Becoming a dealer

Lumen

I want to order a bike frame. The manufacturer does not sell direct. I must therefore order from a dealer, who is not local, and has no stock. The dealer will therefore order one frame from the distributor, and post it to me.

Why can I not just order one frame directly from the distributor? The dealer is adding zero value, since I'm not ordering a built bike.

I own a company that does not normally sell bicycles. How easy is it to become a dealer for a given brand? Are there volume requirements? I understand that for common things like groupsets there is little point, since CRC etc may be the same price as trade, but the margin on high end frames must be significant. Or perhaps not.

Anyone got any insights?

Alternative - Could you check out where other dealers are (inc. other countries), see if you know someone living near one of them or one who will be happy to receive it packaged, then get them to send it on to you, and sort it that way?

thebouldwhacker

Are you suggesting a bike co-op? bulk buying power from boardies? Synchronised annual purchasing of new bikes leading to massive savings???

:cool:

lukester

Lumen wrote: »

Anyone got any insights?

No real insights at all, just speculation, but if you get registered as a dealer, you're going to have a whole lot of new best friends.

I'd imagine as a dealer there would be a volume minimum though.

Lumen

thebouldwhacker wrote: »

Are you suggesting a bike co-op? bulk buying power from boardies? Synchronised annual purchasing of new bikes leading to massive savings???

Yes, that sort of thing.

I'm not sure there would be huge demand; most people wanting value just buy direct from distributor (Wiggle/Focus, Planet-X). I imagine that Trek etc would require you to be a real shop, so it would be for the niche stuff.

Chips Lovell

Pure speculation, but I'm wondering if a distributor would want to do business with you unless you're willing to take on a certain volume of product. While the dealer in quesiton may not have that frame in stock, I'm sure they carry plenty other stuff from that distributor? Still, no harm in asking.

You could find yourself on the top of a slippery slope to owning a bike business.

Lumen

el tonto wrote: »

Still, no harm in asking.

Done. This could be interesting.

lukester

Tangent- when are you setting up Lumen's Bike Fit Emporium?

Lumen

lukester wrote: »

Tangent- when are you setting up Lumen's Bike Fit Emporium?

If my business goes pear-shaped, I may become that "man in a van".

In which case I want an A-team van with a bike jig and video equipment in the back. Space may be an issue.

I have no qualifications or experience, but Google is my friend.

lukester

Lumen wrote: »

If my business goes pear-shaped, I may become that "man in a van".

Would you loan out pumps?

Lumen

lukester wrote: »

Would you loan out pumps?

Brown pumps, size nine?

https://www.youtube.com/watch?v=Cz2-ukrd2VQ

lukester

Old school, I dig. They don't make comics like that anymore.

flickerx

I'm not back in Ireland until Sept, but I'd be on for trying to start up a small shop, keep me in mind if anything concrete develops from this.

IM0

would it not just be easier to pick up the phone and ask about requirements/commitments for becoming a dealer for said brands?

boniver

Lumen wrote: »

I want to order a bike frame. The manufacturer does not sell direct. I must therefore order from a dealer, who is not local, and has no stock. The dealer will therefore order one frame from the distributor, and post it to me.

Why can I not just order one frame directly from the distributor? The dealer is adding zero value, since I'm not ordering a built bike.

I own a company that does not normally sell bicycles. How easy is it to become a dealer for a given brand? Are there volume requirements? I understand that for common things like groupsets there is little point, since CRC etc may be the same price as trade, but the margin on high end frames must be significant. Or perhaps not.

Anyone got any insights?

A) I suppose the distributor is trying to support his dealer who may have invested money in stocking other products/bikes from his range. As a retailer I would be majorly pissed off if I have,say, 5k tied up in stock from brand X and then they go and sell direct to a customer just because I don't hav the one thing he wanted.

Given our experience, very few distributors are willing to set up accounts without i) a commitment to spend a minimum amount on their product so that they have 'brand representation' in your store and ii) unless you are actually running a retail business.

Finally, the margin on high end frames might now be as high as you think. A lot of high end stuff is sold on a paper thin margin because there's so much competition out there.

kona

boniver wrote: »

Finally, the margin on high end frames might now be as high as you think. A lot of high end stuff is sold on a paper thin margin because there's so much competition out there.

Dont konow about the rest but this is 100% true, the bikes with the bigget margin are the cheap ass e100 bikes.
Bike shops make their money from servicing and parts.

IM0

boniver wrote: »

margin on high end frames might not be as high as you think. A lot of high end stuff is sold on a paper thin margin

yeah the retail margins may be small but they have HUGE markup from the Manufacturer to the Retail, as in it all goes to the middle men of the chain. Produced cheaply, sold to next stage for lots more, and by the time it gets to the retail, their markup is the smallest - allegedly

boniver

me@ucd wrote: »

yeah the retail margins may be small but they have HUGE markup from the Manufacturer to the Retail, as in it all goes to the middle men of the chain. Produced cheaply, sold to next stage for lots more, and by the time it gets to the retail, their markup is the smallest - allegedly

I think that's true. Apparently - though I don't know this to be fact - the distributor has the same margin as the retailer and the manufacturer has the same margin again. Then you have to add in shipping costs, import duties, tarriffs etc. In essence it means that even the most expensive bikes are being built somewhere for not much money. No way around it though, imho.

bcmf

If it is to be set up as a co-op then surely margins shouldnt have to be a primary focus because even if you do make a tiny profit think of the revenue/vat side.
I recently spoke to a relative of mine about setting up as being a "retailer" in Gore.I was told that they (Gore) are very fussy about who sell's their product as they have a high end reputation and want it to remain that way.AFIK they issue some sort of vendor licence to be able to sell Gore.This may also be the case with other high-end brands.
If it could be worked out though its a great idea.