gogeta: good news for IBDs and your customers

When a new provider of the tax-free bike scheme launches, cycle retailers, especially IBDs, would be forgiven for looking the other way. The cost of processing many of these schemes has become a challenge to profitable cycle sales at a time when margins on bikes are reducing, and the industry is deep in sale mode, aiming to move an excess of inventory.

Good news – gogeta has chosen to do things differently, and that’s not come about by accident. Barry Scott, gogeta founder, was a bike shop owner for 15 years. He’s seen, first hand, the way schemes are delivered, and the cost a shop incurs when processing vouchers.

The lay of the land

As Barry points out, “Customers were amazed when I told them legacy tax-free bike scheme operators charged us 10-15% of the bike price to accept their vouchers.”

“Through clever marketing (funded by the commission charged!) most customers think legacy scheme operators are non-profits, whereas the opposite is the case. They are immensely profitable and owned by FTSE conglomerates or multinational private equity firms.”

As retailers, we’re all too familiar with the fact that legacy tax-free bike schemes place all of the costs on bike shops. Scheme commission charges are often one of the highest costs of sale for a bike shop, significantly more than accepting a credit card or offering finance.

Prior to the launch of gogeta, a growing number of bike shops had simply passed on all or part of that commission to the scheme user. Some shops now refuse to accept certain tax free schemes, because they are unprofitable. There are bike shops who add a surcharge or exclude certain products from being available to tax free customers – understandable when the cost to deliver the scheme leaves little margin and profit on products.

Customer impact

For bike shop customers this means the headline tax savings of the scheme are reduced, and the overall customer experience is undermined, with more friction, and difficult conversations about price and having to pay more. Retailers end up being portrayed as the bad guys, as if this was a devious attempt at extracting more margin, when all they are doing is passing on the additional  costs they bear.

Not great for employees, or for their employers who want to offer meaningful benefits.

And then there’s the fact that legacy schemes also typically charge a 7% fee at the end of the salary sacrifice term, to cover transfer of ownership. That extra cost can be a bit of a surprise after 12 months!

gogeta do it differently

gogeta´s  approach is to share the cost equitably across the buyers  and sellers.. Employees pay a small platform fee, and bike shops pay a lower commission.

This means bike shops can afford to pass on their best prices and give their usual warm welcome and high level of service to their tax-free customers. Our partners all sign-up to this.

Scheme users are confident they’re getting a great deal. In fact, savings with gogeta can be higher than the headline tax savings, when taking advantage of a discount or sale price in addition to the tax break. Win! 🚀

Barry and the gogeta team also manage the end of scheme hire process without any extra charges, which makes for an excellent employee benefit, with great savings and no friction.

Three key gogeta points:

✅ An even better deal for employees on their new bike.

✅ No hidden end of scheme costs for employees.

✅ A more equitable deal retailers large and small, which is good for us all.

The fine details

gogeta are totally transparent about the fact that instead of charging retailers a big amount, they charge both employees and retailers a small amount each: An equitable fee structure brings the biggest savings for all.

• Employees are charged a 4% platform fee per voucher (which after salary sacrifice saving is c.2.5%).
• Barry states that, “retailers are charged the lowest fees in the industry, by miles”. In return retailers pass on their best pricing to users, including all available discounts, with no added fees.

“By doing this gogeta can harness marketplace savings with salary sacrifice tax benefits on top, to get our users unheard of savings. The more affordable we make bikes, the more people who will ride, and that’s good for you, your community and the environment.”

To explore the gogeta offering in more detail visit https://gogeta.bike/retailer