No one likes getting dumped.

Cervelo recently shocked the bike business by announcing that they were leaving the individual online retail business. Instead, they're going with a business model that allows customers to either order their bike online directly from Cervelo and pick it up at their local dealer or to purchase their bike directly from the dealer. Time will tell if this is a smart move on Cervelo's part, but it is intriguing, especially since Cervelo's three biggest dealers are online retailers. Only one of their online retailers has publicly commented on this news, Competitive Cyclist. This quote from the "What's New" page on their site (which is actually the personal blog of one of the owners of the company) says volumes - "It's not for the potential loss of business -- we'll finalize our plans for filling the Cervélo financial void by lunchtime. The bike business is where we're PRO, and this is akin to an ill-timed puncture, but no more than that."

Before I continue, I'll give full disclosure here - I used to work for Competitive Cyclist (CC). I can honestly say that I enjoyed my 6 years with them and that I have several friends that still work there and love their jobs. I think they operate a great business, offer excellent customer service, and that they are the Gold Standard for online retail. I would also like to add that I left on very amicable terms - I'm not aware of any sour grapes on either end. Now I'll continue....

I worked for CC when they brought Cervelo on, and it didn't take long for them to become the #1 brand in the company. Much of the success that CC has enjoyed over the last 5 years has come from Cervelo sales - one look at their photo gallery of sold bikes will tell you that much. For the owner of the company to post such an idiotic statement on the company's site instantly devalues everything that their salespeople have been telling customers about Cervelo for the last five years, and the tone of the statement speaks to the arrogance and maturity of the company's leadership. This statement is just the warm up - the rest of the blog post is dedicated to the reasons why Cervelo will fail and come running back to CC. Picture the speech, whether delivered aloud or mentally, that everyone has ever given to the person that just broke their heart and you'll be right on the money.

CC's owner regularly uses the "What's New" blog to chastise companies like Trek and Specialized for refusing to sell online. He advocates cutting out the local brick & mortar dealer, suggesting that they should go to consumer direct sales or - big surprise - let him sell their product . In the past, he even used Cervelo's allowance of online sales as a shining example of how to succeed in the bike business and included them in the so-called "Big Three" with Trek and Specialized (never mind that there are several other bike companies much bigger than Cervelo, or that Cervelo's annual sales are roughly equivalent to what Specialized does annually in shoes and gloves). He constantly goes on about how inferior brick & mortar retailers are, about how they "hold their vendors hostage" ( I can assure you the opposite is usually the case), about how they can't come close to the level of service he provides, blah blah blah. While he is a very smart guy and a good businessman, what he seems to forget is that Trek, Cannondale, Specialized, and the cyclists in Little Rock financed CC in the early years, only to have the door slammed in their face when CC became profitable enough shut down the brick & mortar side of the business. But now that one of his vendors has essentially taken his advice and cut him out of the equation, the customer direct strategy seems "fraught with risk for several reasons." I guess it seemed like a much better idea when someone else was getting dumped.

While companies like CC spew fiery rhetoric about how Cevelo will never make it without them, they are too self-absorbed to notice that brick and mortar Cervelo dealers have been dropping out like flies. I have no doubt that CC, Excel, and R&A Cycles sold a shitload of Cervelos over the last few years, but even those three behemoths combined can only sell the equivalent of about 15-20 decent-sized brick & mortar dealers. Cervelo has lost a bunch of brick and mortar dealers in the last five years, most of them dropping the line because one of the above dealers was constantly dropping their pants to move Cervelo inventory. If you're a non-internet dealer, where is your incentive to sell a brand that your online competitors are regularly selling at near wholesale pricing? I can tell you nothing is more frustrating than educating a person about a product you have in stock, letting them test ride, fitting them to the bike, etc. only to have them order online for a few bucks less. I don't want to blast online bike sales - if your local shop doesn't treat you right, you don't owe them your business just because their door is open. Or if you're the type of person that likes to do all of your own research, doesn't really need or want personalized service, doesn't feel the need to have a salesperson guide them through their purchase, or prefers to shop on a schedule that is outside "normal" business hours, shopping online is a great option. But it's important to realize that there is more to a good deal than just the final price - if you wish to use the time of an attentive, knowledgeable, salesperson and they treat you with respect and offer you a fair price, you shouldn't dismiss their efforts to save a couple of bucks. It's insulting and tacky.

As I said before, time will tell if this is the right move for Cervelo. One obstacle they face is getting back into showrooms of the dealers that have moved on without them - Cervelo is a great brand, but there a lot of great bikes out there these days, and with their limited product offering, it's hard to build a business around them if they are your primary line. Also, Trek and Specialized have been clear about the prospect of their dealers giving floor space to Cervelo, and those two lines can make or break a shop. And while I've been critical of CC in this post and I find their arrogance at times nauseating, I am sincerely sad to to see them get the rug pulled out from under them. CC is a company full of hard working people that did a lot for Cervelo and this seems like a shitty reward for that effort, so maybe their response to this news is forgivable - no one likes getting dumped.

A Few Cool Bikes, and Uncommon vs. Quality

It's been pretty fun at the shop this week - I've built this Pegoretti Marcelo with Campy Super Record...
This S-Works Roubaix with Dura Ace 7900.... And this S-Works Roubaix with Dura Ace DI-2.

Three very cool bikes , but this photo shows the reality of the bike biz - notice the DI-2 equipped Roubaix on one side of the stand, and the GMC Denali bike on the other side.  Only a $9700 price difference between them!

Of those three bikes, I would have to say that the Pegoretti is my favorite, even though the S-Works bikes are cool as shit and much more like the bike I actually ride.  The Peg holds a special place in my heart because it represents handcrafted Italian steel at its best, welded by a master.  It's much more than the sum of it's tubes and paint - it's a bike frame, but it's also a piece of art.  

I run a bike shop that sells primarily Trek and Specialized.  I dabble in some cool Euro stuff (like the Pegoretti), but Trek and Specialized pay the bills.  I'm fortunate to be able to offer these two premium brands, and thanks to our customers and our staff there are a lot of Trek and Specialized bikes on the local roads. As a byproduct of this success, I hear the phrase "I don't want the same thing everyone else has" about a thousand times a year.  I get it - everyone wants to be an individual.   A few of them (like the owners of the bikes above) simply buy the best, which is expensive and therefore rare.  That type of buyer appreciates quality, likes having unique equipment, and is willing to pay the cost of admission.  This is a mentality I respect, and not for the obvious capitalist reasons.  I respect it because they buy a bike that's both uncommon and the best of its breed.

On the other hand, many of the people who say this to me are willing to trade uncommon for quality - in other words, they will ride inferior equipment rather than (gasp!) ride the same bike as someone else.  This is the mentality I find mind-boggling.  I can't imagine spending more money on a bike that is at best equal - and often inferior in construction, distribution, and warranty support - to the brands I sell for the sake of having something different.  Is their wish to punish Trek and Specialized for their success?  To chastise them for offering premium product, warranty support, and supporting bike advocacy?  Have they grown weary of exhaustive research and development, cutting edge materials, and proprietary production facilities?

It's hard for me to tell people the truth about the majority of the bikes on the market without sounding like some curmudgeon who doesn't sell the brand they want.  But the truth is this - most of the so-called "premium" bikes on the market are cookie-cutter, mass produced pieces that share assembly lines with tennis rackets, golf club shafts, and other "premium" bikes.  For example - Cervelo frames roll off of the same assembly line as the Ridleys, Scotts, and Trek 4 Series Madones at Ten Tech Composites.  Do you like the Orbea Orca?  Then you will probably like the Kestrel, Kuota, Quintana Roo, and Fondriest bikes that are built under the same roof at Martek Composites.  Does that make any of these bad bikes?  Absolutely not - both Ten Tech and Martek do excellent work and all of these frames are well built.  But it hardly makes them unique - the tube shapes may be different, but there is often no significant difference in the type of carbon used from brand to brand.  So if you don't want the same thing as everyone else, are you really accomplishing that goal with these bikes? 

I'm not bashing any of the bikes listed above.  If you ride them and like them more than what I sell, that's what you should buy.  But before you run out and buy something just because it's "different", ride a Madone, Tarmac, or Roubaix - you might find there is a reason everyone is riding a Trek or Specialized.