Big Bad "S".......at it again

[54ny77]

Sinyaaaaaaaaaaaaard!!!!!

[djg21]

Originally Posted by thirdgenbird

pretty sure trek does this at even a higher percentage. This seems more like active coercion than specialized offering to pay their dealers more if they drop a competitor. It doesn't sound like there is any penalty for saying no. It's really not far from a spiff used countless industries.

If the LBS thinks they can make more money by dropping cdale for an extra 5% on spec sales, more power to them. If not, it's business as usual.

These kinds of arrangements are termed "exclusive dealing arrangements" or sometimes "tie-out agreements" (if you are the manufacturer being excluded and want to contemplate taking legal action). They are perfectly lawful so long as the manufacturer does not have market power. "Market power" is a term of art in antitrust jurisprudence. In essence, it is the ability to unilaterally raise prices a relatively significant amount without losing customers to competitive products. At the AT Division and FTC, a 5% price increase is generally the threshold, but there are a lot of other factors to consider.

This is nothing new in the bike business. When I worked in the bike business, bike shops could only carry one of the "Big Three" brands, which were Specialize, Cannondale and Trek.

If you are interested in learning more, you can take a look at:

https://www.ftc.gov/tips-advice/comp...ive-dealing-or
and
https://www.law.cornell.edu/wex/excl...ng_arrangement

[EDS]

I really do not see anything wrong with what Specialized is doing unless they are also making the bike shops pay a 5% premium if they carry Cannondale as well.

If anything they are just giving a shop a choice - and a shop that does a large amount of Specialized sales relative to their Cannondale sales would benefit. If not they stay status quo.

[djg21]

Originally Posted by EDS

I really do not see anything wrong with what Specialized is doing unless they are also making the bike shops pay a 5% premium if they carry Cannondale . . . .

Even this would not be an issue. The shops are free to say no and go to other manufacturers. In today's market, shops do not need to stock Specialized (or any other particular brand) to remain in business.

The only way there could even possibly be an issue would be if Trek and Specialized agreed amongst themselves not to sell bikes to shops that also sold Cannondale.

[bcroslin]

Originally Posted by thirdgenbird

If this bothers you, then you will need to start boycotting a lot of companies. Conquest missions are pretty standard fare. They are not forcing the dealer to do anything.

I'm happy when companies are willing to point out what bastards they are so I can avoid them. I haven't shopped at Walmart in 15 years because of their shady business practices.

As for Specialized, the end is coming for any LBS that depends on selling big-name brands. I have friends that own and work at a few LBS's and the things they tell me are stunning. Cervelo, Specialized, Giant and Trek are all awful to deal with. Sounds like Raleigh is starting to play games as well. The only manufacturer that I consistently hear good things about is Moots and I can count the number of dealers in FL on one hand.

[CampyorBust]

Big S

Is anyone surprised anymore?

Having said that every time I look for a new bike I test ride one of theirs, just to make sure I am not missing out on anything. Every time I reach the same conclusion... meh close, but no cigar. I have one Big S product - a black floor pump, I took a sharpie and blacked out the IZ, I like it a lot more now.

[djg21]

Originally Posted by CampyorBust

Big S

Is anyone surprised anymore?

Having said that every time I look for a new bike I test ride one of theirs, just to make sure I am not missing out on anything. Every time I reach the same conclusion... meh close, but no cigar. I have one Big S product - a black floor pump, I took a sharpie and blacked out the IZ, I like it a lot more now.

I do love my 2008 Specialized Epic MTB, and in particular, the rear shock with the Brain inertia valve. When I'm in the market for a new MTB, I would have to look at another Spec.

IMO, Specialized's business practices aren't really that horrible. It is a successful company trying to adjust and keep market share in a rapidly changing marketplace. Sure there have been some miscues, but I have far less disdain for Specialized than I do for Trek given its past affiliation with a certain detestable pro cyclist and its seemingly willful ignorance of that cyclist's PED issues. Spec makes some really nice stuff!

[p nut]

Just limit your bike purchases to Kirk, Winter, Strong, Potts, Coconino and you'll ride with clear conscience.

[CampyorBust]

Originally Posted by djg21

I do love my 2008 Specialized Epic MTB, and in particular, the rear shock with the Brain inertia valve. When I'm in the market for a new MTB, I would have to look at another Spec.

IMO, Specialized's business practices aren't really that horrible. It is a successful company trying to adjust and keep market share in a rapidly changing marketplace. Sure there have been some miscues, but I have far less disdain for Specialized than I do for Trek given its past affiliation with a certain detestable pro cyclist and its seemingly willful ignorance of that cyclist's PED issues. Spec makes some really nice stuff!

Indeed, that Epic especially the world cup is truly drool worthy. Also the short chain stays on the Enduro 29 - yes please! Still every time I end up with a bike that does not have Specialized written down the side. Rode the Ripley and Stumpjumper Evo back to back, not even close Ripley FTW in every category. Hey if it works for you nothing anyone says should matter.

Oh and I totally forgot that new Vader worthy Venge they just put out - ummm O face!

As far as questionable business practices yeah I get it corporations will do what corporations do, but the whole cafe Roubiax thing was going too far for me. That fine line between good ole corporate self interest and the morally right thing to do has been crossed way too many times by Big S.

[stephenmarklay]

This is not a lot different than the motorcycle dealer I ran. It sounds like an aggressive move by Specialized to me.

I had reps tell me they would kick a bike over if I did not move it our of the way of their product. I had others tell me they would pull the plug on us. That is pretty hard to do with state laws etc.

[Dustin]

"Hey, we're dicks just like everyone else!" still isn't doing it for me.

[thirdgenbird]

Originally Posted by stephenmarklay

This is not a lot different than the motorcycle dealer I ran. It sounds like an aggressive move by Specialized to me.

I had reps tell me they would kick a bike over if I did not move it our of the way of their product. I had others tell me they would pull the plug on us. That is pretty hard to do with state laws etc.

What am I missing?

How is doing nothing to dealers that don't drop cannondale aggressive? I would assume the only the dealers that participated are ones that will financially benefit. Is that the fault of spec, cdale or the LBS?

would you be upset if a LBS offered their customers a discount if they exclusively purchased from them?

[djg21]

Originally Posted by thirdgenbird

What am I missing?

How is doing nothing to dealers that don't drop cannondale aggressive? I would assume the only the dealers that participated are ones that will financially benefit. Is that the fault of spec, cdale or the LBS?

would you be upset if a LBS offered their customers a discount if they exclusively purchased from them?

Funny you mentioned it. I proposed this type of arrangement to a friend with a bike shop. Pay an annual membership fee of a couple hundred bucks up front to join a bike coop of sorts. Membership gets you fairly significant discounts on bikes, parts, softgoods and service (competitive with Internet sellers) and priority in the service cue. Credits from purchases accrue and can be used towards additional purchases, like with Team Performance, or to re-up the coop membership the next season. A shop like this that establishes a loyal base of committed repeat customers could work.

[thirdgenbird]

Originally Posted by djg21

Funny you mentioned it. I proposed this type of arrangement to a friend with a bike shop. Pay an annual membership fee of a couple hundred bucks up front to join a bike coop of sorts. Membership gets you fairly significant discounts on bikes, parts, softgoods and service (competitive with Internet sellers) and priority in the service cue. Credits from purchases accrue and can be used towards additional purchases, like with Team Performance, or to re-up the coop membership the next season. A shop like this that establishes a loyal base of committed repeat customers could work.

Despicable. Good luck in the classifieds

[victoryfactory]

There's nothing new about big companies trying to get more space at the
dealer. You should see the supermarket shelf battles between coke and Pepsi.
Dealing with only the "good" companies makes us feel better but does it really slow down the mega manufacturers? What do you say to the guy who wants a bike but only has $1000. to spend? Or a mom who has 3 kids who all need bikes?
Supporting small makers with better business practices is a good thing but not
everyone can afford this kind of political statement.
So, how not to be a hypocrite every time you shop around for a better price?
I have no answer, but I don't go to a Chevy dealer if I want a Ford either.
VF