Tuesday, 21 April 2015

Opinion: More standards, are dealers de-stocking because nothing is actually standard?

For those who follow me on twitter you will already know my views on the constant introduction of ‘standards’, mostly they are brought in to solve to problem that wasn't even there in the first place. Recently we had some more with ‘Boost’ hub spacing (with Boost chainset spacing), plus sized wheels and direct disc brake mounts, this got me thinking, if this is a nightmare for the consumer what is the effect on a dealer?

One thing we have learnt over the past few years as there is no such thing as a standard component any more. Replacement parts for bikes have now become a minefield of common and obscure standards, most so similar yet still completely incompatible, it’s a complete headache.

As a distributor this becomes a massive problem as we then have to invest in stock to cover an obscure standard that somebody may or may not want. We can do this as we have the advantage of a massive customer base, who in-turn have large customer bases so somebody somewhere is going to need that part sooner or later. If we look at it on a shop level the customer base diminishes so the chance of a dealer having the exact standard of component for that customer who walks through the door becomes a lot smaller.

We notice sales wise that we are selling a lot of headsets, headset bearings and bottom brackets, in actual fact more than ever. We also notice that the orders for these products are becoming more and more for single items, so dealers are ordering the exact part for a specific job, this leads me to ask the question ‘are dealers de-stocking because of standards?’ The simple answer has to be yes, we can already see this through patterns in our sales.

For dealers complex standards are a nightmare, why take the risk on stocking something which has a low stock turn when you could invest the same amount with a far higher stock turn. With this in mind de-stocking complex parts makes perfect business sense, but by doing so you risk losing the customer service element which consumers expect from an IDB.

Back in the 90’s I worked in a few retail shops and making a stocking decision was relatively easy. I have a demand for headsets so I need to stock headsets. When a customer walked through the door and you could sell them a headset (and hopefully fit it), you have a happy customer and hopefully he will return. Move forward to today and a customer walks in to a bike shop and asks for a headset for his bike. The first problem is that the dealer has is to work out what headset the customer actually needs; the second problem is you don't stock 'that one'; the third problem is that you have to call your supplier to order the headset in and hope the customer will wait and possibly pay the postage charge.

I have just used headsets here for an example, but you can easily substitute them for bottom brackets, bearings, chain rings, chain sets, hubs, free hubs and cassettes etc...

With every additional standard launched on the market my heart sinks a little, as I know what’s coming, dealers will continue to de-stock service parts as they struggle to understand the market. By choosing to de-stock the dealer risks losing customers to other sales channels.... But ultimately it’s the customer that loses as they can no longer buy what they want, in their local shop when they need it.

And the worst part about of it is, we as an industry are driving this trend...


UPDATE: Following the publication of this we had a pretty good discussion on twitter with lots of great points being made, here are a few

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