The world of bicycle retail is continually changing, and with that comes increased opportunities to buy products online. Most recently, Teravail tires announced that all of their tires would now be available to purchase online, and would ship directly to your door.
Considering that Teravail is one of QBP’s in house brands, the announcement came as a bit of a surprise. For those who aren’t familiar with QBP or Quality Bicycle Products, the Minnesota based company is one of, if not the largest parts distributors in the industry.
With that in mind, it’s easy to see that the news might be a bit unsettling to current dealers. However, in the press release, Teravail stated, “To help support our retail partners, a portion of the revenue from your transactions goes to qualifying bike shops in your area.”
To further clarify how that process will work and just who will qualify, we reached out to Teravail (and QBP), for more details. From the sounds of it, a portion of the revenue will go into a big pot, and that pot will be equally divided between qualifying retailers at the end of each fiscal quarter. However, depending on how many tires are actually sold, and how many qualifying retailers are in the same MSA (see below), it sounds like the actual amount of money received could vary greatly. Which means if you have a favorite shop that you want to support, and want to buy some Teravail tires, it’s still best for you to purchase the tires directly from that shop. However, if there are no stocking Teravail dealers in your area, then this is a great opportunity to get your hands on a pair.
What are the details of retailer revenue-sharing?
QBP: QBP will share a portion of the revenue of items sold via STS with all the retailers who bought into that brand’s Dealer’s Choice program (Tier 1, 2 and 3) and who are located within the same Metropolitan Statistical Area (MSA) as the consumer who purchased the product. Consumers will not have the option of choosing which retailers receive revenue for a product they purchase.
MSAs are geographical regions determined by the US Office of Management and Budget, each having a relatively high population density at its core and close economic ties throughout the area.
At the end of each fiscal quarter, QBP will credit the eligible retailers with their equal share of the revenue of the products sold via Supplier Transaction Services within their MSA.
Eligible retailers will share in the revenue of STS sales without any additional cost or action required of themselves. This program does not constitute a partnership or joint venture between QBP and participating retailers.
What is the percentage of revenue that will be shared with retailers on products?
QBP: It will depend upon the brand, and the product. The accumulated revenue is what remains after we subtract the actual cost of the product, shipping, the cost to administer the program, cost of returns, and other expenses related to this program. QBP will retain a portion of the revenue, with the balance going to retailers.
The ability to purchase Teravail tires online includes their entire line – from gravel to fat bike. And with free shipping over $75, it means that pairs of tires will ship for free.