Specialized making dealers choose: Cannondale or them! - Page 2
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  1. #26
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    personally owned must be..

  2. #27
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    My LBS is a Cannondale and Raleigh dealer but he sells Specialized helmets, shoes, tires, etc. Basically everything but bikes. All of my shoes are Specialized, they fit my feet. My first adult bike was a Specialized Hard Rock in 1987. This is the first that I have heard of their business practices, but it is all about profit. If Cannondale is putting blood in the water, Specialized is going to go after them.
    Retired sailor

  3. #28
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    Quote Originally Posted by independentdealer
    Mainly on the basis that cannondale was bought by pacific and will soon be in performance bike shops. Cannondale completly denies this and went as far to say they will be releasing a memo in the Bicycle Retailer Magazine saying Cannondale will not be in Performance and maintain staying in High End non chain retail stores.
    Clever choice of words. Perhaps it's true that they'll "maintain staying in high-end, non-chain retail," but what they're not saying is that they also have a side deal going with a not-so-high-end chain store—like REI.

  4. #29
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    Quote Originally Posted by wim
    Clever choice of words. Perhaps it's true that they'll "maintain staying in high-end, non-chain retail," but what they're not saying is that they also have a side deal going with a not-so-high-end chain store—like REI.
    what Im hearing is that cannondale isn't going to be sold outside IBDs. no dicks sporting good type arrangements. they've got mongoose, schwinn and to a lesser extent gt for that. additionally, word on the street is that theyre in the market for another high end IBD only brand.

  5. #30
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    independentdealer - try using the quote function so we know who the heck you're replying to. Otherwise it looks like you're babbling.

    As far as losing Spec'd - who cares. There's better rides out there. I don't find the "bang for the buck" of Spec'd gear to be ANYTHING to crow about. It's good stuff, but priced nearly as bad as Trek.

  6. #31
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    I have three LBS's within 7 miles. One carries Specialized and Trek. One carries Specialized, Cannondale, and Seven. One carries Giant, Trek, and Orbea. If they pull out of one dealership just because they carry the 'C' word, folks around here will have a 33% chance of randomly walking into a store with Specialized instead of 66%, while there'll still be a 66% chance of finding Trek. Even with a massive cash inflow I think Trek, and not C-dale, is Specialized's real competitor.
    To the troll mobile, away...

  7. #32
    wim
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    Quote Originally Posted by blackhat
    what Im hearing is that cannondale isn't going to be sold outside IBDs. no dicks sporting good type arrangements. they've got mongoose, schwinn and to a lesser extent gt for that. additionally, word on the street is that theyre in the market for another high end IBD only brand.
    Yes, I hear that too. REI's been selling Cannondales for some time now, so Cannondale would have to terminate that arrangement if they're serious about the IBD-only thing.

  8. #33
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    I wasnt too impressed with the Cannondale anti Specialized advert in the Velo News Buyers guide. Tactics like that wouldnt make me want to buy a Cannondale. I dont think cycling needs politician style slanging matches from either party.

    "If you havent seen the advert thay basically reprinted an email from a Specialized recruiter trying to poach Cannondale engineers implying Specialized was desperate to get some good designers"

  9. #34
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    Quote Originally Posted by lakes road sheep
    "If you havent seen the advert thay basically reprinted an email from a Specialized recruiter trying to poach Cannondale engineers implying Specialized was desperate to get some good designers"
    You know what...i remember just recently seeing an ad on cyclingnews that specialED was looking for designers in all areas...hmmmm??? I am pretty close to the owner of my LBS and he said that specialED is very strict and they require such a high order amount to be a dealer that it wasn't worth it, he said that the numbers they require would force him to drop all his other lines and be a one-trick pony! He carries TREK, GIANT, BMC, and DeROSA and Pinerello is coming this spring so he's got his markets covered...
    "I'm not known for my patience. Patience is a polite quality and often appropriate, but it rarely gets things done. Impatience, however, is the hunger for results and intolerance for excuses and delays. Impatience got me over countless mountain passes..."
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  10. #35
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    Quote Originally Posted by wim
    Yes, I hear that too. REI's been selling Cannondales for some time now, so Cannondale would have to terminate that arrangement if they're serious about the IBD-only thing.
    Define "IBD". REI is a co-op. Is there a distinction there? (Serious question.)

    Given the turmoil that Cannondale has been in for the last few years, I am not sure why the most recent ownership transition would change anyone's opinion about the brand. In the meantime they have gone from the CAAD7(?) to the SuperSix as their flagship. Not bad for a company that is on the way down. Regardless of your opinion of their bikes, they have been as innovative as any of the other Big Brands and still do the majority of their production in the US.

    I am as suspicous as anyone about the claims of new owners. Having lived through such a deal that went sour, I know that even the best intentions don't always work out. That said, it makes zero sense for anyone concerned to turn Cannondale into another bargain bin brand. That would be a total waste of the investment that the new owners are making.

  11. #36
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    Specialized is mercenary for sure.

  12. #37
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    trek does that

  13. #38
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    Specialized makes some top notch bikes and, they are only going to get better in the future, like next year when the SL2 technology filters through the non S-Works Tarmac line. They are starting to put some "engineering" distance between themselves and, the boatload of other brands. And, their mountain bikes need no introduction to popularity and proven performance.

    Losing the Specialized line would not make good sense in my opinion. Of course Cannondale is a good line too and, their series of road bikes appears to be well thought out, regarded and priced. But, in business its common sense and level headed judgement that leads to success, not biases, prejudices, feelings & the like. Times change, shi't happens, the business world is far from perfect but, just be ready to make the right decision.

  14. #39
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    Not that simple.

  15. Whether you buy the marketing or not, Speicliazed is clearly not satisfied to let is products compete on their own merits. This case demonstrates that they would rather monopolize floor space than let their products compete.
  16. Specialized makes many demands of its dealers, from minimum orders, to insisting on the sale of their clothing and accesory line, to interfering with your other business relationships. Does it make good sense for a private business owner to let one vendor dictate their buisiness strategy?
  17. I worked for a company that was a volume buyer of Specialized products. This relationship generated no CS issues nor required any rep attention. One day Specialized decided that they did not want to sell product to them any more because said company was not a channel for their wholistic approach to selling cycling goods. If they will pursue their percieved interests to the point of turning down easy money, what will they do your store if they get a wild hair up their STs?

    Specialized does not make the kind of common sense, level headed judgements that you associate with success. Dealing with Specialized means dealing with their biases, prejudices, feelings, and often times being strongarmed into a position where you are at the mercy of their whims. Its not a simple matter of having a popular brand in your store.

  18. #40
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    In response to PeanutButterBreath. It probably has less to do with specialized being dissatisfied with their product and more to do with market share. If a new consumer who has limited knowledge about bikes comes into a shop, Specialized, as a company, wants to make sure that their bikes are the ones that the consumer can everywhere. It's not dirty tactics, it's good business(this is to a earlier response).

  19. #41
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    Quote Originally Posted by blackhat
    what Im hearing is that cannondale isn't going to be sold outside IBDs. no dicks sporting good type arrangements. they've got mongoose, schwinn and to a lesser extent gt for that. additionally, word on the street is that theyre in the market for another high end IBD only brand.
    Sports Basement sells Cannondale.

    And regarding Specialized non-terminating its current dealers. A local IBD (Bike Spring in Mountain View, CA) got out of buisness real fast after, being a Spellized concept store, it decided to branch into other brands (Colnago, Ridley). There were other factors contributing to the demise, but, from what I heard, Specs reaction was the major one.

  20. #42
    wim
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    Quote Originally Posted by PeanutButterBreath
    Define "IBD". REI is a co-op. Is there a distinction there? (Serious question.)
    In my view, "IBD" should be reserved for a retailer who sells quality bicycles, provides first-class customer service and supports the local bike scene. I've not looked at recent figures, but such retailers should still have the biggest market share by far in terms of dollars—so it wouldn't be wrong to define "IBD" by numbers as well.

    It varies with the store, but I think REI in general falls short in the customer service and local support department. I agree that REI is not your standard chain sports store like The Sports Authority. But compared to a retailer as decribed above, I don't see the distinction so much in what REI is or isn't, but rather in what it lacks .
    Last edited by wim; 02-28-2008 at 06:41 AM.

  21. #43
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    I know nothing about the bicycle industry, other than I have purchased multiple bikes, but I have found this thread very interesting.

    It appears to me that Specialized is taking advantage of the uncertainty created by the Cdale sale to Pacific. As independentdealer has shown, he/she is not sure of what will happen to Cdale. It is likely Specialized doesn't know either, but they realized this is the perfect opportunity to encourage local shops to jump from the Cdale ship. The use of both incentives and threats is very effective when it is unclear what will happen with Cdale. Specialized is hoping to take advantage of those dealers who are more conservative. I guess you (independentdealer) will have to decide whether or not you are a risk taker or more conservative from a business standpoint.

    This practice is commonplace. When I was interviewing, I was offered a job by an institution. I explained that I hadn't completed my other interviews yet. They began to pressure me to take their position before I could complete my other interviews. They told me they had to give their number 2 candidate an answer right away. Classic incentive (job offer) combined with threat (must tell us now or we'll go with #2). Fortunately, I had multiple options and their threat did not work with me.

    Unfortunately, it seems like independentdealer doesn't the luxury of many other options.

  22. #44
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    While the initial post made me think Spam from a rep with too much time on his hands or a dog eared copy of Viral Marketing 101, I will play for now.

    1. Specialized (and other major brands) have been doing this for years, not just since the Dorel thing, so that's incorrect.

    2. Specialized dropped the San Diego dealer for numerous reasons well laid out in the BRAIN article. The article is probably still on the webs.

    3. I have seen the "drop X" brand offer, and they were not coercive. They were more like pot sweeteners for more "floor share" (see i.e. supermarkets and endcaps), moving up a level or two in the discount scheme (which is a big deal margin wise over time), expanded credit lines to match what you lost with brand X, better payment terms ect. So the "the sky is falling, the Big Evil Specialized company is coming" is hilarious, but alas, also untrue.

    4. Given Cannondale's spotty track record of last few years and the massive uncertainty with the Dorel takeover (especially the course of action with each purchased brand- especially GT loaded up in Performance right now) any smart IBD is probably looking at their options anyways.

    5. Trek, Giant and Specialized all prefer to be the Big Dog at an IBD. Specialized doesn't seem any worse then Trek about this (and probably a bit better actually). If you want a first tier brand on your floor, you should understand that. They will always be looking to expand your business with them- they would be stupid not to. Don't like it- drop them and load up on third tier brands and hope Performance doesn't pick them up and cut prices to near wholesale a month after getting them.

    6. The IBD industry is pretty open. Work at a shop, read BRAIN and all this stuff becomes pretty well known. Trek, Specialized and Giant got to be first tier companies by being aggressive competitors, expanding their lines, and being fair with their customers (unlike some of the other lower tier companies which love messing around on warranty issues, grrrr). None are perfect, that's for darn sure- but they are so superior in almost all aspects to the shattered corpse of Cannondale its not even funny IMHO. If Specialized is dumb enough to offer you something to drop Cannondale post-Dorel, I say take it. Then pick up another line down the line- something with a small buy in, and no chance of being found at Target in 16 months. Maybe some Euro bling to offset the domestic brands.
    Dr. Cox: Lady, people aren't chocolates. Do you know what they are mostly? Bastards. Bastard-coated bastards with bastard fillings. But I don't find them half as annoying as I find naive bubble-headed optimists who walk around vomiting sunshine.

  23. #45
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    Many independently owned local bike shops not only fall short of your definition but lag behind REI to boot. If the non-chain Cannondale or Specialized dealer has lousy service and doesn't support the scene, are the no longer an IBD? That doesn't make sense to me.

  24. #46
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    Its good business for Specialized. Not necessarily for IBDs or consumers.

  25. #47
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    Quote Originally Posted by PeanutButterBreath
    Many independently owned local bike shops not only fall short of your definition but lag behind REI to boot. If the non-chain Cannondale or Specialized dealer has lousy service and doesn't support the scene, are the no longer an IBD? That doesn't make sense to me.
    Makes sense to me because, as I said, that's what I would like to see as the definition. I suppose you could use trade journal language and define IBD as the specialty bicycle retailer segment which commands the vast majority of parts and accessories sales, virtually 100% of the service market and currently dominates the market in bicycles selling for $250 and up. Too numbers-oriented for me.

    I understand your point, it's clear. If I had to write an article about bicycle distribution channels, I'd try very hard not to use "IBD"
    Last edited by wim; 02-28-2008 at 08:34 AM.

  26. #48
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    Quote Originally Posted by treebound
    Yes, I have.
    Me too.

  27. #49
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    IBD = ??

    IBD Inflammatory Bowel Disease
    IBD Investors Business Daily
    IBD Ibadan, Nigeria
    IBD Ibidem (Latin: In the Same Place)
    IBD Improvised Biological Device
    IBD Inclusion Body Disease (viral disease of boid snakes)
    IBD Infectious Bursal Disease
    IBD Inhabited Building Distance
    IBD Institute for Biodiagnostics
    IBD Insurance Broker/Dealer
    IBD Integrated Base Defense
    IBD Interest Bearing Debt (finance)
    IBD Interest Bearing Deposit
    IBD International Business Daily
    IBD International Business Development
    IBD Investment Banking Division
    IBD Ion Beam Deposition (semiconductor manufacturing)
    IBD Irritable Bowel Disease

  28. #50
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    Quote Originally Posted by axebiker
    independentdealer - try using the quote function so we know who the heck you're replying to. Otherwise it looks like you're babbling.

    As far as losing Spec'd - who cares. There's better rides out there. I don't find the "bang for the buck" of Spec'd gear to be ANYTHING to crow about. It's good stuff, but priced nearly as bad as Trek.
    I agree. For the price neither Specialized nor Trek offer huge bangs for the buck for mass produced frames. no knock on mass production either but there are loads of other offerings out there with rides that are just as good and similiar or better pricing. And Specialized certainly is not the only company with large volume requirements and pressure tactics used on dealers. One of my LBS's carries Trek and he claims that the amount of bikes which they require him to pre order is so huge that it effectively prevents him from carrying other lines which he would love to carry. 2 years ago he dropped Pinarello because of his Trek order requirements, which was a shame. His dilema is that Trek is his best seller, but he still hates the large amount of inventory they require buy as a minumum order each year.
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