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A $6000 bike from just some guy?
by Dan Empfield 12.22.04
(www.slowtwitch.com)
What with the new economy and all, there's a lot of ways to make a living. Back in my day, used to be there was a thing called a Bike Shop. You'd drive there, park your car, go in and walk past $300 bikes, $3000 bikes, and everything in between. These places had spare parts, accessories, you could even get your own bike worked on there. No fooling.
Nowadays, you buy your stuff online perhaps. Your LBS is two time zones away. The website has a "contact me" button and you're lucky if you can find a phone number on the page you go to when you hit that linkonly an email address for a POP account that never seems to generate a reply. Unless you inform them that their "Add to Cart" button is broken.
There are also stores that have everything in them except stuff to buy. You can take a swim in the Endless Pool, run on the treadmill, check your email (or log onto the Slowtwitch Forum), buy a grande latte, or read Triathlete Magazine in an overstuffed chair, but no, you can't buy a pair of size 46 Carnac Eclipse cycling shoes.
The newest retailing paradigm has snuck up on a lot of us, because it wasn't announced. Nobody sent out a press release saying you could buy your custom bike from just some guy [JSG]. But now you can, and in some cases from just some girl (same acronym). Quite a few cities host JSGs, throughout the Northeast, the Mid-Atlantic and California.
Don't dismiss or shortchange the JSG. He's more than just a simple guy (or gal). These sorts of people are as adept as those in stores at bike fitting. In fact, this is their specialty. You might even say that, on paper, they're more adept, because it's almost entirely what they do. Some will perform as many as 200 bike fits a year, and that's just about one full-blown fit every working day. They almost all have advanced training in bike fit, and they almost all have special adjustable position simulators (a Serotta Size Cycle, a Bikefitting.com bike, or something custom like those I have built for myself).
Some go further. Fitwerx in Vermont advertises a "Digital Video Fit," where a high-contrast image of the bike/rider is subjected to a pixel count, yielding a pretty tight estimate of one's frontal area. This is combined with other high falutin options, such as its "Performance Analysis Fitting... a proprietary system to analyze oxygen transfer, power output, spin and aerodynamics in detail."
Obviously, this is the sort of detail rarely found at a retail store.
Usually, these enterprises sell stems, aero bars, saddles, seat posts, and the like, so as to couple the generation of your ideal position with the sale of those items necessary to achieve it on the bike you already have. This is the JSG's entre into retailing. But it's not the end of it. These operations also usually sell complete bikes, usually custom bikes.
The best known and probably the most universally widely regarded of these operations are PK Racing in the San Francisco Bay area, run by Christopher Kautz, and Signature Cycles north of New York City, run by Paul Levine. Both these gentlemen sell custom bikes made by Serotta, and both enjoy a loyal following. They also are key educators in Serotta's fit school.
But they are not the only exponents of this style of retailing. Ian Buchanan of Fit Werx, home based in Vermont, is also highly regarded and sells not only Serotta's bikes, but those made by Guru, Softride and Independent Fabrications, as well as others. Most of these companies also make custom bikes.
Will Pennino runs Synergy Bike Fit, Inc., out of Melville, NY. Will does the same sort of thing as would the othersthat is, generate your specific fit specifications for youhe'll sell you a custom Guru if that's what is indicated.
A bit further south, in Carrboro, North Carolina, are two ladies who run Cycling Specifics. Both Laurin Stennis (pictured in her fit studio) and Lori Hoefer (a pioneer in the setting up of Serotta's fit school) gave me a really hard time when they became F.I.S.T. certified, pestering me with all sorts of contrary questions and scenarios. This is because they are both very smart, very well educated in the science of bike fit, and the hard time they gave me was welcome and appreciated.
Cycling Specifics isn't just about bike fit. Laurin is also a Barnett School graduate, and as such is a crack bike mechanic. She'll host classes teaching the end-user how to keep his bike in top-top shape. That and a variety of other resource options separate her from any traditional bike industry model.
That established, Cycling Specifics will sell you a custom bike if such is called for. One can see why the bike sale is an intuitive adjunct to this business model. First, who best to buy your bike from if not the person you trust to fit you atop it? And second, well, let's look at the numbers. Let's say a person was to perform 100 fits per year, at a cost of $200 each. Pretty nice side business, eh? That's $20,000 per year. Let us say, however, that this is not the end of it. Let's suppose that half of these fit sessions carry with them an accessories sale of $400 on average (you're doing to need some parts to make your existing bike fit like you do on the position simulator, aren't you?). The gross profit on these sales will be mean an extra $7500 or so annually. What, you think $400 is an overestimation? How about a new set of Hed one-piece bars, a new Fizik Arione Tri saddle, a new Thomson seat post, and a new Syntace F99 stem for your existing bike's refit? That's over $700 not including any installation costs.
So, we're up to $27,500. But we're not done. Let's say that as a result of these 100 fits annually performed 25 custom bikes are sold. These are usually in the $5000 to $7000 range. Let's use a number in between. Gross profit on these, using industry standards, is about $57,500. So, of the $85,000 in gross profit this business model generates, two-thirds of it comes from the sale of these 25 bikes. Take away these bike sales and the model suffers.
Is my theoretical model anywhere close to accurate? I don't know. That said, as I informally query some of the JSGs and the bike manufacturers from whom they buy, these JSGs are not inconsequential dealers. One assumes they would also be significant sellers of tri specific saddles made by brands like Selle San Marco, Fizik and FSA. And of aero bars by Easton, Hed, FSA, Profile Design, and others.
But it's not quite that simple. Certain of them have a difficult time gaining access to bike shop vendors like Quality Bicycle Supply in the Twin Cities, probably the largest seller of bike parts to shops around the country. One of those mentioned above was opened as an account by QBP, then was told (said the JSG) that because of the lack of a traditional storefront, he could no longer buy parts. But none of the entities written about in this article have been shut out of the parts business altogether. They all obtain what they need, probably because certain other distributors have awakened to smell the coffee, and were quicker to recognize the robustness, and perhaps the legitimacy, of this non-traditional paradigm.
Yes, it's a new way of doing business, and some of the bike manufacturing companies that supply the JSGs might face a backlash from the retailers who've made the investment and dairly take the risk of providing a brick and mortar, full service face for their customers. Of course certain of these retailers would rather beat the JSGs instead of complain about them. Retailers like Wheelworks in Belmont, Massachussetts and Wheat Ridge Cyclery in Boulder, Colorado regularly employ upwards of a dozen bike fit specialists, and have extensive, well-stocked bike fit studios. From their point of view, nothing the JSG offers can't be found inside their stores, and with triple or quadruple redundancy.
The converse is happening as well. Not only are some full service bike shops building reputations as fit specialists first and retailers second, certain heretofore JSG's, like Paul Fabish in Connecticut, are slowly taking on more brands and are looking more and more like bike shops. Paul also adds an additional component to the mix: He's often the coach his clients hire (that's really how his business started). Now he's opening up a new studio, complete with a pool with an Endless Pool style propulsion system, an 8-station Computrainer layout, and so forth, all to enhance his analog coaching business. Likewise, the Fit Werx enterprise has now grown to more than Just Some Guy, with a staff of three and about two dozen high end bikes in stock at any one time.
The consumer is likely to benefit from the JSG retailing paradigm in the long run. The JSG has carved himself a niche, by proclaiming himself the provider of the missing ingredient in the consumer's relationship with his LBS: highly professional bike fit. Depending on the part of the country he's from, his claim can be quite compelling. The LBS community is not likely to take this lying down, however, and covets both the loyalty of the end user, and the high-end sales such loyalty yields. Accordingly, bike shops like Wheelworks and Wheat Ridge are the models for those who want to beat the bike fit specialist at his own game.

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