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Specialized Founder Mike Sinyard Blasts Amazon’s Price Check App

specialized attacks amazon price check app and warns bike shop retailers against it
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specialized attacks amazon price check app and warns bike shop retailers against it

In a letter to Specialized dealers on Tuesday, company founder Mike Sinyard warned independent bicycle retailers to be wary of Amazon.com’s new Price Check app.

The complete letter is copied here after the break. Bicycle Retailer & Industry News (BRAIN) has posted two excellent articles (part one and part two) of why it matters and how and why it affects both dealers that sell through Amazon and those that don’t.

Plenty of shops supplement their income selling parts on eBay and Amazon, but, as BRAIN suggests, it’s the ones that are selling online without the authorization of the brands that typically slash the prices to a point where they’re hurting the market. Two of brands called out in Sinyard’s letter, Sidi and Louis Garneau, told BRAIN they require online resellers to maintain MSRP on current model year products but that older inventory may be discounted.

For as long as we’ve been cyclists, prior model year goods have a long history of being closed out at discount, often sold in large lots to blowout mail order companies like Jenson USA. What’s becoming an issue is the ease with which consumers can now price check and order via smartphones directly from the brick and mortar bike shops.

LETTER FROM MIKE SINYARD:

Dear Specialized Dealer,

Is your store a fitting station for your online competition?

Amazon.com recently launched a free app called Price Check that allows consumers to use brick-and-mortar shops for research, then easily buy many cycling products online right from their mobile device.

Here’s how it works: when in your shop, consumers simply scan a bar code, type in the product name or take a picture to see the product and prices from a variety of online retailers. After ensuring they have the right fit by trying on the product in your store, and talking to your staff, they can buy it from somebody else with the press of a button.

Participating brands include Pearl Izumi, Shimano, Louis Garneau, Giro, Bell, Fizik, Sidi and CatEye.

Who loses in this situation? Certainly not Amazon. And, at least in the short term, not the cycling brands selling through bike shops and Amazon. But what about you?

By buying product from brands that severely undercut you, you are supporting your competition. Why finance your own demise?

Please investigate for yourself by downloading the free Amazon app.

Amazon is clearly interested in the cycling space, and is hiring talent from the bike industry (including from Specialized).

In related news of brands that leverage the IBD while simultaneously undercutting them, Easton-Bell Sports dropped the fruitless suit it filed against Specialized before Interbike. Was this legal maneuvering just carried out for publicity?

Whether the current news is mobile device apps or lawsuits, the underlying issue remains the same: some suppliers support the IBD and some do not. For the sake of your business, examine your suppliers’ strategies and vote with your dollars. The entire bike industry is watching.

Click here to see how Amazon’s Price Check App works in store (Video here)

Thank you for your continued support.

Sincerely,

Mike Sinyard
President & Founder
Specialized Bicycle Components

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Dan
Dan
12 years ago

Oh no, the Specialized oligopoly may come to an end, what will happen when people have more options. Honestly I feel bad for the small shops that can’t compete with online price, but when Specialized complains I don’t feel bad for them. May be you can sue Amazon like you’ve sued everyone else.

Chad
Chad
12 years ago

“Honestly I feel bad for the small shops that can’t compete with online price” ~Dan

A lot of Online sales are below dealer wholesale costs, not even big shops are willing to give someone a product for free, and some money on top of it.

Adam
Adam
12 years ago

The letter was sent to local bicycle store owners not to the consumer. His point, to shop owners, is to examine what products they are choosing to sell. Margins in bike shops are extremely low. A sole shop owner is not in the business to get rich (actually barely making a living). The internet has already destroyed the brick and mortar camera and book stores. Hey cyclists, do you enjoy going to your local shop and talking about bikes? Do you appreciate the knowledge they have? Do you appreciate your bicycle mechanically working? Please think of this the next time your about to order via your laptop……

Sevo
12 years ago

Dan-You must not own a shop or have any experience in one. Specialized is probably the best all in one brand out there. Solid bikes, leader in helmets since day one, leader in gloves since day one, leader in optics since day one, leader in tires since day one, leaders in shoes since day one, and ditto for saddles.

And bonus….Sinyard still rides. A lot.

This doesn’t hurt Specialized. But it does hurt their shops and Sinyard sticking up for this retailers is admirable in such a fashion. Yep, he’s calling out his competitors poor business practices. Yes it strengthens the reason to buy Specialized. But you can’t go wrong as a shop by making this switch. And Specialized protects it’s dealers fairly well plus offers them a product as good as any.

And if knocking Specialized for litigation is your best argument, probably should stay at the kiddy table and be seen, not heard. Litigation is a fact of life in a large corporation to small business. Specialized is protecting its’ brand. I don’t blame them. I would.

Sal
Sal
12 years ago

The other nasty part of Amazon’s plot is that your community doesn’t get the sales tax money that helps build local bike paths, bike lanes, bike parking, recreation centers, safe routes to school and other projects that cyclists use. Whatever you may think about Specialized or any other manufacturer, when you deprive your community of tax dollars, you are only hurting yourself and other cyclists. And buying local creates jobs and allows the mechanics and shop rats to make a living. The projects and jobs you save may be your own.

Michael
Michael
12 years ago

There is certainly nothing wrong with trying to save money by buying online. However there is a special place in hell for those that go into bike shops, try on stuff and ask questions then buy online. If you seek advice from bike shops, you should purchase from them.

Josh
12 years ago

Well would you rather they support local bike shops or join internet retailers themselves? There are hundreds of bike manufacturers you can choose from; I see no oligopoly. And anyway, Sinyard isn’t complaining – he’s making his dealers aware of something that is negatively impacting their business. He is doing them, and us, a service.

Scooby
12 years ago

@Sevo I must respectfully disagree whole heartedly; a leader I think not, an innovator? Yes! From his start in mountain biking he took someone else’s mountain bike bike idea and mass manufactured it. The Horst Link is also someone else’s idea…….. get my direction??? He does well at improving things. Specialized has made many improvements to the cycling experience but he is far from a leader unless you consider being one of “the big three” a leader. If you’ll look closely…. I think most of his bikes are manufactured by Giant Bicycle Manufacturing.

It’s America and consumers are free to shop wherever they wish. It’s up to us in the retail business to come up with a solution and not complain about how they are undercutting us. Let’s quit complianing and develop a business plan folks!

I must make one point! It’s pretty low-class (I wanna use alot of four letter words here) to go into a shop and use them as your fitting room for stuff you know you don’t plan on buying there. That’s the perk you recieve for a brick & mortar shop.

Dallas
Dallas
8 years ago
Reply to  Scooby

Giant Does Not manufacture Specialized bikes. Specialized are manufactured in Merida Factories, whom are 49% owners of SBC.

Andrew
Andrew
12 years ago

I see this as Sinyard trying to protect his way of doing business. They develop alot of concept based products and the concepts themselves which are fruitless without the backing of a human, preferably in a shop. Specialized is in a position in the market where they can make such “moral” claims. Its a shame that a large company like Bell Giro Easton are not. Sinyard is not the only one at the wheel with all of this, alot of people and companies have a stake in Specialized (ie: Merida).
Having worked for small and large bike shops, I can say that we are always trying to sell more than a piece of foam to strap on your head, or some new kicks to clip in with. We are selling our stores passion, community, and economic (buy local) beliefs (yes even the big ones). Although I am not always drinking the Specialized kool-aide that comes with every new idea, I respect that Sinyard and Specialized have the balls to bring up a topic that should be a concern to the entire industry.
I admit, Specialized is trying to have its foot in all parts of the cycling experience. But is it their fault they do some of those parts better than alot of other companies? I mean who knew those dorky looking seats back in the day would work for alot of the market. (I still prefer traditional) I think critics who feel like Specialized is limiting their selection are shopping at the wrong kind of shops. There has never been a time where a Specialized rep has discouraged me from selling similar products right next to theirs. Sometimes they loose, sometimes they win. Its called consumerism. Buy what works for you and if your shop cant provide by in stock items or ordered, then go somewhere else.
Change the type of store you shop at, or help change your current store to work for you better. Local Bike Shops love to sell you whatever you want.

craigsj
craigsj
12 years ago

The Amazon effort is not unique nor does it enable customer behavior that doesn’t exist already. It just makes it easier. The issue exists independent of Amazon.

Any local retailer who doesn’t understand that instant global communications, payment and worldwide overnight shipping are competition will go under. The key with any business is adding value; whining about what Amazon is doing isn’t adding value.

Andrew
Andrew
12 years ago

@craigsj – well put… Agreed…. Amazon is just doing what Amazon was designed to do, collect markets. As for the bike industry, it needs to work together on all levels. Adding value is key! But, when a brand you sell in your store is decreasing the value of the product on your shelf by allowing it to be sold under what you pay for it online? That brand should be scolded by the LBS and those who support what we do. Its our way of adding to the *values* we sell.

Kovas
Kovas
12 years ago

I agree with craigsj, added value is key. Value that’s beyond the physical product purchased. If you don’t add that value, good luck surviving in today’s click-click-buy-now world…

Lots of brick and mortar are adapting, and succeeding: Buy a DSLR at a camera shop, get a free clinic. Buy a bike at a shop, and get a free 30 day tune-up. Good luck getting that kind of added value with an on-line purchase. Shops have to be able to offer product And service. Sure it’s more difficult with lower-cost items (like the helmet in the vid), but not impossible.

Specialized-is-right.
Specialized-is-right.
12 years ago

I agree with Adam. When you go to your local cycling stores and pay MSRP, you’re supporting so that shop exists at that location. Most shops make little money, and they need that profit margin from MSRP to stay afloat. I just went by a shop near-by, and it’s in chapter 11. Unless you’reTyler/Marc&Co., most of us need these shops for repair services.

Alex
12 years ago

I don’t get the uproar about this app. Price checking apps are not new, they’ve existed for a decade. I buy a lot of things at my LBS. I also buy from Amazon, PBK, Treefort, and Wiggle too. Amazon is giving the consumer access to information, and there is nothing wrong with that at all!

Adam
12 years ago

A knowledgeable bike shop staff adds a huge amount of value to a purchase because it helps a customer to buy the right thing on the first try. Some shoppers take a very shortsighted view of their purchasing decisions and see internet sales as a great way to save some money; in some cases, lots of money. The irony of the ‘bike shop abuser, internet purchaser’ practice is that if it continues, bike shops will disappear and cyclists who once thought they would save wads of money by testing in the store and buying online will have to buy two or three times in order to get the bike, clothing or repair part that actually works for them. All those savings? Gone. The long view reveals that a good bike shop employee will save you money because with their research and advice, the consumer minimizes the risk of buying the wrong thing and wasting money.
And lets not forget the saying, “membership has its privileges”. A customer that makes friends with and shows loyalty to a bike shop gets special attention and sometimes even a price break. On the other hand, renegade shoppers do not get these perks and bike shops quickly learn that such individuals are not worth their time and attention. Good business is a two-way street between retailer and consumer. Make it worth a retailer’s time to help you and a retailer will make it worth your money to support them.

Adam
12 years ago

@Alex – careful with your terminology here. Don’t make the mistake of confusing Data with Information. The internet provides data. Data needs to be filtered and interpreted in order to get information. One of the best places to become informed enough to purchase the right product is at your local bike shop.

Chris
Chris
12 years ago

This is just Specialized spinning stories to try and convince their shops to stop carrying a variety of products that compete with theirs. I guess this method is better than threatening price markups and withholding discounts for those who continue to carry a competitors product. Still makes him and the company look like an ass.

This, and any other barcode scanning app aren’t new, they’ve existed for years, since the rise of the modern smartphone. This isn’t Amazon targeting the cycling community like he tries to spin. It’s Amazon doing what they do best, offer products at often significantly cheaper prices, and they want to prove it to you.

It boggles my mind that so many big cycling names like Specialized think they can fight the rise of e-commerce and sell only through local stores and not lose ground to its accessory competitors. Only certain product markets really reinforce that model, and cycling isn’t one of them.

Whatever
Whatever
12 years ago

I used to hate Specialized too, them I met Mike. Class act. They win by playing fairly and in this letter he is telling HIS dealers HE isn’t going to screw them if they pick up more stuff from the big S. It’s the others are doing the screwing.

halfwheeled
halfwheeled
12 years ago

I have no sympathy for Specialized since they seem to be completely fine with asking $8000+ for a bike. That is price gouging loyal customers like myself.

Fine, if they want to play that game, then I’m going to vote with my wallet and price check the heck out of anything with the big S name on it. Sorry Specialized, internet has a way of keeping manufactures in check, and as a consumer, I’m going to exercise that right.

Yan
Yan
12 years ago

I personnaly own a bikeshop in Montréal and we do sell specialized bicycles and components and I can tell you that they are the best to take care of their customer. They are one of the biggest brand on the market right now and they do all they can to protect their dealers so they can do a good business and stay wealthy. They also provide us with the best informations and the best knowledge of their own products but also on the bike industry in general. We do also sell on ebay old stuff during the winter but we never sell something new at discounted price, the thing is that we are in business to stay in business and when we don’t make money on what we sell, we have no reason to do what we do. I personnaly think that customers should pay a good price, not too expensive but just the price of the market. What we see sometimes on those website, is price below our cost and how they do that, it’s by selling stuff that comes from the grey market, stuff that should have been installed oem on next year’s bike. Like Mickael said, when you go into a bike shop and try a pair of shoes that you will after buy on internet, you’re stealing time from the bike shop!!! If the bike shop guy spend 15 minutes with you, it’s like stealing a 15$ light to put on your helmet!!! Thank you for your understanding. 🙂

Wah Wah
Wah Wah
12 years ago

I bet everyone complaining about this practice will gladly buy shoes, clothes, appliances and electronics online after going to the local department store or mom and pop TV store. Get over yourself. In the end, all that matters in the amount of money in my checking account. If I can get something cheaper elsewhere, I am going to do it.

Huffman
Huffman
12 years ago

I “shop” Amazon, Performance, Nashbar, etc. to see what’s out there then head to the LBS to see if they can order it or a similar product for me. Most times if you are a regular LBS customer you get as good a deal as anywhere else. I’m also willing to pay a little more to keep as much of my money in my community as possible and this is one way to do it. I’m friends with the owners & workers in my local shops and want them to succeed.

If we don’t, local bike shops will be like camera stores – far and few between.

work
work
12 years ago

@craigsj has it quite right.

The consumer chooses what to buy and where to buy it and does so based on VALUE, price, range, service availability and a host of other factors including convenience, staff attitude (or lack of) etc etc. – Just like we all do.

Blaming the competition is the same as saying the competition did a better job at understanding the above.

Good shops will thrive – those taking a margin without adding enough value will rightly struggle.

Same goes for brands – Mike S take note.

Specialized-is-right.
Specialized-is-right.
12 years ago

Haha….so true, Adam.
The shops that I frequent usually give me discounts or free service on certain repairs. At the end, I’m actually saving more money. As for Wiggle, or Chain Reaction, remember when you buy from them you are supporting jobs there, and not here in the US.

Jason Wong
Jason Wong
12 years ago

Is it possible that the markups for items in the bicycling arena are to high? I’ve seen tights sold as “biking tights” without chamois have a price of 75 dollars. Than turned around, gone to the running area and seen similar tights sell for 35 dollars. “Technical riding jackets are made in varying quality so that companies can sell similar products with stepwise rising prices”. The materials may be nicer, but probably don’t warrant a difference of 100 dollars or more, and the often cited “research” on the cut and materials can’t cost that much.

Does Mike Sinyard feel like we shouldn’t shop around? This is akin to the music industry hating on digital music sales. Music sales are actually at an alltime high, only the producers of music were unable to innovate to control the digital market thus retailers like amazon and apple took a piece of their pie.

Like anything in business either adapt innovate or perish.

anon
anon
12 years ago

Jesus Christ specalized and LBS , welcome to android version 1.5 circa 2009… emmm this app (although it wasn’t amazon’s name) has been available since that time (actually even built in some builds on googles devices).. Now that amazon has one dedicated to just their site it’s all the sudden a problem? Google’s built in scanner has again been able to do this since 2009 and it doesn’t just search amazon for the best price either.

Bogey
Bogey
12 years ago

IMO, this was a very ignorant and hypocritical thing to do. If they feel so strongly about it why does Specialized do this very thing on their own website (example: http://www.specialized.com/us/en/bc/SBCEqProductList.jsp?sid=2011EquipTires26_Specials&pscid=1008&scid=1132)?? They’re constantly clearing out stuff that my LBS carries. I’ve never ordered anything from the Specialized site but it would make more sense for them to offere these deals to their LBS’s and pass some savings along to the customers.

Anyways, I buy quite a bit of my stuff online but the few LBS’s that I frequent can usually give me a fair deal on the items that I’m looking for especially when it comes to soft goods. There is great value in being able to try helmets and clothing as well as being able to touch the parts that your’e buying. I wouldn’t dare go into any shop, try something on then order it online.

Jon
Jon
12 years ago

Dear Mike.

Boo Hoo.

b*tcH
b*tcH
12 years ago

Cant please everyone, Support your LBS. I know the bike shop has the tools for installs and repairs!

Michael-Vittoria Shoes
12 years ago

While we are not affected by this issue, we could have been. We were approached by 4 different people from Amazon.com while at Interbike this year. They were asking to have us become an Amazon Retailer, similar to the other brands mentioned. Fortunately, I am not a fan of this method and the family that owns Vittoria would never allow it, so it was a non-issue. But I could see how many companies look to this as a way to turn more sku’s and of course run out the last year model items.

One major problem is the lack of regulation for online retail companies. Lack of tax base and fees which could help curb this problem. The problem with a company like Amazon being charged taxes is once that state charges, Amazon will threaten to leave that state to one that is more “friendly” towards business. So this entire thing truly comes down to our elected officials and their desire to get re-elected! So once we can control that issue, many of the other problems can follow and come in line with reality.

While we compete directly with Specialized on one item, I do applaud them for making people aware. At the same time, many things we have heard over the last 5 months also has been that dealers are not allowed to buy what they want for fear of lost discounts, loss of exclusivity or even loss of dealership for specific products. Which of course is what the lawsuit was with Bell/Easton and Specialized. So while making people aware, the heavy hand of large companies is nothing but the thumb holding down the IBD. To truly make thing even, it would be wonderful to see even play fair and agree to open their dealers up to everyone and everything they want.

Dave
Dave
12 years ago

I like that most of the “Anti Specialized” people have ignored that you can typically haggle pricing at your LBS. The point of the letter is to let SHOP OWNERS know that this app is out (believe it or not, not everyone has a smart phone or internet), so they can do their best to help customers and retain the in store purchases which ultimately keep their business afloat.

Shopping around is fine, but when you look in the shop and buy solely online you are wasting the shops time, and essentially stealing from them. Doing so consistently will eventually mean they stop helping you as thoroughly, which can mean less informed purchases, and with enough people doing this constantly could mean closing of local shops, which in turn means you won’t be able to try before you buy or have your bike fixed.

I can definitely see this affecting the smaller, mom-and-pop style shops, especially in the smaller towns. I am sure most of you think “Who cares”, right? Well those shops going under means less competition for the bigger shops, which in turn means less competitive pricing all around, which means even your online store pricing goes up over time, because there will no longer be actual stores for the online shops to try to beat the pricing.

Also keep in mind when you install the parts wrong or break them on a ride and need to get the bike fixed, online stores won’t be able to do that for you.

And to the person whining about the $8,000+ dollar bike, LOTS of companies clear that cost. Specialized happens to make NUMEROUS bikes well under that price point. Stop acting like it is the only thing they offer. Do you complain to your friends about Ford having trucks for more than 25 grand? How about Mercedes for making a sedan that is over 40 grand? I mean they must be ridiculous considering you can buy a truck for under 20, and a sedan for under 15 grand that is well built, right? Everyone has different wants and needs, and Specialized does a damn good job accommodating people of nearly any financial situation. Just because you don’t need/want it doesn’t mean the world shouldn’t have it available. The high end stuff that comes out and is super spendy at first nearly always comes down in price over time. Look at DA Di2, quite expensive when released, and they had to custom build servo motors for it. Since then, Shimano managed to use generic servo motors and bring the price down, hence Ultegra Di2. Sure it weighs a little more, but the pricing is coming down. So those $8,000 dollar bikes of today will be the $3,000 dollar bikes of the future.

Matt
Matt
12 years ago

Customer service, that’s what is lost. Its a slippery slope and unfortunately leads to customers being cheated of the “cycling experience”. If customers want to be free to to see a saddle in a store, price check and buy it online, throw it on your bike and go for a ride great. But along that entire process the customer is cheating themselves to so many of the things that make the cycling community so great. Interacting with other cyclists, sharing experiences, expert knowledge, and more importantly having a place to come back to are what set shops apart from other retail experiences. There are a large number of people out there armed with basic fit and repair knowledge which can be very dangerous. Cycling is a serious sport where the wrong equipment and bike set up could get someone killed. Why so serious? Ok look at it this way someone buying the wrong seat from SUPERGO.COM riding it and hating it could be what keeps them from ever riding their bike. Often time people don’t know what the difference between a $30 Bell Spring saddle and a BG Riva and why one may be better for that 12 mile commute to work.

Of course not everyone is a novice. I have found though that most forum dwelling experts (myself included) can benefit from getting out from behind their monikers and mingling with other local cyclists. Either at a shop or a ride or both!

Of course there is the issue of price and well unfortunately there isn’t much that can be done with that. I guess smart retailing would help clear out older models before they become a problem but cases like Shimano…

Online purchasing is bad but everyone does it. They key is to know when it’s appropriate. There is good that comes from this. Bike shops will be forced to evolve, offer services that online retailing can’t, and find ways to further enhance and bring the cycling experience to others.

wv cycling
12 years ago

I’m still placing bets on which Big Bike Company (Trek/Cannondale/Specialized/Giant) is going to do DIRECT TO HOUSE sales of bikes from company site first.

Which one do you think? Who’s going to sabotage the middle man first?

Chris
Chris
12 years ago

@Sal

You nailed it! It strikes me as completely hypocritical when people rant about Wal-Mart destroying local communities but these same people then turn around and shop at Amazon. At least when people shop at Wal-Mart tax money is being collected and used to fund services such as libraries, police and fire protection, parks, schools, etc. When you shop at Amazon the local community gets nothing.

As for the LBS situation, I have very mixed feelings. I spent years working at a LBS but I’ve also worked for very large retailers (we’re talking annual sales measured in the billions). On the one hand, local businesses can directly cater to the unique needs of their communities and offer products available for immediate use without having to wait for UPS to arrive. On the other hand so many shops seem to be run by people who may have a strong passion for cycling but don’t seem to know the first thing about how to run a business or how to manage a retail store. The shops often look like little more than an overgrown garage sale and the owners too often seem to have little understanding of basic inventory and merchandising concepts. For example, clothing is an area where you often want to try a product on before handing over your money – exactly the sort of service only a brick and mortar store can provide. Despite this too many shops still seem to have dismal clothing selections.

tommy
tommy
12 years ago

@ dave, its pretty naive to think that you can haggle down an $8k bike, to what? 7k?. There are plenty of examples LBS advertising their supposed “clearance” prices still hovering at $6k, which is still insulting. Seriously, add up the cost of each component, even at retail price, and you wont even come close to $8k, thus = pure markup profit at the expense of the consumer.

Look at the rate at which bikes prices has inflated compared to the rate of income for your average middle income professional and you will see that Specialized is participating in anti-consumer behavior and the LBS is blindly accepting it as just doing business. Nice try.

And its BS that Specialized warranty is worth the extra $$. Look at the epic shock maintenance schedule, something like required service every 20 hours, which if you don’t prove that you took it to the LBS and have it serviced, SBC may VOID your warranty should you have issues. You can blow 20hours in one bike riding vacation.

I agree with halfwheel, the great thing about the internet is that it puts the knowledge base in the hands of the consumer is a good thing. There is definitely a HUGE markup going on here that the internet has allowed consumers to access and make that judgment for themselves if the price is fair market rate. Wah wah is right, too. I’m betting everyone commenting here purchase online, purchasing bike goods online is fair game, too.

So Dave, there are two sides to each story, please don’t drink the cool aid and do some critical thinking. Everyone has a right to purchase from who ever they want, online or not. Its not about right or wrong, but more choice and educating the consumer, ie fair market.

As for LBS, I love you guys but please get you head out of the 19th century and learn to compete in an internet world. Its here and if you think your service is reason enough to charge 20-50% markup, then, hey good luck with that. You are a dying breed, as many examples of other brick and mortar companies who ignore online competition.

Russ
Russ
12 years ago

That industry and those brands already exist… Motobecane for example. None of them will do that because it would take a complete restructure of the company in order to be set up properly for that kind of direct sale.

Additionally, I do not think they need too. These top brands you mentioned have been doing extremely well, and I would doubt they would water down their names by skipping the dealers. After all these products are only any good if they are built and maintained correctly, and the right product is sold for the purpose in mind.

Just to humor you though… Since Cannondale was acquired relatively recently by Pacific Bicycle Group Inc. They would be the first if any, but I think you would see them first in dept stores and quality hacked, before online distribution.

Russ
Russ
12 years ago

Additionally everyone who thinks Mike is bashing Amazon is wrong, he is upset with brands that undercut shops and is telling everyone that he (Specialized) does not.

Amazon just facilitates it, but the real problem are the brands that form and rely on LBS to support them and then once large enough cheat the LBS by selling customer direct and competing with the dealers for sales.

Most industries that have products that require educated professionals have price floors. The sick thing in the cycling industry is that a brands require LBS to follow a MAP pricing schedule and dealer must charge certain prices to remain authorized dealers, then in the same breath of air sell direct for less and cheat the dealers out of the sales. Effectively the shop talks the product up, educated everyone and then the manufacture is sniping the sales by offering their products at a lower, but even more profitable price then what they sell to dealers. SICK SICK SICK Good on ya Mike!

Just my 2 cents.

J ruff
J ruff
12 years ago

You all keep talking about online retailers and bike shops.. this is more about the brand manufactures selling directly through amazon. You think it’s bad now with internet retailers undercutting the lbs… wait until Amazon and manufactures undercut the online retailers.

Online retailers get their stock through distributors and in some cases directly form the brand manufactures (same and the LBS) and so there is still markup, just not as much since they can get lower prices for buying in higher volume. Now if Easton, Shimano, Sidi, etc. can clear out all their old stock in one fell swoop through amazon while keeping most of the profit… why bother with anyone else.

wigs
wigs
12 years ago

the most pathetic group of cyclists are the “club/group” riders. they are overwhelmingly left-leaning, politically, and complain about sales tax.

moral of the story: most cyclists are hypocrits. focus on the customers who appreciate your existence.

fluff
fluff
12 years ago

Thule might be the absolute worst at allowing firestorm sales.

Matt
Matt
12 years ago

One word for you all. GLOBALISATION. Although I agree it’s unfortunate to see LBS disappear it’s a sign of the times. Like it or not it’s here to stay. Take for example a Pinarello Dogma Frame here in Australia. US retail price is around $5000. Australian retail price is around $8000. Now take into consideration that the AUS dollar and the US dollar are generally of equal value (and often the AUS dollar is higher). Would you be happy to spend an extra $3000 for exactly the same thing?? That’s just an example but the same applies to all other brands here. I know economies of scale need to be taken into consideration but still……. I would never buy a bike/frame online but you get my point. No such thing as a national market anymore, it’s a global market.

Someone
Someone
12 years ago

To anyone that thinks this is “out of line” on Specialized’s part, Shimano pulled a nice one where basically “sought to clear up their gray market” by increasing wholesale cost of goods while maintaining retail price. Also, markup on cycling parts is pretty reasonable. Clothing is much, much higher (anywhere, not just bike shops, not just sports industry).

I do agree that added value is key. It is harder than people outside the industry think. Most customers have no idea when their bike isn’t working properly, or when there’s a compatibility issue, or when they are doing an install themselves that they have no idea how to. The same guy that complains about a crankset costing 200 dollars, or suspension overhaul running a hundred bucks doesn’t have the same problem versus auto parts (where markup can be more around 200 percent, versus the 50 to 70 percent that is standard in the cycling industry), since he would never even dream of trying to fix his car.

Topmounter
Topmounter
12 years ago

Fortunately I live in an area with several excellent LBS’s that do a good job with their inventory and pricing. If they have what I need in stock, then I always buy from them rather than on-line. However, the area where almost all of them struggle is when I need something specific that they don’t have in stock… they can’t seem to break out of their standard “orders go in on Friday, we get it by the next Friday” routine…. which is fine if that’s how they want to run their business, but I’m not sitting on my duff for almost two weeks when I can have the part in a day or two and be back on the bike.

And as far as Specialized goes, as an LBS, if you buy in and sell out to Specialized hook, line and sinker, then I’m sure they’re great, but back in my bike shop days, I was on the other side of their soul-selling formula (twice even) and I’ll never buy another Specialized product, nor will I recommend them to anyone. I like my LBS’s to also be IBD’s and not soup-to-nuts “company stores” that push one brand, even if that brand doesn’t suit the customer for whatever reason.

MissedThePoint
MissedThePoint
12 years ago

Talk about drama, and free publicity for Amazon’s price match app. Good to let dealers be more aware of the issue, but this isn’t only the bike industry, but the retail brick and mortar store industry altogether, especially specialty stores.

Besides solving the sales tax issue, these stores need to build relationships beyond the sale, rather than simply being a merchandise outlet. Service benefits add extra value and can “buy loyalty”. I buy from REI, Backcountry, and other dealers that back up the products they care with a guarantee. Enrich customers’ lives locally, but supporting the local community and hosting fun events, within your specialty. Don’t underestimate the power of community, learn to leverage it and nurture it. Try create a club thing, which allows you to keep customer profiles that allow you to better service customers and provide a personal touch, and also allow you to reward them by offering exclusive rewards like some sort of club kit for loyalty and continued patronage (socks, bandana, visor, jersey, stickers, etc.). Could be as simple as doing group rides, maintenance clinics, skill clinics, tours, beginner meetups, etc.

sambo
sambo
12 years ago

specialized wrongly assumes that price is the only factor.

sambo
sambo
12 years ago

the average LBS needs to suck it up and offer something for sale rather than specialized or bontrager… so many LBS are simply concept stores for trek and specialized, sucks. i want variety and i want a range of sizes. if amazon has it, has free shipping and offers an easy return then i will buy from them. if the LBS offers better service, good selection and decent variety then i will buy from them. most LBS are weak when it comes to actually having parts in stock then they gripe about people buying online, amazing. stock the stuff i want and i will buy it from you. thanks.

MissedThePoint
MissedThePoint
12 years ago

I think Specialized is working towards to franchise dealio, thinking that IBD can pop up to cover certain radius of customers, offering the same price on their stuff, like McDonalds. They can analyze others like Carl’s Jr and offer competitive prices, but that’s not the bike industry. Bike stuff is expensive, while fast food is not, so people will look to spend the least and learn to live without extra luxuries, as it’s already enough of a luxury to own such bike related stuff.

I figure it would be best to get them to use it more to make them feel it’s worth it. Invite them to do club stuff and use the local store as a “base camp” to prepare. Offer community discounts. The store should be the hub for the community of enthusiasts.

Mike
Mike
12 years ago

Its quite hypocritical of Mike Sinyard when he farms out the majority of his bike manufacturing to overseas builders. I create jobs in the USA and get better deals on line in the process. Sinyard wants to get top dollar and create jobs overseas. Its no wonder our local bike builders cant make it. Boo Hoo Mike.

slug
slug
12 years ago

local bike builders charge too much for their garbage frames anyways MIKE

matt
matt
12 years ago

@Mike.

Yeah Mike is really doing nothing for American jobs. Too bad Specialized USA has grown by 10% this year and is hiring in this down economic time.

http://abclocal.go.com/kgo/story?section=news/business&id=8450362

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