Editor's note: At a session Thursday monring at the Bicycle Leadership Conference in Monterey, California, leaders of the Bicycle Product Suppliers Association and PeopleForBikes explained their plan to merge the organizations. Andre Shoumatoff, the former owner of a bike retail business in Utah, read the following letter at the session.
Friends,
This letter represents the opinion of myself and associates in the cycling industry, who deeply understand the internet as well as our market, and often from the retailer perspective.
We support the merger of the BPSA into PeopleForBikes, noting several factors as outlined in this letter.
A primary issue facing manufacturers and retailers in the bicycle industry is a lack of systems, procedures, and standardization for how business is conducted. The result is what could easily be a 10-to-15 percent drag on the operations of retailers who are already struggling with margins of usually around 5 percent. This means they are only $50,000 profitable for each $1 million they do, and the slightest hiccup can easily put a retailer out of business, just as we see too often. At the same time, this same lack of standards could also easily be so much as a 5 to 15 percent drag on inefficiency on manufacturers as well. There are no set common operating practices about how we all interact, therefore everyone is doing their own thing. We are hungry for leadership on this matter from our organizations and/or trade associations. But that's understandable given that this issue isn't so much a "dealer" or a "manufacturer" problem, but rather at the intersection where business occurs between the two.
We believe that creating a system of standards, as defined by leadership, could be the biggest single bleed valve to the pressures we all face when operating a business in this industry at this time.
We have confidence in the staff and management of both organizations. Likewise, we greatly appreciate the output of both organizations, particularly considering the lack of funding you each face, while being tasked with doing so much for our $6 billion industry with budget of somewhere around 1/15th of 1% of US sales.
However, it's important to note that PeopleForBikes and BPSA should have different goals. The mission of PeopleForBikes should remain getting more people riding bikes, driving on governmental advocacy, places for bikes and your other excellent initatives. However, the mission of the BPSA should be to drive on leadership, to become our voice even if it's controversial, and to identify and implement the difficult changes that are needed that will benefit us all regardless of how difficult they are. Advocacy isn't leadership and leadership isn't advocacy — too many in the cycling industry mistake one for the other.
As too many have said, in light of changing consumer behavior and the impact of the internet, our current retail model is broken. Continuing to do what we've done in the past, but maybe a little better, can no longer suffice. We need your help, and believe it's your responsibility, as the trade associations of our industry, to help us implement change. Despite the challenges, there are dozens upon dozens of moves we can make to stop the bleeding.
We would like to ask — in fact, we'd like to plead — that BPSA, or PeopleForBikes, or some incarnation now or in the future, please step up to the plate and drive on leadership.
Please look to build revenue sources based on offering critical services to us for our benefit, rather than through surviving from nonprofit support dollars and membership dues alone. Please build a model in the structure of your merger that allows you to ask, and act upon the answers to tough questions that you fear asking because they may have effects on your donor base. Please envision the end goals of our industry, such as imagining what increased efficiency might look like, then work to implement the steps we need to get there. Please do it with the tenacity of a start up if you can. Please surround yourselves with voices and board members who force you to ask tough questions rather than those who reinforce the status quo. Please do not be afraid to smash things open — it doesn't matter anymore how things have always been done. Please be bold, with leadership and confidence. You don't always have to seek permission from all stake holders, because we trust you and encourage you, particularly if you embrace the perspective outlined in this letter. Finally, please run your organizations with the ruthlessness of a business that happens to be tax exempt, rather than as not-for-profit organizations.
With this perspective, we believe you can have the authority to usher our industry into success. This perspective, plus a merger, may provide nothing but opportunity.
