Specialized cutting prices, 25% off Stumpjumper

[oldpotatoe]

Originally Posted by Alexi

Nope, and they sometimes don’t even bother telling you that they put items on sale.

I guess that was my point of the rhetorical question. When trying to sell shoes, we got bit by this more than once...'Factory/distributor' announcing DEEP discounts on the shoes we already had in inventory...and then the Rep(tile) would come by and want us to buy more shoes.....we stopped selling shoes.

[ap_az]

Originally Posted by prototoast

Now I'm not going to say I'm the perfect representative consumer, but I will note that the bikes they have on sale have very little overlap with the bikes that I might personally be interested in. Maybe I could see myself getting a stumpjumper, but I would be much more interested in Crux, Epic, Chisel, Aethos, Fuse, Tarmac, Allez, and I don't see any of those on sale.

+1 on this... the models that are on sale are of zero interest to me personally and I'm guessing that bikes which are more geared toward trail and downhill applications are in a serious lull right now... partly due to season and partly due to the demographic segment interested in those bikes being harder hit by economic conditions (it's a bad time to be younger and nervous about job security).

[carlucci1106]

Originally Posted by oldpotatoe

Gotta wonder how Spec 'handles' LBS' that aren't part of the Spec 'universe', not a factory store and these deep discounts. Does the 'factory' give the LBS some sort of $ break? For inventory already on their floors?

We have had situations in the past where a bike was heavily discounted that was already on our floors.

Spesh would ask you to wait until you sold the bike, show a POP with a serial number, and then credit your account with the adjustment on the wholesale cost that you paid. IIRC, the adjustment was not the exact dollar difference between the original wholesale and the sale priced one, but some kind of compromise.

Needless to say, it was not the best situation for the LBS, as it shrunk the $ margin that you were hoping to get on the ceiling of your floored models, where you are sacrificing a spot where you could have sold 2 or 3 fast-movers like Crossroads hybrid, or a Rockhopper HT in the same time period. Now you have taken a cut on the ROI of your square footage.

I would not be surprised, as Alexi said, that this policy is now eliminated to indemnify the LBS. This is just one of the many ills perpetuated by the MAP pricing policies, and then websites that also sell D-2-C. Where this will really bite you in the A$$ is on helmets or shoes that you have a lot of. IIRC, those wholesale costs were never adjusted, you just took it.

If I ever opened any kind of bike business it would not be with one of the big four brands. I wouldn't expect that corporate mindset to improve at all going forward.

[batman1425]

Originally Posted by Alexi

Nope, and they sometimes don’t even bother telling you that they put items on sale.

Makes me chuckle they've started doing this when during the worst parts of the shortage, they would roll out pricing restructures to dealers for inventory they currently had on the floor, one after another. I think I saw the same physical bike increase in prices 3 times in 6mo. Sliding scale.

[dave thompson]

When I was a Yamaha dealer in the 60/70/80s, if Yamaha would reduce the price on a model I already had on my floor, they would credit my account the same dollar amount for future parts purchases.

For us that system worked pretty well because we did a lot of service work and repairs.

[fredd]

If they do this for the epic, I’m gonna be really hard pressed to not get into mountain biking…

[carlucci1106]

I'll add a bit as now I recall. The credit was based on the best tiered price the dealer could purchase the bike at wholesale originally. As most of you know. tiered pricing involves giving better wholesale to shops who commit to more product. So if you were on a lower tier (a small LBS, let's say) the credit was a large percentage of what you paid, vs. what you would buy it for wholesale now.

For the Erik's shops it was the exact difference betweeen what you paid, and would now pay wholesale.

What is most disconcerting is that your supplier is your competitor at the retail level. They have modeled the sales of their bikes to sell through the LBS channel, their stores, or the D-2-C channel. Some mix of those.

When they are selling "their" bikes at just-above wholesale cost, they are still making a very healthy profit, but the shop now has to match their price to compete, if they are still flush with inventory. If you didn't, people would "showroom" you for size/color, and then turn around and buy it direct. Next week, you'll be building that Stumpjumper.

So, needless to say, your supplier is not your friend when times get tough. I don't get offended when OldP says Rep(tile) because it 100% TRUE. These people egg you on to buy their overpriced crap, then they keep a contingency of inventory to have the power to control your prices-via the digital realm, so all their products sell. You fail- they will do nothing to prop you up, except maybe offer to buy you out.

[peanutgallery]

Many times there is an opportunity to buy product at a promotional price prior to the sale, but guess what, you used your $$$ to stock the floor with a required preseason order and you don't really want/need it to darken the door. If you don't take the company up on the promotional opportunity you are reminded that you had your chance

The company credit route only works if and when you order more stuff. You don't realize the $$ for a while and doesn't help pay the bills for a while. There is usually some chasing involved along with voice-mails that get missed, emails that never make it to an inbox and blank stares from the rep the next they come around for another preseason order. Fun times

Originally Posted by carlucci1106

I'll add a bit as now I recall. The credit was based on the best tiered price the dealer could purchase the bike at wholesale originally. As most of you know. tiered pricing involves giving better wholesale to shops who commit to more product. So if you were on a lower tier (a small LBS, let's say) the credit was a large percentage of what you paid, vs. what you would buy it for wholesale now.

For the Erik's shops it was the exact difference betweeen what you paid, and would now pay wholesale.

What is most disconcerting is that your supplier is your competitor at the retail level. They have modeled the sales of their bikes to sell through the LBS channel, their stores, or the D-2-C channel. Some mix of those.

When they are selling "their" bikes at just-above wholesale cost, they are still making a very healthy profit, but the shop now has to match their price to compete, if they are still flush with inventory. If you didn't, people would "showroom" you for size/color, and then turn around and buy it direct. Next week, you'll be building that Stumpjumper.

So, needless to say, your supplier is not your friend when times get tough. I don't get offended when OldP says Rep(tile) because it 100% TRUE. These people egg you on to buy their overpriced crap, then they keep a contingency of inventory to have the power to control your prices-via the digital realm, so all their products sell. You fail- they will do nothing to prop you up, except maybe offer to buy you out.

[carlucci1106]

Rep came around one year, "Pitch 650b is going to be a hot bike for 2017, better stock up on your preseason."

Preseason goes in Oct. and arrives in Jan/Feb (meanwhile 5 feet of snow on the ground).

FFWD April 2018

Spesh Website: Spring Sale on Select Bikes including Pitch/Sirrus/Whatever!!

SPRING SALE SPRING SALE SPRING SALE (Window clings and Sandwich board style in-store marketing arrives in big boxes)

Dealer emails: If you want to buy more Pitches at discounted wholesale, please contact your rep.



What happened Specialized... did you over-forecast for entry MTB sales, or am I a stupid idiot, and just not order enough? Because I'd have to be a stupid idiot to believe there isn't a correlation between the Spring Sale, and you not selling through.

[PaMtbRider]

Originally Posted by fredd

If they do this for the epic, I’m gonna be really hard pressed to not get into mountain biking…

If they did this for an Epic Evo or an Aethos I would hard pressed to stay out of the local bike shop. Unfortunately they don't even show stock for either of those models in my size.

[carlucci1106]

"Together We Win"= If you do what we tell you to do, we (Specialized) will win

"1000 Desicions Properly Made"= We only made 1000 new Sequoias because we weren't sure they were going to sell

"Innovate or Die" = get really creative with how you change the rules of the retailer/supplier relationship to ensure profits for stakeholders

"Aero is Everything" = there is no other redeeming quality to this bike

"Smoother is Faster"= Ignore that motto just above, we're talking about cobbles right now, not part of Everything

[PaMtbRider]

Anybody get this email from the big S? I saw it over on mtbr.com I looked at the few bikes that would interest me and saw no changes.

[oldpotatoe]

Originally Posted by carlucci1106

I'll add a bit as now I recall. The credit was based on the best tiered price the dealer could purchase the bike at wholesale originally. As most of you know. tiered pricing involves giving better wholesale to shops who commit to more product. So if you were on a lower tier (a small LBS, let's say) the credit was a large percentage of what you paid, vs. what you would buy it for wholesale now.

For the Erik's shops it was the exact difference betweeen what you paid, and would now pay wholesale.

What is most disconcerting is that your supplier is your competitor at the retail level. They have modeled the sales of their bikes to sell through the LBS channel, their stores, or the D-2-C channel. Some mix of those.

When they are selling "their" bikes at just-above wholesale cost, they are still making a very healthy profit, but the shop now has to match their price to compete, if they are still flush with inventory. If you didn't, people would "showroom" you for size/color, and then turn around and buy it direct. Next week, you'll be building that Stumpjumper.

So, needless to say, your supplier is not your friend when times get tough. I don't get offended when OldP says Rep(tile) because it 100% TRUE. These people egg you on to buy their overpriced crap, then they keep a contingency of inventory to have the power to control your prices-via the digital realm, so all their products sell. You fail- they will do nothing to prop you up, except maybe offer to buy you out.

Need a like button. We got bit by the D2C alligator more than once. Again, with shoes..Got 'showroomed', then the guy rides by to show us his new bike(mail-order), and we notice his new shoes...Happened with Colnago too with Maestro-UK..even tho we 'were' a Colnago dealer. The Rep(tile) told us to just lower our prices 'to compete'...Amazing that some of these companies will piss on their LBS network not realizing it's their bread and butter..it sure ain't volume MO/D2C.

[carlucci1106]

Originally Posted by PaMtbRider

Anybody get this email from the big S? I saw it over on mtbr.com I looked at the few bikes that would interest me and saw no changes.

Wow, that's quite the thread over there. And I thought we were getting feisty.

The sentiment by one Spesh dealer really echoes my sentiments... and I didn't even own the shop, but I watched multiple owners take it in the chin for years:

https://www.mtbr.com/threads/special...replies-header

BIke N Gear: The problem is Specialized has chosen to change the rules as it goes along. In the past year due to the pandemic we had to purchase bikes at an inflated cost. Bikes that retailed for $600 pre covid were bumped to $750 during the pandemic along with the same bump in cost. Bikes were impossible to get so shops took whatever inventory they could get at these inflated prices. Specialized then decided to sell the same bike direct to consumers, taking away some sales that would have gone to the LBS. Next, they brought the same bike back down to $650. Ok, we can still make a profit, but not the normal margin. Now that same bike has been reduced on their website to $487.99 and there goes any profit.
Sure, going forward, anything Specialized moves are expected, but in the mean time I have over $100k of bikes that I won't make any money on. If that's not getting screwed by the manufacturer that we supported for 20 years, I'm not sure what is.

This was exactly what my shop experienced from a loyalty timeline, and about 5 years ago everything started to change. Spesh is not a single actor working alone like the Big Bad Wolf, but they are a model for which other every company takes cues from. And those cues are, it's okay to tell the IBD (Independent bike dealer, as Spesh referred to us), that we matter, and we've been a team all along, and slash and burn those same dealers when the opportune time comes. And that time is where the direct model actually seems viable.

I underlined "manufacturer" in the quote because this is a misnomer. Specialized is a design firm, a marketing firm, an importer, a distributor, and a retailer. They are literally everything except a manufacturer.

[Kyle h]

Originally Posted by oldpotatoe

Need a like button. We got bit by the D2C alligator more than once. Again, with shoes..Got 'showroomed', then the guy rides by to show us his new bike(mail-order), and we notice his new shoes...Happened with Colnago too with Maestro-UK..even tho we 'were' a Colnago dealer. The Rep(tile) told us to just lower our prices 'to compete'...Amazing that some of these companies will piss on their LBS network not realizing it's their bread and butter..it sure ain't volume MO/D2C.

I will say, shoes seem like an incredibly hard market to fill for shops. My wife wears 38s and I wear 42.5, went to the closest 3 LBS and found a grand total of 0 shoes of any brand in our sizes. Competitive cyclist just can’t be beat for shoes. We ordered probably 15 pairs to try on and then returned most of them, for free, back to CC.