Local Dealer vs. A Great Deal

Vern

Active Member
I have found some great deals on bikes from far away dealers, many offer free shipping too!
I value my local dealers, but at what cost? If you can save 20-40% buying on-line from some dealer far away, is it worth it?? I know some don't have dealers close by and have no other choice, but what if you do?? Will you feel bad when you try to get it serviced? Will they grumble about the fact that you didn't buy it from them? Or will they be happy that you are bringing them business with the follow up service? I know Court mentioned "Showrooming" I think he called it. Is it wrong??
 

Dave

Active Member
If you have a local dealer and the price is not too far off, I would support the local dealer. Having said that, when we are talking saving $1000.00 or more, I think you owe it to yourself to reap the savings. As far as " show rooming" goes, I won't do it. I don't feel good about doing that, not passing judgement, just the way I feel.
 

James

Well-Known Member
Hey Vern,

I don't know if you read my earlier thread about the life saver I got from my dealer (Jamie driving out from Vancouver to give me a charger, when the extra one I had at my office was broken). I really appreciated it and a great reason to buy from a dealer.
Like Dave said if your gonna save a G or more I think you'd be silly not to save the money and just deal with some less enthusiastic service from the local dealers.
 

FitzChivalry

Active Member
I wish more people had the choice of whether to buy local or not. I was looking at a 4.5-hour (one direction) or 11-hour drive (another direction) each way to buy from a dealer. It was a no-brainer to pick my bike first and then choose where to get it from rather than limit myself to the models sold by a "local" dealer.

If I had a local dealer who was willing to special order a bike, that might be different. But, I didn't see anything about special orders on the local bike shops' web sites.
 

Dave

Active Member
Same problem in my area. I talked to my local bike shop that does a good buisness in regular bikes, and he just wasn't interested in ebikes. At one point he mentioned " just go buy a scooter" if want something like that. Part of the problem in NY is that all ebikes are technically illegal for use on public roads. Of course two of the bigger ebike stores in the State are in NYC and Long Island!
 

Vern

Active Member
I personally like to see the whites of the eyes of the person that I am buying from. I also don't feel good about trying merchandise and products from a brick and mortar location, only to order it online or from someone else. It is something that I struggle with and and feel guilty about. I value my local retailers and retailers in general. I don't want to just order everything online even if it does save me time and money. It is just that at what point does the cost savings out way any personal responsibility I might feel? Does my loyalty have a price? I like the $1,000 price tag a few have mentioned.
 

Court

Administrator
Staff member
Hi guys! Great question here Vern... To start off I want to define showrooming a little bit more. The first time I heard this concept was in regards to consumer electronics which are usually small, easy to stock and ship but still high cost and worth investigating in person. It's part of what killed Circuit City and what's currently challenging Best Buy. According to Wikipedia:

Showrooming is the practice of examining merchandise in a traditional brick and mortar retail store without purchasing it, but then shopping online to find a lower price for the same item. Online stores often offer lower prices than their brick and mortar counterparts, because they do not have the same overhead cost.[1] Showrooming can be costly to retailers, not only in terms of the loss of the sale, but also due to damage caused to the store's floor samples of a product through constant examination from consumers.

Showrooming was said to be behind the collapse of UK photography chain Jessops, and Target’s decision to discontinue carrying the Amazon Kindle.

With that said, I have certainly been guilty of showrooming. It's a natural tendency and part of what makes ecommerce so disruptive. On the flip side, when I visit a store in person I usually get some food and maybe stock up on tertiary products at the register that I might have missed online. This is the doorbuster concept of Black Friday at work, when you get someone to drive to your location, park and walk through those doors there is a natural barrier for them to spend incremental time traveling to another store and as a result they may spend more at yours buying "good enough" substitutes or even paying higher prices due to the opportunity cost and gas required to go elsewhere. This is why Super Walmart's and Target's now carry groceries. One stop shop baby! Don't we live in interesting times...

Okay, so electric bikes are a little different because they are large and heavy (making shipping expensive), they require some assembly (who wants to do that... or even feels like they know how) and they will need maintenance. For all of these reasons, local shops have an edge on ecommerce and showrooming is less common. Many manufacturers actually work against showrooming by accepting online orders but passing them down to the nearest dealer for fulfillment. Your ProdecoTech's of the world are going the other way with this, selling through Amazon and this upsets the other players in the market and the local shops who don't have the support to service, repair or honor warranties.

So to answer your question directly, aside from "it depends on if you even have dealers nearby" I'd say try asking your local dealer for a price cut. Privately approach them and explain that you've found a great deal on the same bike they carry but you want to give them your business and are struggling with the price difference. Ask if they could meet you part way, volunteer to pay an extra hundred or two and give them the opportunity to respond. Explain that you'd be happy to write a Facebook or Google+ review for their business, share the bike with friends and pass on referrals and that you'll come to them for maintenance. If they reject your offer, you can always politely still offer to come in for maintenance and accessories. People who are running small businesses are constantly struggling to make ends meet and they will empathize with your own need to spend efficiently.

The other part of this answer is, ask if they can special order the bike you want (as Fitz mentioned). This happens all the time and many brands want to get their ebikes out into more shops so this could be an opportunity for them to build a new relationship with the shop as well. This is exactly what happened when I bought my Easy Motion Neo Jumper. The shop in Austin didn't carry them yet and I asked if I could get one in. I paid for it up front and the bike arrived (and was assembled) there. They got to test ride it and feel out the quality without spending their own money on inventory and ultimately decided to add a few of the Neo models to their existing lineup. Win, win win baby! Hope this helps, let me know if you have any other thoughts :)
 

Ralph

Active Member
Court, your story on the Neo Jumper is spot on. I have heard from a few dealers that the mistake some bike companies make is that they won't sell them just one bike. They want them to take on the line and invest heavily in their product line. Consequently, there are still a lot of dealers that don't have electric bikes on offer. Given the sparse saturation that electric bikes have, I would imagine what you did with the Jumper would be a smart tactic.
 

George S.

Well-Known Member
I have found some great deals on bikes from far away dealers, many offer free shipping too!
I value my local dealers, but at what cost? If you can save 20-40% buying on-line from some dealer far away, is it worth it?? I know some don't have dealers close by and have no other choice, but what if you do?? Will you feel bad when you try to get it serviced? Will they grumble about the fact that you didn't buy it from them? Or will they be happy that you are bringing them business with the follow up service? I know Court mentioned "Showrooming" I think he called it. Is it wrong??

I wish I knew what the retail markup was on the better bikes. I've heard of bikes that retail for say 3 thousand going for around 2 thousand. In a way this makes sense. The closest dealer to me has about 50 bikes on the floor. He as maybe 800 sq ft, and an employee or two. I can only guess, but his 'nut', rent, salaries, health care packages, inventory carry costs, must be 80 to 100 thousand a year. So he needs to sell 2 bikes a week to break even, if he makes $1000 a unit. If you walk in with a Web price where he makes $200, it only works if it is something he does every now and then. Otherwise his (her) volume has to increase 5-fold, 200 versus a thousand dollars.

If the dealer model needs a $1000 markup to work, I think it is going to fail. The retail system in this country is wrapped around the Web, and dealers at that margin level will be picked off. It's easier to walk away from a dealer if he is demanding way, way more than a more 'wholesale' price, if that price is readily available. I'll gladly pay, say $200, but if the dealer wants a thousand? I'm not going to feel bad.

I bought a bike 6 months ago. I wanted to buy local, but when I ran down the components, I figured I might be paying double, so the online guy won. I only talked to a dealer for 5 minutes, he didn't offer a test ride, and we were not negotiating. I simply went to the websites to figure out exactly what he was offering, and what the retail prices. I couldn't be happier with the online bike ($430) but I had it checked by another bike shop ($35).

I figure if I am 'showrooming' a dealer like the local one, I will do it with as much integrity as possible. I have asked about renting a bike, and that's the way I would try to test drive one I thought I might like. I think the bike rents are subsidized, to some extent, to spur sales. That's his decision.

Look, at some point you are just honest with the guy. If there is a guy in Monroe, Michigan and Lem offers you the model you want for $2200, but the dealer is at $3000, all you can do is say that much money ($800) is too important to you to leave on the table. Ask what he can do. That's how it works with cars. Of course, on top of this there is the sales tax issue. It's reasonable here, but it's another $200 on a 3K purchase.

I think the model for ebikes is to have a website. You import a few models from China. You maybe put 3 hours into each bike, whether tuning or upgrades. You sell through Ebay, Amazon, or Direct. You have a kid named Flipper who goes to the Juco and maintains the Website. There is a guy named Joe in the middle of the country and Joe is you shipper. Theres a cheap storage room with your inventory. Joe ships it out twice a week.

The Chinese make and sell a lot of bikes. Eventually they will do what they have to do to compete in the world market. Local bike shops will be left with maintenance, and they will grab ebike business where they can. I saw a video about how you install that Chinese mid-drive, and it's not rocket science. It's a decent drive. It's cheap. That's the mass market. Higher maintenance stuff provides more jobs in the US, doing the maintenance. (Well, maybe.) Most dealers are not in the mass market, probably for a reason. Prices seem to start at $2500. They need to sell ebikes as a luxury product. Luxury is higher margin. Maybe Walmart will find a decent bike for $1000.
 

Ravi Kempaiah

Well-Known Member
Hi George,

I went through this grueling process of selecting between online vs local. I started my search in September 2013 and have searched extensively both online and local. At one point, I was negotiating with US dealers and when I found the markups were to too high, I started contacting Chinese and Taiwanese manufacturers. I received several quotes and got to know the true whole sale price.

Since this is a baby boomer/ early adopter market, too many dealers want to squeeze in as much as possible. If only they learnt to support local people by offering them good prices, their business presence would be much much better. Just in my area of Washington D.C, 3 dealers have stopped selling Ebikes because they wanted $600 overheads on a $1400 bike and they would not budge, well, they were able to sell only 12 to 20 bikes a season and had to shift to normal bicycles.

I always purchase my groceries and vegetables from fair trade organic market but when it comes to products like these, you can't afford to loose $1000's of dollars. Above all, most of us here are eco-conscious and it is not like other luxury products such as Rolex watch or something. They could make it a win-win for themselves and customers but each dealer is different.

Insane amount of time was spent on my bike selection and finally, I was very fortunate to find a great deal online. With the money saved, I could get the bike + accessories+ 3 years worth of insurance.
 

Court

Administrator
Staff member
Hey George and Ravi, thanks for the perspective. I think you're right about each shop doing it differently with regard to pricing. With any online purchase there's the added effort of time spent communicating and confirming a purchase, the risk associated with buying direct overseas, waiting for the shipment and possibly delays if it is sent improperly due to large Lithium battery regulations, assembling it yourself and dealing with maintenance and warranties down the road.

George, it sounds like your local bike shops offer great service if a tuneup is only $35. In Austin the lowest quotes I got were $80 and there were lines with waiting periods ranging from three days to a week. I personally dislike assembling ebikes (and really the whole experience of hauling the giant box around... I've also struggled with being home when the package arrives!) My full time job made it difficult but also provided the money to just buy one from a dealer. I felt pretty good about paying more for their services and felt like I made friends, they even helped me sell the bikes later when upgrading etc.

However you come by your electric bike, it's a neat piece of technology and I love that they are getting better and cheaper. As you may know, my first ebike was purchased online and it was a bad experience. Everything I mentioned above plus trying to resell a product that nobody around me on Craigslist had ever heard of. The shops wouldn't touch it and I knew I didn't have the parts or experience to fix it myself so I always felt scared riding it. I'm glad your bikes have turned out so well and with the right resources I think you can find good stuff! My experience happened before there was an ElectricBikeReview to visit or a forum to get this kind of help in (I didn't know much about Endless Sphere at the time and when I eventually did discover it, it seemed mostly like modding and kits).
 

FitzChivalry

Active Member
$49 for a tune-up here in Summerville, SC. I plan to tip my mechanic for a couple of reasons:
  • 1) I want him to remember me and have a good impression of me when I come in in the future
  • 2) (Link Removed - No Longer Exists)
 

George S.

Well-Known Member
Hey George and Ravi, thanks for the perspective. I think you're right about each shop doing it differently with regard to pricing. With any online purchase there's the added effort of time spent communicating and confirming a purchase, the risk associated with buying direct overseas, waiting for the shipment and possibly delays if it is sent improperly due to large Lithium battery regulations, assembling it yourself and dealing with maintenance and warranties down the road.

George, it sounds like your local bike shops offer great service if a tuneup is only $35. In Austin the lowest quotes I got were $80 and there were lines with waiting periods ranging from three days to a week. I personally dislike assembling ebikes (and really the whole experience of hauling the giant box around... I've also struggled with being home when the package arrives!) My full time job made it difficult but also provided the money to just buy one from a dealer. I felt pretty good about paying more for their services and felt like I made friends, they even helped me sell the bikes later when upgrading etc.

However you come by your electric bike, it's a neat piece of technology and I love that they are getting better and cheaper. As you may know, my first ebike was purchased online and it was a bad experience. Everything I mentioned above plus trying to resell a product that nobody around me on Craigslist had ever heard of. The shops wouldn't touch it and I knew I didn't have the parts or experience to fix it myself so I always felt scared riding it. I'm glad your bikes have turned out so well and with the right resources I think you can find good stuff! My experience happened before there was an ElectricBikeReview to visit or a forum to get this kind of help in (I didn't know much about Endless Sphere at the time and when I eventually did discover it, it seemed mostly like modding and kits).


Hi Court,

Well, Ravi is the driving force behind this community and he always brings a lot of depth to the discussion.

I think when I found the Sphere forum, it started to change my perspective. At first I though ebikes were pretty complicated, and there are elements that get complex. The integration of the two drive systems is difficult. Flykly, which still has no product, claims they will use the computing power in a smart phone to work this out. The upscale mid-drive systems are supposed to be super smooth. I think Toyota, with Hybrid Synergy, kind of defined this problem in cars, although I don’t think a Prius has pedals.

That aside, I was surprised that hub motors cost just a few hundred dollars, and they are generally thought to be reliable. I can point you to a video showing how to take a regular bike and turn it into an ebike in an hour:

http://www.electricbike.com/one-hour-electric-bike-conversion/

Now I’ve studied people who take old (light and cheap cars) and convert them to electric, generally with fork lift motors. You want complicated? And there is real danger here, with huge battery packs.

Maybe the toughest area is the battery systems. The building block is almost always the 18650 cell configuration. But, from there you have to cope with different chemistries, weights, and types of packs. A no-brand (from China) cell might cost a couple of dollars versus a Panasonic that you find for a multiple of the price. Since a pack may have 50 cells, it adds up pretty fast. I’ve dealt with battery chargers, solar controllers, and power supplies. I can generally follow a set of rules for battery types. But I honestly don’t know how much a battery pack costs, because I don’t know what the best choice is.

Even so, I think you could procure a decent bike for what I paid for mine, maybe $450. You might want to go with a different configuration. The disk brakes might get in the way. There are torque issues, so maybe a mountain bike frame is stronger. There are choices in that price range, even at Costco, the LBS, or Dicks.

So the $400 frame is in the garage. Your hub motor wheel shows up. I’d go with a low power system because I still want to do most of the work. I want help, but nothing more. That wheel is maybe $250. You buy a $400 battery pack. You buy the controller and the other parts you need, maybe for $200. You can get kits with ‘everything’, and all the parts and connectors mate. I may have left something out, but this seems to total $1300. If you happen to have a bike lying around, or you scrounge one from somewhere, you can probably save a lot there. If you buy an integrated kit, and roll the dice on a less than brand name battery pack (not a lead system) you could maybe squeak through for a thousand. I’m using a new bike you buy to build.

Anyway, lets say this is not a real lesson, but a benchmarking exercise. We aren’t going to build. We want one box. (BTW My UPS has some nice scheduling features for their deliveries.) Basically, if I can build a bike in this range, a manufacturer or a wholesale importer should be a bit lower. He’s a quantity buyer. But he has another markup, on a finished bike.

So after doing this, I was wondering why the Neo Cross is a $3000 bike. It’s better, I’m sure, and more refined, but I doubt the basic bike as a frame and components is that much better. The answer really seems to be that the $2800 bikes have a $1000 markup. And this is borne out by the prices wholesale dealers are offering, at least to some people. It’s an information age.

You can go at the thing from the other direction and ask “Well, who is assembling bikes (or having it done it China) but then charging a lower markup.” You are then asking who has few or no dealers, or a different kind of dealer. No dealers = Ebay = Web Direct, etc. I think Hebb started out with models that were engineered for him in China, and then he just went with a rebranded Chinese bike. I can’t say this was successful, or that his margins were lower. The bikes don’t seem to be available. Prodeco claims to assemble their bikes in the US, but I’m sure the drive parts are Chinese. The other parts appear to be decent. Volton seems to sell Chinese bikes at a fairly low markup.

Prodeco is listed as one of the high volume manufacturers on one of the business sites. I don’t have any numbers. Prodeco got in a lot of trouble with some support struts. I don’t know how it dragged on as long as it did. I don’t know if the problem is fixed. It’s discouraging, but it can happen. My guess is that warranty costing is almost impossible in a fledgling industry. Guess wrong and there goes the company. (I don’t know if Pedego or Prodeco was first but one sounds a lot like the other.)

Prodeco seems to have lower margins than the top tier vendors. Volton prices are not too far from assembly costs. There seem to be parts of the Volton bikes that are Chinese spec. You can’t get the part easily. I would avoid having Chinese proprietary parts at all costs. It’s what you get when you buy the $89 generator from Harbor Freight, and it means if something small goes wrong, you’re out of luck. I hope Volton gets out from under that little episode at Sphere. I wish they would do enough labor on their bikes to insure everything but the drivetrain is world standard parts, not local Chinese parts.

I’m in the market for plain vanilla. I like to ride, but I can see advantages to a motor. I’ve lost a step, maybe a whole staircase. I don’t like performance. If you look at the drag curve for bikes, you’re in deep trouble over about 15mph. The energy in the battery is going to move air molecules. How much of the energy? Well, maybe 80%. Is that really ‘green’? But I’m just not in a hurry. So I figure a nice bike with a 250 watt motor should be OK. I’m stuck on the battery, but with a warranty, I can roll the dice. I think I can carry stuff with a trailer, and the trailers carry a lot. People put their kids in bike trailers.

Maybe Prodeco and Volton, others who tend to sell on the Web, can get the kinks worked out, get a reputation that works for them. Prodeco seems to understand what parts work. It’s tough to just bring in a Chinese bike. Too many issues, especially down the road.

I don’t know why all the bike dealers (regular bikes) don’t get together and make a plain vanilla ebike in a couple of configurations and sizes. It doesn’t have to look bland. It would be like a ‘house brand’ for LBS facilities. They could make sure it is a bike they could fix, world parts. They could have a cooperative parts facility to rebuild drivetrains. They might want to try the Chinese mid-drive, but the hubs are more proven. Maybe they should just do conversions in the shop, or offer a bike as a bike, or an ebike. For finished bikes, they could do a hybrid and an MTB. If they had a few hundred bike shops signed on they, as a large group, could control the assembly. I think they could use a Chinese drive and everything else would be about like any bike. And, finally, if they marked it up maybe $200?

Walmart could do this. Home Depot could do this. Dicks or Big 5 could do this. There’s more in it for the LBS because they need maintenance dollars.

Best,

George
 

Court

Administrator
Staff member
Thanks for the thoughtful response George. To answer a few questions buried in there: I think Pedego was first and Prodeco has had to update their name to ProdecoTech. Hebb is still around, just spoke with him the other day and he's updating his designs a bit for 2014 with stronger motors, there are a few super-low end ebikes that go for ~$500 including the eZip Trailz by Currie.

Pricing is often a combination of costs and marketing (what the market values a product at). Take Otterbox, their cases cost $0.25 to make but the shelf space and branding costs something and if they offer a better margin to resellers they get exposure. It is the information age and I think it's great that you can get kits and actually make your own. I'm a fan of purpose built, supporting shops and getting a warranty for something with such high use (I've been riding mine every day to work and back). It's like the car example, I could build a car but really... I'd rather just get a Toyota or a Tesla :D
 
Hey everybody,

Okay, so I’m going to be pretty biased on this one for obvious reasons. But this is a big issue, and there are some things y’all should take into account.

First of all, ebikes currently account for a .01% of all bike sales in America. That statistic alone should scare the hell out of anyone thinking about going into this business. While investors continue to throw money into this emerging industry, ebike shops don’t have it easy. Our closest direct completion, a fantastic shop out of Asheville, just closed their doors after years of running a great shop! THEY HAD NO COMPETION WITHIN A 5 HOUR DRIVE and they still had to shutdown. Asheville is the greenest city in the South and they couldn’t survive.

LBSs are starting to come around to ebikes. That is “why don’t you buy a scooter” bullsh#t is naïve and it’s not something that I hear from the best LBSs in our city. The real problem that LBSs have with ebikes is the inability to service them. While maintenance for an ebike under warranty usually relies on simple parts replacement, diagnosing the problem requires some electrical know-how. When it’s out of warranty, you’re going to need a qualified ebike technician. The overhead of hiring a technician is a lot for a product that accounts for a minute percentage of sales. Plus, any normal electrician is going to require some time and training just to get a feel for the product. Outfitting a workshop for ebikes costs about twice as much as usual. Then there’s additional hazard of working on the bikes themselves. Direct motors can take off a finger if you crack one open!

Ebike inventory is more difficult manage, as the technology is in constant flux. The market turnover mirrors cellphones more than bicycles. We have to be very careful about what products we stock. Also, ebike retailers HAVE to move their product quickly if they want to ensure the battery cells don’t begin degrading on the shop floor.

In terms of “showrooming” (thanks for the description, Court), obviously I don’t like it, but know that it happens. The most offended I’ve been in this regard is when someone, who demoed one of our bikes, came in a few months later to repair the same bike, which he purchased somewhere else.

Please, please don’t do that.

We have 14 different bikes to demo at our shop with more on the way. That’s a big overhead. We’re going to work hard to make sure that each customer finds a bike that’s perfect for him or her. Honestly, you can do all of the reading in the world about a product, but you’re not going to know what it is until you ride it. As I said in my 36v/48v post, I certainly have my opinions about the bikes, but that’s all they are, opinions.

Ultimately, what our shop can do is offer our knowledge base to help real people understand a new product. Next, we try to keep a diverse variety of the best bicycles we can find for anyone to try. And finally, we’re going to offer discounted service to anyone that buys a bike from us for as long as they have that bike. We love these things and we think that everyone should have one.

Now, we’ve offered 30-day price matching for years. However, front loading websites have become very difficult to compete with. By this, I’m talking about web stores with no overheard that immediately offer the lowest price possible. These guys are the reason you’re not going to find an ebike to demo anywhere near where you live. Many manufacturers take precautions to prevent this (BH, for example, doesn’t drop ship) but a few just don’t care so long as their bikes are moving. Just make sure you’re buying from an actual shop (check google maps street view), and you won’t have to feel guilty.

If you’d like to save money, build your own bike. We’ve read Endless Sphere for years. Every guy in the shop as built up a bike for himself. We’ve always got some Frankenstein project in the back built from recycled materials. We’ll even walk customers through the process of buying materials from China and build their bikes for them.

However, doing a build-up is for a hobbyist. Build-ups, while powerful, are usually ugly, clunky and require lots of maintenance. They don’t hold much appeal for the normal person wanting an ebike (just try selling one).

That’s the difference between Sphere and EBR. Sphere is great for techies and hobbyists who like to constantly tinker with their bikes (like us). However, EBR was actually referred to me by my customers. There’s a newer, much larger populace that want to make an informed decision about their ebikes, without getting lost in the language. That’s what we want to offer in our shop. That is what Court has done very simply and beautifully on this site.


-Chandlee
 

Ravi Kempaiah

Well-Known Member
Hi Chandlee,

It was wonderful to hear the other side of this business. I think this is a great forum because it brings all kinds of people together. We have customers, dealers, techies etc.

Now, the sheer fact someone took great interest in ebikes shows that he is concerned about environment, which is a great thing in itself. Most of us on this forum are concerned about our health, keeping our planet in good shape etc and still it is just 0.01% of the biking demography.

Back in 1970’s Ford, GM, Chrysler pushed their vehicles hard and that is how we got hooked on to automotive industry. If we don’t push ebikes in this country, there will be some serious repercussions in 5-6 years. Now, who has to push this trend forward? It’s you and me.

It is like this paradox: unless I learn swimming, I won’t jump into the water but unless I jump into water, I won’t learn swimming. Ebike shops are closing because they couldn’t make profit but if they want huge profits, they won’t sell bikes and close out eventually.

So, there has to be a balance, a win-win situation. How to do that? You offer the best deal you can to your local customer and he WILL take it up, if he doesn’t then it’s his mistake and you can always counter that when he brings his “other” bike for tune-up etc. Most importantly, ebike dealers and customers are human beings. If they communicate well, at the same level, most people will understand and empathize.

If you are transparent about the business, the greatness of the ebikes, how it’s good for us/earth in long term and genuinely care for the customer, there is very little chance that you will lose business. I have been to 6-7 different stores for test rides, and many of them want to sell it for MSRP only. They are not passionate about sustainable future (big red flag in my mind) and they treat these bikes like any other commodity. If a guy is not passionate about this, he shouldn’t step into in the first place. Any sensible guy who has been on different forums, read different reviews, would find it hard to pay full MSRP and thinks, 2nd hand car is better for that price (for $2000, I could use Zipcar service for 3 years). Because of this loss of business, dealers can’t afford to purchase the next batch of inventory. It’s a vicious cycle.

Let’s consider this case; we have a bike that sells for $2000. The dealer markup is $800 and the other online store offers at a much lower markup of $250. After all, we are talking about $800 overhead Vs $250. If the dealer clearly mentions, this is the ballpark figure it is costing me and my service/support is worth extra, so I will offer this a discounted price of XX (~$400 markup). I doubt very few people will turn it down. I remember my first incident back in October 2013 for Prodeco Phantom X2. The guy near my house wanted $1570 and Amazon was offering me $1230. So, I asked him, show me the spare battery or motor so I know if something goes wrong, I would be able to get it immediately. No, he didn't carry any extra in stock and its the same old waiting period. So, why would I pay 25% extra for such service while I have a University bike shop that does everything for free.

Also, many so-called online dealers try to source it from China and want to keep ~$800 profit on a $2000 bike. They think, their service and warranty is worth it but in reality, when things go wrong, they start contacting their Chinese supplier and again, it’s a waiting period for customers. I have raised this concern about bikes like Falcon etc. who only have online presence. I am a big fan of ebikes and any company that stands behind their words and makes a solid product will earn my business but sourcing some cheap bikes from China and trying to sell it to a gullible US customer is plain wrong. I also asked the Volton founder Joe about multiple copies of his bike design showing up in different parts of the world/ebay under different name.

Bike shop dealers are humans too, they are not billionaires and they should try to offer this very niche (new) product at certain premium till they see major cosmopolitan cities are on par with Amsterdam or Denmark. Once we cross this threshold, then you can make higher profits. If we want to keep max profits right from the beginning, I don’t think ebike industry will survive for too long in this country where we have minimal biking infrastructure.

More and more people are interested in this fantastic piece of engineering and I am optimistic about the future. I hope this discussion won’t turn into a “penny wise, pound foolish” phrase. I hope I am not sounding like a liberal extremist but it's people like you and me who is going to push this ebike industry forward.

Here's to a better 2014.
Cheers
:)
 

oilerlord

Member
In terms of “showrooming” ...I don’t like it, but know that it happens. The most offended I’ve been in this regard is when someone, who demoed one of our bikes, came in a few months later to repair the same bike, which he purchased somewhere else.

Please, please don’t do that.

-Chandlee

So, in summary: You had the customer in your store, he demoed a bike, your staff couldn't close the sale, and you weren't happy that he came back to repair a bike he didn't buy from you. Is it possible that:

1.) The salesperson didn't have the communication skills i.e. listening, asking the right questions, building a relationship with the customer, and thus lost any chance at closing the sale?
2.) Your price was significantly higher than the competition's (online or otherwise)?
3.) The customer wasn't aware of extra service offerings that sets your store apart?
4.) You could embrace the opportunity to collect the high-margin service revenue on sales you don't close - instead of being offended or otherwise turning that business away.

In my business (I'm an IT consultant), I have had the occasional customer that pops into a Costco or other big-box store and buys a laptop or other device. They then call me to set it up for them. Not only am I not on the hook for a one or three year warranty (because I didn't sell it), but I get to bill them for all the service I do for their new device. How great is that?

I don't know how margins work in the bicycle industry, but in my business; margins on computer hardware are razor thin. For me, most of my income comes from service revenue. That's how auto dealers work too, they make a small margin on the car and then charge $145 per hour to service it for years to come.

Sales skills and relationship building are a lost arts these days and I think most customers will choose to pay a little more from people they trust, and will value good business relationships for years to come. Please don't take this post as a personal attack; only constructive points that could help your great business become even better.
 
Hey Oilerlord,

I hope that wasn't the only thing you took from my post. That guy simply didn't want to pay taxes on his Prodeco, so he purchased on Amazon. We match prices, but we obviously don't help people evade taxes. We're still friends with him and we're clearly not going to turn down service. Amazon has started adding sales tax as well, so we shouldn't run into that problem anymore.
 

oilerlord

Member
Hey Oilerlord,

I hope that wasn't the only thing you took from my post. That guy simply didn't want to pay taxes on his Prodeco, so he purchased on Amazon. We match prices, but we obviously don't help people evade taxes. We're still friends with him and we're clearly not going to turn down service. Amazon has started adding sales tax as well, so we shouldn't run into that problem anymore.

No worries. You sound like a dealer that knows their stuff and cares about customer relationships. I always give the local shop the first shot at my business, and though it's nice if they match prices; I don't mind paying a little more for great service. Unfortunately, what happens time & time again (at least in my city) is that I get stuck with a someone that knows barely enough about running the point of sale machine - let alone about the products they sell. Add to the fact they are 20-30% more expensive than buying online or, in my case, across the border in the USA, and that makes the purchase decision easy for me.

I've only been looking at e-bikes for a couple of weeks, and was initially interested in the Stealth Fighter. It was $10,000 + shipping at our local dealership. They are sold almost everywhere else in the USA for $7900. When I visited their store, they:

1.) Wouldn't let me ride the bike (apparently, for liability reasons)
2.) Knew very little about the bike, and what he didn't know he guessed at
3.) Didn't seem to care if I bought anything, or made any effort to get to know my needs.

Contrast this with the folks at Optibike where I send an email on a Sunday night, and within 30 minutes I get an answer. I don't expect that kind of service, but when it happens, I know I'm dealing with the right company. I'm getting on a plane next week to try out a few of their bikes.
 

Ravi Kempaiah

Well-Known Member
Hey Oilerlord,

I hope that wasn't the only thing you took from my post. That guy simply didn't want to pay taxes on his Prodeco, so he purchased on Amazon. We match prices, but we obviously don't help people evade taxes. We're still friends with him and we're clearly not going to turn down service. Amazon has started adding sales tax as well, so we shouldn't run into that problem anymore.

Hey EBS,
I hope that wasn't the only thing you took from the post :)
I did not purchase Prodeco because it is a sub-standard product. It won't work for regular commuting at all. I knew more about bikes/tech than the guy who was selling the product.
I ended up getting Neo Jumper 650B.