Ask the Trade: What are the effects of Brexit on overseas competition?
In the second part of our ‘Ask the Trade’ series on competition for the bike shop we seek to understand whether Brexit has had any impact on competition and whether the consumer press could be doing more to drive customers toward the frontline bike shops that serve the marketplace…
New rules coming in to play post Brexit have further dented the viability of cheaper goods entering the UK undercutting the market. Likewise, some B2C brands are stepping back for now. Will this give the IBD sector a breather on bike sales and promote margin stability?
Jake Voelcker, Bristol Bicycles
I’m split on that. On the one hand, if UK is less flooded with discounted parts or cheap bottom end bikes that’s got to be a good thing. We want to see reasonable quality that lasts and is nice to ride, as well as avoiding a price race to the bottom.
On the other hand, almost all bike components made outside of Britain, so we will reasonably expect to see the imported in bulk from Europe bits become more expensive and with more red tape. It looks like a price rise of about 15% on some items. Wholesalers in Europe pay import duty on Asia and again when it is shipped on to Britain. Maybe there are ways around it, but it’s early days.
In the long-term if UK manufacturing returns that could also be good. But in the short-term it’s not good for costs. Even though we build bikes to order, as with any other bike components come from Europe or east Asia. These include electric bike parts from Bafang and frames from all over Taiwan. For the moment, technical requirements carry into British law from EU law, so that’s okay to plan around at the moment.
David Stainthorpe, Cyclesense
We have already seen an increase in sales from being able to pick up discarded B2C business and hopefully it will continue. The other side of the coin is the extra costs that we are experiencing already with disbursement fees and increased shipping costs. It’s extremely doubtful that the Government will try to smooth things out so we will have to wait and see how it pans out. Meanwhile, I’m happy if we can capitalise on this change in consumer supply.
Simon Davis-Savage, Webbs Cycle Shop
Yes, I’d agree with that, but it is really who has stock. Customers are being forced to actually shop around and look into what the bricks and mortar shops has to offer. To be honest, I haven’t been asked for a deal or discount in a year as they are just grateful you have bikes in stock. Forward ordering is essential.
In CI.N’s 2021 Retail study bike shops flagged consumer press affiliate links to online giants as a threat to business. If given the chance with the publishers would you also move product via this means?
Jake Voelcker, Bristol Bicycles
I have noticed that whenever newspapers do e-Bike reviews links tend to go to Amazon and Halfords. We do our own work to find brand ambassadors and will get in touch with newspapers in the hope of featuring. Marketing remains important for us in order to compete with bigger brands.
A few people cycled around the world on our touring bikes, without paid affiliate links required, but they generated lot of publicity and social media so it was worth doing.
We are just about to launch a new lightweight electric bike working with another Bristol e-Bike firm and we will deliver a sub 16 kilo cycle. It’s fairly priced too at £1,500.
David Stainthorpe, Cyclesense
There is always an extra cost to affiliate selling, whichever way it is viewed. You have to decide whether it’s worth throwing money at it like any form of advertising. It is better to capitalise on reputation, existing customers, referrals and recommendations, paired together with positive online feedback. At the very least this will create organic business growth and you don’t end up being busy fools chasing extra trade that has been bought by expensive marketing.
Simon Davis-Savage, Webbs Cycle Shop
More drive by the consumer press to shop local, or check out your local IBD in person would be helpful for the trade’s indie firms.
