y ago
There's a chain of Trek stores. And Trek owns Gary Fisher.

Zigurd 9y ago

Tire Rack has done this to the tire retail business. You can get the tires you want from Tire Rack, and get referred to a shop that will mount and balance them. That's what should happen to bike sales.

dredmorbius 9y ago

This brings to mind Moen's Law of Bicycles: "Good customers make for good products" http://linuxmafia.com/~rick/lexicon.html#moenslaw-bicycles http://linuxmafia.com/~rick/lexicon.html#moenslaw-bicycles

zbentley 9y ago

Hmmm. A lot of this rings true, but a couple of things seem to indicate to me that brick-and-mortar bike shops may continue to exist over time: Bikes are an interesting confluence of both very personal (i.e. the style/"feel" of someone's new bike is important, or the "fit" if they're buying with a bit more experience), very expensive (relatively), and very physically large (and hard to assemble). That means that people will want to try out bikes before they buy, since the investment is substantial. Bikes need to be assembled to try out. If a brick-and-mortar store went online-only, it might be a substantial outlay for them to ship bikes to people to try out, and a hassle for folks to assemble them before trying them (unless they were shipped assembled, which is a much larger container). It seems like that might be cost/difficulty preventative for moving a lot of merchandise compared with the benefits of a showroom. Sure, bike stores might have to become more showroom-only, but I don't think they're going away.