ST. PAUL, Minn. (BRAIN) — While the rest of the industry battles over market share in the enthusiast market, Midway Bicycle Supply is finding growth providing parts and accessories to nonprofit shops and other programs that serve consumers in need of lower-priced bikes. Those operations, as well as some mobile service and service-only shops, often can’t establish accounts with larger distributors.
Overlooked by many suppliers and those counting bike shops (see related article on the cover), Midway’s wholesale customers are something of a bellwether for the industry: They are often the first to see growth when improved bike infrastructure encourages more bike use.
Midway has a mailing list of about 3,500 unique shops, said Benita Warns, who runs the business with husband Michael.
“The industry as a whole is only focused on one thing: Keep pumping out products that are the newest, latest, greatest. They are all chasing the same customers. There are not that many focused on needs of ordinary people,” Warns said.
Midway, which incorporated in 2013, stocks products from Kenda, KMC, UNO, Co-Union, Wald, Sta-Tru and others. Last year, Midway more than doubled its inventory when it bought the remaining inventory of Midwest Bicycle Supply, a closed St. Paul distributor. Midway also had its own tire made last year when it identified an unmet need: a 27-inch studded tire for customers with older road bikes who need to ride in winter conditions.
Unlike some distributors, Midway doesn't require a brick-and-mortar location or landline phone. “Any legitimate business needing bicycle parts can open an account at Midway,” Warns said.
Midway requires that its wholesale customers have liability insurance and some form of business incorporation or a fiscal agent, and have a state tax ID number. She said some nonprofits have limited hours, so Midway will ship to home addresses when necessary — which some distributors refuse to do.
Besides its mailing list, Midway markets by exhibiting at the CABDA Midwest show and attending the Bike!Bike! regional conferences for community bike project leaders. Midway also has had success reaching out to bike shops run by the Amish community, whose operators appreciate that Midway donates 10 percent of its revenue to charity. Midway still produces a printed catalog for customers who can’t shop or order online.
The Warnses know the needs of small bike shops because they run one. It all started more than 20 years ago when the couple, both full-time engineers at the time, began gathering donated and trashed bikes and restoring them for those who could use them.
They ran that operation, called Mr. Michael Recycles Bicycles, out of their home in the Midway neighborhood of St. Paul for about 10 years, then began renting a retail space for it. The shop is open just 10 hours a week and relies on volunteer staff. Last year it gave away 681 bikes and grossed $49,000. “That’s a ton of money for a little place,” said Benita, who retired from the U.S. Postal Service in 2009. Mike retired from his full-time engineering job about four years ago.
“The majority of our customers do not go to local bike shops. We are reaching a whole different customer base. … We have a few local bike shops who will send people to us when a person comes in that can’t afford what they have. We have a good relationship with several local bike shops.”
The shop partners with the University of Minnesota to round up abandoned bikes on campus and restore them to working condition for students and others.
Through the retail store and the wholesale business, the couple serves a clientele overlooked by the industry, Warns said.
“It's the part of the bike consumer world that the industry wishes they could tap, but they're not listening to them. They don’t know how to connect to those customers. Most people can’t afford what's in bike shops. In an ordinary working-class area and in small towns, these people are all making a minimum wage income. They can’t afford what the industry is offering,” she said.
