BRAIN Dealer Tour: Internet realism

SALT LAKE CITY (BRAIN) — As executive director of the National Bicycle Dealers Association, Fred Clements had a chance to reflect on issues facing the 13 dealers visited during a three-day tour of Utah's Wasatch Valley.

And what Clements noted was the grudging acceptance of Internet sales as part of modern retailing. "Dealers here are coping with the Internet and they are competitive in their markets," Clements said, shortly after finishing his first full BRAIN Dealer Tour.

"They feel the threat, but to a person they are coping with it; they are actively reaching out to their community with events, activities and sponsorships, and they are seeing some improvements in online pricing that is starting to level the playing field," Clements said.

Several dealers, for example, pointed out that Shimano and its Pearl Izumi brand have done a much better job gaining control over Web pricing. Still, it's the "leaky" supplier who remains the problem," Clements said.

It was Brady Edwards at Bountiful Bicycles, a Specialized store in Bountiful, Utah, a bedroom community for Salt Lake City, who best summed up what most dealers had to say. If a customer "showrooms" a product, he will match it. "We want that customer to come back. We don't want to send that customer out the door mad," Edwards said.

But the general support by local government for improvements in the cycling infrastructure has given dealers in an 80-mile stretch along the Wasatch Front from Provo in the south to Ogden in the north a boost in visibility and sales.

Another factor driving retail success for many of the retailers we visited were the number who own their own stores and the number of multi-generational stores. Many of the stores were launched in the 1970s. Today, the sons, daughters, grandsons and granddaughters are actively involved in the business, Clements said.

"There was such a variety of family-owned stores liked the Taylor family," he said. The Taylors own three stores — Taylor's Bike Shop south of Salt Lake City. But Clements also noted that the Wasatch Front is home to concept stores, urban shops, pro road and pro mountain bike stores, multi-sport operations and a full-line Internet operation.

Cycling to Bountiful Bicycles from downtown Salt Lake takes you through an industrial area that includes refineries and other industrial operations. Ironically, a bike path—littered in sections with gravel and debris—snakes through a portion of the area.

Bountiful Bicycles is a modern store with glass windows and an open-air vibe. Edwards is the fourth owner. The original store was a former Schwinn shop that first opened in the mid 1960s. Edwards' father bought it in 1985. This new and sunny 8,000-square foot store was built in 2000 and has three levels, with storage on the top level, tucked behind a mezzanine. Bountiful Bicycles has a second, smaller location in nearby Kaysville.

While it focuses on families, the store floors a deep selection of mid- to high-end Specialized bikes and accessories, including three Specialized Turbos—electric bikes that retail for almost $6,000. The store has sold several and the staff loves bombing around on them. The store has carried the big "S" brand since the early 1990s. But Edwards supplements that brand with models from Pivot, Raleigh, BH and Niner.

BikeWagon, just a few miles from Bountiful Bicycles, is primarily an e-commerce operation in an industrial park yet it features an attractive, high-ceilinged storefront and a small service area inside its 33,000 square-foot warehouse. The operation brought on retail veteran John Jarvie to help build and manage the shop.

Dale Majors founded BikeWagon about ten years ago after buying bikes and parts at swap meets. He would then sell them on eBay. The business exploded, and now BikeWagon is a major purveyor of close-outs and in-line products sold through eBay, Amazon and its BikeWagon.com site.

George Majors, Dale's father, said BikeWagon has shown that an e-commerce vendor can sell products at full MAP price on eBay, something not every vendor allows. The eBay listings are sold at a fixed price, not at auction, and BikeWagon includes a coupon or flyer in the package, helping drive eBay buyers back to BikeWagon.com for future sales.

The third store on the day's tour was Beehive Bicycles, the only urban store visited. Owner Greg Steele opened it in 2011 in Salt Lake City's up-and-coming 15th and 15th neighborhood. Steele, who had been stay at home dad for more than a decade, opened the store after sending out more than 100 resumes while trying to re-enter the workforce.

After countless rejections and seeing the perfect location for a shop with a "for lease" sign on the window, Steele decided it was time for a career change. Three months later he opened the 2,100 square-foot shop located one block from his home.

Beehive sells a limited selection from Pivot, Salsa, Surly, Dahon, Ritchie and Spot. And Steele said he's had unexpected success in the cargo bike market, selling a number of Surly Big Dummies since opening. Like many Salt Lake City area retailers, fat bike sales have both extended the season for Beehive and evened out what has historically been a seasonal market. But the real bread and butter has been commuter and neighborhood business.

Rounding out the day was a final stop at the Sports Den, the only multi-sport store on the schedule. Roy Crane, the store's manager and buyer, said the Sports Den is a family-owned, single store operation, but it's claim to fame in Salt Lake City is its expertise in ski sales, repair and tuning. It specializes in custom boot fitting and race tunes drawing customers from throughout the region.

While it has been selling bicycles since 1972, its winter ski and apparel sales drive the operation. Crane stocks an array of Fuji, Kona, Devinci, Raleigh and Electra bikes with most located up a stairway looking out over the store. Several Electras are lined up outside to remind passersby that the store sells more than skis.
The Sports Den was also the only store visited located in a major shopping mall. Crane said winter sales account for up to 80 percent of its annual sales. And that explains why its accessory offerings are limited. Still, the shop has three full-time mechanics on hand throughout the week, orders most of its parts from QBP in nearby Ogden, and can generally get repairs out in a couple of days, Crane said.

While 650b sales are growing fast, Crane pointed out that there is plenty of service work being done on 26-inch mountain bikes. "About eight out of 10 mountain bike repairs are 26-inch bikes. There's still a lot of work to be done on them," he said.

The Salt Lake City Dealer Tour is sponsored by Advanced Sports International , Finish Line/White Lightning, Lizard Skins, Bell Helmets, Interbike and PeopleForBikes.