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Specialized Dealers: It’s a Buyers Market

Published July 13, 2009

SNOWBIRD, UT (BRAIN)—Ask any retailer attending the Specialized Dealer Event “how’s business” and you get a reasonably consistent answer—it’s good, but…and it’s the “but” that sparks conversations ranging from the “fixie” culture to Internet sales to selling a $13,800 DeRosa.

Some 400 Specialized dealers began arriving Monday to attend the event at one of Utah’s most scenic resorts. They came by the busload, checking in with Specialized staff before heading to rooms in The Cliff Lodge. Lunch was available near the resort’s high-speed tram and tents were up and ready for today’s round of meetings. Overall, dealers said they are having a fair year as sales volume closely tracks 2006 and 2007. Most agree that 2008 was an anomaly as record gas prices and a seemingly robust economy brought a wave of consumers into their stores. And then came November.

The result: high-end sales of bikes priced above $3,200 are soft, but sales below that appear strong and several dealers report an uptick in mountain bikes sales.

But if there was a consistent theme running through most conversations it was that this season it’s a buyer’s market. Shoppers are comparing prices and features before laying down cash or credit cards.

“I see more and more people coming into my store with an iPhone, and they are checking my prices online before buying,” said Howard Larlee, of Orange Cycle in Orlando, Florida. Larlee said he’s willing to match prices if the spread is reasonable. But he recently watched a customer check the price on a Terry saddle and then leave. “I really don’t know where they went,” he said.

There are now iPhone applications that can scan barcodes so consumers can get up-to-the minute pricing, Larlee said. “That’s coming and you can’t worry about it,” he added.

Bicycle retailers are no more immune from the economic dislocation caused by the Internet than any other industry, and dealers are paying more attention to how their suppliers manage Internet sales. So far, dealers say they are pleased with Specialized.

But Dave Nazaroff, pausing to talk for a few minutes after a mid-afternoon run, said Internet sales have made it more difficult to sell some items like wet suits. “You can buy them anywhere on the web,” said Nazaroff of Gotham Bikes in New York City. Nazaroff has a strong following in the triathlon market at his upper end pro shop in the city.

On the other hand, Dale Brown, owner of Cycles de Oro in Greensboro, South Carolina, is accepting some trade-ins from known customers who want to purchase more expensive bikes. He takes their old bikes on consignment and sells them either at the store, on the store’s Web site, or posts them for sale on Craigslist or Ebay.

Jeff Parker of Bowling Bicycle in Pasadena, Texas, said he recently sold two Specialized S-Works with Shimano’s expensive new electronic shifting system the Di2. He then took their trade-ins on consignment and sold them on the Internet.

Brown, an NBDA board member, and Parker said sales are down this year and for Brown it’s been an erratic season. “January, February, March and April were up and then came May—I was off 30 percent, and in June I was off 50 percent,” he said. However, sales rebounded strongly in July, he added. And it was Brown who sold that $13,800 DeRosa.

—Marc Sani

Topics associated with this article: Events

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