After a recent purchase of discounted tires from a “big name” online store, and an incredible customer service experience, plus a free overnight shipping upgrade, I found myself asking, why does everyone seem to hate these online businesses so much? Why do I feel guilty about buying anywhere other than a Local Bike Shop? Then I realized, I shouldn’t, Online Stores aren’t the bad guys, they are simply businesses, just like the Local Bike Shop, they are simply producing a different more successful product.
A hefty debate grows throughout our cycling industry, with opinions running rampant, but where is simple logic? The accountability of a business? Why must I donate my money to a Local Bike Shop?
Picture this: A new set of tires, half off retail price, ordered from my couch, and delivered next day after only paying for standard shipping. The eCommerce shopping experience is seamless, it is secure, and it is as convenient as ever.
Then there is the other scenario: I walk into a bike shop, I talk to a trained employee/ bicycle expert, he recommends products and talks about places to ride, and I pay full retail price for products with the opportunity to have them install.
One is heavily frowned upon (the former), and although my fresh rubbers ride the same, I still feel guilty rolling by the LBS, but why should I? So I did a little research and my understanding of the LBS argument lost its validity.
and Chain ReactionCycles
: You know these guys, our favorite eCommerce spots with ridiculous savings, constant sales, and the potential to put regular bike shops out of business. It is the last part of that sentence that scares people. In their minds, one company putting others out of business is a bad thing. They see a small business owner being crushed by a huge organization and assume it is like Wal-Mart. All of a sudden these eCommerce sites get lumped in with “the man”.
According to both Jenson’s
and Chain Reaction’s
sites, they started as small local bike shops (yes, just like the one you are trying to save), at some point they realized there was potential in selling product via catalog or the internet, they made a leap and invested in a large inventory, furthermore they set ground rules for customer service. This led to success, and because of their solid business model and pursuit of excellent customer service they were able to generate a greater income and growth.
Local Bike Shop: According to the National Bicycle Dealers Association
70% of traditional bike shops fail within 3 years. Why? The average bike shop has a profit margin of 5%. In other words, they will have to sell one million dollars’ worth of product per year to profit fifty grand. Hmmm, seems like there may be something wrong with this business model?
|This is not a real advertisement, instead it is a poorly designed star burst.
Now I don’t want to come off as the guy that hates bike shops, or that I only purchase online, because frankly, I do both out of convenience to me. Loyalty to purchase solely from an LBS is difficult when the guy working at the bike shop ordered his bike directly through a manufacturer at half price. How can anyone tell me that it is necessary for me to donate my money when he won’t do it himself? Is it okay for him because bike shop employees don’t get paid well? If that is the case, is there some sort of income cap for when you must start donating? I can’t imagine there is an answer, but there are a few things I do know.
My day job consists of helping build eCommerce sites for small businesses and there are many platforms that will allow small businesses sell online with a little effort and a potentially a few educational courses. Every bike shop could sell eCommerce out of their own shop, yet they don’t. I know I have asked a lot of questions but here is my big question for you. Is it time for the local bike shop’s business model to change? It appears we are enabling these businesses by allowing them to get by yet a simple process change could allow a much more powerful cycling community to evolve and flourish through a competitive online marketplace.