Specialized Direct to Consumer Bike Sales

Lots of good points in this thread. Couple of other observations:

Specialized distribution has taken a big hit in the latest round of Trek shop purchases. A good number of those shops were dealers of both Trek and Specialized. It’s a lot harder for a consumer to buy a Specialized in those markets now, so the direct model makes sense if they’re not prepared to open their own stores or get into other independent shops.

Trek released their direct-to-consumer plan several years ago with the fanfare that the launch was “the single biggest expenditure in Trek history.” Dealers were furious and terrified, worried that Trek was now a direct competitor for their business. That hasn’t materialized at all. The landscape is certainly somewhat different now, but I still don’t think Specialized D-T-C is going to take a big cut of their existing dealers’ sales.

Specialized seems to have badly underestimated the demand shock of the last couple of years and failed to react fast enough. I hear they’re way behind their peers in terms of getting inventory in stock and providing reliable ETAs.

I’m still stunned by their withdrawl from Mike’s. I know Pon is a competitor but sometimes you have to make uncomfortable alliances. Where are they going to replace that lost business in NorCal? I really doubt DTC is going to get it done.

No insider info here and I don’t have a Grand Theory Of What’s Going On. Just shop talk. Hmmmmm.

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I would want option 6

  • just send me all the parts and let me do it all myself. just give me 20% off.

Because I have to take the bikes apart and put them back together anyway…

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To be fair, diamondback has a similar thing.

I just remembered this, but when I bought the Andean last year, it was more expensive to ship it over to my house partially assembled than shipped to a store to be picked up. I chose the store delivery although it was not the store I would usually visit.

I think in this environmental lbs will not mind the option of having a bike sent to be assemble and picked up by costumer than wait for bikes to sell…

Just a couple thoughts because this is interesting to me.

There is potential it makes sense when you’re talking freight to ship mass quantities in larger boxes. Essentially shipping air does come at a cost.

There’s also reasons to want your product to be labeled as assembled in the US, and varying levels of what assembly means.

I find it interesting to think about the business case like this. I’m sure they have their stuff figured out to where this makes sense though.

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When shipping from asia they want to pack as many bikes as possible into a cargo container. Large mostly empty boxes are expensive. If just shipping to Specialized they don’t need each bike to be individually wrapped with all its parts so that can make it cheaper than what they ship to dealers. Assembly should be cheaper than dealers too. They can have an employee dedicated t building bikes all the time. Do dealers sell enough bikes to have someone do that?

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As a former bike shop mechanic and a one time internet bike purchaser, bikes arrive at a customer’s house with much less assembly required than the way they normally arrive at the shops. That said a little extra labor in no way offsets what they would normally lose by selling through a retailer

So if you need to adjust the steering spacers, shorten the cables, or swap the brakes Front right, rear left or other the bike still needs to go to a shop. These are things a good shop would do prior to delivery. Not sure how Canyon handles it. I’d rather get a bike from a shop if it has internal cable routing and/or the brakes swapped around, those are two tasks that can be a big headache on modern bikes.

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This is where I think the LBS could get upset. The consumer will choose direct shipping to their home, cutting out the LBS financially, and then take it to the LBS for fit issues and expect them to do the work for free.

The more I think about it, the more I think this works for both S and their LBS partners…

If a customer can get into a queue and buy a bike and then ship over to a LBS to be assembled and inspected before pickup, for the same price as shipping to home and assemble it yourself, I think most people would chose to pick up at bike shop if the shop is close enough (there are many people who have no interest in learning how to put together a bike)

Bike shops in the other hand, do not have to handle customers bitching about the lack of models or sizes. They can tell them to order online (get into the queue to get a bike) and wait to it get shipped.

anyway… Mr Cynic is still alive and well… but I think this move makes perfect sense…
I would not call it direct to consumers, like Canyon, tho.

Of course…I have spent literally my entire career sourcing goods from Asia. The current container rates certainly makes the US labor component less of an issue, but how long those freight rates remain at this level remains to be seen. That could turn the whole calculus around on them.

Most people don’t care about cable length or even know that they can be shortened. The overwhelming number of bike customers are not us…they are buying Hard Rocks and kids’ bikes, not Tarmac or Diverges. And nobody is really swapping brakes around.

Having bought one Canyon and now building two Specialized kids bikes through consumer direct programs, I can say that the bikes have been well-assembled and tuned. No major issues.

However, one thing does stand out as a concern and that is bedding in disc brakes. Most people are unaware of the importance of this step and it is a critical safety factor.

When I got my daughter a gravel bike a few years ago, an old industry buddy hooked me up. Bike arrived and we built it, but I forgot to bed the brakes in….as we rolled down the street on her first ride, the brakes were essentially worthless.

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Specialized has been screwing with their dealers for a while now. It’s a funny company. Some great bikes but they do weird things at times. I have two but kinda look elsewhere now.

Outside of bikes, there are other things going DTC through dealers. Recently bought a prosumer level snowblower. The local dealer couldn’t get any machines at all. Sent me to the DTC page where I was able to order direct from the manufacturer. Machine was in stock. Shipped to the dealer a week after ordering. Dealer assembled and then delivered to my door. Even filled the gas tank.

After I ordered online, the dealer had to “OK” the order saying they would receive it and then deliver it.

Worked great for me as same price. But I’d rather have done everything locally and presumably keep more profit local too.

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I expect this additional cost is less than the margin that shops make on bikes, say 30%. Sure, for low end bikes this becomes less attractive due to fixed costs of shipping, packing materials, and labor(nominally fixed per bike). For high end bikes there is big money to be made. Hell, they will probably charge extra for shipping anyway.

#onelessspecialized

*I do own one :face_with_monocle:

Bought a Canyon Lux a couple of years ago. Arrived ready and spent maybe 5 mins putting it together with a small basic tool kit. Worked like a charm. At the time, I thought it was too easy and too straight-forward for larger bike companies to not jump on that bandwagon and cut out a middleman.

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All of my local specialized shops suck and its more likely to get a bike that poor assembled. They can’t keep mechanics its just new people learning on the job. If Specialized has people assembling the same thing over and over again its more likely to be right. Besides dealers make most of their money on repairs and service, new bike sales aren’t the money market. Its how they acquire customers.

Specialized has already started opening their own shops. There is one a couple miles away from me in Chicago:

Yeah, they’re coming. I’m just not sure how much scope they have with it yet.

I’ve heard rumor they added (or are adding one) in Houston too, but haven’t been able to find it yet

The direct to consumer model is not usually rolled out by a premium brand.

To reinforce the perception of a premium product you need the support of physical shops/ centres in case of recalls, on going servicing requirements or resolving any issues and finally what about test rides? Before you drop on a purchase, regardless of personal income and on the back of price increases most individuals will research their next purchase more carefully. All the reviews drop away once you test ride a bike. A S Works is £1200 more than a Dogma F, need a bike fit, need a shorter stem?

In the UK we have concept stores which on the whole are an excellent endorsement for the manufacturer.

As for the rationale behind this decision it will be interesting to see how the commercial offering evolves from the Big S and let’s not forget the 49% shareholder of Specialized, Merida.

Interesting times for sure, although it remains to be seen if they’re better times.