Trek’s bike shop buying spree continues, dealers lose out on some commission sales

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Trek has bought Sacremento bicycle shop City Bicycle Works, adding to its steadily growing portfolio of owned stores.

Bicycle Retailer has been tracking the firm’s steady progress in acquiring stores, reporting in February that the brand has taken over four-store Revolution Cycles, as well as reporting in May that it had added 16 store Bike Line, a chain in Philadelphia.

In the UK, Trek has acquired a handful of businesses in recent times, with Triathlon specialist Royles perhaps the most notable name to date. Later this month, Full Gas Bikes of Sheffield will re-open as a Trek store, the fifth in the UK owned by the brand.

Clarifying Trek’s position on the U.S. takeovers, Trek veteran Gary Fisher told CyclingIndustry.News: “We have been buying shops that want to sell in places where we don’t have representation, the dealer can’t sell the shop, or their kids don’t want to takeover the biz.

“We have been buying what seems like a lot of shops this year, however these shops total sales are projected to be way under 10% of our total sales in the USA. Next week is Trek World in Madison. No product, 100% training and inspiration for our dealers. We are dead set on working as we always have on bringing up our independent dealers.”

The firm’s relationship with the independent bicycle dealer does however appear to be shifting slightly. In early 2016, Trek announced that it would sell directly to the consumer, offering the customer’s local bicycle dealer a commission to complete and service the sale.

CyclingIndustry.News has now learned from UK stockists of the brand that the firm has reduced dealer margin in some cases with a change of terms, with one store tallying the move to equate to “4.5-5k off our bottom line.”

The same dealer also outlined that, while Trek have enhanced dealer margin on products ordered via TrekBikes.com and collected from the dealer, commission has been withdrawn on P&A items shipped directly to consumers.

“This is a massive step from a previous champion of IBDs,” said our stockist.

Nigel Roberts, the UK managing director told CyclingIndustry.News that, while there is certainly the possibility that some accounts may have dropped down a tier, most have the opportunity to make more money with Trek going forwards, if they invest.

He said: “You can earn more today with Trek than you could 12 months ago. In response to market movements, our programs are evolving and those committing to the brand can enhance their business with demo schemes and our work to develop the electric bike offering. Not all will be upfront headline margin, but partners can certainly stand to earn more now.

“Our click and collect margin, for example, is one area to increase for the dealer where customers have a partner. Partners are not always available to some customers and we’ve had expressions of confusion when they’ve been prompted to choose one, so there has been a small change here.

“Certainly we’ve a number of projects with retailers to help them take their businesses to the next step, so the focus remains on the IBD.”

In July, the firm dropped its Irish distributor in favour of a dealer-direct relationship, adding weight to the notion that the firm is streamlining. The very same has happened in New Zealand.

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