Trek is going viral…Smoke and mirrors yea! I said it. Ironic the big three of the bike world just like the car companies couldn’t care less about the consumers; bottom line is what matters the most to them.
Having been in the MTB industry practically since its inception, I’ve seen the consumers, bike shops and innovators such as John Parker (Yeti) Doug Bradburry (Manitou) John Grafton get mowed over. One of our 3 time Tour De France champion and great ambassadors of our sport Greg LeMond wasn’t sparred from the sport while Lance Armstrong was taking Trek to the mountain top.
Trek, Specialized, and Cannondale will have you believe that part of the profits they’re making off the consumers is going to R&D… bullish they’ve all learned from Nike. Go big on advertising and paying the top athletes and race teams in Europe millions of dollars and let the consumer pick up the tab. It takes anywhere between 11 million dollars to 20 million dollars to support a pro team that is not counting what they pay other teams to ride their equipment.
This online program doesn’t benefit the consumer while taking the bite out of the bike shops bottom line. The bike shop will build the customer’s bike for them. As a result, the shop will receive a commission–roughly 80 percent of their normal margin on sales of online sales. It also forces the bike shop to deliver the bike to the consumer at their own expanse. If the shop doesn’t offer delivery, it means that the customer must come into the store to pick up the bike. Having to pick up the bike defeats the purpose of online purchase. It's a bit better for the folks who live near their bike shop but what about the customers who live in a rural area and have to travel 20 to 30 miles to get to the nearest bike shop.
Bike shops are struggling as is due to the advent of the internet. They can’t compete against European shops that are online and can sell the same item available in your local shop for a third of the price. Why? Because unlike US bike shops European bike shops don’t have to go through distributors therefore the savings gets passed on to the consumers and bypass the local bike shops.
This is only a trial run not to alienate the bike shops and the risk of losing dealers. But if it all works it won’t be too long before your local bike shop turns into your local garage and all it will be good for is a fix it shop.
There are already online companies that are selling top quality bikes at a substantial savings sometimes a two thousand dollars savings on Titanium bikes. They’re bikes have been reviewed by the top publications and can stand wheel to wheel with the big three. Why? Because some of those bikes are made in the same factories as the top dogs.
Smoke and mirrors is the moral of the story. The sales strategy for Trek here makes sense for Trek. Consumers don’t benefit and the bike shops surely won’t. I don’t think Trek’s new online bike sales strategy makes any sense at all. We’ve become a society of instant gratification and simplicity and saving money this program serves neither.