BROOKLYN, N.Y. (BRAIN) — R&A Cycles, which operates brick-and-mortar stores in Brooklyn and Walnut Creek, California, as well as a well-known e-commerce business, has introduced a $150 charge on bikes sold at its stores, to cover shipping, handling, and assembly.
"Thirty years ago the industry adopted free assembly and services as a way to attract customers to buy a bike," said R&A's CEO, Albert Cabbad. "The problem is 30 years ago bikes took 30 minutes to build, labor costs for those qualifications was way lower, and we did not have a ton of fees simply to do business. Our industry needs to change; our industry has antiquated itself. Being a large dealer my margins are pretty decent but due to my overhead we need those margins to profit. Now imagine small bike shops. We all have a relative cost to doing business and our work is unappreciated," he said.
"We are one of the only industries that does not charge assembly and or fees for servicing when buying something new. The auto industry adopted the destination charge as a whole which was designed by automakers to reduce processing costs when selling a car. Furniture companies charge full freight and offer an additional cost for white glove treatment (assembly). If you buy a painting, you can pay to have it hung. If you buy a TV you can pay to have it installed, if you buy a computer you can pay to have it set up for you. When you buy a cell phone you pay a fee to switch your service over ….. The list does not end there. Most of these services cost the same as what we are charging and the time put in is way shorter. It is time we legitimize and stop underserving ourselves. We are worth more than 'free' and it is time we focus more on profitability and not trying to take each other down and lower our standards and price," Cabbad wrote.
The retailer told customers about the new fee last month.
"The machinery of modern commerce — and especially e-commerce — trades primarily on the cost of not goods, but labor. This creates the familiar 'race to the bottom,' as businesses all along a supply chain do whatever they can to reduce expenses and increase the efficiency of product turnover," said Caffery Garff, R&A's Director of Marketing. "This can take many forms, but is often done by reducing operating budgets by cutting employees, cutting wages, reducing product offerings, or all of the above. Overall service then suffers. We do not want to fall into this cyclical trap."
