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Just read on Vital that Trek are trying out a hybrid of the YT/Commie model and the standard dealer model.
They'll have a big online store selling direct, but instead of direct shipping everything is sent to a local dealer for final build and set-up, dealer gets a fee, but I would assume a smaller one than if they sold the bike in the first place.
It's an interesting idea - but I can't see it being too great for LBSs and it will probably kill any chance of bike finance.
finance is basically the dealer paying the interest in lieu of and discount. The finance will probably be more accessible fully backed by trek. You will probably end up seeing the end of the smaller dealers. The true online's save by not having the dealer so can't see the price dropping much.
A bit more detail here:
I dunno if it would hurt dealers or not, presumably it means Trek will run a demo fleet too, which means that anyone not 5ft9 and after a medium 5" travel bike will actually be able to demo the one they want?
And if they're cheaper than the competition (spesh, cannondale etc), and an LBS is in effect on an equal footing with Evans et.al. then they may get back a bigger slice of the market without having to have bikes sat on the shop floor tying up cashflow and losing value.
Might eb a better deal for shops as maybe there won't be such a requirement to buy stock?
Giant have been doing the same thing for a while now. Buy online, collect at LBS. Seems to work well.
Does this mean you do not have to visit shop to pick bike up?
I remember they would not allow bike shops to sell bikes online without customer picking bike up. They dressed it up with something about having to give the customer the correct size bike ... nothing what so ever to do with customer shopping around for cheapest online price ...
I think they did something like this already with their ex-demos. Who knows how it works out for lbss, maybe they make money from it that previously would have gone to a mailorder?
Does this mean you do not have to visit shop to pick bike up?
I read it as the whole point being you do have to collect it from the shop, otherwise it's the full-on mail order model Trek won't support.
Well, if they drop the price of a carbon Remedy 9.8 27.5 by about £1000 then they would compete on price with a Capra or Strive. Keeping the LBS invloved with service, warranty and having some kind of demo bikes available would put them ahead of the pure direct sales companies for me.
There doesn't seem to be any reduction in price (yet). Which is sort of missing the point, isn't it? People who buy a Canyon aren't, on the whole, bothered about having an LBS set the bike up. They are bothered about getting a better spec than they would if buying from a shop. Which Trek's solution doesn't offer.
While it's convenient being able to buy a Trek at 1am in your underpants as you're going into a shop anyway to pick it up if you weren't able to do that the extra effort to go into the shop one extra time to order it isn't going to stop you buying one if you really want one over something else.
However I'd be surprised if their prices didn't drop in for 2017 bikes because of this.
Sounds to me it's just eliminating over production.
Might eb a better deal for shops as maybe there won't be such a requirement to buy stock?
Except Trek will still require you to spend x to be a dealer of a certain level. Strikes me the only winners are Trek in this. What happens if a shop takes a Remedy 9.9, then a customer does 'click and collect' for one, dealer just has expensive demo bikes!
Makes sense to me - dealer makes most of the margin they would have done for a direct sale (that they may not have made), with less sales floor space and a new customer contact. Trek + dealer sell more bikes because some people like to buy online but want local support.
good article Trekster
Trek + dealer sell more bikes because some people like to buy online but want local support.
Do people like to pay traditional RRP for a bike that you buy online? Not saying it's this simple but if YT charged the same for their bikes as the bricks and motor competition would they be as popular?
suspect its gives Trek a win win - eliminates their current borderline legal business model which seems to be sales only through approved dealers whom it seems to me to have to maintain rrp's to keep their dealerships. Sell direct enables Trek to continue to control pricing and route to market as all pricing will be controlled centrally with shops only acting as agents not retailers and no conflict with consumer law
only win for buyer is that there are plenty of other brands available
Makes sense to me - dealer makes most of the margin they would have done for a direct sale (that they may not have made), with less sales floor space and a new customer contact. Trek + dealer sell more bikes because some people like to buy online but want local support.
Except Trek stipulate how much you must buy to be a dealer. I can't imagine they'll wave that on the basis you 'may' get a few online sales. So dealers just duplicate stock.
It'll only work if there is a significant cost saving. 20% of dealer mark up as a reduction won't take any of Canyon or YT's customers.
20% of dealer mark up as a reduction won't take any of Canyon or YT's customers.
I would think Trek know that, that's not their aim. What they're trying to do is get the jump in the "service lead" part market, people who prefer to buy from shops with "back up".
Where's the benefit for consumers buying direct from Trek as opposed to the current dealer model? A what 7% saving?
It wouldn't turn my head.
Some people prefer online shopping.
It works well at the giant brand store I work at. We get a similar margin to walk in sales. We get a new customer without the leg work, and we can offer bike fitting, servicing and aftermarket sales.
Finance is also done directly through giant online. We get a slightly reduced margin but don't tie up staff doing finance in store.
Other big thing for brand store is that giant own our display bike stock. No risk to us (independent company), great range 140 bikes for customers to view.
Retail is charging, the big players are not stupid and are making clever changes to keep their dealers relevant
esher_shore what %age of bikes sold are indirect online ones - ie ones that come randomly off the web site?
It cuts out the distributor middleman. Lots of big manufacturers are trying methods to cut them (and their cut) out now.
surely a brand the size of Trek does their own UK distribution? Would have thought the likes of Silverfish etc are for the smaller brands who can't afford that.
Yep, although they also have a lot more stock in a central European warehouse