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How Rumbleship is changing the relationship between brand & local bike shop

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Personally, Iā€™m fascinated by anyone that can create a new business model for an existing industry and change the way it operates, improving or creating opportunities for others to succeed while making a living for themselves. In business and running for two years, Rumbleship has been steadily building an alternateĀ supply chain and ensuring that theirĀ back end system would run smoothly as they grew. Now, theyā€™re starting the outreach to build awareness among retailers. That growth, and a chance encounter at Sea Otter, led to this story.

Rumbleship’s raison d’etre is “to serve the independent bike dealer,” said Alex Lugosch, co-founder. “We’re a marketplace for brands and dealers, and we make money on interest from the loans to retailers. The twist is that the dealers aren’t paying the interest, the brand is by offering a small discount off their invoice to Rumbleship. So, it’s not a sales commission because Rumbleship pays the brand immediately after the order is placed and then floats the money until the retailer pays the invoice. Rumbleship takes all the risk and covers all credit card fees.

So, what’s the benefit to independent bike shop? To the brands? Lots of things…

Upon logging in, a dealer/retailer sees the shop's dashboard. It has links for cust support, a news feed for current promotions and specials from suppliers, the top suppliers the shop buys from and recent orders.
Upon logging in, a dealer/retailer sees the shop’s dashboard. It has links for cust support, a news feed for current promotions and specials from suppliers, the shop’s top suppliers and recent orders.

“We cost a lot less than a distributor,” Lugosch says. “We donā€™t have a warehouse. We donā€™t buy and sell products, we just provide an avenue for brands to sell their products directly into a retailer.”

“But more importantly, we’re a software company that provides retailers the tools to do business the way thatĀ makes sense for them,” adds fellow co-founder Isaac Sparling. “And we give a dealer credit to buy from the brands on our system. We can do this because we have significant investment backing that guarantees our terms, and we have insurance on the loans to retailers.”

The benefit to retailers is that they have access to more brands or SKUs that may not be carried by the big distributors and better terms than a brand could offer on their own. Occasionally, the prices might even be lower if a brand lists the product at distributor pricing rather than wholesale pricing, though Lugosch says they recommend most brands split the difference between distributor and wholesale pricing. The other benefit is a single credit check, and a single invoice for orders from multiple brands showing whatā€™s due and when, which saves shop management a lot of time doing the things no one likes doing…time spent away fromĀ sales and marketing activities that actuallyĀ boost business.

An order page on the Rumbleship B-to-B site.
A catalog page on the Rumbleship B-to-B site showing available brands…
...and the order page for a single brand's items.
…and the order page for a single brand’s items.

The brands gain access to more retailers without having to add a huge sales force, and if theyā€™re listing at somewhere between distributor and wholesale pricing, the retailer gets to make a little more margin. Or offer a more competitive retail price to battle online resellers. Or both. It may also be that the brand is just too small to get the attention of a major distributor, which was the case with Dog Ears GPS and JET Roll. Bigger brands like KTM Bikes and Light & Motion are on board, too.

The discount off invoice from the brand variesĀ (but isĀ always less thanĀ 8%) depending on how quickly the brand wants to get paid, the credit history of the retailer and the volume of sales.

Once an order is placed, the brand can approve the order and update or change it as needed by communicating directly with the retailer. Itā€™s then drop shipped directly from the brand. Shipping rates are up to the brand, but are all configured and shown on the Rumbleship order screen so everyone knows whatā€™s being charged ahead of time.

They have about 50 active brands now and about 25 in the pipeline. At the moment they have about 2,600 retail accounts, but theyā€™ve been largely growing with boutique and niche shops from the start. Now, theyā€™re getting into more of the mid-sized shops and regional 2-3 shop chains.

Brooke Summers, marketing manager, says “as avid cyclists, we really believe in (the brands we list)Ā and their products and how they can really bring value to what a shop carries. We enjoy the stories that each of the brands carries with them, and I really enjoy telling that story. So, rather than dealers just logging in a browsing a catalog, we reach out to dealers with a weekly newsletter to tell the stories of new brands or products we put online.”

Rumbleship was acquired six months ago by OrderWithMe, but they still operate as an independent group thatā€™s focused on cycling for now. They plan on expanding intoĀ the general outdoors category shortly.

Rumbleship.com

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7 Comments
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Cheese
Cheese
8 years ago

Tyler, do you think you could make that Prologo advertisement more flashy and annoying?

Please
Please
8 years ago

@cheese do you think Tyler has any control over the design of his sponsors’ ads? Grow up.

Chris L
Chris L
8 years ago

Cheese: apparently you don’t know f*** all about how media placements work.

DCT
DCT
8 years ago

Adblock

Eric E. Strava
Eric E. Strava
8 years ago

This is a rad concept

don
don
8 years ago

Thx, love BikeRumor for exactly this kind of stuff. Apparently you sent a bunch of folks their way, just signed up and am on the waiting list.

don

Brooke
8 years ago

@don and other shop owners – thank you for interest in Rumblship! Shop accounts are individually verified and activated within 24hrs during business days. We look forward to serving the BikeRumor fans! Any questions: 415-534-5442 or info@rumbleship.com

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