We participate in a confidential e-list discussion forum of bike dealers, in which we all abide by understandably strict rules about repeating or relaying the opinions or specific writings of other retailers.  It only makes sense though that careful generalizations are permitted, at least to provide context for a topic discussed elsewhere.

Someone wondered whether Phil Wood was selling directly to consumers, implying a question of whether this was acceptable in terms of business practices favoring the Independent Bicycle Dealer (IBD).

My response was that yes, Phil Wood & Co. has always been willing to work directly with their end-user and bypass the retailer.  They have however maintained a strict policy of charging at least what their retailers will likely charge, so there’s no real price competition.  Another factor I did not mention, but others indicated, was one significant advantage for retailers in having Phil Wood do this.  They have a long history of producing high quality intricate parts, and servicing so many years’ of those items would require us tying up capital in stock of hundreds of these pieces, and maintaining inventory of them, just to claim we can replace a pawl and spring in a 1979 hub once every 6 years.  I’m happy to do it too, but I’ll gladly permit Phil Wood to take that job, thank you.  They earned it.

Within my reply was contained a comment, “We’re not entitled to free profits.  We earn them by providing a service, to both the supplier and the customer, and it’s our job to convince the customer we’re worth it.”  This of course was not referring only to flat tires, bent wheels, and spring tune-ups, but really encompassing everything cyclists might expect from their bike shops; on the showroom floor too, including earning a fair share to help procure, install, ride, and possibly service a conscientiously selected Phil Wood product.

Another thread brought up our annual international trade shows, and whether we as retailers will remain as relevant as we have in the past, to our suppliers, to our customers, and even to the show itself.  Do our suppliers [and customers] need us, or are we just another “cog in the distribution chain,” eventually found obsolete?

A few of my own thoughts on the subject:

Some vendors may see us as valued customers, of a sort.  Some view us as partners, critical cogs in the distribution-chain machine, but dispensable when a more efficient machine is developed.  A few likely see us (IBDs) as barely necessary leeches, middle-men, sucking profits from what could have been their bigger bottom lines (regardless of whether this is actually true, and in many cases may not be, as this lengthy White Paper attempts to relate.)

Similarly some customers feel we are critical entities in their lives, sources of valued services, advice, and the best products and end support; hard to imagine living without.  They’ll occasionally pay a slightly higher price than they know can be found elsewhere because they also believe it supports our continued existence, from which they draw tremendous value they don’t always fund directly.  Unfortunately this often paints the IBD portion of our industry as charity.  Others think of us as fun places to visit, but only worthy of their hard-earned money when the value is clear and obvious in the moment.  Finally, a growing number seem to view the IBD as almost completely unnecessary service centers for tube changes and wheel truing, not a sustainable business model and, similar to the final example of suppliers above, just another place to spend more money than should be necessary.

Neither the manufacturers, distributors, nor consumers owe us anything not earned, not even an opinion on how to perpetually justify our existence into their futures, let alone our value or place in the industry’s chain of distribution.  By itself it doesn’t matter that we have 40 years of business behind us.  The experience itself matters, but then only if we can apply it for someone else’s benefit.  It doesn’t matter that we pay for all our business licenses and government mandated fees, collect sales tax (without compensation), are available for service and support 70+hours per week, answer hard questions for free, promote or support community and charity events, anonymously bolster or refer business to competitors, and strive after-hours to push the boundaries of our training and expertise abreast of what is provided to our customers through magazines, group ride wisdom, and social media, while still fairly paying employees, supporting our families, and paying the mortgage.  It doesn’t matter that we provide a conveniently dry, lit, and heated space to experience the products and perform the services.  None of that matters and, for the most part, little of it should… it’s the harsh truth, but it’s the real world.  What matters is the value we can relay to a customer when she’s standing before us with a checkbook.  She needs to leave our shops knowing she got a great deal, not because she paid a cheap price, or even because she subsidized our existence for when she really needs us, the next time.  She needs to know she got a great deal because we provided her with a level of service equal to or greater than what she paid, not just in the moment, but relative to her overall cycling experience.  Yes, it really is that basic.

Sometimes we may provide a high level of service and under-charge, and she still feels ripped off.  Other times we do something simple and charge too little, and she may feel exceedingly privileged.  An enormously overlooked part of our jobs is to accurately convey the true value of what we produce.  And yes, we need to produce something, not just present it.

And we need to latch the shop door each night knowing we were fairly compensated for those services, whether repairing a flat tire, addressing a warranty issue, or developing and executing an ingenious solution to a complex problem.

Likewise manufacturers and suppliers are not obligated to attach assumed values to the services we provide.  They’ll see it when it shows up (or doesn’t) in their own bottom lines.

As IBDs, we’re only cogs in the machine if we’ve chosen and elected to stubbornly hold that position.  Cogs are easily replaced, and machines become more elegantly designed (cog-less) by nature of our free market.  It’s up to us to either convince the customer and our suppliers that our cog-in-the-machine model remains ideal (through example), make ourselves an indispensably superior cog, or participate heavily in the on-going re-design of that fancy new replacement, potentially cog-less distribution model so that it still somehow includes us.

Maybe it’s high time we sought the opinions of our customers.  What do you think?