It was sometime in early 2013 that BRAIN's then-publisher Marc Sani sent me an email. Of course Marc and I had traded lots of emails over the years, usually just swapping industry gossip. (Well, there was also the time one of his editors referred to me personally as "Cyber-Trash" in the front page headline of BRAIN. Marc and I had what diplomats would call "a full and frank exchange of views" over that one.) But all things considered, we got along pretty well.
Besides, this email was different. In it, Marc asked if, instead of my sporadic gratis contributions to Bicycle Retailer to date, I'd be interested in doing a monthly series of opinion pieces. And getting paid for them (quite modestly, he assured me). As a longtime bicycle industry consultant and freelance advertising copywriter, Marc's warning that he was going to pay me (however modestly), to write anything I wanted to about the bike biz came across like he was trying to threaten a dog with a pork chop.
Of course I immediately said yes.
Because the pieces would appear exclusively online, they could be as long as I wanted, although I usually broke them into two or more parts if they went much over 1,500 words. (Apologies for last month's piece, which weighed in at more than 2,600 words in a single installment. But I wanted to keep the parts together.) Also, I could write about any topic that interested me, as long as it was at least somewhat germane to the (U.S. specialty retail) bicycle business.
So I did. And 12 years later, you're currently reading the one hundred and second installment in this series. (There were actually a few more before these, but I'm only counting the pieces that got saved onto the BRAIN website. The others are still on my backup hard drive, but would take hours of work to unearth.) The remaining 101 pieces are available here. And in case you're wondering why I'm not writing the present piece to honor the 100th edition, I frankly didn't realize there were that many of them in the archives until I actually checked and started counting them.
The first piece, March 13, 2012
"You have to remember," a dealer friend once told me, "that the I in IBD stands for "Independent." "True," I replied. "But the problem is, so do the B and the D."
My first piece under the new agreement proposed that we as an industry respond to retailers paying exorbitant transaction fees on card purchases by implementing a voluntary alternative and then-new ACH (Automated Clearing House) payment automation system called Dwolla, and donating a portion of the savings to cycling advocacy.
It was entitled "Fwolla the Dwolla," which was certainly not the best headline I've ever written. Fortunately, the lede was pretty good:
"There are any number of things National Bicycle Dealer Association Executive Director Fred Clements doesn't mince," I wrote, "and words are some of them. Ask him about the effect of credit card fees on retailers' already modest profit margins, and he'll tell you flat out: "It's a black hole of conspiratorial behavior on the part of the credit card industry."
That was written 12 years ago, and aside from the fact that we now call them "payment gateways" and they're increasingly bundled (or "seamlessly integrated," as the vendors insist on putting it) into POS packages, dealers are still getting ripped off. Transaction costs are as high as ever, with some getting mulcted (a much nicer word than "screwed") by rates as high as 4%, according to dealers I've talked to.
How much less were Dwolla's rates at that time? A quarter. "Not 'one-quarter less than the big guys,'" I wrote. "Or even 'one-fourth of what they're charging.' But a real, honest-to-god quarter. Two bits. A couple of dimes and a nickel. So if a $1,000 bike purchase takes $30 off the retailer's bottom line, the same purchase made via Dwolla only costs them 25¢. Unless it's a small purchase, say less than ten bucks. Because in that case, my friend, the whole thing's free." (Note: I have no idea what Dwolla charges nowadays; its website gets cagey about rates, but presumably it's still less than other payment gateways.)
So my Big Idea was to get consumers interested in paying via Dwolla (they have to establish an account with Dwolla to make payments though it) by donating half the dealers' transaction savings to PeopleForBikes or similar advocacy groups. The big problem, I realized, would be reaching a critical mass of participating dealers and getting the initiative supported by suppliers.
In hindsight, It was an interesting idea, but difficult to put into practice. "You have to remember," a dealer friend once told me once, "that the I in IBD stands for "Independent."
"True," I replied. "But the problem is, so do the B and the D."
Still, the piece made for interesting discussion, and the problem still haunts with us more than a decade later. Except that retailer margins are smaller than ever nowadays, which makes the transaction fees proportionally all the more painful. And because those transaction costs are increasingly baked into dealers' POS systems, it's harder for dealer to shop around and pick more cost-effective gateways.
Which brings me to the whole point of this piece. And about time, too, I hear you mutter.
It's all about the conversation
This kind of back-of-the-napkin analysis inexorably leads to what BRAIN editor in chief Steve Frothingham likes to call the "Three's Company Theory of Vosper's BRAIN Pieces."
My motivation in writing that first piece in 2012, and each of the hundred — now 101 — that followed it, was to get the industry talking about things it doesn't normally talk about. And It turns out there is a functionally infinite number of those things.
On the one hand, this is good, because I have plenty of material to write about. But it's probably not so good because "those things" tend to be issues that other, more successful industries would address as a matter of course to in order for them to successfully do business. Which, as I've pointed out more than a hundred times now, the bicycle industry doesn't. So it doesn't.
Oftentimes, this pointing-out business involves working from incomplete or imprecise data and extrapolating it into largely tenuous conclusions about what's going on beneath the surface of our quirky and incestuous little industry. And I'm the first to admit this.
Examples of this process include working from Christopher Georger's dealer counts (which are created from bike brands' published dealer lists and necessarily can only be as accurate as those lists themselves) to see how the dealer landscape is evolving over time.
Another example is trying to integrate ridership data published by PeopleForBikes and the National Sporting Good Association, which use two completely different criteria for defining who's a cyclist in the first place, not to mention different methodologies for sourcing that data. And then there's my entirely conjectural hypothesis about dividing the industry's business model in eras I call Bike 1.0, 2.0, and so forth, in the first place.
This kind of back-of-the-napkin analysis inexorably leads to what BRAIN editor in chief Steve Frothingham likes to call the "Three's Company Theory of Vosper's BRAIN Pieces," to wit: "In the same way that most Three's Company plots would collapse if the characters had had cell phones," he has written in any number of internal-circulation emails, "most Rick Vosper column premises would collapse if the bike industry actually had reliable market data."
In addition to being rather funny, Frothingham's Theory points to a darker truth at the heart of the U.S. bicycle business: As I noted previously, any other comparably sized industry would already know this stuff — and in fact, literally has to know this stuff — in order to run itself effectively.
But this is the bike business, and we don't know this stuff. Which is one of many reasons why we don't run ourselves effectively. And pointing this out is where I come in.
