With the internet, nearly everything has become available online to purchase and ship directly to your home bypassing your local brick and mortar business. Direct online bike sales have existed in the past but not from the large bike manufacturers. You could buy lesser known names and bikes direct from Asia without having to visit your local bike shop. Now, two of the industry giants, Trek and Giant, will offer online bike sales. As with everything else these days going online, are direct online bike sales a good thing or does it rob of the customer’s experience and benefits of buying from a local shop not to mention the return not going to the local business. Surely buying a bike isn’t as standard as choosing the color and model that you want as with a coffeemaker and having it show up on your doorstep from Amazon. Or is it?
What Are Direct Bike Sales?
First, what are direct online bike sales? They are when the manufacturer offers their product on their website, not via a third party retailer (think Wiggle, Competitive Cyclist, Performance Bike, Etc.), for purchase. They are dealing directly with the customer instead of only having their bikes available to be purchased in-store at a local bike shop. To keep the local bike shop in the loop however, both Giant and Trek will ship their bikes to a local Trek or Giant dealer of your choice where they then assemble the bike. You then either pick the bike up at the shop or some Trek shops may even deliver the bike to your doorstep.
Why It’s Changing
There have been a few companies in the past offering online bike sales such as bikesdirect.com, competitivecyclist.com, canyon.com who was one of the few early bike manufactures to offer their bikes online, and bullsbikes.com who is a new player to the North American market. Because of companies like these along with the endless amount of bike related accessories that you can buy online for cheaper than what you can buy in-store, manufacturers who only offer in-store purchases were starting to loose market share along with the individual retailers who sell their products. As a market evolves, particularly with the internet, it becomes more efficient and thus margins decrease as competition increases. For the large manufacturers to stay ahead of the small guy and keep their market share, they adopt the strategies of the smaller incumbents, generally with their own twists, to try and stay ahead.
The Goal of the Larger Manufacturers
The approach of the large manufacturers is to try and capture the sales they are otherwise loosing to other online retailers. They are doing this by not only offering their bikes but also cycling accessories online. Because the independent retailers are such a large part of the manufacturer’s revenue (they’re the ones who actually sell the bikes), they want to give them a share in what is sold as they are technically taking the purchase from the local bike shop. Giant will give 100% of the normal margin to the shop if they carry that product and 80% if they don’t while Trek will give a service commission to the local shop.
Better or Worse
It will depend upon the size of shop and the purchasing power of the local population but in general it will first be of benefit to the consumer, the local shop, and the manufacturer. This is because the customer base who go into a local shop will continue to do so because they are unaware that they can buy the same products online. The customer who is only looking to buy online can now be captured by Trek, Giant, and presumably others in the near future. The general trend, as with online retail, is that more and more purchases will be funneled online and less through the shops. This will result in less of an inventory to be carried and thus less of a profit from the sale of those items as well as, at least with Giant, the amount the manufacturer will give to the shop. It is a way for the large manufacturers to keep their market share at the expense of local shops.
Should You Buy Online?
Part of the reason to buy from a local shop is the added value you get with a purchase, whether bike or accessory. The knowledgeable staff can help answer your questions and help you find what you are looking for. You may be paying more than you would online but the added value, not to mention the continued relationship you build with your bike needing occasional maintenance, is well worth it. The big deciding factor here though is “do you need the added value?” You may already know what you want or may have purchased it in the past so you only need a replacement. This can be with an accessory or bike. In this case, taking the “support a local business” aspect out of it, it would be more beneficial to you to buy online.
What the Future of Bike Shops and Buying Bikes May Look Like
With more and more bikes and accessory sales going online, the overall number of purchases in a local shop is going to decrease. This means that shops aren’t going to have to carry nearly as much inventory. This means shops will be smaller with the staff that is there being more on the mechanic side with new bike builds as well as service as fortunately you can’t get your bike serviced online, yet anyway. With the smaller shops, increased competition, and smaller margins to be had by anyone on the supply side, prices will continue to drop for the consumer and more purchases will be made online.
Online Bike Sales – The Takeaway
The shift of the large manufacturers is a key indicator of the cycling industry and that change is underway, not that it hasn’t been in recent years, just not this drastic. Industries are becoming tighter and tighter with consumer demand often decreasing, at least of late, and competition increasing. Whether this is the exact right solution, you never really want to hurt the local small guy, it is at least a change that the industry is beginning to make to try and stay ahead in the game. Those who try and stay set in the way they do business often are left in the past while the smaller, new incumbents take over the market. There are definitely a lot of mixed responses in this area from varying perspectives whether consumer, local shop owner, or industry giant. We want to hear from you and your thoughts on if the large manufactures should be offering online bike sales and if you think you will utilize it or if you will stay with your tried and true local bike shop. Let us know in the comments below.
