In a letter to Specialized dealers on Tuesday, company founder Mike Sinyard warned independent bicycle retailers to be wary of Amazon.com’s new Price Check app.
The complete letter is copied here after the break. Bicycle Retailer & Industry News (BRAIN) has posted two excellent articles (part one and part two) of why it matters and how and why it affects both dealers that sell through Amazon and those that don’t.
Plenty of shops supplement their income selling parts on eBay and Amazon, but, as BRAIN suggests, it’s the ones that are selling online without the authorization of the brands that typically slash the prices to a point where they’re hurting the market. Two of brands called out in Sinyard’s letter, Sidi and Louis Garneau, told BRAIN they require online resellers to maintain MSRP on current model year products but that older inventory may be discounted.
For as long as we’ve been cyclists, prior model year goods have a long history of being closed out at discount, often sold in large lots to blowout mail order companies like Jenson USA. What’s becoming an issue is the ease with which consumers can now price check and order via smartphones directly from the brick and mortar bike shops.
LETTER FROM MIKE SINYARD:
Dear Specialized Dealer,
Is your store a fitting station for your online competition?
Amazon.com recently launched a free app called Price Check that allows consumers to use brick-and-mortar shops for research, then easily buy many cycling products online right from their mobile device.
Here’s how it works: when in your shop, consumers simply scan a bar code, type in the product name or take a picture to see the product and prices from a variety of online retailers. After ensuring they have the right fit by trying on the product in your store, and talking to your staff, they can buy it from somebody else with the press of a button.
Participating brands include Pearl Izumi, Shimano, Louis Garneau, Giro, Bell, Fizik, Sidi and CatEye.
Who loses in this situation? Certainly not Amazon. And, at least in the short term, not the cycling brands selling through bike shops and Amazon. But what about you?
By buying product from brands that severely undercut you, you are supporting your competition. Why finance your own demise?
Please investigate for yourself by downloading the free Amazon app.
Amazon is clearly interested in the cycling space, and is hiring talent from the bike industry (including from Specialized).
In related news of brands that leverage the IBD while simultaneously undercutting them, Easton-Bell Sports dropped the fruitless suit it filed against Specialized before Interbike. Was this legal maneuvering just carried out for publicity?
Whether the current news is mobile device apps or lawsuits, the underlying issue remains the same: some suppliers support the IBD and some do not. For the sake of your business, examine your suppliers’ strategies and vote with your dollars. The entire bike industry is watching.
Click here to see how Amazon’s Price Check App works in store (Video here)
Thank you for your continued support.
President & Founder
Specialized Bicycle Components