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Beeline's traveling bike shop in a van.
Beeline's traveling bike shop in a van. (Photo: Beeline Bikes)

The Death of the Local Bike Shop

Independent bike retailers have been fighting for survival for more than 15 years. But recent developments could put these beloved brick-and-mortar shops out of business for good.

Published: 
Beeline's traveling bike shop in a van.
(Photo: Beeline Bikes)

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My college girlfriend and I used to love to walk to the local Blockbuster and peruse the shelves. We would ghost along the middle aisles of aged videos, our feet shuffling along the thin blue carpet, and occasionally lift a box for the other to reject with a noncommittal shrug. Now, of course, we peruse online, and Blockbuster has been reduced to a , a last , and a blast of nostalgia for聽people like me.

When we want to buy a bike, however, we still go through a similar ritual: we go to a local shop and wander the aisles.聽But recent shifts in sales and business models are changing the way that we buy bikes, and some shop owners are worried that if things don't change, they could become a relic, too.聽


The clouds have been gathering over the independent bike shop for some time. According to the National Bicycle Dealers Association, there鈥檚 been a 42 percent decline in bike shops since the industry鈥檚 height in 2001, when a population injected with Armstrong enthusiasm stormed shops across the United States, demanding carbon fiber and spandex.

Although a general increase in store size has allowed overall revenue to stay relatively constant, and every city with a healthy bike scene聽can point to a shop that鈥檚 thriving, this trend does not bode well. So any change in the purchasing habits of consumers looking for a new ride can cause the industry to look furtively upward.

And the storm building over their heads looks a lot like Canyon Bicycles, which is set to enter the U.S. market next year.聽

You may have seen the diminutive Colombian bullet, Nairo Quintana, win the Vuelta a Espa帽a on a Canyon. You might have salivated over of the company鈥檚 MTB line. Over the past decade, the German manufacturer has been increasing market share in Europe, growing roughly 30 percent each year and claiming nearly $180 million in revenue for 2015. What worries independent retailers is that聽Canyon did it entirely through direct-to-your-door online sales.聽Bypassing the local shop means聽Canyon is able to sell its bikes at a steep discount compared to prices at Joe鈥檚 Wheels and Deals. For many, the convenience and savings of purchasing online outweighs the benefits of test rides and a free tune-up.

Until now, bike shops have been somewhat insulated from the impact of e-retail, largely because a typical shop earns nearly half its revenue from sales of complete bikes, and manufacturers have heavily committed themselves to selling through bike shops and keeping their bikes out of digital shopping carts. But recently, in response to Canyon and the pressure to adapt to a changing sales model, both and introduced online sales.聽

The聽storm building over their heads looks a lot like Canyon Bicycles, which is set to enter the U.S. market next year.聽

This is big news that has seriously worried the聽shops that rely on these brands. To allay their concerns, both manufacturers have doubled down on their relationships with stores that carry their product. “I appreciate the bind these manufacturers are in,”聽says Erik Tonkin, owner of Sellwood Cycle Repair in Portland.聽“They鈥檙e trying to do the right thing, but they鈥檙e having to acknowledge market forces.聽But they also don鈥檛 want to piss off their brick-and-mortar network, so they鈥檙e trying to thread the needle.”聽

Say you want a new Giant or Trek, but the closest shop to you is across town and you really don鈥檛 want to put on pants. So聽you hop online. You know your size, and purchasing is as easy as choosing the model you want. Click, pay, done. Almost. You still have to put on pants eventually, because rather than showing up at your doorstep, the manufacturer shipped聽your new 15-pound rocket to your local dealer. The shop builds the bike, shakes your hand, and throws in that free tune-up. You get convenience, and the shop gets close to the same revenue聽as if the bike had been in stock. For the consumer, that means there's no discount for bikes purchased online: instead, she's getting the benefit of convenience聽and a broader selection of models.聽

That all speaks to the potential for positive symbiosis. If online sales increase, shops need to carry less inventory, thus lowering their overhead and credit debt to manufacturers. Consumers still get the shop experience that Giant and Trek hope will keep cyclists loyal to their product. Shops further pivot toward the service-over-sales model that builds a relationship with their community, and passers-by still glimpse their dream bikes through store windows.聽鈥淚 don鈥檛 think it鈥檚 a bad thing,鈥 says Tonkin. 鈥淚t鈥檚 reality. Whichever company does this the best might just get more brick-and-mortar sales out of this.鈥澛

But there are a few issues.聽

Problem one: the online-to-shop model must respect MSRP and the margins necessary for a shop to keep its doors open. If models like Canyon catch on, Trek and Giant can鈥檛 hope to price match without cutting out your local shop. Sure, consumers may decide they value shop and brand loyalty over price, but that鈥檚 pretty soft ground to build a house on. Just ask defunct bookstore Borders.

Problem two: because of their long avoidance of internet sales, these companies have potentially already drilled into the hulls of their brick-and-mortar ships.聽Until recently, big manufacturers had responded to the internet with a kind of retail land grab, maneuvering to dominate entire stores rather than share space with competitors. Instead of basing wholesale prices on the number of bikes ordered, brands began basing them on what percentage of a shop鈥檚 inventory that particular brand represents. If, say, 60 percent of your stock is a single brand, you get one price. If it鈥檚 80 percent, you get a much bigger discount. The required percentage has crept higher every year. These days, the very best deals don鈥檛 kick in until shops devote 95 percent of their inventory to one brand. With margins as thin as they are, the incentive to essentially become a showroom for a single brand is significant. This system,聽combined with shops purchasing on credit,聽nearly buried independent retailers in 2015.聽

“Most manufacturers rolled back commitments because last year was so bad,鈥 says another shop owner in Portland, Oregon who asked not to be named. 聽鈥淭he industry is unhealthy and everybody we deal with didn't front load us this year.聽The shops that are still getting front loaded won't be here for long.”

This means your middle-tier manufacturers, like Santa Cruz and Yeti, which have been聽pushed out of the storefront by the big three, have a huge incentive to jump on the direct-to-consumer model. They haven't done so yet, but if Canyon is successful in the U.S., brands like Yeti and Santa Cruz will likely follow suit quickly.聽As more manufacturers bypass shops altogether and sell at online-competitive prices, consumers鈥 sense of 鈥渨hat a bike costs鈥 will lower, and shops will have difficulty competing.

鈥淪ell your shop now, or enter the demise of all brick and mortars,鈥 says Mike Romanco, CEO at Mike鈥檚 E-Bikes, in response to Trek鈥檚 online sales program. 鈥淵ou鈥檇 be better off working out of your home and just having a delivery van.鈥

Which, funny enough,聽is exactly what鈥檚 happening. From the swell of increased online sales and sidelined brands, the mobile mechanic has emerged, riding the wave of change in a tool-filled Sprinter.

Beeline Bikes and Velofix are at the forefront of this model, providing a certified mechanic and full-service shop in a van, which comes right to your door, so Dad can continue pulling raisins out of his kid鈥檚 nose instead of schlepping a flat Schwinn to the shop. With minimal overhead and a franchise model, both businesses are growing rapidly. So rapidly, in fact, that Beeline Bikes has now , owner of Raleigh and Redline, to build and deliver their bikes鈥攑urchased online鈥攄irect to your door. Imagine what will happen if they install an espresso machine.

Will we, a few years from now, reminisce about the smell of new tires and the sound of an air compressor burping from the repair section? Will we chat with the mobile mechanic about how we used to pull down the most expensive bike in the shop and feel, even for just a fleeting moment, what it would be like to own such a steed?聽

Here's the bottom line: to keep local retailers聽around, we're going to have to forget about price and instead put a premium on experience. The question is: Will we?聽

Lead Photo: Beeline Bikes

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