The newly-formed Bicycle Dealers Association is to pursue further reform of the Cycle to Work sector, today launching a petition for which it is calling for shop support.
“We are a group of bicycle dealers, and we are challenging how the administration involved in government’s Cycle to Work is currently structured. We have tried, over an extended period, to positively engage with the bicycle industry, to discuss a more rational and fairer system. This, to date, has been an unsuccessful process – there seems to be resistance to change because of vested interests predicated on a history of excess profits within the Cycle to Work administration sector. In essence, we feel this is a failure of appropriate governance of the sector,” starts the petition.
The story so far, for those catching up, began with the Bicycle Dealers Association pressure group forming with initial backing of just a handful of stores, though the group’s spokesperson now tells CI.N its network now reaches north of 200 stores in support and growing. The aim of the petition is to put a public marker down showing support for further reform, potentially in a new legislative format.
The group’s short term goal is to have a seat at the table for further discussions on how to make the scheme better suit all parties, with a spokesperson telling CI.N “It will be far better to have those conversations now, rather than wait until we have 1,500 stores behind the message. There can be very few bike shops in the land that would not want to see further improvement in the terms handed to IBDs.”
Almost in tandem with the group’s formation the UK’s largest Cycle To Work scheme, Cyclescheme, pledged to slim down its commission to a figure more familiar with its early days in business. The changes, which come in to force at the start of November, trim the third-party provider’s commission to 8.33%, plus VAT, with no further commission taken beyond the £3,000 price tag, should a customer be investing well. The moved meant that the fee taken can now never exceed £249.90 on a single transaction.
The response among bike shops was mixed with some hailing it as a move in the right direction and others saying the reduction still does not go far enough to address the issue.
Separately, there were further complaints that a conversation voluntarily mediated by the Bicycle Association on the matter included only Cyclescheme and four key brands, but no retail representation. The brands at the table were Giant, Raleigh, Specialized and Trek.
Many bike retailers are already battling with margin on bike sales which has been steadily shrinking in the face of increased competition from direct to consumer channels, currency shifts and other issues tied to the supply chain’s many links. Therefore there remains a sense that some third-party providers remain unrealistic with their commission demands.
Cyclescheme is thus far the only Cycle to Work provider to react to criticism, with the Bicycle Dealers Association telling CI.N it would like to see some comment from Halfords, among others, on its relationship with cycle stores when it comes to dishing out voucher payments.
Pressed on whether the BDA may wish to consider if too strong an action could jeopardise the scheme as a whole, the spokesperson added: “I don’t think the scheme will be scrapped any time soon as the bike industry has really shown its worth lately. With refinement of this legislation everyone stands to benefit. The Cycle to Work sector requires us to sell the idea enthusiastically on the shop floor. If a retailer is not keen it won’t do as well and that translates up through the chain in sales. No one is enthusiastic of losing 15% margin. Once this is resolved then we can become passionate sales people and advocates.”
Earlier this year, prior to the national press picking up on bike retailers’ discontent, CI.N ran this series of articles asking the front line their views on the structure of things as they stand and whether it is likely more or less business would be handled via the scheme in the future. Separately, CI.N’s annual market study holds data illustrating the direction of the market as it stands. This year’s survey, for which retailers are invited to share their views, is now live here.
Cycling Industry News’ next print edition will carry an in depth interview with The Bicycle Dealers Association where the group’s structure and longer-term goals are explored. Verified UK-based businesses may subscribe for a copy in print or digital format here.